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Title: PowerPoint Presentation Firebuy Relationships with Regions within the National Procurement Strategy


1
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2
WELCOME
3
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4
CHAIRMANS OPENING ADDRESS
5
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6
Peter Howarth Managing Director of SBV Ltd and
Chief Executive Officer of SOPO
7
Selling to Local Government 2007
  • The Local Government procurement landscape.
  • What drives the value for money agenda
  • Peter Howarth
  • CEO SOPO
  • MD

8
Selling to Local Government
  • The Landscape
  • The Efficiency Review
  • The National Procurement Strategy
  • Local Government Acts
  • White Paper Strong and prosperous communities
  • FOI
  • EU Consolidated Directive
  • ( Public Contract Regulations 2006)
  • Sustainable Procurement
  • Whats in it for you

9
Local Government Landscape
  • Local authorities consist of over 400 councils
  • County councils
  • Metropolitan councils
  • Unitary Councils
  • London Boroughs
  • District / Borough
  • plus 1000s of Parish councils
  • Not to mention
  • Police ,Fire, Housing and numerous other
  • local public sector bodies

10
Local Government Landscape
  • The main services provided include
  • Social Services
  • Education
  • Transport
  • Housing/ Benefits
  • Leisure /Museums /Libraries
  • Economic Development
  • Trading Standards /Environmental Health
  • A host of other activities from Archaeology to
    Zoology

11
Local Government Procurement Spend
40bn Procurement Spend 4bn cost of procurement
Local Government
12
Analysis of typical County Council spend as a
of contract type
13
Drivers in local government Procurement
NATIONAL/INTERNATIONAL GOVERNMENT
Sustainability Agenda
e-Government
Best Value CPA
OCLG
National e-procurement project
National Procurement Strategy
Regional Centres of Excellence
Delivering Efficiency In Local Services
EU Directives
Peter Gershons
Efficiency Review
Local Government Acts/ Guidance
EUTreaty
14
The Efficiency Review
  • Background
  • Review by Peter Gershon /OGC
  • Affects whole of public sector
  • 40 billion local gov procurement expenditure
  • Target 2.5 efficiency savings for 3 years to
    2008 (50 Cashable) 6.45 billion
  • 3 from 2009 All Cashable

15
Efficiency gains - three kinds of projects
Investing for Results
Improving Outputs
Reducing Inputs
Outputs
Outputs
Inputs
Baseline 2004/5
Inputs
Outputs
Inputs
  • re engineering
  • processes
  • PFI
  • New Technology
  • use of p cards
  • reduced prices

E.g.
No reduction in output levels is allowed
16
The Efficiency Review
  • Procurement
  • Enhance scrutiny,monitoring and accountability of
    procurement
  • Improve strategic management of major supply
    markets
  • Better leadership of procurement
  • Improved professional support and capacity
  • Improved procurement of professional services

17
The National Procurement Strategy
  • Objectives
  • Better quality public services
  • Mixed Economy of Service Provision
  • Continuous improvement
  • Greater Collaboration
  • Community Benefits
  • Equality and Opportunity for staff ,service users
    and suppliers
  • Market Stimulation and Innovation

18
The National Procurement Strategy
Partnering collaboration
Providing leadership Building Capacity
Doing business electronically
Stimulating markets achieving community
benefits
Cultural shift
  • Strategy,
  • Policies
  • Implementation
  • Leadership,
  • People
  • Skills

Partnering Collaboration including stimulating
the market
Processes Systems including doing business
electronically
19
The National Procurement Strategy
  • Who is the Strategy aimed at
  • Elected Members
  • Senior Officers
  • Procurement Officers
  • Third Sector
  • Partner Agencies
  • Suppliers

20
Local government Acts and Guidance
  • Recently the most pertinent was the 2003 Act
  • Opportunity for Prudential borrowing
  • Trading powers in ordinary services
  • Charging for discretionary services
  • Comprehensive Performance Assessment (CPA)
  • Update on Best Value and options
  • Workforce issues
  • Race relations implications
  • They have changed the way many local authorities
    go about their business

21
White Paper- Strong and Prosperous Communities
  • Reinforces many issues relating to procurement,
    calls for
  • A more radical approach to value for money
  • Increased Collaboration
  • Wider adoption of new business processes and
    technology
  • Greater contestability fair and open competition
  • Additional professional support

22
CPA
  • CPA (comprehensive performance assessment)
    introduced by Audit Commission in 2002
  • Generally measures how well councils are
    delivering services
  • Now introducing CPA the Harder Test with greater
    emphasis on service users, use of resources and
    value for money
  • How well do councils achieve VFM and how well
    does they manage and improve it
  • It has had a positive affect.

23
Best Value
  • The Best Value regime was introduced in 1998
  • Based on principles of 4Cs, challenge, compare,
    consult and compete
  • Resulted in considerable outsourcing of council
    services.
  • Mixed economy approach to provision of services
  • Best Value is still a very important element of
    the efficiency campaign If others can do it
    better then it is likely that an activity will be
    outsourced

24
Workforce Issues
  • The circular recognised the rights of workers
    in the contract procedure for example in regard
    to
  • TUPE
  • Information
  • Involvement of Unions
  • Workers rights

25
Race Relations
  • The Amended Race Relations Act gives
  • councils a duty to
  • Have due regard to
  • Eliminate unlawful discrimination
  • Promote equality of opportunity and good
    relations between people of different racial
    groups
  • This duty applies to procurement and functions
    delivered by suppliers under contract
  • A guide has been produced by CRE
  • www.cre.gov.uk

26
Freedom of Information Act
  • The general right of access came into force
  • 1st January 2005
  • A public authority will be obliged to disclose
    that information in response to a request,
    regardless of the terms of any contract…
  • Public authorities have been told to reject
    confidentiality clauses wherever possible…
  • Public authorities will not be able to give
    guarantees of confidentiality which have
    previously featured in public procurement.
  • Whilst certain types of information are
    exempt, the Freedom of Information Act contains a
    presumption of disclosure.

