Digital Marketplace gets thumbs down from public sector buyers

Profile picture for user Madeline Bennett By Madeline Bennett September 19, 2017
Whilst spend through the Digital Marketplace has surpassed £2bn, buyers still find the frameworks inflexible and unhelpful for certain projects.

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Digital Marketplace panel at Think Digital Government 2017

The Digital Marketplace might be championed by GDS and the Crown Commercial Service (CCS) as a means of opening up public sector contracts to a broader range of suppliers, but unfortunately some buyers don’t seem quite so keen on the scheme.

Speaking at the Think Digital Government 2017 event in London this month, representatives from various areas of the public sector were keen to point out flaws in the system, and suggest potential improvements.
One delegate, who works for London councils, bemoaned the fact that she is bombarded with unsuitable suppliers in the marketplace, causing extra workloads as part of the evaluation process. She said:

You want to have a very robust methodology. You don’t want all these people tendering for projects that they’re just never going to get, but you have to evaluate. There’s a reason sometimes to strip it down tight. You just get an awful lot of people that maybe are just simply not suitable.

[I’d like] a lot more filtering, and take out contracts from any platform. If you’re in local authorities, the landscape for local authorities from a procurement perspective changes hugely. You’ve got some boroughs that have got big big buying teams and some boroughs are being supported by others. It’s not the same space.

Just because we’re London, for all 33 London boroughs, it’s very very different. There’s a tendency to see local authorities as a one size fits all and that is just not the case.

The marketplace is “a clunky system”, she added, which has a habit of logging users in as suppliers when they’re actually buyers.

Another user from the Department for Transport agreed there is a need for better filtering, as there is too much information to wade through on the marketplace in its current form:

It’s like searching for a needle in the haystack.

The setup also makes it difficult to have useful conversations with suppliers about product customisation. He pointed out that a product the DfT department bought on a previous framework has now doubled in price.

When you compare the standard issue documentation, it’s impossible to work out the justification for the price increase. I want the marketplace to bring innovation and be able to have a sensible conversation about what’s possible. But it’s difficult to start having those conversations, with procurement watching over your shoulder making sure you’re sticking to the rules.

I see the benefits of a fair and transparent and open competition process, but I’m not convinced that it’s actually delivering us the results that we want.

The DfT staffer called on suppliers to make it easier for public sector buyers to get access to these details, as opposed to expecting them to just buy whichever product comes out at the top of the search results.

We’ve described it internally as an Amazon for government but actually there’s a lot of stuff there that’s more complicated than I would go and buy from Amazon. On the supply side, we used it to get a foot in the door but then you end up having to go and do the customisation pieces.

Is it working for anybody? It’s a means to an end, and speeds up the procurement process, but what’s the opportunity cost as a result of that. Is it getting the best answer for both sides?

Improving the Marketplace for complicated projects

These comments won’t make easy listening for the GDS and CCS, as the Digital Marketplace is still woefully under-used in local government. As of 31 July this year, 83 percent of G-Cloud sales were through central government, leaving only 17 percent through the wider public sector. 
Smaller businesses are also still getting a smaller chunk of available cash. While 73 percent of total G-Cloud contracts have been awarded to SMEs, this accounts for only 47 percent of the overall spend.

The criticism of the Digital Marketplace came during a panel discussion, after Daniel Thornton, programme director at the Institute for Government, asked the audience to rate the system by showing a thumbs up/down or flat hand.

Among the suppliers in the audience there were no thumbs down, and most were either happy with the marketplace or neutral. However, among the buyers, there were a few thumbs down and most others were flat.

Thornton agreed that the marketplace needs to build in more flexibility and support around complicated projects.

Some stuff is not commodity and it needs to be tailored and specific, and that requires more engagement, upfront or you need to work that out after you’ve done the tender, and that’s a tricky thing about digital projects. Often you don’t necessarily know exactly what it is you want until you have people who’re going to come along and help you and do testing with users and show the prototypes.

It’s an iterative process often, people are often not in a position to really work out what the outcomes are. They want to find some good people to help them who’ve ideally done a similar thing in the past. You can’t put too much burden on the marketplace to solve pretty complicated problems.

Panellist Poss Apostolou, who worked for 10 years in government and is now head of Commercial Operations at supplier dxw, picked up on the suggestion around the need for better conversations between vendors and buyers, saying that pre-engagement might help improve the system. He noted that to make it a level playing field, having a dozen coffees would take up too much time for public sector buyers, so suppliers should instead look to post more useful content and case studies.

The positives

Thornton was keen to promote the advantages of the marketplace as well, including an easy way to connect suppliers and buyers, and reduce transaction costs. He added:

It also spreads standards across the system. It brings together sellers who’ve been vetted in some way so you know that you’re getting companies of a certain quality when you use the marketplace. To some extent, GDS can look at the tenders put out and give some support to public sector buyers, to say ‘when you said it needs to be familiar with Prince 2, we prefer Agile’.

Thornton cited a Ministry of Defence (MoD) tender that called for suppliers that had worked for the MoD for the last three years and knew certain specialist systems.

Part of the objective of the marketplace is to allow small businesses to come in, and some of the public sector tenders don’t really go in that direction.

What we’ve called on GDS to do is provide more active support to people who’ve put tenders out on the marketplace, so that when someone puts down a tender that says you have to have worked for the MoD for three years, they ring them up and say ‘you want to think about some of the wording there and think about your policy because this isn’t necessarily the right approach’.

Electronic payments and tiering the market for buyers and sellers would also be useful additions, according to Thornton.

David Worley, a Digital and Technology fast streamer at the Ministry of Defence, welcomed the idea of more interaction and examples from elsewhere in government. He noted that while a project he’s currently working on is with a very small supplier, that’s quite rare. Worley added:

The MoD is quite archaic and struggles to really pick up on some of the positive digital stuff that’s happening elsewhere. It would be really good if the GDS or any of the other government departments who’ve been and done this before, would come out and help us to get that right.

Defence thinks it’s a unique snowflake and it isn’t and really needs to start picking up on other departments and GDS’ advice. But that needs to be there for them to do so.

The Brexit problem

Whether GDS makes improvements to the Digital Marketplace or not, the shadow of Brexit - and its potential impact on projects - is hanging heavy over the UK public sector. Thornton has mixed feelings about the possible outcomes, explaining:

The current rules build in a lot of inflexibility. So for really big projects, it’s helpful because you get a bigger pool of possible suppliers. But if you’re just bumping above the threshold, it’s a lot of aggro for not much benefit. The benefit [of Brexit] will be, that you could get a lot more flexibility for relatively small projects without all the massive bureaucracy that’s involved and the rigid timeframes around the European procurement process.

We’ll be having our own membership of the WTO [post-Brexit] and I hope we’ll be signing up to the procurement unilateral agreement, which will involve quite a lot of international business anyway.

Thornton also noted that UK suppliers currently feel that other European countries haven’t really opened up their markets as much as they have.

But we’ll also lose something if we’re cut off from the European market in that way, so I think it’s going to be swings and roundabouts. Everyone says we’re escaping all this evil European control, but actually we’ll then be reverting to UN and other international organisation frameworks, so there still will be quite a lot of international regulation over UK activity.

He finished with a glimmer of hope for Remainers:

That’s all of course assuming that we do indeed leave the Single Market and that the transition continues.