Public sector organisations such as councils and health services in the UK have a long and honourable tradition of transparency in procurement of goods and services and strong fair competition measures in place in their tendering processes.
When I said that to someone from a small telehealth supplier company recently his response was a rolling of the eyes and a look that said “Where have you been?” He then proceeded to list some of the anti-competitive tactics employed by some suppliers and councils to subvert neutrality in procurement to ensure that the outcome is a pre-determined result.
Have you been on the receiving end of some of these practices?
Or maybe you would like to confess to using some?
Normal market forces make it difficult enough for companies to compete without having the odds unfairly stacked against them, so I’m throwing this issue open to readers to blow the whistle on these tactics. I think it will not be necessary to name companies or organisations – just leave a comment and describe the tactic(s).
Anonymous comments will be considered for publication, but please note from our Anonymity Policy: if you wish to comment anonymously please email it to me in confidence first. I will anonymise and post it for you. steve.hards@telecareaware.com
Dirty tactics – large players gang up
If it isn’t the Government stacking the odds in favour of their preferred providers then there is also collaboration between large players to ensure that smaller third parties cannot sell into the market. They simply gang up and refuse to supply the equipment or they use their collective muscle to squash any attempt to compete. The UK is a waste of time for newcomers to the market. Although the telehealth / telecare industry comes outside the National program for IT in the NHS you only have to look at the way that program was run to see appalling procurement practices openly being pursued and with the full blessing of the Government.
Procurement practices
One technique that has long been used is, of course, to write the RFP so very tightly that it effectively precludes all but the company/product of choice.
Procurement
Agree with Trevor. I have been involved in tenders where the RFP has been so tight and selective that only one company could win even though they where the most expensive. This is common practice within local authority telecare offices and is very easy to get away with and is encouraged. There is also a lot of friendly friendly purchases! Funny this is mentioned now as I have been considering whistle blowing these types of practices over the last few weeks.
Big guns barge in!
I had a private meeting arranged with a PCT as a potential customer and confirmed beforehand that I was the only one speaking and who was in the selected small audience. I could also set the agenda.
When I arrived I found reps from a large well known company were there in my slot, set up to give the first of 2 presentations – with mine to be second! They were involved with telehealth with a contact close to the PCT (and from a different PCT) and, having got wind of the meeting, got themselves invited along. I decided at notice, to listen to their presentation but not let them stay for mine. They talked longer than agreed and were not stopped. My time was cut from an hour to less than 20 minutes as as result. These tactics are apparently not uncommon.
So blatant it’s stupid
We were recently asked to supply one of three competitive quotes for telecare for 20 tenants. The invitation specified a well-known supplier’s branded equipment by name! Did they think we were retailing our competitor’s equipment? We complained of this bias. We have now received a further invitation from a separate organisation for another project, with the same specification!
Dirty Tactics
I’m not really sure of the purpose of this thread, or why it was started, if the names of councils and suppliers are not mentioned what is the point? Come on let’s be brave!
Supplier status changed in mysterious circumstances
My firm was made preferred supplier by a local authority commissioning several supported living developments for people with disabilities from RSLs. One of the RSLs invited quotes for telecare from three suppliers including us and a market leader. The market leader won the work. We were not informed of the result and followed up with the building contractor who told us that our bid had been price adjusted (without our knowledge). It had been the cheapest initially until the nonsensical ‘adjustment’ made it more expensive. The price adjustments were clearly partial since on top of telecare costs, the successful supplier’s system involved additional costs of wiring infrastructure which its system required but ours did not, and this was excluded from the analysis.
We checked the RSL’s website and found an advertisement for the telecare supplier (I notice some local authority websites also advertise or provide links to this supplier).
Our complaint to the commissioning local authority was peremptorily dismissed on the grounds that it was not their responsibility, even though they were providing most of the capital funding for the development.
The telecare business on these contracts alone could be worth over a quarter of a million pounds. I hope that people being entertained by companies at the forthcoming conference dinner realise that ultimately this largesse is being funded by taxpayers who are probably paying over the odds for the products and services which have probably been unfairly protected from competition on price or quality.
Aren’t ‘dirty tactics’ just ‘tactics’?
