There are two common complaints I hear from voluntary sector organisations about procurement (grants and contracts) from public bodies.
The first is:
"Why isn't good performance rewarded and recognised?"
"We've done a good job, we've exceeded out targets and/or delivered more than we said we would yet this doesn't seem to make any difference when it comes to the next round of funding!"
The second complaint is the other side of the coin.
"Why isn't poor performance punished?"
"We (and everyone else) knows a certain organisation isn't doing what it said it would and is under-performing, yet they enter the next round of funding on the same basis as everyone else!"
It seems obvious, especially to those that are doing well, that both good and bad performance should have consequences. At a national level there is a similar debate following G4S's failure to provide sufficient security services at the Olympic Games, and ATOS's wish to withdraw from their contract to carry out Work Capability Assessments. At a European level new procurement rules now explicitly allow public bodies to take into account past performance. The message is clear - firms that fail shouldn't get future public contracts.
What is less clear is how this should happen in practice - when and how should public bodies take into account past performance?
To take an example from my experience. Many years ago I set up a volunteering support project funded by an NHS grant. For a number of reasons, partly due to the pressure that the organisation was under, inexperienced management, and some poor recruitment, the project underperformed. In the self-evaluation, we were honest about what had happened, explained why and were duly awarded a rating of 3 out of 5.
The funder used our self-assessment as the basis of their decision not to award us further funding.
Was this really fair? There were reasons that the project didn't perform as it should have done but the problems had been addressed. We were open about the problems, which is surely something to be encouraged, and were honest and self-critical (unlike other projects who we strongly suspected had over-claimed in their self-assessment). It might be argued that our openness created a better basis for future funding and a productive relationship with the funder.
Given our view about the unfairness of the process perhaps we should have challenged the process, as self-assessment seemed a poor basis for comparison? Could the funding body have robustly defended its decision?
What if we had decided to apply to the funding body again? How long should the poor performance of a single project be held against us - a year, 2 years? When would our record be expunged and we'd be allowed to start afresh?
Similarly should our track record be used only to influence decision-making if we applied for another volunteering project or for any project we applied for? Was it a judgement against the whole organisation or just the part that applied for the original funding? I was working for a national organisation. Should the underperformance of the Manchester branch affect the opportunities of the Bristol branch?
It could have been, and in this case was, a blip, a low point in an otherwise excellent record of project delivery by my organisation, and it seems unfair that one instance of underperformance should be used to tarnish the rest of the work of the organisation.
If past performance is going to be taken into account then how big a part should it play in the decision-making process. It could be used to rule out further applications as it did in this case or be one of a number of factors taken into account when making a decision. What if we'd been able to demonstrate our success in delivering projects with evidence from other funders?
How about new organisations applying for funding? How is their past performance to be judged? Why should they start with an advantage over my organisation when they might have failed in delivery to another funder?
What if the project had been a roaring success and instead of scoring 3 we'd scored 5 out of 5? It seems to me that all the same questions apply: is the score credible?; does it represent the performance of the whole organisation, a part of it, or just a specific project?; how long should this record of success be used and to what extent should it be used to decide on future funding?; how can there be parity for organisations newly applying?
In my present job as Strategic Lead for Commissioning I've witnessed numerous examples of the use of past performance in decision-making by panels. Sometimes the evidence comes from monitoring, sometimes it comes from direct experience of working with an organisation, sometimes it’s relies on reputation and sometimes it’s just hearsay. They'll use this evidence to assess future effectiveness alongside what's written in a form.
Members of panels know all too well the limitations of written forms and how a well written bid can falsely portray the competence of an organisation, and equally that a poorly written bid can fatally damage the prospects of organisations that are doing great work. Panels are caught in the dilemma of "doing what they think is right for the beneficiaries" vs "strict adherence to the process". There is never enough information however carefully that the procurement process is designed. Panel members, for the best of reasons, want to use any information that they can get hold off to make a better decision.
As with most complex issues this is not a story of good vs evil, right vs wrong. In my experience, virtually without exception, members of panels strive to do the right thing, both for the organisations that apply and for the beneficiaries of the funding, and often are all too aware of the messiness, compromise and deficiencies of their decision-making. In a difficult situation they do the best they can.
In Part 2 of this article I’ll begin to sketch out some of my ideas about how one might begin to answer some of the questions outlined here … but what do you think?