In what appears to be a classic case of local vendor bias, Canadian transport manufacturer Bombardier, Inc. has found itself in hot water over sole-source contracts with two separate municipal authorities. Both deals are political, with Bombardier’s promise of local jobs seeming to influence the decision not to go out to public tender.
That’s right. A career in procurement no longer means you’re “in charge of paperclips”. In somewhat provocative terms, the Financial Times (subscription required) reckons that procurement has undergone a revolution. It’s no longer a career dead-end. No longer a mere support service. The modern procurement department is experienced, professional and respected, and it’s being unleashed on an ever wider array of goods, and services. Not just stationery, furniture and laptops, but lawyers, accountants and consultants.
Public procurement has been in the spotlight this month, and for good reason. We like to think our taxes are being well spent. As Jeff Kennett put it:
What’s the value of a good NDA? About $70 million if your name is Scott Van Dyke. In 2003, his company, Anglo-Dutch Petrolem, won a $70.4M damages claim against US oil giant Halliburton and Scottish oil exploration and development firm Ramco. This month, with a Texas court ordering it to hand over various assets, Ramco is struggling for survival.
With the FSA's deadline for contract certainty looming, Lloyd's is putting a positive spin on its latest initiative to "streamline the way insurance contracts are checked, produced and issued." The goal, of course, is to produce insurance documentation without any mistakes, and to issue that documentation to the customer before (or very soon after) inception.
For those of us enjoying the benefits of laptops and mobile storage gadgets, it's easy to overlook the risks. But as a recent article in Law Technology News ("Death by Laptop", May 8th, 2006) points out, the risks are high, and the consequences of ignoring them rather scary.
Some people are skeptics when it comes to online delivery of legal services. They don't think a machine can do the same job as a well-trained lawyer. But this probably has more to do with the quality of many online legal solutions, than with the concept of online legal services per se.
The "C" word is starting to catch up with law firms, it seems. Commoditisation, I mean. The process by which nice, profitable, bill-by-the-hour work becomes not-so-nice, unprofitable, fixed-price drudgery. Legal futurologist Richard Susskind has been talking about it. Some firms have retreated from it. And after years of ambivalence, any lawyer with a career horizon longer than five years is starting to worry about it. Is someone going to commoditise me?
Actually, "Best in Class" is the term they use in Aberdeen Group's report Contract Management Benchmark: Procurement Contracts. To make the grade, you need to have clearly defined and enforced procedures and policies, using automated systems company-wide as well as standard contract language. You also need to have 90% compliance between your purchases and your contracts. Does this sound like you?
What’s the price of an ambiguous insurance contract? About a billion dollars in the case of Larry Silverstein’s policy over the World Trade Center’s Twin Towers. That’s a billion good reasons to get the fine print right.