27
Freedom of Information Act
  • Local Authorities have been advised to
  • 1. Inform all suppliers at the outset
  • a) about FOI when issuing requests for
    tenders or
  • placing advertisements in the
    newspapers and
  • b) of the authority's policy regarding
    information it
  • intends to release outside of the FOI
    Act
  • 2. Ask suppliers to identify sensitive
    information, when forwarding material to them and
    advise them where disclosure of information is
    being considered under the FOI Act.
  • 3 Public Interest Test in most instances
    authorities will only be able to withhold
    information if they are satisfied that there is
    an overriding reason not to provide access to
    specific information.
  • 4. This opinion can however be challenged by the
    Information Commissioner

28
Freedom of Information Act
  • You should look on the FOIA as an opportunity
    to gain additional information about the public
    sector markets you operate in e.g. with regard
    to procurement policy and decisions
  • L As will be happy to co-operate providing the
    requests are reasonable and fair and not vexatious

29
New EU Consolidated Directive
  • The main new procedures include reference to
  • Framework Agreements
  • Competitive Dialogue
  • Dynamic Purchasing systems
  • Reverse auctions
  • Information Provision
  • Social /Environmental issues
  • Qualification
  • Host of other changes
  • The European Directives will be covered in some
    detail by later speakers

30
New EU Consolidated Directive
  • The Directive has been incorporated into UK law
  • under the following regulations
  • The Public Contracts Regulations 2006
  • for England Wales and N Ireland
  • The Public Contracts (Scotland) Regulations 2006
  • If you are exporting to Europe you need to be
    aware
  • that each nation may have a slightly different
    version dependent on national law

31
The Sustainable Procurement Agenda
  • The sustainable procurement task force report
  • Will be covered as a separate item but it is
    important that you understand how this fits into
    Local Government policy
  • It is designed to help the Business Community as
    much as the environment
  • It is a hot topic and will get hotter

32
Look Out For
  • Lyons report on L G reorganisation
  • Varney report Service transformation A better
    service for citizens and businesses, a better
    deal for the taxpayer
  • Comprehensive spending review (CSR2007)
  • Move to Shared Services
  • PAG (Procurement Action groups)
  • Treasury Review of procurement costs

33
What does it all mean for you
  • New Market Opportunities and Access
  • Partnering Opportunities
  • Greater Transparency
  • Better Contract relationships
  • E commerce benefits
  • Requirement for Continuous improvement
  • Better Information provision and access
  • Sustainability of Business

34
What does it all mean for you
  • Improved professional relationships
  • Opportunity to be innovative
  • Improved transactional interface
  • Share of some efficiency gains
  • Greater scrutiny by and involvement of elected
    members
  • A need to keep abreast of changes
  • Lower business Rates !!!

35
What does it all mean for you
  • Today is an opportunity to get a better
    understanding of local government and its
    business culture and an opportunity to increase
    your competitiveness

36
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37
John Scowen Corporate Procurement Manager, London
Borough of Havering
38
  • SELLING TO THE PUBLIC
  • SECTOR
  • LOCAL AUTHORITIES
  • Harnessing the power
  • enhancing efficiency in local
  • government procurement

39
  • METROPOLITAN 38 BIRMINGHAM
  • COUNTY 34 SUFFOLK
  • UNITARY 46 SLOUGH
  • LONDON BOROUGHS 32 HAVERING
  • BOROUGH/DISTRICT 238 BRAINTREE
  • PARISH/TOWN 1000s HARKSTEAD

40
  • Goods and Services Cost of
    Purchasing
  • 40 BILLION 4.5 BILLION

41
  • Buying Consortia CBC, LCSG
  • Supply Side Consortia ESPO, YPO
  • Central Stores Kent, Hertfordshire
  • Central Purchasing Dept Essex, Havering
  • Departmental Purchasing Officers

42
  • Office of Government Commerce OGC
  • Privatised Central Stores The
    Consortium
  • Distributors DBC
    (Food)
  • Brokers CDS (Print)
  • Other Public Sector Bodies NHS
  • Council Contractors
    Capita

43
  • European Procurement Directives
  • National Regulations and Policy
  • Council Procurement Rules and Policies

44
  • OJEU Notices
  • Public Notices
  • Trade Magazines
  • Specialist Magazines Contrax Weekly
  • SOPO Website
  • Council Websites
  • Selling to Booklets
  • Library
  • Department of Trade and Industry
  • Chamber of Commerce
  • Business Link

45
  • Advertisement
  • Letter of Invitation
  • Instructions on how to respond
  • Terms and Conditions of Tender
  • Specification
  • Pricing Schedule
  • Contract Conditions
  • Tender Evaluation Mode
  • Interview/Presentation Arrangements
  • Evaluation Tenders
  • Debriefing

46
  • Contact relevant council department or officer
  • You may be asked to fill in a Pre-Qualification
    Questionnaire (PQQ)
  • Provide Financial information about your company
  • Comply with Councils insurance requirements
  • Provide details about your Race, Equalities and
    Health and Safety Policies
  • Work within the Councils own Policies
  • Proof of experience and technical ability

