Procurement work plan - Mid-year update & progress report

Transcription

1 Agenda Item Executive Leader (Advisory Panel). 2 December 2002 Report of the Director of Resources & Head of Financial Services Procurement work plan - Mid-year update & progress report Purpose 1 The purpose of this paper is to: Introduction Inform Members of the progress made to date against the original 2002/03 work plan for Procurement approved by Leader EMAP on 12 June 2002; Advise Members of proposed changes to the plan in light of limited resources and emerging priorities. 2 A systematic review of the original 2002/03 work plan for Procurement has been conducted following the appointment of a temporary Procurement Adviser on the 23 September. This incorporates matters highlighted by the Corporate & Financial Scrutiny Board since the plan was originally reported and also comments arising from a recent review of service by the District Auditor Draft summary report Procurement 2001/ This paper set out: the progress made to date against the seven key areas of activity programmed in the Procurement work plan for 2002/03; necessary amendments to the plan in light of emerging priorities and service constraints arising since the work plan was approved by Members earlier this year.

2 Update & progress 4 The original work plan for Procurement detailed the key activities to be undertaken further to the following seven priorities for the service in 2002/03: strategic issues; documentation & advice; corporate contracts; major procurements; regulatory work; developing the market place; work with YPO and other organisations. The main tasks and activities associated with each of these priorities, along with an update of the progress made to date in respect of each of these areas and proposals to amend planned activities (as appropriate) is summarised in Exhibit 1 overleaf. Strategic Issues 5 The Director of Resources has been working with two other Directors and the Chief Executive to address strategic procurement issues. This has resulted in a draft report which has been informally considered by some members and will lead to a process for members giving strategic consideration to the Council s procurement strategy much more will need to be done, covering such areas as partnerships, green procurement etc. It is intended that this work will be completed between now and March 2003 such that members can consider a draft procurement strategy in early in the next financial year. 6 Contracts Register The District Auditor recommended that the council should maintain a central register of contracts and a list of approved suppliers. This is considered good practice in any major organisation. 7 Such a document will also ensure that the Council complies with EU directives and responds appropriately. 8 A database is being prepared, this will also contain supplementary data to enable the council to seek additional information to ensure that its effectiveness is maximised.

3 9 E Procurement The use of electronic processes to support Procurement, either via making documentation available on the web page, to the issue of Tenders, through to the production of Quotations and purchase orders, with the retention of purchase data is seen as a route to cost and process reduction. 10 Presentation A presentation to the Corporate & Financial Scrutiny Board will be made by John Herdman from Yorkshire Water this will be held on Monday 9th December 6.15pm 11 The focus will addresses Devolved v Central Procurement, Controls, Measurement, Manpower Development and the Procurement interface with the Councils overall strategy. 12 High Volume Low Value Invoices An approach is being made to suppliers of who have corporate contracts with the council to encourage them to move towards consolidated invoicing. The initial focus however will be with the Direct Labour organisation, and suppliers with whom we have high transaction volumes. 13 Purchase Cards The use of Purchase cards is currently being considered, and a small working party is preparing an implementation plan. Documentation and Advice 14 Goods for Suppliers Advice Supporting the development and an understanding to suppliers, advice notes have been prepared. Corporate Contracts 15 The range of contracts as reported in June have been reviewed with our suppliers, these are currently being widely used, but additional emphasis will be made to bring the benefits of these contracts to all user departments. 16 The range of contracts will be expanded, this expansion will be based on an analysis of spend and cross council use. 17 Corporate Contracts will only be successful if all relevant parties are engaged in preparing the contract requirements.

