The Tender TrapPosted: September 3, 2012
People I talk to not in ‘the charity business’ are often shocked to hear that Cyrenians have to competitively tender to run services funded from the public purse. It instinctively doesn’t seem right to them. It is an interesting reaction. I am used to the trials of competitive tendering by now. But explaining it to the surprised Jo Public is a useful exercise.
“So you’re like G4S then?” I was challenged in such a conversation the other day. No, not at all, I countered, a tad too quickly. Sure, we both tender to deliver public services but G4S is a global company – the world’s third-largest private sector employer - whose whole raison d’être is to make as much profit as it can for shareholders from contracts.
But it’s true. It’s the same game, albeit a massively different league. And we’re in it for the love, not the money. And we’ve got options. Over the years we’ve developed 3 distinct ways of ‘doing business,’ – see the diagram. Winning contracts is not do or die for Cyrenians – which is the tender trap that many larger charities have fallen into – although losing hurts badly.
A charity like Cyrenians needs to be pioneering: boldly going… If we just deliver what is commissioned as established need there would be no-one meeting the unmet needs or innovating new approaches. From 1995, for example, our SmartMove service pioneered the opening of private rented tenancies to people on benefits, previously excluded. Pioneering is generally funded by independent foundations or enlightened social investors. Projects have to prove their efficacy and find their way through the long grass before funding runs out, either justifying a contract or finding another path or simply ending. Where there’s a genuine market opportunity, social enterprise is a path to sustainment.
Cyrenians only tender to deliver services that fit our raison d’être and that we know we can do really well. Unlike G4S we can’t afford to fail. We also take care to select contract opportunities with commissioners who we can work with and where there’s some scope for innovation and adding value. Timely to add then that the Cyrenians and City of Edinburgh Council partnership around the Homeless Prevention Service is short-listed for the Third Sector Excellence Awards later this month.
The Scottish Government has just opened consultation on the Procurement Reform Bill. I will be definitely be responding in time for the closing date on 2nd November. I’ll be asking amongst other things why contracts that are working well can’t be for 5 years rather than three. Suggestions for reform on a postcard please.