Three sets of accounts, copies of their equalities and environmental policies, all the boxes are ticked so onwards to the ITT and contract award. This process or many variants of it have been going for years in the public sector. All good stuff to keep one’s back covered if things should go pear shaped, and all totally wrong! Southern Cross, Connaught, and now Mouchel, to name but a few, make unpleasant reading for the box tickers.
Backward looking supplier evaluation has long since been dead in the water. Apart from satisfying a few CSR zealots, it tells you absolutely nothing about the future! And as contracts get longer 7, 10, 15+ years the future is where the action will be. We have been arguing that company ownership, direction, and strategy are where the real evaluation processes should start. The failure of Mouchel and others was not something that could be foreseen simply by looking at the company’s annual report and accounts. It was about ownership, strategy and decisions taken in corporate offices, things that often never get reported apart from the occasional note in the Financial Times.
The Guardian has picked up on this today with an excellent article entitled ‘Mouchel bankruptcy shouldn't be 'business as usual' for public bodies’ – read it here. The banks have stepped in to save the day - so that has to be ok then? Remember these are the same banks that nearly bankrupted the whole global economy in 2008. Well the leader of Bournemouth Council, John Beesley, thinks it is all fine now as no doubt lots of other people relying on three sets of accounts to safeguard future do too.
I think it is time for a rethink on supplier evaluation, but who is going to lead the revolution?