47
  • Consumables
  • Indirect Services
  • Capital Equipment
  • Major Project Purchases
  • Purchase of Direct Services

48
  • Government Targets
  • Marketplaces
  • Financial Systems
  • Supplier adoption of E-Commerce

49
  • Need to
  • Be proactive in their reaction to eProcurement
  • Prepare their own eStrategy
  • Consider how they can best use the eTools
    available
  • React positively to their customers needs

50
  • To prepare and equip themselves for eProcurement
  • To transform their own processes
  • To respond and take advantage of new trading
    methods and opportunities
  • To challenge their own suppliers
  • To increase their competitiveness
  • To be prepared to share the benefits

51
  • Stationery Advertising
  • Computer Equipment/Consumables Agency Staff
  • Furniture Car Leasing
  • Telecommunications Vehicle Hire
  • Audiovisual Maintenance Services
  • Office Equipment Utility Services
  • Cleaning Equipment Energy
  • Rehabilitation/Special Needs Travel
  • Catering Equipment Hotels
  • Food Safety Services
  • Electrical Goods Hygiene Services
  • Clothing Office Services
  • Tools and Hardware Financial Services/payroll
  • Gardening/Horticulture Insurance
  • Sports Banking
  • Vehicles Care Contracts
  • Books Teaching staff
  • Building Materials Consultancy

52
(No Transcript)
53
Terri Hudson Corporate Manager, London Borough of
Merton
54
Understanding the Procurement Process in the
Public Sector Presented by Terri Hudson
MCIPS Corporate Procurement Manager London
Borough of Merton Tuesday 1st May 2007 SOPO
Selling to Local Government
55
Introduction and Overview
  • The annual purchasing spend of the public sector
    in the UK is estimated at 450 billion
  • Local Authorities in England Wales spend 25
    billion each year on bought in goods and services
    2.5 billion is spent on purchasing itself

56
Value for Money Best Value
  • The definition of Value for Money is the optimum
    combination of whole-life cost and quality (or
    fitness for purpose) to meet users requirements.
    This is rarely synonymous with price
  • Local authorities are subject to the Best Value
    guidelines which embraces the concept of the
    price-quality relationship.
  • Making decisions and selecting suppliers based on
    the most economically most advantageous tender
    (MEAT) rather than price alone.

57
The Directives
  • The EU Procurement Directives set out the legal
    framework for public sector procurement
  • They apply to public authorities and utilities
    seeking to acquire goods, services, civil
    engineering or building works
  • They set out procedures which must be followed
    before award of contract when its value exceeds
    set thresholds (unless the contract qualifies for
    specific exemption, e.g. on grounds of secrecy)
  • The Directives have been implemented into
    national law in the UK by Regulations.
  • Revised Regulations came into force on 31 January
    2006 to implement the new Procurement Directives
  • These new Directives seek to clarify, simplify
    and update the previous regime and introduce a
    number of new provisions.

58
The Directives
  • There are now only two Directives instead of
    four these being
  • Public Authorities (the State, Regional and Local
    Authorities and other public bodies)
  • The Public Contracts Regulations 2006 (SI 2006
    No 5).
  • The Consolidated Directive replace the previously
    separate Supply, Works and Services Directives
  • Utilities (i.e. certain operators in the water,
    energy, transport and telecommunications sectors)
  • The Utilities Contracts Regulations 2006 (SI
    2006 No 6)

59
The Directives
  • Purpose
  • The purpose of the EU procurement rules is to
    open up the public procurement market to members
    of the EU
  • To ensure free movement of goods and services
    within the EU
  • Encourages fair and transparent competition
  • To reflect and reinforce that procurement must be
    based on vfm (defined as the optimum combination
    of whole-life cost and quality to meet the users
    requirement)

60
New Provisions
  • The main changes are
  • The previously separate public sector
    supply,works and services Regulations are
    consolidated into a single set of Regulations
  • The public sector Regulations expressly provide
    for framework agreements and electronic auctions
    for the first time
  • New competitive dialogue procedure allowing
    dialogue with bidders before seeking final
    tenders from them.
  • Introduction of rules for Dynamic Purchasing
    Systems
  • Contracts may be reserved to supported factories
    and businesses
  • Provisions for Central Purchasing Bodies
  • Clarification on the use of social and
    environmental issues
  • 10 day standstill period (Alcatel) for
    unsuccessful tenderers to challenge contract
    award decision

61
Framework Agreements
  • Making explicit what already is permissible
  • No volume/spend commitments but an agreement to
    use contract as and when the need arises.
  • Maximum contract length 4 years
  • The new Directive clarifies that contracting
    authorities may establish Framework Agreements
    either with a single undertaking, or with several
    undertakings in which case there must be at least
    three, if available.

62
Electronic Auctions
  • Precise specifications are required
  • Definition An electronic auction is an
    electronic repetitive process used for the
  • presentation of new prices during a tendering
    process.

