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Procurement Training

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Title: Procurement Training


1
Procurement Training
2
Introduction
  • Working with the districts has identified a need
    for various levels of training
  • This session is designed to give an overview
  • More in-depth training will be developed based on
    district needs
  • This session will cover
  • Introduction to Procurement Lincolnshire
  • Introduction to Procurement
  • Introduction to EU Procurement Directives
  • We want feedback from you on who else would
    benefit from attending this session and what
    other training you want / need
  • Questions

3
A Guide to Procurement Lincolnshire
4
Agenda
  • Introduction to the session
  • Introduction to Procurement Lincolnshire
    including a brief background
  • Key Deliverables and Drivers of Procurement
    Lincolnshire
  • How we work
  • What we do
  • How we can support you
  • What do we need from you
  • Procurement Lincolnshire Website and Sustainable
    Procurement Strategy

5
Introduction to Procurement Lincolnshire
  • All eight authorities signed up
  • One team, with mix of existing and new staff with
    wide skills base
  • One employer LCC
  • Dedicated officer working with each partner
    authority, dedicated category managers
  • Shared procurement strategy and agreed work
    programme
  • Governance arrangements in place

6
Introduction to Procurement Lincolnshire
  • Specialist knowledge and expertise eight main
    categories
  • Business Services
  • Construction Consultancy
  • Environmental Services Facilities
    Management
  • ICT/Telecoms Utilities Vehicles and
    Transport

7
Brief Background Procurement Lincolnshire
  • Formed as part of wider county shared service
    programme established in response to elected
    members desire for authorities to work
    collaboratively to generate benefits
  • Aim to provide a centralised resource on behalf
    of each partner offering procurement service,
    advice and support to both members and officers

8
Key deliverables
  • Savings
  • Increased capacity
  • Economies of scale

9
Two Key Drivers
  • Efficient and Effective procurement
  • Socially responsible procurement

10
How we work - Our Vision
  • Procuring goods, services, and works by the
    most economic, efficient, effective and
    sustainable means to ensure that the needs of the
    community are met, within a clear framework of
    accountability and responsibility. In doing so,
    Procurement Lincolnshire will become best in
    class by adopting excellent procurement practices
    and techniques.

11
How we work - Core Values
  • Looking after Lincolnshire
  • Putting Customers First
  • Demonstrate Leadership in Sustainable Procurement
  • Effective Working Partnerships
  • Provide Value for Money
  • Valuing Colleagues

12
How we work - Bringing it all together
  • Promoting effective procurement across all
    Partner Authorities
  • Key step towards achieving value for money
  • Adopts a strategic approach to sustainable
    procurement

13
The practicalities how it all works
  • Who will be working with you?
  • What do we do?
  • What support will you get?
  • What do we need from you?
  • Where can you go for help?

14
Who will be working with you?
  • 3 Procurement Liaison Officers
  • 5 Procurement Officers responsible for Category
    Management
  • 2 Procurement Officers responsible for strategic
    procurement and training
  • 3 Procurement Managers
  • Procurement Analyst, Assistant Procurement
    Officers
  • Procurement Assistants, Finance and Comms
    Officers
  • Head of Service

15
What do we do?
  • Ensure a co-ordinated approach to the tender
    process
  • Introduce corporate contracts and monitor
    compliance and spend
  • Introduce existing framework agreements where
    they represent value for money
  • Develop a standard set of procurement documents,
    templates and policies
  • Develop a contract data base and register
  • Seek to maximise procurement efficiencies

16
What do we do? (continued)
  • Develop a web presence for internal use
    www.procurementlincolnshire.co.uk
  • Develop an external web presence
  • Carry out a spend and supplier review
  • Promote implement the Lincolnshire Procurement
    card
  • Training for Officers and Members

17
What do we do?
  • PROCUREMENT TRAINING MODULES
  • Specification Writing
  • Introduction to How to do a Perfect Tender
    including Tender and Supplier Evaluation
  • Introduction to Best Practice Procurement
    including Contract Procedure Rules and EU
    Procurement Rules
  • Request For Quotations, Mini Competitions,
    Frameworks and Gateway Reviews
  • Contract and Supplier Relationship Management
  • Obtaining Value for Money including developing a
    Business Case and Return on Investment as a
    Method of Investment Appraisal
  • E - Procurement Training
  • Overview of TUPE Rules
  • Negotiation/Post Tender Negotiation Skills
  • EU Remedies Programme
  • Sustainability and Responsible Procurement How
    to address Social Issues in Public Procurement,
    Equality Diversity in the Supply Chain,
    Business Continuity and Risk
  • Third Sector Commissioning including an overview
    of the Voluntary and Community Sector/Networks
  • Strategic Sourcing and Market Development