4 18 Design & Printing Steady progress is being made; currently we are seeking details of our current suppliers & sample documents that we have purchased commercially. Discussions will then take place with them to enable us to outline a way forward. This will include the development of a design & a printing contract. 19 The current expenditure is in excess of 1/2m per annum. It is anticipated that this contract will be in place by 1 st April 03, noting that it will be subject to EU Directives. 20 Taxi & Vehicle Hire The provision of transport provided by the council is vast and varied. Transport is used by a wide range of people and is a cross council issue. There are a range of contracts in place, however over a process of time the use of these contracts is not as robust as it could be, principally as a result of changes in service need. 21 Bed, Breakfast & Removals Discussions are at an early stage to redefine the existing arrangements. The contract for the provision of removals is currently being considered. 22 Agency Staff We are on target to issue the tenders for this work in November, these tenders will initially be for Administrative & Clerical Staff, however provision will be built into the documentation to allow other staff groups to be included subject to need and satisfactory service levels. 23 Vehicle Spares Procurement will support the Direct Labour team to ensure that the purchase of vehicle spares is co-ordinated by a contract, following the evaluation of the current trial. Major Procurements 24 There has been no substantive action by the procurement team since the last report, however following receipt of the Audit Commissions Report Housing Management I anticipate significant support being offered in this area. Developing the Market Place 25 This process is at a very early stage, and there is nothing significant to report other than the comment on advice to potential suppliers.

5 Yorkshire Purchasing Organisation & other organisations 26 Yorkshire Purchasing Organisation The YPO is a major Local authority Trading Organisation, based in Wakefield. The City of York Council has two members on its Management Committee. Last year YPO s turnover was considerable of which 45m was for stock items. From this latter figure the city s transactions amounted to 932.4k from which we obtain our dividend. 27 Positive networking continues with procurement staff within the Yorkshire & Humberside Forum. Key issues arising 28 As Exhibit 1 shows, much good progress has been made so far this year despite significant resourcing constraints prior to the appointment of a temporary Procurement Adviser in September However, some key work remains outstanding, principally: The movement to electronic Procurement and improvements to the management information system.; The use and expansion of Corporate Contracts; The implementation of the recommendations of the District Auditor in his report Draft summary report Procurement 2001/ The activities identified above, are the base line for the current work plan, Those identified for completion will be completed and outcomes reported. 30 Some work, as identified has a longer time scale,particularly that associated with E Procurement, the reduction in Invoices and the implementation of the District Auditors report. The initiatives taken with YPO are at an early stage and considerable work will be required to implement a programme that allows us to improve our trading with this organisation, this together with the contracting work outlined will take all of the Procurement teams resources for the remainder of the financial year. Conclusions 31 Much good progress has been made since the Procurement work plan was originally reported for Members approval in June The main focus of activity since late September following the appointment of the temporary Procurement Adviser has been to: identify the high spend areas that are not covered by contractual arrangements for further action;

6 support the need to address a history of high volume/low value invoicing at the Council, and; engage more effectively with the YPO 32 However, given the vacancy factor in the team between April and September this year, progress has been slower than originally anticipated leading to delays in actioning some areas of work. Equally, a number of new additional works have also been identified, mainly in respect of the recommendations of the District Auditor that require implementation. In light of these matters it has been necessary to revise this year s work plan to reflect these necessary changes. Recommendations 33 It is recommended that Members: note the progress made to date against the original 2002/03 work plan for Procurement summarised in Exhibit 1 above; consider and endorse the proposed changes to the plan discussed in paragraphs x-x above, in light of in year resourcing constraints and emerging priorities and service needs requiring action and amendment in 2002/03. Author Derek Nash Procurement Advisor Tel: November 2002 Background papers Work programme for 2002/03 Joint report of the Chief Officer (ODU) & the Head of Financial Services (June 2002) DA report Draft summary report Procurement 2001/2002. CFO Simon Wiles Director of Resources Tel: 1100

7 Exhibit 1 Summary of priorities & progress Priority Key planned outputs Progress to date Amendment required (if any) Strategic The Director of Resources has been working with two other Directors and Chief Executive to address strategic procurement issues. This has resulted in a draft report which has been informally considered by members and will lead to a process for members giving strategic consideration to the Council s major procurement decisions. Whilst this work will be done, covering such areas as partnerships, green procurement etc. A Contract database, as recommended by the District Auditor, is being prepared, this will also contain supplementary data. It is intended that this work will be completed between now and March 2003 such that members can consider a draft procurement strategy early in the next financial year. To enable the council to identify the contracts that it has, and ensure compliance with same. We will also be able to respond to requests for information & complete the statutory returns. The programme is now at a trial stage, & will be evaluated during the next three months.

