Understanding Public Procurement Welcome

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Understanding Public ProcurementWelcome
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Agenda
8.30am Welcome Breakfast and registration 9.00a
m Understanding Public Procurement Ian
Heptonstall 10.00am ? District
Council ???? 10.15am QA 10.30am Coffee and
networking
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Ian HeptonstallDirectorBusiness to Business
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Public Procurement in the UK

• Local authorities (Unitary, Metropolitan, County
  and District)
• Central Government Departments
• NHS Trusts
• Emergency Services (Police, Fire and Ambulance)
• Education (Universities Schools)
• Large projects - Olympics
• Publicly funded bodies (BBC, Crown Agents,
  British Nuclear fuels, The Post Office etc.)

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Why work with the public sector - advantages

• Recession proof
• Marketing opportunities
• Credibility, Recommendation, Word of mouth,
  repeat business
• Huge spend local government 40 billion, NHS
  60billion
• Good payers and proper arrangements
• Do not go bust!
• Work with a broad variety of suppliers
• Subject to rigours of procurement legislation
• Some exciting and unique projects

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Why work with the public sector - disadvantages

• Can be lengthy (expensive) process to win
  business
• Political impact can have an unexpected effect
• Decision making process is longer
• Different format, forms and tendering process

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Exploring the options

• 500 Local authorities in England and Wales
• 303 NHS Trusts
• 42 Police Authorities
• 334 Universities
• 24,000 Primary Schools
• 3,500 Secondary Schools
• 39 Ambulance Services

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The East Midlands

• 5 Counties each with
• County Council
• Police
• Fire Service
• Ambulance Trust
• Unitary Councils, e.g. Nottingham, Derby,
  Leicester
• 36 district councils
• 8 Derbyshire districts and boroughs Amber
  Valley, Erewash, Bolsover, Chesterfield, North
  East Derbyshire, High Peak, Derbyshire Dales,
  South Derbyshire

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County Council have responsibility for

• Strategic planning
• Highways
• Traffic
• Social services
• Education
• Libraries
• Fire
• Refuse Disposal
• Consumer protection

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Districts Council have responsibility for

• Local planning
• Housing
• Environmental Health
• Markets and fairs
• Refuse collection
• Cemeteries
• Leisure services and Parks
• Tourism
• Electoral register

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Unitary and metropolitan Councils responsible for

• ?

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Accessing opportunities
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Smaller contracts

• Formalised competitive process
• Formality increases with contract value
• Approved supplier lists, Framework agreements,
  OGC
• For example High Peak District Council

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The challenges for suppliers

• Cost reduction 3 year on year cash savings
• Collaboration contracts may get bigger unless
  split
• Whole life cost contract management, continual
  improvement
• Understanding the procurement process
  requirements
• E-procurement (e tendering, purchasing cards,
  electronic ordering)
• The supply chain
• Who is the decision makers

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The challenges for suppliers

• Cost reduction 3 year on year cash savings
• Collaboration contracts may get bigger unless
  split
• Whole life cost contract management, continual
  improvement
• Understanding the procurement process
  requirements
• E-procurement (e tendering, purchasing cards,
  electronic ordering)
• The supply chain
• Who is the decision makers

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Consortia . . .

• www.ESPO.org
• www.cbconline.org.uk
• www.westmerciasupplies.co.uk

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The challenges for suppliers

• Cost reduction 3 year on year cash savings
• Collaboration contracts may get bigger unless
  split
• Whole life cost contract management, continual
  improvement
• Understanding the procurement process
  requirements
• E-procurement (e tendering, purchasing cards,
  electronic ordering)
• The supply chain
• Who is the decision makers

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The challenges for suppliers

• Cost reduction 3 year on year cash savings
• Collaboration contracts may get bigger unless
  split
• Whole life cost contract management, continual
  improvement
• Understanding the procurement process
  requirements
• E-procurement (e tendering, purchasing cards,
  electronic ordering)
• The supply chain
• Who is the decision makers

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The challenges for suppliers

• Cost reduction 3 year on year cash savings
• Collaboration contracts may get bigger unless
  split
• Whole life cost contract management, continual
  improvement
• Understanding the procurement process
  requirements
• E-procurement (e tendering, purchasing cards,
  electronic ordering)
• The supply chain
• Who is the decision makers

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ODA/CLM
Olympic Park
Aquatics Centre MC
Tier 1 contractors
Aquatics Centre MC
Swimming Pool MC
ODA Supply Chain approx. 50,000 contracts
Tier 2 contractors
Swimming Pool MC
Bricklaying Subcontractor
Tier 3 contractors
Bricklaying Subcontractor
Brick Merchant
Brick Merchant
Tier 4 contractors
Distribution Company
Distribution Company
Tier 5 contractors
Brick Manufacturer
Brick Manufacturer
Tier 6 contractors
Quarry
Quarry
Tier 7 contractors
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The challenges for suppliers

• Cost reduction 3 year on year cash savings
• Collaboration contracts may get bigger unless
  split
• Whole life cost contract management, continual
  improvement
• Understanding the procurement process
  requirements
• E-procurement (e tendering, purchasing cards,
  electronic ordering)
• The supply chain
• Who are the decision makers

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The process in large organisations . . .
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Criteria in tender evaluation

• Price
• The FOUR policies
• Environmental impact
• Health Safety
• Quality policy
• Equal opportunities policy
• Technical ability
• Added value
• Innovation
• Community benefit

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Opportunities for local suppliers
Speed of service
Sustainability
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Accessing opportunities
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Useful routes into smaller contracts . . .

• www.highpeak.gov.uk
• www.sourcederbyshire.co.uk
• www.derbyshire.gov.uk
• www.supply2.gov.uk
• www.london2012.com/business
• www.publicprocurement.co.uk
• www.LocalGov.co.uk. (the Municipal Year Book)
• www.Constructionline.co.uk (works only,
  pre-qualified suppliers)
• Contrax weekly Paper based or
  www.contraxonline.com

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Useful routes into large contracts . . .

• European legislation
• Over threshold not annual amount but overall
  contract value
• Goods services 139,893
• Works 3.4 million
• OJEU Official Journal of European Union
• www.ted.publications.eu.int
• www.BiPcontracts.com
• www.tenders.com
• www.tendersdirect.co.uk

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Olympics
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Who does what . . .
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Time line . . .
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Summary

• A huge market, but patience and time needed
• Many ways into the public sector
• Buyers have competing pressures on them
• Need to be properly prepared

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Questions answers