Aren’t ‘dirty tactics’ just ‘tactics’? All’s fair in love and business, after all!
[Maybe, but aren’t statutory organisations such as councils, PCTs and NHS Trusts supposed to operate a level playing field on behalf of the taxpayer and for the benefit of society in general? Steve]
Tilting the playing field
Here are two ways councils tilt the playing field:
1) Some local authorities follow the practice of using ‘select lists’ to restrict the bidders for telecare.
2) Recent local authority tenders have asked for Telecare Services Association (TSA) accreditation as part of the pre-qualification sifting process for acceptance onto a tender list. One of the criteria refers to satisfactory supply of services for two years before accreditation can be applied for! This effectively prevents new suppliers entering the market.
Not just goods and telecare services
So far people have commented on tilted playing fields in the supply of goods and telecare services. These same practices occur in the telecare consultancy sector with purchasers using strange weightings for tender scoring, re-scoring tenders or failing to hold tenders with stated requirements. In addition to these “standard” practices, some manufacturers seek to dissuade organisations from using named consultants to support their business development, documentation of systems or equipment procurement. That is, consultants who they suspect will not act as sales people for that company or who have failed to do so in the past.
We know this because one manager had the courage to tell us that this took place in the background to our appointment. It makes you wonder how many contracts we have not got as a result of such tactics!
Response to Dirty Tactics (Small Supplier)
In response to Small Supplier (comment 6 above) I guess I’d better justify the item… although I think the number and content of the comments are probably justification enough.
One reason for raising this is that I thought it is about time the complaints I’ve been hearing privately over the years got an airing, because anti-competitive behaviour, in addition to any legal implications for the perpetrators, is in no one’s long term interest.
A more personal reason is that I’ve been approached a number of times recently by companies asking how they can break into the UK market. That’s a difficult one to answer, for reasons most readers will appreciate. Now I will be able to point them to this post and they can start to piece together an answer to the question for themselves.
As for being brave and naming names, I suspect it must be a mystery to US-based readers why this isn’t happening as it certainly would on a US site. Well, you have to remember that in the UK there is no ‘First Amendment’ to guarantee freedom of speech and of the press and so people commenting here are rightly nervous of sticking their heads too far above the parapet.
In the UK, to ‘name and shame’ you have to be either foolhardy, wealthy, or an MP speaking under Parliamentary privilege. London has become known as the capital of ‘libel tourism’. See Times reports here and here.
Tactics and dirty tactics
Whether “dirty tactics” are just “tactics” is a matter of personal opinion, and may equally depend on whose money you are spending. (A point Steve made that I will not expand on as it might look like preaching.)
We are all adult enough to recognise that the world of sales is full of games and tactics. However, what people are describing falls outside generally acceptable professional behaviour in the commercial world; that is why they are remarking on it. Indeed, this is the boundary that turns “tactics” into “dirty tactics”.
Subversion of the procurement process is not a victimless event. There are costs to unsuccessful tenderers; innovation, choice and competition is stifled; ultimately, prices rise and people may lose jobs and companies. In addition, there are costs to the purchaser in terms of unnecessary expenditure and damage to brand and reputation.
Of course, the market is an environment of natural selection and you may think that some of these impacts are just the normal effects of market competition. If that is your outlook, then you need to be careful what you wish for as a market that is unregulated and red in tooth and claw would also dispense with the consumer protection rights that allow you to eat wholesome food, purchase safe products and save for a pension. Somehow I suspect that even an experienced “tactician” like yourself has a need for protection from others and would regard behaviour that grossly damaged your interests as dirty tactics…
Your use of a pseudonym clearly indicates that you like protecting yourself. Are you ready to acknowledge that others are similarly entitled to protection from abuse when they go about their lawful business?
tactics, tenders & telecare framework
Am I missing something – I thought that the existence of the OGC (once NPASA) telecare framework contract, meant that individual tenders were not required.
PASA
PASA applies to NHS services, not local government and housing associations, which is where the bulk of the spend on telecare occurs. Moreover, getting a PASA (now OGC) badge does not necessarily mean that your products or services are good quality; merely that they have passed a minimum standard threshold. In my opinion that standard has been set too low and insufficient work has been done to ensure that telecare products or the supporting services are effective at meeting complex needs, where the biggest cost savings against alternative services can be made.