63
Competitive Dialogue Procedure
Old
New
Negotiated Procedure
New Negotiated Procedure
OR
New Competitive Dialogue
64
Competitive Dialogue When to use it? (Art 29)
  • Particularly complex contracts
  • Authority considers that open or restricted
    procedures will not allow the award of the
    contract and
  • Authority is not objectively able to define the
    technical means of satisfying its needs and/or it
    is not objectively able to specify the
    legal/financial structure of a project
  • Authority is concentrating on the outputs of the
    contract and allows innovation from the market as
    to the methods of delivery through a dialogue
    process

65
Competitive Dialogue How it works
66
Dynamic Purchasing System
Electronic Open Procedure
Definition A dynamic purchasing system is a
completely electronic process for making commonly
used purchases, the characteristics of which, as
generally available on the market, meet the
requirements of the contracting authority, which
is limited in duration and open throughout its
validity to any economic operator which satisfies
the selection criteria and has submitted an
indicative tender that complies with the
specification
67
Central Purchasing Bodies
Definition A Central Purchasing Body (CPB) is
defined in the Public Contracts Regulations as a
contracting authority which acquires goods or
services intended for one or more contracting
authorities awards public contracts intended for
one or more contracting authorities or concludes
framework agreements for work, works, goods or
services intended for one or more contracting
authorities.
68
Social Environmental Issues
  • Sustainability is used as basis
  • for evaluation of tenders
  • Exclusion for non-compliance
  • with environmental or social
  • legislation
  • Award criteria can include
  • environmental characteristics but
  • must be linked to the contract
  • must be compatible with EC law

69
How the regulations apply to mixed Contracts,
e.g. supplies and services
  • Although public sector Regulations have been
    consolidated some differences remain for works,
    supplies and services contracts
  • e.g. contract for services and supplies can be
    determined by respective values of the two
    elements
  • where it covers both works/supplies or
    works/services it should be classified according
    to its predominant purpose
  • where contract provides for the supply of
    equipment with an operator, it should be regarded
    as a services contract
  • contracts for software are considered to be
    supplies unless they have been written to the
    purchasers specification, in which case they are
    services.

70
The OJEU advertising requirement
  • Contracts covered by the Regulations must be
    published in a contract notice in the Official
    Journal of the EU (OJEU)
  • Standard forms for OJEU are mandatory and are
    available at http//simap.eu.int
  • Minimum time periods to be followed (depending on
    which procedure followed)
  • Times can be reduced where
  • A Prior Information Notice (PIN) has been
    published (must have be live for 52 days)
  • If the documents was submitted electronically
  • Where authorities offer full and unrestricted
    access to tender documents online or via an
    eTendering portal

71
OJEU Procedures Timetable
72
Choice of Procurement Procedure
  • There are four procedures
  • Open procedure
  • Used in small, niche markets where all those
    interested may respond to the OJEU advertisement
    inviting tenders and tender for the contract
  • Restricted procedure
  • Used in large competitive markets when all those
    interested respond to the OJEU advertisement,
    submit a pre-qualification questionnaire and are
    short-listed before being invited to submit a
    tender
  • Competitive dialogue
  • On Particularly complex contracts, dialogue is
    entered into with bidders, following the OJEU
    notice and selection process, to develop one or
    more suitable solutions on which chosen bidders
    will be invited to tender.
  • Negotiated procedure
  • Under which a purchaser may select one or more
    persons with whom to negotiate terms of the
    contract. OJEU notice is normally required

73
Stages in the Procurement Process
  • The Regulations set out detailed criteria which
    are designed to avoid
  • discrimination and to ensure that suppliers are
    treated on equal terms
  • Specification stage
  • use performance specifications, not technical
    specifications
  • use equivalence, e.g. ISO instead of British
    Standards.
  • Selection stage
  • the rejection or selection of candidates, e.g.
    evidence they are unsuitable, economic and
    financial standing, technical capacity etc
  • Award stage
  • contracts awarded on either basis of lowest
    price or various criteria for determining which
    offer is the most economically advantageous
    (MEAT) (i.e. best value)
  • Government policy favours the use of MEAT for
    contract awards

74
Post Tender Negotiations
  • Restrictions on the use of post tender
    negotiation under
  • Open and Restricted procedures
  • The European Commission has issued a statement on
    post tender negotiations in which it
    specifically rules out any negotiation on price,
    i.e.-

In open and restricted procedures all
negotiations with candidates or tenderers on
fundamental aspects of contracts, variations in
which are likely to distort competition, and in
particular on prices, shall be ruled out
however, discussions with candidates or tenderers
may be held only for the purpose of clarifying or
supplementing the content of their tenders or the
requirements of the contracting authorities, and
provided this does not involve discrimination.
75
How you can win business?
  • Always ensure that you complete all sections of
    the Business Questionnaire (or PQQ) and enclose
    supporting documents where prompted (e.g.
    Finances, Accreditations, Policies). Information
    asked for will be used to assess you against
    other companies.
  • Where written policies and procedures do not
    exist, include a statement to support how you
    manage that activity in your organisation.
  • This is your opportunity to sell yourself to us.
    Think if it as a job application. In order to get
    to interview stage, you need to sell yourself on
    the application form.
  • Dont be afraid to ask for help if you are not
    sure, but ensure your queries are submitted in
    writing.

76
Available Help…
  • Tendering
  • www.sbs.gov.uk - Tendering for government
    contracts
  • www.sell2wales.co.uk Free Guide to Tendering
  • SME Support
  • http//www.supplylondon.com/
  • http//www.businesslink.gov.uk/
  • Policies
  • http//www.haringey.gov.uk/equal_opps_workbook.pd
    f
  • http//www.haringey.gov.uk/health_and_safety_work
    book.pdf
  • http//www.haringey.gov.uk/quality_workbook.pdf
  • http//www.haringey.gov.uk/sustainability_workboo
    k.pdf

77
Some useful websites….
  • Supply 2 Gov www.supply2.gov.uk
  • ODPM www.odpm.g2b.info
  • OJEU http//ted.europa.eu
  • Commission www.simap.eu.int
  • EC law and case-law www.europa.eu.int
  • BiP Solutions Ltd www.bipsolutions.com
  • SOPO www.sopo.org
  • OGC www.ogc.gov.uk
  • LCSG www.lcsg.org
  • Tenders Direct http//www.tendersdirect.co.uk/

