Invest to Save Pathfinders

The Pathfinder PQQ is up on the DWP website now (http://www.dwp.gov.uk/supplying-dwp/what-we-buy/welfare-to-work-services...)

This brings 2 interesting aspects to DWP procurement. Firstly, the use of "competitive dialogue" as part of the bidding process and secondly the testing of 100% outcome related funding.

In my opinion, competitive dialogue could work fantastically as a way of providers proving their ability (rather than just submitting a "sexy" tender), but it needs to be run well.

But the probable funding model must be the real eyebrow raiser. The spec gives a bit more detail than the briefing events did, but still in essence we're looking at:
- No start payment or service fee
- Monthly payment for up to a year and a half, for each month that the customer remains in work
- The above payment being taken from the benefit savings of the customer no longer claiming ESA.

The spec suggests that there's still a long way to go before finalising the model, and that it's possible that each provider could be paid differently, but ultimately we're still looking at long term funding for long term jobs, zero funding for work done with customers that doesn't lead to a job outcome.

I must admit that I'm torn on this one. I like the idea of 18 month sustained outcomes & regular rewards to match, but no service fee/start payment is a bit harsh for this client group. I'm also a little wary of the mention of a job outcome target being X% above attrition - how will they decide the levels of attrition in each of the 5 Pathfinder areas (Manchester, Glasgow, West Midlands, Norfolk & Lambeth, Southwark Wandsworth)?

Ultimately, I think that it's all going to come back to how well the competitive dialogue works. If a provider promises high performance for lower funding, how will DWP validate the feasibility of it? If Provider A's offer is stunningly different (cheaper, higher performing, etc.) to Providers B-F, how will DWP give it a reality check?

I'm watching this one with interest. At the briefing event I thought "Oh my God, the first ever contract that NOBODY will bid for!", but there's a clear commitment by DWP to work with tenderers to agree the final product & its funding. Now let's see it happen in practice.........