18
What support will you get?
  • Assistance on procurement projects
  • A dedicated source of advice and guidance
  • Contributing to Best Value reviews, Audit
    enquiries and Use of Resources activities (or
    similar)

19
What we need from you?
  • Provide detailed spend data and budget
    information
  • Ensure that you have a detailed specification for
    your requirement
  • Be prepared to compromise, especially on
    collaborative projects
  • Ensure contracts are forwarded to PL for
    inclusion on the contracts register

20
Where can you go for help?
  • The first port of call should be your Procurement
    Lincolnshire District Liaison Officer
  • They will either give advice and guidance or
    facilitate contact with the relevant category
    manager

21
The Procurement Lincolnshire site is split up
into two sections. The front-end of the site is
mainly directed at suppliers who may be looking
at how they can do business with us. The second
part of the site can be viewed by logging in at
the top of the screen and following the
instructions...
22
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23
procurement

24
Once logged on, an extra tab will appear on the
main menu screen.
This will open up a whole new menu of useful
information and items, such as document templates
and regulations
25
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26
If you are organising a new project and need /
want Procurement Lincolnshire's services, please
fill in the New Project Request form and fill
in the details.
Marie...
27
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28
Closure of the session
  • Any Questions?

29
A Guide to Procurement
30
Agenda
  • Introduction to the session
  • What is procurement?
  • The Procurement Cycle
  • Questions to ask yourself prior to the start of
    the process
  • Financial levels
  • Contract value and aggregation
  • Tender documentation and award
  • Use of Procurement Cards
  • Top tips

31
What is Procurement?
  • Procurement is the process of acquiring goods,
    services and works, covering both acquisition
    from third parties and in-house providers.
  • The process spans the whole cycle from
    identification of needs, through to the end of a
    services contract or the useful life of an asset.
    It involves options appraisal and the critical
    make or buy decision which may result in the
    provision of services in-house in appropriate
    circumstances.

32
The Procurement Cycle
  • Good procurement, sustainable procurement
  • Sustainable procurement means value for money by
    purchase of goods/services/works used and
    disposed of in a manner minimising social and
    environmental impacts maximising social
    environmental benefits
  • When we buy something there are a number of steps
    to follow which the following diagram outlines -

33
The Procurement Cycle (contd)
34
Questions prior to purchase
  • Do I need it?
  • Do I have approval to buy it?
  • Are there funds available to pay for it?
  • Have I complied with CPRs?
  • Is there an existing framework agreement in place
    so that I do not have to go out to tender?
  • Is there an in-house facility that can do the
    type of work I require?
  • Is this a possible collaborative opportunity?
  • What procurement route do I use?
  • Should I contact Procurement Lincolnshire?

35
Contract Values and aggregation
  • Contract value is the total cost of
    goods/service/works over the full length of the
    contract, not just the annual value
  • Any possible extensions to the contract to be
    taken into account when calculating the value
  • i.e. 50,000 p.a. , contract for 2 years plus 1
    year extension. If extension taken contract value
    over EU thresholds so must be advertised through
    OJEU

36
Whole Life Costs
Buy
Own
Use
Dispose
Taking an example of a vending machine
that supplies coffee and other hot drinks-
Suggest examples of the total life costs under
each of these categories
37
Whole Life Costs (Answers)
  • Buy
  • Cost of lease / purchase
  • Procurement process
  • Delivery
  • Installation
  • Building alterations
  • Plumbing
  • Electricity supply
  • Signage
  • Risk management
  • Initial stocks
  • Own
  • Insurance
  • Cash collection and handling
  • Interest Payments / APR
  • Licence fees
  • Depreciation
  • Use
  • Consumables
  • Utilities
  • Disposal of waste (e.g. plastic cups)
  • Cleaning / Maintenance / Servicing / Repairs
  • Staff training
  • Contract management
  • Storage of consumables
  • Time to restock machine
  • Invoicing costs
  • Dispose
  • Transport for disposal,
  • compliance with W.E.E,
  • reverting area to original state,
  • Contract Termination

38
EU Thresholds
  • All tenders above the EU threshold, currently
    139,893 for goods and services, 3,497,313 for
    works subject to full EU process.
  • Procurement Lincolnshire have a separate booklet
    for guidance on EU, Pocket Guide to EU
    Procurement Directives, a green booklet.
  • Further training session will follow based on
    this booklet.