78
Questions?
79
For more information…
  • Terri Hudson MCIPS
  • Corporate Procurement Manager
  • London Borough of Merton
  • Civic Offices
  • London Road
  • Morden, SM4 5DX
  • Tel 020 8545 3371
  • Email terri.hudson_at_merton.gov.uk

80
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81
Richard Parsons Strategic Procurement
Manager, London Borough of Camden
82
The Sustainability Agenda / CSR
  • Richard Parsons
  • Head of Strategic Procurement
  • London Borough of Camden

83
Defining Sustainable Procurement
  • Sustainable Procurement is a process whereby
    organisations meet their needs for goods,
    services, works and utilities in a way that
    achieves value for money on a whole life basis in
    terms of generating benefits not only to the
    organisation, but also to society and the
    economy, whilst minimising damage to the
    environment.

84
Alternative Definition
  • Sustainable procurement in short using
    procurement to support wider social, economic and
    environmental objectives, in ways that offer real
    long-term benefits - is how the public sector
    should be spending taxpayers money. Anything less
    means that todays taxpayer and the future
    citizen are both being short-changed.
  • Sir Neville Simms, Chair of the SPTF

85
Corporate Social Responsibility
  • the business contribution to our sustainable
    development goals. Essentially it is about how
    business takes account of its economic, social
    and environmental impacts in the way it operates
    maximising the benefits and minimising the
    downsides.
  • CSR.gov.uk

86
  • …the voluntary actions that business can take,
    over and above compliance with minimum legal
    requirements, to address both its own competitive
    interests and the interests of wider society.

87
Sustainable Procurement National, Regional
Council Drivers
  • National Procurement Strategy
  • Chapter 6 Stimulating markets and achieving
    community benefits
  • Securing the Future delivering UK sustainable
    development strategy, DEFRA (March 2005)
  • Sustainable public procurement aims.
  • Sustainable Procurement Task Force
  • Action plan launch 12th June 2006
  • Central / Local Government responses
  • Achieving Council Objectives
  • Community Strategy, Environmental Policy,
    Corporate Procurement Strategy, Equality Scheme,
    Neighbourhood Renewal Scheme

88
Local Authority Powers to Promote Sustainability
  • Best Value Local Government Act 1999
  • Non-commercial considerations Exclusion Order
    2001 to the extent that a best value authority
    considers it necessary or expedient to facilitate
    compliance with best value
  • Power of well-being Local Government Act 2000
    action results in a benefit to the community but
    doesnt directly benefit the contracting
    authority
  • Community Strategy authoritys overarching plan
    on sustainable development
  • Case Law Finnish Bus Case (2002)
    environmental criteria permissible in award of
    contract

89
Powers to Implement Sustainable Procurement
  • Key Points
  • Environmental and social issues must be relevant
    to the subject matter of the contract
  • Are they a core requirement of the contract?
  • Consider at the earliest stage business
    case/contracting strategy
  • Actions must be consistent with Government
    procurement policy based on Value for Money and
    be proportional to the value of the contract and
    the impact
  • Most economically advantageous tender which meets
    the users requirement
  • Use Whole Life Costing

90
Sustainability in the Procurement Process
Integrating sustainability at every stage of the
process not a bolt on or an after
thought
91
Environmentally and Socially Responsible
Procurement Policy
  • 10 key objectives covering all elements of
    procurement
  • Compliance with legislation
  • Research promote best practice in sustainable
    procurement
  • Sustainability appraisal and qualification of
    vendors
  • Environmental social specifications
  • Sustainability considerations in tender
    evaluation
  • Sustainability considerations in the supply chain
  • Minimise environmental impacts of contracts
  • Sustainable procurement awareness raising and
    training
  • Sustainability considerations in monitoring and
    review
  • Promoting local BME businesses, SMEs,
    social/voluntary enterprises

92
SPTF Action Plan Key Themes
  • Lead by Example Managers must enforce minimum
    standards and make it clear that value for money
    is linked to sustainability
  • Set Clear Priorities Define objectives, targets
    and monitor / report
  • Raise the Bar Working with suppliers and
    collaboratively in regions
  • Build Capacity Establish effective management
    information systems, provide training, include
    sustainability into Gateway reviews, implement
    Flexible Framework
  • Remove Barriers Budget arrangements
  • Capture Opportunities Address priority areas

93
Prioritise Action - Spend
94
Prioritise Action Scope to do More
95
Prioritise Action Procurer Influence
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Flexible Framework
  • People
  • Policy, Strategy and Communications
  • Procurement Process
  • Engaging Suppliers
  • Measurement and Results
  • Level 1 Foundation
  • Level 2 Embed
  • Level 3 Practice
  • Level 4 Enhance
  • Level 5 - Lead

Level 1 (or above) by end April 2007 Level 3 (or
above) and Level 5 in at least one area by
December 2009
97
ECA Findings
  • Sustainability environment
  • Policy not an indicator of engagement
  • Compliance not conviction
  • Accreditation drives policy
  • Participation varied among sectors Construction
    most participative
  • Suppliers want Council to lead
  • Costs dont have to increase
  • Positive about collaboration

98
Whats In It For You?
  • Its good for business
  • Corporate reputation
  • Better use of resources
  • Legal compliance
  • Preferred employer

99
Issues
  • Supply chain
  • Moving goalposts
  • Reality vs rhetoric
  • Cost vs quality
  • Womb-to-tomb / disposal etc.

