Understanding SMART Procurement in the MOD
The environment might change but the culture would remain surprisingly resilient.
The main thrust of this Report will be on issues to do with strategy,organisation and processes.
It would perhaps be true to say that the changes to the defence environment and policy have not changed the culture because they were not designed to. Any change has been largely incidental. As all companies who have been through any change programme know,to change the culture the people must be changed.
To achieve this, three things are necessary:
- top management acceptance of the need for change
- investment to effect change throughout the organisation
- sustained effort and commitment to maintain the change programme momentum.
Probably the greatest single challenge is to ensure that this commitment is maintained through the inevitable changes of personality at the political and senior management level.
The most valuable benefits of this report
- Focuses on the commercial implications and issues that the SPI raises
- Adds value to the debate by discussing different forms of contracting that would underpin the SPI intent
- Provides a guidance on how SPI is at present unfolding and to add some thoughts on the commercial dimension
Who will benefit form this report
- Procurement Managers
- Commercial Managers and Directors
- Contracts Managers
- Bid Managers
- Sales and Marketing Managers and Directors
- Anyone who is involved in the tendering and vendor selection process within his/her organisation
1 – SMART procurement guide – background and introduction
- Why was the change needed?
- Why wasn’t the current system working well?
- What changes were recommended?
- What is Smart Procurement aiming to achieve?
- Who is involved in the new acquisition process?
- Who is in the Integrated Project Team?
2 – SMART procurement guide – main elements
- What are the main elements of Smart Procurement?
- The Through-Life Management Plan
- Performance measures, targets and indicators
- Smart Requirements Acceptance and In-Service Date
- Incremental Acquisition
- Smart Procurement and collaboration
- Smart Procurement and Public/Private Partnership (PPP)
- Teamworking, competition and incentives
- Financial changes resulting from Smart Procurement
3 – Smarter contracts
- Blame v co-operation
- Gainshare and painshare
- Continuous improvement and continuous trading-off
- A step forwards or backwards?
- Simpler, clearer contracts
- Turning partnering principles into practice
4 – Contract incentives
- The search for incentives
- Principles of Target Cost Incentive Fee contracts (TCIF)
- Why do it?
- Smart TCIF
- Firm Price Incentive Performance (FPIP)
5 – Summary and conclusion
Tim Boyce is Commercial Manager, Siemens Plessey Systems. He studied electrical and electronic engineering at London University before joining the Procurement Executive of the Ministry of Defence. Most of his six years in the MOD were spent in contracts functions, involving contract and price negotiation and, in the policy area, work in contract conditions, procedures and regulations, competitive tendering and advising procurement branches on contract matters.
In 1980 Tim Boyce joined the giant electronics group Plessey. Over the past decade he has been responsible for the contract management of major projects, many of them involving multi-million pound subcontracts with a number of rival contractors.
His published works include: The Commercial Engineer, Successful Contract Administration, Commercial Risk Management and Successful Contract Negotiation.
He was also a contributing author to UK Government Procurement