39
Financial Levels
  • Procurement Below 5,000 ensure value for money
    achieved, be aware of market prices. Direct
    approach to a single supplier and oral quotation
    are acceptable.
  • Procurement from 5,001 - 10,000 minimum of 2
    written quotes based on written specification.
    Keep quotes process of selection of supplier
    for audit purposes.
  • Procurement from 10,001 - 25,000 3 quotes
    based on written spec. Keep quotes process of
    selection of supplier for audit purposes.
  • Procurement from 25,001 - 75,000 at least 3
    written quotes based on Request for Quotation
    (RFQ)
  • High value procurement 75,001 to EU thresholds
    all tenders with cumulative value of 75,000 and
    above to follow formal tender process. Procedure
    to follow is either Open or Restricted
  • High value procurement above EU thresholds
    subject to the full EU Directives process
    consult with your procurement resource.

40
Tender documentation and tender award
  • Advertise the requirement, PIN notice, OJEU,
    Supply2.gov, Source Lincolnshire and specialist
    publications
  • 5 Procedures Open, Restricted, Negotiated,
    Competitive Dialogue and Accelerated
  • Pre Qualification process. Used in the
    restricted procedure to short list suppliers to a
    manageable number. Access capability, capacity
    etc
  • Procurement Lincolnshire standard tender
    documentation should be used

41
Tender documentation and tender award (contd)
  • Tender specification must be provided by you!
  • Evaluation process most economic advantageous
    tender (MEAT). Emphasis on price quality.
  • Team approach to evaluating bids
  • Tender award process
  • Offer debrief to unsuccessful bidders
  • Keep documentation for audit trail
  • Inform your District Liaison officer so contract
    can be put on the Procurement Lincolnshire and
    District Contract Registers

42
Use of Procurement Cards
  • Procurement Lincolnshire Procurement Card
  • Used for low value, high volume, low risk
    purchases
  • Save officer time, no orders to raise, no
    invoices to process and approve
  • Give supplier improved cashflow
  • Similar to a visa card
  • District Liaison Officers will work within the
    authority to implement this project

43
Top Tips
  • Take a step back and look at options available
  • Use framework agreements and corporate contracts
    where possible
  • Calculate all costs associated with the
    requirement
  • Consider collaboration
  • Stick to rules and timelines
  • Record your reasons for why you used a particular
    procurement route
  • Liaise with your District Liaison Officer. They
    may save you a lot of time
  • If in doubt just ask!!

44
Closure of the session
  • Any Questions?

45
A Guide to EU Procurement Directives
46
Agenda
  • Introduction to the session
  • What are the EU Directives?
  • Why are they important?
  • When do the full EU Procurement Directives apply?
  • Contracts, Notices and Procedures
  • Part A and Part B Services
  • Developing the Specification
  • Contract Award
  • Useful Websites
  • Jargon, what does it mean?

47
Introduction
  • Pocket Guide to EU Procurement Directives gives
    overview of the regulations
  • For further details, including Contract Procedure
    Rules and other procurement Guides go to the
    Procurement Lincolnshire Website
    www.procurementlincolnshire.gov.uk

48
What are the EU Procurement Directives?
  • They set out the legal framework for public
    procurement
  • They apply when public bodies acquire supplies,
    services or works
  • They set out procedures that must be followed
    before awarding a contract if the value exceeds
    set thresholds

49
Why are they important?
  • The purpose of the directive is to open up the
    public procurement market to ensure free movement
    of supplies, services and works within the EU
  • These rules reflect and reinforce the value of
    money ethos set out in the Procurement
    Lincolnshire Sustainable Procurement Strategy

50
When do the Full EU Procurement Directives apply?
  • When the contract value is above
  • 139,893 for Supplies and Services
  • 3,497,313 for Works
  • Where a contract covers a mixture of supplies,
    services and works is should be classified the
    aspect with the highest value
  • These are local government thresholds and
    different thresholds may apply of other public
    bodies
  • These thresholds change every 2 years and will be
    revised in January 2010. More information on
    Thresholds can be found at -www.bipsolutions.com/h
    tml/ecdirectives/htm

51
When do the Full EU Procurement Directives apply
(contd.)?
  • Where the contract falls outside the scope of the
    Directives the following principles should still
    apply
  • non discrimination
  • equal treatment
  • Transparency
  • Advertising appropriate to the size of the
    contract is necessary to demonstrate
    transparency. Must also be fair and impartial
    allowing for sufficient competition

52
Types of contracts
  • Supplies relates to purchase of supplies or
    commodities e.g. furniture, computer equipment
    etc
  • Services contracts that do not fall under works
    or supplies but involves the provision of a
    service e.g. cleaning, grounds maintenance etc
  • Works usually relates to a construction based
    project but could also be major refurbishment or
    rebuilding works e.g. site preparation,
    construction, repairs etc