100
Presented by
  • Richard Parsons
  • Head of Strategic Procurement
  • London Borough of Camden

nicole.fletcher_at_camden.gov.uk www.camden.gov.uk
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Mike Phillips Managing Director, West Mercia
Supplies
103
SELLING TO CONSORTIA Mike Phillips Managing
Director West Mercia Supplies National
Executive Committee Member Society of Procurement
Officers in Local Govt. (SOPO)
104
Consortia?
  • Only talking about Local Government
  • Covering those which act as large trading
    operations only
  • Large warehouses
  • Significant fleets to enable close control of
    logistics
  • Fully functioning commercially run business but
    owned by the Public Sector
  • Take in bulk product, store, pick and pack and
    deliver to site

105
  • The main Consortia are
  • Yorkshire Purchasing Organisation -Wakefield
    (YPO)
  • Eastern Shires Purchasing Organisation-Leicester
    (ESPO)
  • West Mercia Supplies -Shrewsbury (WMS)
  • The Consortium Ltd- Trowbridge now a private
    sector operation
  • NEPO

NEPO CBC Central Buying Consortium KCS (Kent
County Supplies) Hertfordshire Supplies

106
  • Nearly all England and most of UK covered
  • Some regional focus but significant trading in
    areas between the main regional centres
  • South West England has no public body Consortium
  • Consortium growth is at the expense of the
    private sector and single Authority contracts
    which are seen as remote

107
  • CONSORTIA - MAIN FEATURES
  • A collaborative venture bringing together the
    purchasing requirements of a number of
    authorities
  • Operate from large warehouse premises usually
    owned by the Joint Authorities engaged in the
    consortium
  • Staff are employed by the Consortium
  • They own and operate their own distribution fleet
    with their own operators licence (CPC)
  • They are large mail order operations with highly
    developed logistics and distribution operations
  • They have sophisticated marketing and selling
    skills and work to best industry practices

108
Why have Consortia?
  • Collaboration is the new buzz word in the LG
    procurement space
  • Allows significant buying opportunities to be
    developed
  • Generate significant savings - cash and process
    (NAO cost of each transaction is 28!)
  • The preferred route to market for most education
    suppliers

109
  • COMMON MYTHS
  • They are heavily subsidised by their parent
    Authorities
  • There are no profit drivers
  • Standard business costs are not paid (rates,
    rent, cost of capital)
  • Staff are seconded from the parent authorities at
    no or minimum cost
  • Support functions are provided at no charge
  • Any losses are written off by the owners
  • Their main customer groups are mandated to use
    them

110
  • SIMILARITIES AND DIFFERENCES
  • No 2 Consortia have the same Business Model
  • Most operate as large mail order operations with
    a product emphasis directed at the education
    sector
  • YPO operates a large food buying, storage and
    distribution facility including frozen foods, but
    has only recently moved into strategic
    procurement- they do have very significant call
    off contracts and are the largest public sector
    supplies operation in the UK
  • ESPO are class leaders in Strategic Procurement
    with their trading arm being a smaller part of
    their business
  • WMS concentrates on being the leader in
    transactional procurement, and has developed a
    significant expertise in Energy buying

111
New EU Directive recognises Consortia (2006)
Ability to combine to provide goods and services
Consortia established in law (UK)
Local Govt Goods and Services Act 1970
Education main market but other public bodies
able to join in
Enabling Act
112
  • THE GROWTH OF CONSORTIA
  • From small beginnings the Consortia grew into
    multi-million pound businesses
  • Current T/O pa on transactional trading is
  • - YPO 100 million
  • - ESPO 25 million
  • - WMS 15 million
  • YPO and ESPO have annual T/O of 300 and 400
    million respectively
  • Developing sales outside Owning Authorities
    territories helped to generate significant
    turnover growth

113
Thatcher Govt 1988 Education Reform Act
Central Govt. expected the private sector school
supply operations to move in
?
Limit Town Hall intrusion
Mandated use of in house operation now unlawful
Schools able to leave LA control (Grant
Maintained)
Private Sector expected to see dramatic growth
114
  • POST EDUCATION REFORM ACT REALITY
  • Private sector competitors to the Consortia hoped
    to grow under the new freedoms given to schools
  • The Consortia, with their one stop shop
    facility, were ideally placed to exploit the new
    opportunities
  • Schools took time to adjust to their new
    freedoms, changing only the things which had the
    greatest impact and leaving those things which
    worked for later action
  • There was little motivation to move away from
    established systems of buying
  • Even the poorest performing in-house supplies
    operation seemed to provide a good enough service
  • Private sector educational suppliers with similar
    product portfolios to those offered by Consortia
    watched as Consortia sales outside their
    traditional territories grew substantially

115
  • BESA COURT ACTION AGAINST YPO
  • The British Educational Supplies Association
    undertook legal action against YPO, the largest
    of the Consortia, referring to the size and scale
    of YPOs trading in February 1996
  • BESA argued that YPOs trading was now so large
    as to fall outside the 1970 Goods Services Act
  • Judicial review action was against YPO but it
    threatened the commercial existence of all local
    government Consortia
  • Suggestion by some BESA members is that the
    action didnt represent all BESA members

116
  • THE OUTCOME OF THE COURT CASE
  • His Honour, Mr Justice Owen, commented as
    follows
  • It is ironic that in 1970 a Parliament........not
    averse to protection for local authority or
    state enterprise, gave local authorities powers
    which in 1996 are challenged in a free enterprise
    economy by a body representing private
    enterprise
  • Ruling found in favour of YPO
  • Ruling established that there could be no
    geographic limitation provided actions fell
    within the 1970 Act
  • BESA appealed the decision
  • June 1997, Lord Justice Brown upholds the
    previous decision

117
  • NEW POWERS UNDER LABOUR
  • The Labour Government has taken a much wider view
    than the Goods Services Act
  • Authorities should be at the heart of their
    communities and to have powers to deliver
    community benefit
  • Wellbeing Powers introduced in 2000. Authorities
    free to take any action they felt had the effect
    of improving the lot for the local citizen
  • No general power of trade under the Wellbeing
    Powers
  • July 2004, a new Power to Trade Act became law,
    allowing Authorities to do anything incidental to
    statutory powers they wish
  • Consortia now able to deal with the voluntary
    sector and even the general public?

