Strategy
Definition
Procurement in the wider sense encompasses the whole process of acquiring external goods and services, from determining and specifying the requirement, reviewing the market, sourcing suppliers, obtaining and evaluating bids, negotiating and awarding a contract, through to contract management. Strategic procurement is the development of ways of interaction with the supply market so as to exercise influence upon it, to obtain maximum supplier contribution to securing better services, value for money and delivery of strategic objectives. It requires differing approaches dependant on the service, market, value and risk.
Background
Procurement is becoming central to the delivery of high quality public services as well as simply securing value for money; it can also help the Council achieve wider objectives. Currently over £65m p.a. is spent on bought in goods and services via outside organisations and over 340 staff are involved in procurement activity to some degree. There are currently over 5,000 suppliers generating 61,000 paper invoices annually.
Sir Ian Byatt’s review of local government procurement, “Delivering Better Services for Citizens” published in July 2001, drew attention to the importance of taking a more strategic view of procurement within local authorities and the need to introduce best practice techniques. Amongst its key recommendations was that all authorities establish a corporate procurement function and set out a formal strategy for its development. The Council’s management of procurement is now measured as part of the Comprehensive Performance Assessment process.
The Best Value report on Finance reported in June 2002 and echoed many of the Byatt recommendations and led to the appointment of a new Head of Procurement for the Council. The first Bracknell Forest Procurement Strategy and its associated Implementation Plan was approved by the Full Council in March 2003.
In October 2003, the Office of the Deputy Prime Minister published the National Strategy for Local Government Procurement setting an ambitious change agenda to take forward the modernisation of procurement. Subsequently the establishment of regional centres of procurement excellence have been announced. Bracknell Forest has a seat on the management board of the South East centre and has been taking a leading role in the initiation of a number of collaborative projects in the Thames Valley region.
The financial background against which this is set is one of the Council’s expenditure exceeding its revenues, with the gap being filled from reserves. The Medium Term Financial Strategy is to bring resources and expenditure into line.
This paper represents the first full review of the Procurement Strategy in the light of the ODPM initiative and incorporates changes to demonstrate the Council’s commitment to the national initiative. It reaffirms the principles that will govern procurement in Bracknell Forest and appends a plan to make them happen.
Key Aim
The key aim of the Council’s procurement activity should be to support the achievement of the Council’s key objectives and allow concentration of more resources, both financial and staff time, on delivering core tasks and help bridge the budget gap. This will be achieved by securing best value for money, reducing or managing risk and modernising related business processes through the adoption of best practice procurement techniques for all bought-in goods and services. The Council is firmly committed to implementing the National Procurement Strategy established by the ODPM and will aim to do so within available resources, within the published timescales. The Council will work with the South East Centre for Procurement Excellence and take advantage of opportunities arising from their work in order to help fulfil this aim.
Principles
To achieve this, the following 12 key principles will form the governing basis for the Council’s future procurement.
A strategic overview will be taken of the Council’s procurement activities to ensure professional support can be concentrated on the more important and complex areas of spend. This will highlight opportunities for rationalisation of the supply base, establishment of more corporate contracts, collaboration with other authorities, partnering etc, which will reduce costs. The Council will seek to develop this further through initiatives emanating from the South East Centre for Procurement Excellence (SECPE).
Procurement will form a specific part of theCouncil’s normal planning process, both in Council’s annual Corporate Plan and individual Service Plans.
All procurement decisions will be taken on the basis of Best Value. Quality, risk management, whole life cost and employment issues, not just purchase price shall be given due weight in the evaluation of all bids. In the long term, this will reduce costs and help meet the Council’s objective of delivering better services.
E-Procurement can best be exploited by ensuring new contracts incorporate requirements for e-trading wherever practical and collaborating with neighbouring authorities to establish a viable local E-MarketPlace based on a strong platform of joint procurement activity.