Every part of this industry needs a shake-up to improve the procurement and applications processes. For too much of the time people are simply buying boxes of kit to tick boxes, whether or not they will be used effectively.
PASA may be goood for the NHS’s bank balance, but I fear it makes commissioners lazy at managing the procurement process to get the right product for the purpose.
PASA agreement – some insidious effects
The National Telecare Framework Agreement “is freely available for use by all government bodies involved in healthcare, including local authorities, social care, NHS trusts, strategic health authorities, voluntary and charitable associations, independent sector providers and non-departmental bodies for health and social care delivery. It offers a comprehensive selection of services from 13 suppliers eliminating the need to tender locally.” (Current website.)
However, as I heard it – and perhaps someone more knowledgeable can confirm or deny this – the really insidious things about it are:
a) prices, whilst negotiated to be discounted from list prices, may still be above what could have been negotiated if the NFA had not existed.
[It’s actually illegal without retendering to negotiate lower prices. Q16 page 33 of the Contract Award Information Pack, download it here (PDF): “If organisations wish to secure lower prices than currently offered via the national framework agreement, legally, an organisation would be required to undertake their own EU procurement exercise, if the anticipated volume of business exceeds OJEU thresholds.”]
b) it is possible for companies not on the main list to get in by being ‘hosted’ by a company that is listed, at the price of a commission on sales.
[ah yes… have just found it – they call it ‘subcontracting’ see page 15 of the Contract Award Information Pack.]
Preparations are even now underway to set up a new framework agreement for when the current one expires in May 2010. (See link above.)
Tactics seem to be working
We at Docobo use tactics to help PCTs decide on our telehealth equipment and services; and they do seem to be working…
Our key tactical approach is to be honest and open and to work to the goal of helping the PCTs get the greatest use and value out of our products. We do this in the belief that those PCTs that put their faith in our knowledge and ability will do so again when they come to mainstream.
With several PCTs we have benefited due to the fact that they have previously experienced another supplier who provided little or no support. Even though they are now our partners we do not forget that they still have choices as to which supplier to work with. Most purchasers and users are not stupid and will only be fooled and lied to once. The second time round these experienced users know what to ask for and which suppliers had integrity. On this basis, I hope it’s only a matter of time before the dirty tactics become unacceptable.
David Danson – Sales Director Docobo
Once bitten twice shy
“Most purchasers and users are not stupid and will only be fooled and lied to once.” (@ David Danson, No. 16)
True. Except what if, when they enter into what appears to be a straightforward deal they subsequently find that there are hidden strings which make it difficult to drop the unsatisfactory provider afterwards?
Spineless purchasers
The behaviour that is really questionable is not so much that of the suppliers, but that of the purchasers. It is the public sector purchasers who are being less than professional by “tilting the field”, taking the easy way out, such as not running a procurement exercise or borrowing a manufacturer’s specification or allowing parties to invite themselves into meetings and hog the agenda. Given the weak, unfocused, spineless and unprofessional behaviour of the purchasers, you can hardly blame any supplier for seeking to exploit that to their own benefit, although there are questions of how far one should reasonably go down that path.
TSA Code of Practice for Suppliers
At the next meeting of the TSA supplier sector group I will be asking for a suppliers code of practice to be established. The feedback I have from initial discussions with many of the TSA suppliers is they are in favour of this. Of course I have not yet spoken to all suppliers. An extract from Jontek’s code of practice is:
“We uphold ethical principles. We consistently conduct ourselves with the highest degree of professional integrity, honesty and business ethics.”
A simple statement that I strongly believe in, but we all know from bitter experience, not all suppliers in this industry share the same values.
If you are in favour of the development of a suppliers code of practice to be established then please make your views known, the next meeting is on Thursday 3rd December at Manchester Airport, contact TSA for further details.
tender process
Having seen dirty tricks used to influence the tender process, would it not make sense for the Office of Fair Trading to investigate the telecare market place?
[Original comment edited to avoid legal action – Steve]
Tender process – fair trading – the audit office
Office of Fair Trading to investigate? Interesting thought. The audit office is there to protect tax payers’ money and to ensure that it is used wisely.
