Crawley Borough Council E-Procurement Strategy

Transcription

1 Crawley Borough Council E-Procurement Strategy

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3 Crawley Borough Council E-Procurement Strategy March 2008

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5 Crawley Borough Council E-Procurement Strategy Executive Summary The aim of this strategy is to explain the different facets of e-procurement and clearly set out how Crawley Borough Council will approach e-procurement. This document links with the Council s Corporate Plan, the Procurement Strategy and other procurement policies and guidance. 2. Definitions a) Procurement Procurement is the process of acquiring goods, works and services, covering both acquisition from third parties and from in-house providers. The process spans the whole life cycle from identification of needs, through to the end of a services contract or the end of the useful life of an asset. It involves options appraisal and the critical make or buy decision. National Procurement Strategy for Local Government, October 2003 b) e-procurement The role of electronic technologies throughout the whole life cycle to streamline the procurement processes from identification of a need through to acquisition and payment, with the benefits of e-procurement generally seen as:- reducing paperwork reducing supplier queries reducing re-keying and errors controlling spend through an approval process improved management information standardisation and rationalisation of process sharing of contracts across directorates and organisations E-procurement covers five key areas:- e-sourcing (including e-tendering); e-auctions; purchasing cards; e-marketplaces; the purchase to pay (P2P) process (i.e. the process from e-ordering through to e-invoicing and e-payment). 3. Background and Context This strategy is one of two supporting documents, the other being a Sustainable Procurement strategy, of the council s Corporate Procurement Strategy. The relationship is explained in the diagram below. National legislation and best practice Joint Procurement Strategy E-Procurement Strategy Sustainable Procurement Strategy Procurement Procedures (Putting the strategies into practice) Best Practice Procurement 3

6 Crawley Borough Council E-Procurement Strategy a) Internal Context i) Council Expenditure During Financial Year 2006/2007 Crawley Borough Council spent approximately 39m (Capital and Revenue) with 2500 suppliers and processed approximately invoices. Analysis of the expenditure data has revealed some further cleansing will be required before establishing the baseline for Crawley Borough Council expenditure with trade suppliers from which performance measures will be made. This shall be one of the priority actions of the new Procurement Strategy. ii) Crawley Borough Council s Policies Care has been taken to ensure the use of e-procurement does not impair the Council s Corporate Plan objectives for supporting local business and supporting sustainability. Both of these important areas are factored into the e-procurement objectives shown below. b) External Context i) The National Procurement Strategy for Local Government (NPS) Launched over three years ago this strategy was one of the main driving forces behind local government adoption of e-procurement tools, via the setting of e-commence targets for councils to meet. Most of these targets have been met, but a few remain outstanding, either because the business case does not yet justify the adoption of the technology or the supplier market place has not yet fully embraced the opportunities the technology could bring. ii) t-government Initiative Formerly the e-government initiative and now focused on transforming government, this is a complementary stream to the national procurement strategy. T-government endeavours to maximise the electronic interface opportunities between local government and its customers. iii) EU Legislation Changes to the EU procurement legislation introduced in 2006 provided incentives for the greater use of electronic means through shortened timescales for electronic advertisements in the Official Journal of the European Union (OJEU) and the use of e-tendering. New procurement options such as Dynamic Purchasing Systems were also introduced in the new legislation and these rely heavily on the use of technology. iv) e-enablement of supplier base The Council must also have due regard of the e-capabilities of its supplier base. Whilst e-enablement can deliver significant efficiency benefits to both buyer and supplier, it can also be a costly exercise for both if inappropriate technology is chosen or implemented incorrectly. Council officers should consider the cost to suppliers of e-enablement when developing an appropriate contracting strategy for their requirements. 4. Crawley Borough Council e-procurement Objectives i) e-sourcing This is the sourcing of goods and/or services by electronic means, which in some cases may include the use of e-tendering. In the first instance, the Council will ensure that all sourcing requirements will be via the Council s Central Contracts Register and the contracted suppliers listed on the Sussex e-marketplace. Where these requirements are not available from a contracted supplier, officers may use the wider e-marketplace to 4