8 Presentation A presentation to the Corporate & Financial Scrutiny Board will be made by John Herdman from Yorkshire Water this will be held on Monday 9th December 6.15pm The focus will addresses Devolved v Central Procurement, Controls, Measurement, Manpower Development and the Procurement interface with the Councils overall strategy. High Volume Low Value Invoices * An approach is being made to suppliers of who have corporate contracts with the council to encourage them to move towards consolidated invoicing. The initial focus however will be with the Direct Labour organisation. By virtue of the supplier, in most case being the stockist, demands are treated as individual To reduce the high volume low value invoices by 5% ( 3,000) by 30 June 03 internal procedures have been developed to ensure compatibility with business and costing needs. The council s financial processes and systems also require a high level of management information, which is based on an individual transaction basis, however discussions have been held internally and opportunities are being discussed, including the use of Web based technology, or other agreed e Procurement Processes.

9 transactions. Purchase Cards The use of Purchase cards is currently being considered, and a small working party is preparing an implementation plan. E Procurement The use of electronic processes to support Procurement, either via making documentation available on the web page, to the issue of Tenders, through to the production of Quotations and purchase orders, with the retention of purchase data is seen as a route to cost and process reduction. A trial, in three of the councils areas, is targeted to take place in April 03 To streamline costs, procesesses, and transmit documentation more effectively. Purchase Cards require a level of control, and should ideally only be used for low risk, low value items which the contracted supplier is unable to supply, or where the transaction cost is disproportionate to the value of the goods. Pilot work is being carried out by Leeds, in conjunction with the Office of Government commerce, City Council in conjunction with two other local authorities. Liaison is taking place with Leeds, both at IT & Procurement levels with a view to importing this work into York.

10 Priority Key planned outputs Progress to date Amendment required (if any) Documentation & advice (100 days) Contract Support Goods for Suppliers Advice Supporting the development and an understanding to suppliers, advice notes have been prepared. These will be available on the Councils web site within the next week or two. Ensure professional timely advice is given to those staff letting contracts on behalf of the council Work is given on as request basis A structured \approach will be given when the Contracts register is in place, from that a contract timetable can be developed and resources directed into that area Standard Contract Documentation Some work was carried out earlier this year

11 Best Value Review support Provision of Training & development sessions Procurement Intranet Site No recorded as far as I can tell during the immediate past To enhance the skill base of those engaged on the procurement function in all areas of the organisation. To ensure that procurement staff are aware of current processes and documentation This site will also be used to advice of Corporate Contracts. Excellent work was carried out on staff development relating to contract documentation, this will be developed.i am discussing with the Chartered Institute of Purchasing & Supply an enhanced training programme which will focus on contractor performance, Output specifications, whole life cycle costing and other key processes. The Councils Procurement Policy & Code of Practice are available on the Intranet site. The notice Board will be built into the Directorate Work plan following discussion with the lead manager.

12 Corporate contracts * Design & Printing Steady Progress is being made. it is anticipated that a contract will be let by April 02. To ensure that the council complies with EU directives, and with its Financial Regulations, given the value of spend which is in excess of 500k per annum Currently we are seeking details of our current suppliers & sample documents that we have purchased commercially. Discussions will then take place with them to enable us to outline a way forward. This will include the development of a design & a printing contract. Senior managers will be invited to input to these discussions thereby ensuing that any eventual contract reflects on the councils service needs.