118
  • EU PROCUREMENT RULES
  • All public sector buyers, including Consortia
    buyers, are bound by EU procurement rules
  • These complex and prescriptive rules are being
    overhauled and a new Consolidated Directive is
    shortly to be introduced
  • Sellers have important rights under the rules
    including the right to challenge key decisions
  • General view that any challenge might jeopardise
    future trading relationship, but there is little
    evidence to support this
  • January 2005, Freedom of Information Act became
    law. This has extended the right to know for
    suppliers.
  • The release of any information likely to damage
    an authoritys commercial interest is likely to
    be exempt

119
Weve been here before!
  • 1982 John Banham reviews Central and Local Govt
    buying
  • Purchasing placed centre stage - but the real
    stars lose out

1
1.50
2.00
2.50
3.00
SUPPLIER
  • All buyers are told to get the same price as the
    best buyers

120
The pie is only so big
Prices migrate to a standard level All deals
become visible Danger of a one off price setting
the price level for the industry The danger of
benchmarking to the top buyer cannot be
overstated
Someone forgot to tell the supplier
121
2005- Procurement tops the Agenda again
  • Government looking for significant
  • savings
  • All sectors of Govt now need to
  • demonstrate the maximum bang for
  • each 1 spent
  • Each sector now chasing efficiencies-
  • but are we all chasing the same savings
  • The price paid is now visible through
  • benchmarking and other similar price
  • comparison mechanisms

Regional Centres of Excellence
122
Supply Tensions?
Regional Centre of
Expertise?
Regional Centre of Excellence
Private Sector Competitors
Central Govt OGC OGCbs
Consortia
Single Authority Procurement Units
Local Authority Customer
123
Consortia- the real Centres of Excellence?/Experti
se??
  • Central Govt recognises that, so far, the big
    picture procurement issues have not been tackled
  • Saving targets have been met this year but the
    strategic issues still remain untouched
  • New recognition that the Consortia could be the
    delivery mechanism needed
  • RC of Es are change agents not the deliverers
    of procurement services

124
Strong and Prosperous Communities
  • White Paper published by Ruth Kelly in October
    2006
  • Aims to give local communities more control over
    their improvements
  • New ambitious efficiency gains will be
    established for 2007 onwards
  • Much greater drive for Councils to collaborate
    with each other and across sectors
  • Procurement will be at the leading edge of this
    further transformation

125
West Mercia Supplies (WMS)
Yorkshire Purchasing (YPO)
Eastern Shires Purchasing Organisation (ESPO)
Pro5
Central Buying Consortium (CBC)
North East Purchasing Organisation (NEPO)
126
  • LONG TERM TRADING RELATIONSHIPS
  • The highly competitive nature of the Consortia
    requires specialist marketing strategies
  • Main criticism - supplying companies assume one
    size fits all
  • Successful companies have adopted intelligent
    marketing strategies which meet the needs of the
    individual consortium but dont de-stabilise
    trading relationships with other Consortia
  • Each consortium is a direct competitor to the
    others as well as to the private sector
  • The education market has matured into a highly
    service and price sensitive arena
  • The problem for suppliers is greater in the
    geographic hot spots of competition

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  • SELLING SKILLS
  • Establish the buyers timescales and key drivers
    and work to them
  • Set clear objectives prior to any meeting with
    the buyer and marshall appropriate arguments
  • Dont waste time
  • Anticipate particular objections likely to be
    raised and have appropriate counters
  • Have a clear view of what you want to achieve
    from the meeting and conduct an honest evaluation
    of your performance
  • Buyers actually enjoy a challenging meeting with
    sellers who know their products and their
    markets, and who have arrived fully prepared and
    ready to do battle

128
  • PRICING STRATEGIES
  • Pricing, whilst confidential, is nevertheless
    highly visible
  • There is a need to develop strategies which
    protect suppliers relationships with all the
    Consortia
  • Volume related pricing strategies are too
    simplistic
  • Need to look at the depth and range of products
    stocked and the motivation of the buyer to
    develop new sources of supply which could become
    long term competitors
  • Consider production dead spots, value
    engineering, distribution economies and unique
    product mix offerings

129
  • SMEs AND CONSORTIA
  • Consortia need to seek out niche suppliers,
    typically with restricted capacity
  • SMEs are ideally placed to offer this service
  • SMEs which offer product and service offerings
    which are in direct competition with Consortia,
    particularly in the educational sector, will have
    difficulty in establishing a trading relationship
  • Consortia are also significant users of
    specialist services needed to run their multi
    million pound businesses. This presents many
    SMEs with significant opportunities to work with
    Consortia

130
Any Questions?
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Martin Scarfe London Borough of Newham
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Talk To Suppliers
  • Martin Scarfe
  • London Borough of Newham

134
Suppliers - A Councils Perspective
  • What Are We Doing?
  • What Are you Doing?
  • The Future

135
What Are We Doing?
  • Government Targets
  • Efficiency
  • eProcurement
  • Collaboration
  • Regional Centres

136
Council eProcurement
  • 96 Councils are e enabled
  • Purchasing Cards
  • Electronic Orders
  • email, XML
  • Marketplaces
  • New Contracts with e in them!!