7 Crawley Borough Council E-Procurement Strategy source suitable suppliers. Only if the requirements are not available through either of these routes should departments consider using other e-sourcing or traditional sourcing routes. The Council will support the use of e-tendering processes where these systems can make the process quicker and more efficient and deliver it in a cost effective manner for both the Council and the suppliers. Often the cost of these systems can be prohibitive for a Borough Council to purchase in its own right. As a priority area of this new strategy, discussions will be held with other councils in Sussex with a view to collaboration in, or joint purchase of, an e-tendering system. In the interim, and as a minimum, departments with a requirement to tender for particular goods or services will advertise their requirements as widely and transparently as possible to encourage bids from local suppliers and Small, Medium Enterprises (SMEs) in accordance with the Small Business (SME) Friendly Concordat, which the Council has committed to support. It is recognised best practice to publicise requirements on the Council s Selling to the Council web page and on the Government and Sussex Enterprise approved Supply2gov web site. Ability to supply interested companies with electronic copies of the tender documentation is also encouraged. For requirements in excess of the EU Procurement Threshold an electronic notice should be published in the Official Journal of the European Union (OJEU) using the Council s preferred EU Notice provider, further details are available on the Procurement Intranet Site. ii) e-auctions As the name suggests this is the process of bidding via electronic means. However, unlike traditional auctions the prices reduce, rather than increase, over time. These auctions are sometimes referred to as Reverse Auctions. The Council recognises that e-auctions can play an important part in the procurement process of appropriate goods and services. However the value of many commodities purchased at District or Borough council level is insufficient to justify the costs associated with the acquisition and use of e-auction software. Therefore the council will consider the use of an e-auction on an individual commodity/contract basis when the value of business (e.g. via collaboration with other councils) is deemed sufficient to generate savings in excess of the cost of running an e-auction. iii) purchasing cards In broad terms purchasing cards are very similar to the use of a personal credit card. Purchase cards can be a cheap and quick means of e-enabling suppliers and could be especially useful when dealing with SMEs. Purchasing cards can streamline and speed up the procurement process, and can have preset monetary thresholds and authorisation levels built into them. Unlike an e-procurement system purchase cards cannot monitor commitment and the suppliers used prior to purchase. However, purchase cards can have an important place in the Council s overall e-procurement strategy being a useful tool particularly for one-off purchases, buying from the internet, buying from suppliers not currently e-enabled, purchases that would previously have involved a cheque with order or petty cash reimbursement and for use by field workers without access to a computer. The Council will consider implementing a purchase card trial during the term of this strategy. If successful the use of purchasing cards will be extended as required. iv) e-marketplace An e-marketplace is a virtual marketplace bringing numerous suppliers in one or more market segments together under a single web site and providing customers with a single entry portal to access these suppliers. The Council has purchased an e-marketplace from IDeA (Improvement & Development Agency) and this 5

