While the policy note issued by the CCS seems to acknowledge that aggressive risk transfer has become a more serious problem in recent years, it is evident that this has long been an issue in government procurement.
Among survey participants, the most frequent explanation for this behaviour was the public sector's aversion to risk. A senior executive of an international provider which does a great deal of work in the private sector, contrasted the behaviour of public officials.
With the private sector, it is: 'How can I better serve my customer?' There are benefits for innovating and risk-taking in doing that. The public sector is more insular, more self-focused. There is a lot of self-justification.
He saw risk management as the core business of the Civil Service - although it is political and reputational rather than commercial risk. The term 'blame culture' was used by many of the survey participants to describe attitudes in the public sector.
More than with low-price bidding, risk transfer seems to be linked to a perceived disregard for the private sector and a belief that because companies are making a profit, they can be expected to carry inordinate amounts of risk. As company executives saw it, the attitude was:
We're going to get these b…...ds since they are going to make money out of this.
Here's the risk - you think you're so smart, you can cop it.
You're making a profit out of this, so you can carry all the risk - or we will find someone else who will take it.
Again, suppliers link this behaviour to a belief within government that there is an endless supply of firms waiting to break into the market. One commercial director with a background in government said that the attitude was: 'If it's so bad, why do you keep bidding? More people will replace you.'
They see a distinction between the attitudes of senior and more experienced commercial specialists, and the more junior officials usually involved in procurement teams: 'Senior commercial people say it is a starting point but junior people don't see it that way'.
Providers report they are now being more careful in the risks they accept, but they are still concerned that competitors, particularly new entrants, have not learned the lessons.