13 * Taxi & Vehicle Hire The provision of transport provided by the council is vast and varied. Transport is used by a wide range of people and is a cross council issue. There are a range of contracts in place, * Agency Staff The current expenditure across the council is 500,000 per annum for all staff groups. Since the commencement of these contracts requirements have changed and they is not as robust as they could be. New contracts will require to be let from Aug 03 I look to a target saving of 5%, and seek to have a contract in place by April 02. To enable new contracts to be negotiated to the benefit of the council, arrangements are in hand to meet with the transport suppliers. This meeting will take place on the 24 th November. We seek to work closely with them in developing a suitable model of transport, to look at cost effective mechanisms for booking journeys, invoicing, and developments in the industry. This occasion will also enable us to bring to their notice the environmental policies of the council. As part of service improvements we are also engaging service users in the discussions. We are on target to issue the tenders for this work in November, these tenders will initially be for Administrative & Clerical Staff, however provision will be built into the documentation to allow other staff groups to be included subject to need and satisfactory service levels. Discussions are taking place with key user

14 departments and the central HR manager to finalise the documentation. given the business value an advertisement will be placed in OJEC. * Vehicle Spares To satisfy that cost effective processes are in place to support the organisation, and that the regulations are not breached. Procurement will support the Direct Labour team to ensure that the purchase of vehicle spares is co-ordinated by a contract, following the evaluation of the current trial Business Travel & Venue Hire To minimise costs across the council No action has been taken on these initiatives A review of expenditure will take place and the position will be reassessed in the light of existing commitments.

15 Priority Key planned outputs Progress to date Amendment required (if any) Major procurements There has been no substantive action by the procurement team since the last report, however following receipt of the Audit Commissions Report Housing Management I anticipate significant support being offered in this area. Regulatory work Work is on going to satisfy all parties that adequate processes are in place to support those areas where breaches were identified. This latter report is undergoing significant discussion, it will be necessary to ensure that opportunities are given to all suppliers if contracts for any activity are subsequently let. I have no definitive timetable for this work or scope of activity required at this stage. To reduce the number of Financial breaches that may place the council at risk Outline meetings are on going. Additional support will be offered to managers to support there processes.

16 Priority Key planned outputs Progress to date Amendment required (if any) Developing the market place This process is at a very early stage, and there is nothing significant to report other than the comment on advice to potential Suppliers. The Suppliers advice will be on the Councils web page within the next two weeks. Work with YPO & others The YPO is a major Local authority Trading Organisation, based in Wakefield. The City of York Council has two members on its Management Committee. Last year YPO s turnover was considerable of which 45m was for stock items. From this latter figure the city s transactions amounted to 932.4k from which we obtain our dividend. The City of York is seeking to increase its spend, subject to cost effectiveness, by engaging the YPO in a fuller range of activity, noting that it receives a return on its trading account Improvements in the profile of the YPO will support a number of the council s objectives. A marketing & awareness day has been planned for 12 Dec in the Guild Hall, this will be open for all members and staff who are engaged in the procurement function. The director of YPO will be providing opportunities on widening the commitment and demonstrating the electronic ordering system.

17 The YPO offer the city a wide range of benefits, principally in the supply & delivery of educational consumables, but also by negotiating commercial contracts for food, energy, cleaning materials and IT consumables. To support this, and promote awareness of the YPO, arrangements are in hand for a marketing forum to be held on Thursday 12th December in the Guild Hall. The format is to provide an open forum supported by a two plenary sessions. Complementing these sessions, static displays will be available. The day will focus on strengths, opportunities, and good news. York City Council purchases the majority of its educational materials, energy, provisions, and cleaning materials from the YPO the occasion will be designed to advise of these successes, and encourage directorates to be aware of the considerable opportunities that YPO can offer the council. Positive networking continues with procurement staff within the Yorkshire & Humberside Forum. YPO also has the facility to support Electronic Trading.