Procurement will support wider Council objectives. It will therefore be consistent with the aims and objectives included in the Council’s:
- Community Plan
- "All of Us" Community Cohesion Plan
- Environmental policy
- Medium Term Objectives
- Departmental Policy Objectives
- Core aims and objectives set out in other strategic documents
Related business processes should be simplified to free staff to concentrate on the Council’s key priorities. Appropriate solutions should be developed to exploit the opportunities offered by new technology to automate high volume low value purchasing. This will allow procurement staff to focus more time on complex projects and strategy. This will release staff time for core business activities.
Supply Markets , especially in key strategic areas of expenditure, will be engaged more directly to improve mutual understanding so they can better respond to the Council’s needs. This should reduce costs and deliver better services.
All staff involved in procurement (including schools) should have access to relevant training and professional advice to ensure they can make use of best practice techniques. A network of procurement practitioners within the Council should be established through which guidance will be disseminated and experience shared. Teams undertaking Best Value reviews or larger projects will include a procurement professional as a matter of course. This should reduce costs and deliver better services.
The organisation of procurement will continue to be based on the delegation of day to day procurement activity to departments, with the issue of professional advice and guidance and overall strategic direction being the responsibility of the Head of Procurement. However the Head of Procurement will be responsible for the establishment and strategic management of corporate contracts, where they are appropriate.
All procurement activity must be subject to a high standard of ethical behaviour, consistent with the Council’s Code of Conduct. It must be fair and, subject to normal commercial confidentiality, open.
Development of the Procurement Function will reflect the priorities established in the National Strategy for Local Government Procurement published by the Office of the Deputy Prime Minister in October 2003.
Procurement practices, policies and processes, including this strategy, will be subject to continuous improvement with monitoring and evaluation backed by best practice benchmarking. Where appropriate this will be carried out in cooperation with SECPE.
CMT and Member Involvement
The Leader will act as the Council’s Procurement Champion. This role includes:
·Scrutiny of Annual Report on procurement activity within the Council, prepared by the Head of Procurement. This report would cover the overall scope and extent of procurement, identify the main contracts awarded and forthcoming programme, identify achievements, lessons learnt etc. This will be the main vehicle through which this responsibility is discharged.
Overall scrutiny of the activities of the Strategic Procurement Group (SPG). The SPG will report to CMT through the Director of Corporate Services and Resources and thence to the Executive and/or Full Council where appropriate.
Promoting the wider, strategic benefits of a more professional approach to procurement. This will be a joint responsibility of the Director of Corporate Services and Resources and the Procurement Champion.
Strategic Procurement Group
The Strategic Procurement Group has been established to oversee the development of Procurement in line with this Strategy and in particular the associated Implementation Plan. The Group is chaired by the Head of Procurement and consists of DMT-level representatives of each Department and the Assistant Borough Solicitor.
Key Drivers For Change
The key drivers for implementation of these changes are considered to be:
- top level commitment to both the Council’s Procurement Strategy and the National Strategy
- establishing good lines of communication with the procurement community within Bracknell Forest
- training
- collaboration and aggregation via the Thames Valley Procurement Forum and SECPE
- Availability of professional Procurement support
- E-procurement
Appendix 2 - Procurement Strategy Implementation Plan
Aims
To support the achievement of the Council’s key objectives and allow concentration of more resources, both financial and staff time, on delivering core tasks. This will be done by securing best value for money, reducing or managing risk and modernising related business processes through the adoption of best practice procurement techniques for all bought-in external goods and services.
Objectives
1. Take a strategic overview of corporate procurement.
1.1 Undertake annual Portfolio Analysis to identify key spend areas and suppliers; track changes in key markets.
1.2 Identify scope for aggregation of demand into larger/corporate contracts; develop annual corporate contract programme.
1.3 Ensure adequate contract management and performance monitoring arrangements are in place for all new corporate contracts
1.4 Identify scope for collaborative arrangements via Thames Valley Procurement Forum, SE Regional Centre of Procurement Excellence, Association of Directors of Social Service SE Region Procurement Group etc
1.5 Maintain database of the procurement community within BFBC
1.6 Create key procurement performance measures against agreed baseline (see Annex C)
1.7 Prepare an Annual report to the Director of Corporate Services & Resources and the Leader (as Procurement Champion).
Establish procurement as specific element in corporate and departmental planning process.