137
Council eProcurement
  • eSourcing
  • Tenders
  • ALL Contracts Over 10,000
  • RFQs
  • ITTs
  • Council websites

138
Council eProcurement
  • Construction
  • Social Services
  • Education (non schools)
  • Consultancy

139
What Are You Doing?
  • Do you have a website?
  • Do you use email?
  • Can you receive orders electronically?
  • Personal emails dont count!!
  • Can you accept card payments?

140
What Are You Doing?
  • Can you send invoices to customers as .pdf
    attachment…or better!!
  • Have you seen Councils websites for Contract
    notices?
  • Can you collaborate?

141
The Future
  • ALL Council contracts over 10k electronically
  • 98 of ALL transactions In/Out electronically
  • Collaborative Contracts

142
Useful Information
  • www.nepp.org.uk
  • www.rcoe.gov.uk
  • www.ogs.gov.uk
  • www.YOURCOUNCIL.gov.uk

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Terry Brewer Head of Procurement, London Fire and
Emergency Planning Authority
145
Selling to the Emergency Services
  • Terry Brewer Chief Executive Officer
  • Firebuy

146
Outline of Presentation
  • About Firebuy
  • About PEPS
  • Purpose of selling to guide
  • Procurement processes rules
  • Firebuy policies
  • Tendering procedure
  • How suppliers can apply
  • Procurement opportunities

147
About Firebuy -1
  • Audit Commission / Cap Gemini
  • Step change through central focus
  • NPS launched November 2005
  • Firebuy responsible for implementation
  • Work commenced on next strategy

148
About Firebuy - 2
  • Formally commenced on 1/4/06
  • Non-Departmental Public Body and company Limited
    by Guarantee
  • Will be a public corporation from 1/4/08
  • Chair 6 Directors Open appointment
  • Ex-officio Directors CFOA, LGA LFEPA
  • Funding position

149
About Firebuy - 3
150
About PEPS - 1
  • What is PEPS?
  • PEPS is the Centre for Procurement Excellence in
    the Police Service. Our purpose is to facilitate
    improvements in police procurement by promoting
    and facilitating collaborative working and best
    practice. PEPS Strategy
  • PEPS will work with stakeholders to deliver
    procurement efficiency and value for money. and
    will develop capacity and capability to embed and
    sustain excellent procurement performance across
    the Service. In other words. we want to take the
    best of what we do in procurement and help
    everyone do it better everywhere in the Police
    Service.

151
About PEPS - 2
  • PEPS High Level Goals-
  • Coordinate the delivery of procurement value and
    efficiency targets across the Police Service
  • Identify and implement opportunities to develop
    national standards, specifications and contracts
  • Lead or promulgate the development of
    collaboration and aggregated procurement across
    the sector and beyond
  • Reduce duplication of effort and transaction
    costs
  • Develop and promote a vision for the organisation
    and management of procurement
  • Identify and promulgate best practice in
    procurement processes, techniques and approaches
  • Develop procurement staff capability and
    competence through professional development
  • Coordinate an approach to management information
    and benchmarking that supports the commercial
    objectives of the Service.

152
About PEPS - 3
153
Selling to the Emergency Services
  • Police forces or fire and rescue services will
    typically buy through the following routes
  • Use of a OGC / purchasing consortium arrangement
    or direct purchase for commodities
  • Use of a Firebuy contract or collaborative police
    force contract for specialist requirements
  • However this is not a hard and fast rule!

154
Procurement Processes Rules
  • Procurement activities reflect guidance from OGC
  • All procurements comply with relevant EU or other
    international procurement rules
  • Value For Money based on most economically
    advantageous tender
  • For major procurements full options appraisal
    carried out including financial checks

155
Typical Tendering Procedures
  • Current threshold levels
  • Up to 5,000 minimum 1 quotation required
  • 5,000 - 20,000 minimum 3 quotations required
  • 20,000 - 75,000 minimum 3 tenders required
  • 75,000 to EU threshold minimum 5 tenders
    required
  • Over EU threshold full process compliance

156
Look for Selling to Guides
  • One stop shop for suppliers
  • Place for suppliers to find out information about
    future procurement opportunities
  • Information about procurement processes and rules
  • Explains tendering procedures
  • Give details of how suppliers (particularly SMES)
    can apply
  • Use supply chain for procurement solutions
  • Encourages suppliers to contact with new products
    or innovations
  • Details of procurement contacts

157
Policies that you need to be aware of
  • Health Safety
  • Equalities Diversity
  • Environmental
  • Sustainabilty

158
How Suppliers can apply
  • Suppliers should view websites for future
    procurement opportunities
  • In particular look at Blue Light Database
  • Encourage smaller organisations to work in
    partnership with national suppliers
  • Key factor is market awareness for both suppliers
    and procurers
  • Procurers are seeking best value for money
    solution using the supply chain

159
Procurement Opportunities
  • Spreadsheet with future opportunities
  • Encourage suppliers to profile new products
  • Key procurement contact listed
  • Information on timescales/future action required

160
Summary
  • Emergency services very similar to rest of public
    sector
  • Similar needs plus specialist products

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Nicol Thornton East of England Regional Centre of
Excellence
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THANK YOU FOR ATTTENDING
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