53
Part A Part B Services
  • Service contracts divided into 2 categories, Part
    A and Part B
  • Part A subject to full requirement of
    Directives. Part A Services include telecoms,
    financial, publishing etc
  • Part B limited rules apply relating to
    technical specifications and post award
    information. There is no requirement to publish a
    Contract Notice in OJEU but you are required to
    publish a Contract Award Notice. Even though the
    full Directives do not apply still deal with in
    an open, transparent and fair manner. Part B
    Services include hotel, education, recreation
    services etc
  • A full list of Part A and Part B Services can be
    found at www.opsi.gov.uk/si/si2006/uksi_20060005_e
    n.pdf

54
Contract Notices (adverts)
  • There are 3 main types of Contract Notices that
    should be placed during the tender process
  • PIN (Prior Information Notices) published to
    alert the market of a likely contract
  • Contract Notice sets out details of contract
    being advertised and is posted at the start of
    the tender exercise
  • Contract Award Notice gives details of who the
    contract has been awarded to, including the
    tender value

55
Procurement Procedures
  • 5 award procedures provided in the Directive
  • Open allows all interested suppliers to tender.
    Should only be used in a limited market. Takes
    less time to complete than the other procedures
  • Restricted a 2 stage process initially
    allowing all interested suppliers to express an
    interest in the tender opportunity. PQQ is then
    issued and once evaluated allows officers the
    opportunity to restrict which companies receive
    an Invitation to tender (ITT). Takes longer then
    the open procedure and used where the interest in
    the tender opportunity is likely to be high

56
Procurement Procedures (contd.)
  • Competitive Dialogue allows authorities to go
    through the selection process followed by a
    dialogue phase with potential tenderers to
    develop one or more suitable solutions for its
    requirements. Bidders invited to tender on one of
    the solutions. Used in complex contracts where
    the end result may not be clear at the outset.

57
Procurement Procedures (contd.)
  • Negotiated Procedure may only be used in
    prescribed circumstances. Please consult
    Procurement Lincolnshire for advice before you
    consider using this procedure
  • Accelerated Procedure may only be used in cases
    of extreme urgency outside the control of the
    contracting authority. It may not be used in
    cases of poor planning or organisation

58
Developing the Specification
  • Directives designed to ensure all tenderers
    receive equal treatment and geographical
    discrimination does not happen
  • Contract specification should avoid using brand
    names that would eliminate particular providers
    or products/services
  • If UK/BS included the wording or equivalent
    must be included within the specification

59
Contract Award
  • Once the tender has been evaluated and award
    decision made a formal award must not be made for
    at least 10 working days after the unsuccessful
    bidders have been notified. Known as the Alcatel
    standstill period
  • This gives unsuccessful tenderers the opportunity
    to challenge the decision if they feel any of the
    regulations have been breached and also to
    receive constructive feedback as to why they have
    been unsuccessful
  • If the tender was awarded and the decision
    successfully challenged substantial damages may
    be awarded against the Authority concerned
  • In addition individual officers may also be
    liable

60
Remedies Directives
  • Remedy of ineffectiveness allows courts to tear
    up contracts entered into illegally.
  • Damages may be claimed by contractor originally
    awarded contract
  • Court may impose fines on contracting authority
  • Effective from 20 December 2009

61
Useful Websites for tender information
  • Procurement Lincolnshire www.procurementlincolns
    hire.co.uk
  • Source Lincolnshire www.sourcelincolnshire.co.uk
  • Tenders Electronic Daily
  • http//ted.publications.eu.int
  • Bip Solutions www.bipsolutions.com
  • Supply2Gov www.supply2.gov.uk
  • Office of Government Commerce www.ogc.gov.uk
  • ESPO www.espo.org

62
Jargon what does it mean?
  • PIN Prior Information Notice
  • OJEU Official Journal of the European Union
  • PQQ Pre Qualification Questionnaire
  • ITT Invitation To Tender
  • FOI Freedom of Information
  • MEAT Most Economically Advantageous Tender

63
Closure of the session
  • Any Questions?

64
And Finally!!
  • Dont forget about managing the contract
  • Two way relationship with the supplier
  • Set up a regular schedule of meetings appropriate
    to the risk level / value of the contract
  • Take action
  • Completes the Procurement cycle

65
Feedback
  • Please let us know
  • Who else you think would benefit from attending
    this training
  • What other training you need
  • THANK YOU
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