PA Consulting Group with the Identity and Passport Service
Like the passports it issues, the Identity and Passport Service's current contract has an expiry date: October 2010. The UK is the second-largest passport issuer in the world and IPS is the organisation charged with managing the UK's passport application and issue process. The passport is an integral part of the National Identity Service - from 2010, citizens will be able to choose which identity product they prefer: a card, passport or both.
When re-tendering, IPS wanted to provide enhanced security features to keep ahead of the threat of counterfeiting, while supporting a ministerial commitment to stay in line with developing European legislation. The new passport would need to be reworked in design and page layout and also made capable of storing biometric information.
IPS set up a passport design and production (PDP) project to begin a procurement exercise. The organisation had a long-term passport supplier and this, coupled with the high cost of bidding, meant that a competitive market was not guaranteed. Yet IPS needed to complete procurement and still have time to implement the new service.
PA Consulting Group worked with IPS to identify the most effective procurement approach, the competitive dialogue procedure - a relatively new procurement process that can be used to resolve key issues, finalise requirements and develop bidders' solutions by means of regular and consistent dialogue with prospective suppliers.
The consultancy began its work some three months before the PDP procurement was due to launch. The first phase was a short review to test the viability of the procurement strategy. This scoped out the areas where PA could best contribute to the programme and identified gaps in the procurement approach. It also found that, although the civil service technical experts were in key roles, they had limited experience in how to execute a competitive procurement.
So PA arranged competitive dialogue training for IPS staff, which focused on how to get the best out of interaction with bidders, in terms of both achieving the required result and building a strong relationship with them - one that would continue after the service went live.
PA ran workshops to define the topics for dialogue - resulting in a detailed plan for each session, identifying the topics, required outcomes and the relevant experts required to attend. The PA team then co-ordinated dialogue sessions to ensure that common messages were communicated, decision-making was aligned and that all parties had a common set of objectives.
The consultancy led commercial negotiations and also enabled bidders to provide detailed plans, which wouldn't normally be expected at this stage. Given that the transition time, from contract award to service cut-over, was limited, any time saved in preparation and planning would significantly reduce the risk to the project.
A crucial aspect of the process was ensuring fairness to bidders, while preserving the competitive advantage of the incumbent supplier. PA scrutinised bidders' submissions throughout the procurement to identify unique transition costs that might put a bidder at a disadvantage compared with the incumbent. Where appropriate, such costs were then excluded from evaluation, though not from affordability assessments. In addition, the procurement team continually discussed with bidders where they felt disadvantaged, and took steps to eradicate any relevant disadvantage.
PA then worked with IPS to appoint the preferred bidder through the selection of the most economically advantageous tender. Finally, it supported IPS through to contract signature with the successful supplier, De La Rue, and with preparations for implementation to provide a smooth transition from procurement into setup and delivery.
The process was completed four months earlier than planned and came in below budget. Quality and security of the passport have exceeded expectations, and the new passport service will deliver savings of more than ú160m over the contract term.
'PA managed to help us deliver an extremely difficult procurement in a timely manner, while providing excellent savings to the UK government,' says Ian Forster, IPS commercial delivery director. 'Its joint working approach has enabled my commercial team to learn a significant amount throughout the process which will be put to good use within IPS in the future.'
The IPS, responsible for processing UK passport applications, asked PA to help with a competitive procurement process that would equip it to implement a new generation of documentation incorporating biometric data. PA trained IPS staff in negotiating with potential suppliers in a structured and consistent manner and building long-term relationships. The consultancy helped to elicit detailed plans from bidders at an early stage, yet maintained scrupulous fairness. Signed four months ahead of schedule, the new contract will save £160m over its duration.
- Create a level playing field through careful planning.
- Play devil's advocate - constructively challenge the project throughout, so that each decision and action is thoroughly tested.
- Blend formality with informality - the best results are achieved through a mix of formal processes and informal gatherings.
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