Very rarely do I get so much mileage from one topic. Thankfully, the numbskulls at MBIE have made my blogging so much easier of late. For those of you who haven’t been following the All of Government “Gen 3” tender process (or for journalists who call me about it to save reading the tender documents), here’s a quick recap for recruiters and non-recruiters alike: Previously, Recruitment firms provided Contractors to Government Agencies, and clipped the ticket on each hour worked. This is how contractor recruitment works the world over. This is until some bright spark at MBIE decided to turn this on its head. Instead of this proven model, under “Gen 3”, Recruitment agencies will no longer make margin on Contractors. Instead, a set fee (based on one of two job families) will be invoiced on start date. This will be for a maximum of 12 months, and pro rata’d for anything less. Temp-to-perm fees are gone, recruitment agencies are to propose their best rate for this up-front contractor fee without collusion with any other agencies, and agencies, warned of this change on the 5th August, had until the 2nd September to fundamentally turn their revenue model on its head. Next came a load of p*ssed off Recruitment Company owners, bloggers with nothing to lose (or no filter), and eventually the RCSA, who put pressure on MBIE to firstly extend this unfair deadline, and then ask, via the Official Information Act, who was actually consulted during this process, as per MBIEs claim.
And this brings us to Monday morning of this week. Picture if you will, Lake Wakatipu 11am, and yours truly has his third Bloody Mary of the day in hand. For the record, this isn’t my usual start to Monday morning, but I was taking some R&R. Writing poisonous blogs is tiring work. My phone flashes up with the name of a well-known recruitment leader who then informs me that MBIE have cr@pped their pants and “paused” the tender process. The full statement can be found elsewhere, but here is the abridged version:
New Zealand Government Procurement (NZGP) is pausing the Talent Acquisition Services Request for Proposal . The RFP, issued on 5 August and closing on 30th of September, prompted feedback from the recruitment industry – in particular the change in pricing structure. Pausing now, will allow NZGP time to undertake further consultation with government agencies and the recruitment industry to potentially refine some aspects of the proposed commercial model. We had hoped that the change from percentage fees to a single tendered pricing structure would remove complexity, improve clarity, and allow for greater transparency for all parties. However, it has become clear that while we consulted with the recruitment industry, issued a Request for Information (RFI), spoke with our Client Advisory Group and agencies and held supplier briefings and one-to-one meetings, we may not have heard all the right voices. It’s important that we get this right. The RFP has been paused for a minimum of four weeks.
This extended consultation period does not guarantee that any aspect of the tender will change, however it may result in some minor changes to the current content.
A last, a victory for the little guy. That is, if you can describe a few thousand festively plump recruiters as “little”. In what is the biggest climb down I’ve seen in this industry, under the threat of being exposed as a bunch of liars who consulted no one except other procurement pencil-necks and no-mark internal recruitment administrators, MBIE have capitulated. Those who know me know that I would never gloat at the misfortune of a bunch of procurement numpties, but please excuse my sh*t-eating grin. What was no doubt seen as a real boon in the procurement world has spectacularly exploded in their stupid, morning-tea-sipping, lamington-covered faces. Monday was a good day.
The statement, clearly written by some poor 24 year old Communications Advisor is also interesting. Firstly this: Pausing now, will allow NZGP time to undertake further consultation with government agencies and the recruitment industry to potentially refine some aspects of the proposed commercial model. Hang on a moment. Weren’t the liars at MBIE telling us that this had already happened? Wasn’t the new pricing model based on industry research and feedback from subject matter experts across government agencies and the recruitment sector?? Funny what a request for information does guys. Next up, this: We had hoped that the change from percentage fees to a single tendered pricing structure would remove complexity, improve clarity, and allow for greater transparency for all parties. Tell me MBIE- what kind of arrogant asshat thinks that they can “remove complexity” by fundamentally changing a business model for an industry that they know nothing about? Oh you meant “remove complexity” for yourselves. Right. And then this: However, it has become clear that while we consulted with the recruitment industry, issued a Request for Information (RFI), spoke with our Client Advisory Group and agencies and held supplier briefings and one-to-one meetings, we may not have heard all the right voices. Here we see MBIE stating all the hard, hard work they’ve undertaken to come up with this hairbrained idea. Just to be clear MBIE, we don’t believe you consulted anyone of any value so do shut up. And then the curious last statement: This extended consultation period does not guarantee that any aspect of the tender will change, however it may result in some minor changes to the current content. This whole process, littered with errors from NZGP and MBIE, has wasted millions of dollars and thousands of hours. Not just of their time, but ours. It is clear that those who know what they are talking about see no way that the new fee structure will work. If this “pause” does not result in the new charging model being scrapped in its entirety, we are essentially back to square one. A “minor change” will not dig MBIE out of this hole.
So there we have it. Another 4 weeks of limbo for the Recruitment Industry, and 4 more weeks of morning teas for MBIE.
Have a good weekend.