8 Crawley Borough Council E-Procurement Strategy as an essential piece of the e-procurement jigsaw, providing access to contracted suppliers who have undergone a formal accreditation and/or tender process. The marketplace will be fully integrated with the Council s Financial Management System (FMS) e-procurement module with the aim of a seamless electronic procure to pay process which will remove unnecessary manual processes. The Council will also use the implementation of the e-marketplace as a mechanism to rationalise the supplier base and cut out maverick (i.e. off-contract) purchasing. Measures are already in place for the creation of new suppliers on the FMS to be subject to the approval of the Procurement section. As part of the e-marketplace development the Council will support fellow Sussex users of the IDeA Marketplace (Chichester District Council and Horsham District Council) in the creation of a Sussex Marketplace. The regional marketplace should assist identifying commonly used suppliers and provide opportunities for greater collaboration between the three councils, allowing improved terms to be negotiated. It is hoped that the Marketplace will also provide opportunities for accredited or contracted local suppliers to increase the amount of business they undertake with the three councils. Ultimately the Sussex Marketplace membership may extend to other Sussex councils but there are no plans to actively recruit additional members in the short term. v) Purchase to Pay (P2P) This covers the whole process of buying, receiving invoices and paying electronically. There are two main strands to P2P, e-ordering and e-invoicing. The Council recognises the benefits P2P can bring in streamlining and speeding up the procurement function, with the checks and authorisation required by a manual purchasing system built into the e-procurement system. The Council is currently implementing an e-purchasing module of the Cedar Open Accounts financial management system, the use of which the Council shall make mandatory for departments to place orders with suppliers. The module will be fully integrated with the e-marketplace to provide access to the full range of suppliers and allow commitment accounting. Any remaining manual ordering systems will be removed, save for the use of petty cash for emergency purchases. e-invoicing is the means of electronic billing and payment as opposed to the issuing of paper based invoices. The Council recognises the efficiency benefits e-invoicing can deliver to both the Council and the suppliers it trades with. Processes at both the Council and it s suppliers would be streamlined by the adoption of an e-invoicing system which should be able to automatically check an invoice against a goods receipt note and process payment, thereby guaranteeing the Council pays suppliers within 30 days. However, the Council also recognises that the speed of e-invoice adoption will undoubtedly be supplier led, and will therefore work closely in supporting and encouraging the Council s key suppliers to trade electronically. As an interim measure, the Council will adopt invoice scanning technology which will ensure that paper invoices are scanned and sent electronically for approval. Furthermore, once an invoice has been received an automatic invoice matching routine will take place, this will enable the Council to streamline the processes involved in paying an invoice if the relevant purchase order and goods receipt note has been completed. 5. Document Review This e-procurement strategy will be periodically reviewed to reflect changes in the Council s Corporate Plan, the Council s Constitution and Contract Standing Orders, the Council s Procurement Strategy and to incorporate changes required due to the greater adoption of e-procurement systems. These reviews shall be conducted not less than on an annual basis. 6

9 Crawley Borough Council E-Procurement Strategy Appendix 1 E-procurement Action Plan Current Position The Council has acquired a new e-procurement module for its Cedar Open Accounts financial Management system and has acquired the IDeA e-marketplace. The Council also uses an electronic system to place tender advertisements in the Official Journal of the European Union (OJEU). Key Activities: To develop and adopt e-procurement (the process of doing business electronically ) through the enhancement of the Council s existing technology and electronic systems to acquire goods, works and services and payments from third parties. To recognise that e-procurement covers a number of distinct areas throughout the procure to pay cycle including e-sourcing, e-auctions, purchasing cards, e-marketplaces, and e-invoicing, and to use ICT to reduce the cost, and improve the efficiency and effectiveness of all aspects of this process for the Council and its suppliers. Success Measurements: Establishment of a Crawley BC and Sussex Marketplace; number of e-catalogues hosted on, and volume of business processed via these e-marketplaces to increase Create and regularly produce financial/procurement reports extracted from FMS The reduction in the number of transactions made and suppliers used. An increase in on-contract expenditure The Council will by the end of:- March 2009 March 2010 March Undertake a comprehensive Spend Analysis to obtain accurate baselines on which success of e-procurement may be monitored 2. Implement, and fully integrate the Cedar Open Accounts e-procurement system with the IDeA Marketplace software. 3. Implement, and fully integrate the Cedar Open Accounts invoicing scanning and auto-matching technologies. 4. Develop and implement a shared Sussex e-marketplace in conjunction with other Sussex councils 5. Consider implementing a Purchase Cards trial. 1. Further develop the Sussex Marketplace with an increase in number of catalogues hosted and in the level of business 2. Host all CBC contract details and place all business opportunities on the South East Business Supplier Portal 3. Review, and where supported by a robust business case, adopt a suitable e-tendering platform 4. Monitor performance of e-procurement systems via agreed KPIs 5. Conduct e-invoicing trails with the Council s key suppliers 1. Roll-out e-invoicing with the Council s suppliers 7

10 Crawley Borough Council E-Procurement Strategy Appendix 2 The E-procurement Jigsaw How the different strands of e-procurement will fit together with Crawley Borough Council e-sourcing e-auctions P2P (Purchase to Pay) (Cedar finance system) Purchasing Cards e-marketplaces 8

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