Competitive tendering hurts service collaboration, but what’s the fix?

By David Donaldson

Tuesday January 19, 2016

There is still a long way to go to ensure effective coordination between services in disadvantaged communities. A New South Wales parliamentary committee went looking for the barriers to effective joined up and coordinated services and found a host of problems and few answers that fit the needs of both government and the community.

Those problem include reduced trust and a lack of coordination between service providers, according to the final report released by the social issues parliamentary committee.

The competitive nature of the tendering process encourages non-government organisations to resist sharing information and leads to reduced collaboration and service coordination, witnesses told the Standing Committee on Social Issues.

The committee was, however, unable to propose an alternative that would meet the requirements of value for money and transparency, instead recommending in its Service Coordination in Communities with High Social Needs report that government review its competitive tendering processes to examine best practice models in other jurisdictions, “particularly those that facilitate co-design, collaboration and joint tendering”.

“The underlying premise of collective impact is that no single organisation can create large‐scale, lasting social change alone.”

Overcoming “entrenched, multifaceted disadvantage” found in a handful of communities will require long-term commitment and effective cooperation between services, the report stated. It’s not uncommon to discover different organisations doing either exactly the same thing — or the complete opposite — in the same space and not talking to each other about it, noted Karen Willis, board member of Domestic Violence NSW.

Committee chair Bronnie Taylor MLC acknowledged that although better coordination of human services has long been a goal of those working with communities with high social needs, “there is still a long way to go to achieve effective service coordination for these communities”.

“We can do much more to make coordination easier, including encouraging better information sharing between agencies and collecting data on program outcomes, not just outputs. Activities to promote service coordination should also be required in all human services contracts between the government and non-government organisations,” said Taylor.

Better service coordination does not require more funding, just better use of existing resources, she argued.

Part of the problem is a lack of awareness among both clients and service providers about what services are available in any area, which can be counteracted by creating service maps.

The committee made a recommendation to develop key performance indicators for measure coordination and collaboration, and to mandate that a certain percentage of the value of human services contracts be targeted towards service coordination.

In response to concerns about privacy laws potentially restricting the ability of agencies to work together in the public interest, NSW Privacy Commissioner Elizabeth Coombs told the inquiry last year that it was not the law itself but inaccurate interpretations of it that created barriers to useful information sharing.

Improving competitive tendering

Domestic Violence NSW told the inquiry the competitive tendering approach “created significant trauma, change and turmoil” across the sector. Sophie Trower, policy manager at Domestic Violence NSW, emphasised to the committee that a positive funding process “cannot be done in an environment where there is a toxic undertone”.

Although the committee could not find alternatives to competitive tendering, they did suggest it could be improved. One suggestion for improving the process was made by Karen Willis:

“The solution is to start with a statewide plan that says, ‘In this population, with this group of people, with these particular characteristics, these are the services that need to be provided.’ We know that organisations may already have been working in that area for 10, 20 or 50 years. They might be able to provide 50% or 90% of the services that are required, but not 100%.

“Rather putting in place something new, why not put the resources into working with that organisation to build its capacity to meet the demands of a growing and changing evidence-based system? That would build on existing knowledge, rather than throwing the baby out with the bathwater every time a new plan is implemented, which is what competitive tendering does.”

NCOSS argued that a “full and thorough cost-benefit analysis” should be undertaken to assess whether competitive tendering was achieving its aims. It also urged government, in making decisions to award contracts, to consider giving weighting to issues such as whether an organisation has a proven track record in the community, understanding that community’s culture, and trust and existing relationships.

As well as reviewing tendering process, the committee argued NSW should allow longer lead-times in tender preparation to encourage joint tenders, and increase funding periods to a minimum of five years for human services providers.

Collective impact frameworks: a new way forward?

A number of best practice principles for service coordination became apparent during the inquiry, said Taylor. “Most notably, a collective impact framework was espoused as having great potential to transform the way in which services are coordinated.

“Critically, inquiry participants emphasised the importance of having a backbone organisation to drive, monitor and evaluate service coordination within a geographic area.”

A number of inquiry participants suggested the use of “collective impact frameworks” to overcome some of the barriers to collaboration created by competition, silos, unwillingness to cede control and differences in motivation and commitment between organisations.

The Benevolent Society said a collective impact framework involves:

“a coordinated approach that brings organisations together from across government, community and the business sector to solve difficult social issues and achieve important social change. The underlying premise of collective impact is that no single organisation can create large‐scale, lasting social change alone. Sustainable change which addresses complex issues requires people from different sectors, different functions, different cultures and diverse geographies to come together to be part of the solution.”

The Benevolent Society, NSW Family Services and The Hive, Mount Druitt each outlined the five conditions of success under a collective impact framework:

  • common agenda — all participants have a shared vision for change including a common understanding of the problem and a joint approach to solving it through agreed upon actions
  • shared measurement — collecting data and measuring results consistently across all participants ensures efforts remain aligned and participants hold each other accountable
  • mutually reinforcing activities — participant activities must be differentiated while still being coordinated through a mutually reinforcing plan of action
  • continuous communication — consistent and open communication is needed across the many players to build trust, assure mutual objectives, and appreciate common motivation
  • backbone organisation — creating and managing collective impact requires a separate organisation(s) with staff and a specific set of skills to serve as the backbone for the entire initiative and coordinate participating organisations and agencies.

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