2.1 Incorporate Council’s procurement strategy and this implementation plan in the Council’s annual Corporate Plan.
2.2 Establish procurement strategy/plan for each individual department as part of annual Service Plans
2.3 Review plans annually in normal planning process
Adopt a commercial approach, in line with Best Value principles, to all procurement decisions
3.1 Evaluate all bids on quality as well as whole life cost wherever appropriate
3.2 Review procurement processes and Contract Regulations (and keep them under review)
3.3 Prepare process guide in the form of a Procurement Manual and best practice toolkit with standard documentation and procedures to help Departmental staff; keep under regular review.
3.4 Ensure in addition that Departments have access to professional advice/involvement wherever needed
4. Develop scope for E-Procurement.
4.1 Develop and maintain links with neighbouring authorities and other public bodies to identify scope for collaborative procurement and establishment of local E-MarketPlace
4.2 Ensure new contracts incorporate requirements for e-trading wherever possible and practical.
4.3 Identify scope for e-tendering and e-auctions using these procurement methods where appropriate to do so.
4.4 Trial use of Government Purchasing Card in areas of high volume/low value
4.5 Develop and publish a separate e-procurement strategy to coordinate activity across the Council.
5 Commit to principles of sustainability, community cohesion, and ethical procurement and have regard to the needs of local SMEs where these can be achieved within the terms of Best Value principles
5.1 Develop appropriate best practice guidance to staff in conjunction with Sustainability Action Group and Community Cohesion Group, as part of Procurement Manual, taking account of relevant guidance published by central government.
6 Simplify business processes
6.1 Establish framework agreements for high volume/low value goods and services;
6.2 Prepare process guide in the form of a Procurement Manual and best practice toolkit with standard documentation and procedures to help Departmental staff. This will include advice on contract management and performance monitoring.
6.3 Ensure effective interfaces with other Council systems and processes
7 Improve Communications with markets
7.1 Publish annual procurement plan/programme of forthcoming contracts
7.2 Identify markets that do not deliver optimum performance and seek to develop/manage them to better effect
7.3 Identify opportunities for greater partnership working/collaboration with suppliers/markets; monitor the new Partners in Construction contracts established for general building works
Publish a "Selling to BFBC" guide on the Council’s website
7.5 Initiate development programme with major suppliers and partners
Ensure availability of appropriate training and guidance for all staff involved in procurement (incl schools)
8.1 Undertake procurement skills gap analysis
8.2 Develop training programme, buying-in expertise as required
8.3 Prepare Procurement Guidance Reference Manual covering principles and processes and summarised Mini Guide
8.4 Prepare detailed best practice toolkit with standardised documentation
The organisation of procurement will remain largely devolved to departments, but:
9.1 Improve communications with staff and schools
9.2 Develop feedback system for identifying lessons learnt from individual procurement exercises and sharing best practice
9.3 Ensure clarity in all guidance issued (Use plain English)
9.4 The Corporate Procurement Team will be strengthened in order to deliver more cashable savings (see KPIs – Annex C).
10 Ensure all suppliers are treated fairly and openly in the award of Council contracts
10.1Prepare Ethical Code as part of Procurement Manual and integrate with Council’s Code of Conduct
11 Aim to implement the National Procurement Strategy for Local Government within the prescribed ODPM timescales
11.1 Prepare annual report of achievements and plans against National Strategy’s checkpoints
Commit to continuous improvement of all procurement practices and procedures and supplier performance through proactive contract management.
12.1 Regularly review Contract Regulations, Procurement Manual and Toolkit
12.2 Initiate benchmarking review of procurement and refresh bi-annually
12.3 Establish and monitor Key Performance Indicators for Procurement
12.4 Establish KPIs for all major contracts as a means of monitoring supplier performance and driving improvement in service levels
Procurement Strategy 2005 Annexes (485kb)
Annex A - BFBC Procurement Strategy Implementation Plan Progress Statement March 2005
Annex B - National Procurement Strategy Progress Statement March 05
Annex C - Key Procurement Performance Indicators
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