What about Doncaster PCT that purchased 80 telehealth systems 2 years ago, never put any of them into use and are purchasing another 180 of the supplier’s new product which now replaces the previous one? What about Nottingham PCT that purchased 300 systems 2 years ago and only have 100 in use? What about the plethora of PCTs in the West Midlands that purchased several years ago? What a waste – other than for the supplier!
[Comment slightly edited, Steve]
Equipment Sold and not deployed
The questions that should be raised here is the amount of telecare and telehealth equipment that has been purchased through PTG that has never or ever will be installed in the homes of people who need this technologhy. We see the continual lobbying of Goverment that telecare and telehealth works when this equipment is holding up store walls all across the country.
We have for the past 12 months been pinning MPs to the mast about expenses, but maybe its time the tax payer knew exactly how money is being spent to support patient care when all it is doing is filling the pockets of large technology companies.
My closing comment: Tactics are tactics but lets not forget the people that matter – The Patients.
NHC ‘independent’ advice
Almost three years on and I am still shocked by the rumour that 2 posts within the Northern Housing Consortium to offer supposedly independent advice to councils who were looking to develop their telecare services were supplier-funded – a rumour reinforced by the impression that councils that took up that advice used their PTG to buy only that supplier’s products.
Dirty Tactics?
Not sure if you would call it a dirty tactic but some manufacturers are now putting codes in their software which prevents a 3rd Party Company from carrying out essential maintenance without paying the manufacturer for the code!!
Customers should check before they have new Equipment installed to give them choice for later Maintenance contracts.
Dirty tactics go on and on
Working in a telecare monitoring centre I have witnessed the following. It involves companies who openly say they don’t get involved and people in governing bodies. It’s a case of “we don’t do that” but, behind closed doors it continues and I don’t see it stopping in the future:
I can go on and on, but just look at the TSA conferences and see which sales managers are best friends with, and socialise with, response centre managers at functions and outside of work.
A real grip needs to be taken, with financial regulations inspections and follow ups on the use of telecare funding, otherwise the money is just being wasted. How many telecare project jobs for friends were created using the PTG funding? TOO MANY. And how many pieces of equipment sitting on shelves rotting? TOO MANY.
Equipment sitting on shelves
Nobody likes the idea of expensive equipment gathering dust on the shelves of service providers. However, the popularity of eBay and similar auction sites shows that we are all guilty of buying things that aren’t quite what we thought they were, or which don’t exactly do the job that we wanted.
The current generation of telecare sensors made their debut (at least in prototype form) in trials in Anglesey, Cheshire and County Durham, as far back as 1998. It is hardly surprising that newer products have emerged that look better, work better and are easier to use. Nevertheless, the older products work and are capable of use somewhere if only they were made available.
So I guess that I’m proposing a form of Telecare Swapshop (or even a Tel-eBay) that would allow owners of now unwanted but functioning products to be exchanged for different products (or perhaps for financial credits). To make it work, we need a form of brokerage – a trusted intermediary who can perhaps establish value, and advise on operational limitations, interoperability(!) and testing procedures. Maybe this is a role for a charity, a housing association or a social enterprise.
When times are hard, it would be a shame if anyone, anywhere in the country, was denied a telecare service (medical or social) because their local authority couldn’t afford the cost of new equipment.
Procurement corruption in Canada
At least in the UK we have not seen anything on this scale. Yet.
UK market eye opener
I was considering a start up in the telehealth industry. These comments have been eye openers. Should I still consider making the move? is it that bleak out there? many thanks
Re: UK market eye opener
Hi Nassif,
As no readers have chipped in to respond to your questions, my take on it (especially after having re-read Insider’s comment a few above) is that if I were you (unless you have a truly ‘killer product’ and enough funding to spin your wheels for a few years), I’d find some other way to spend your time.
As for ‘Is it that bleak out there?’ you might want to read this item from Healthcare Republic, which blows the lid off what some of the PCTs are up to in another context… Darzi centre director calls for ‘overfunding’ inquiry (“It’s not commercially sensitive, it’s commercially embarrassing”).