Working through industry associations such as the BSA, providers may be able to develop tools that would assist them individually in overcoming some of the perverse incentives that emerge in the market.
For example, most companies undertake some kind of rough 'due diligence' of potential customers or procurements before submitting a bid or signing a contract. One survey participant thought that companies should investigate the nature of the customer's relationship with previous providers. Another suggested that as part of their due diligence, before responding to the request for proposals, companies should ask, 'Who is managing risk on your side?' There may be potential to work with different providers to unpack the key elements of a due diligence process, and to popularise the use of such an instrument by publishing the results.
Publications which explain the conditions that create a 'winner's curse' procurement and induce 'bid fever', and document the behaviour of different departments and agencies in the pursuit of risk transfer, might enable the industry as a whole to better understand the conditions which lead them to make unwise decisions in the course of bidding and negotiations. This is about building a shared understanding of the market, how it works, the different ways in which companies might respond, and the likely consequences of different responses.
The industry might also bring together a publication explaining to government what a good customer looks like, and why it matters. There has not been the opportunity to pursue this question in this review, but when this issue was raised with a number of survey participants, they responded: a good customer understands what they want; they are able to engage; they focus on value rather than cost, and they are a confident outsourcer, relying less on consultants. You recognise a confident customer, if was said, because they have fewer people at meetings. They take a long-term perspective, they focus on building trust, they want to build a relationship, they share the same values, especially around the treatment of staff. There is honest communication. They are tough but fair. They are not subject to the blame culture.