Mystery Shopper scheme leads to changes to tender processes in 80%+ of cases

Some 85% of procurement cases investigated and resolved over a three-month period as part of the government’s Mystery Shopper initiative resulted in either immediate or future changes to the tender, the Cabinet Office has claimed.

The initiative was set up by the government to give businesses the chance to report instances where SMEs or other suppliers were shut out of the market.

The Cabinet Office said that 14 new cases – involving local authorities, housing associations, NHS bodies, a government department and other public bodies – were resolved between June and September 2011.

Of these, 12 led to changes while one was resolved without intervention and another was investigated and found to be sound.

The Cabinet Office said pre-qualification questionnaires were still the most common issue (in five out of 14 cases), followed by unfair disqualification on financial pre-requirements (in two cases).

The contracting authorities involved were:

• Local authorities: North Tyneside Council; Thurrock Council; Sunderland City Council; Doncaster Council
• Housing associations: Teign Housing/West Country Housing; Anchor Housing Trust
• NHS Trusts and related bodies: Birmingham Children’s Hospitals NHS Foundation Trust; The Royal Wolverhampton Hospitals NHS Trust; Birmingham Community Healthcare Trust; NHS Surrey; NHS London Procurement Programme
• A Government department: the Department for International Development
• Other public bodies: The Office of Rail Regulation; The University Catering Organisation

In the North Tyneside case, the local authority abandoned a procurement process for a tender for the supply of vehicle parts. This came after a supplier was disqualified from the process because the concept of manufacturers’ recommended retail price (MMRP) did not apply to the parts he supplied.

Following the intervention of the Mystery Shopper team, the council reconsidered its approach and removed references to MRRP in its subsequent procurement.

In the Sunderland case, a small business that was successful in a tender for a framework agreement was concerned that the award notice enabled competitors to work out their pricing structure.

The local authority undertook where possible to present future winning scores in a way that does not allow prices to be identified in the contract notice.

The Mystery Shopper initiative has seen more than 80 cases so far, almost half of which have been resolved. Cabinet Office action has led to direct changes in 81% of cases since the scheme was launched, it was claimed.

Cabinet Office Minister Francis Maude said: “The publication of Mystery Shopper results shows how effective government action can level the playing field for SMEs. This is yet another lever, in addition to our actions to scrap unnecessary PQQs and publish all contracts on contracts finder. We will continue to publish these cases regularly so that issues are transparent.”

The outcomes of the 14 cases can be seen here.

Philip Hoult