GMFRS Strategy. Procurement Finance and Technical Services. Greater Manchester Fire and Rescue Service. Policy Template (Draft)

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1 GMFRS Strategy Procurement Finance and Technical Services Greater Manchester Fire and Rescue Service Policy Template (Draft) July 2012

2 Contents Contents... 2 Document Details... 3 Document Version Control... 3 Approval Process... 3 Consultation & Engagement... 3 Related Documents... 3 Strategy Statement... 3 Scope... 4 Aims and aspirations... 4 Where are we now?... 5 Background... 5 PESTLE / SWOT Analysis... 6 Where do we want to get to?... 7 Corporate Aims Supported... 7 Goals... 8 How and when will we get there?... 8 Delivery plan summary Performance reporting Appendices

3 Document Details If this Strategy requires updating or editing prior to the review date please contact the Author. Document Version Control Document Version Date Author Version 1 05/11/2015 Anthony Hilton Approval Process Approval Agency Strategy Owner Andrea Heffernan Consultation & Engagement Involved DFTS directorate teams Consulted LT, CLT Related Documents Equality Impact Assessment not applicable Policy & Procedure Procurement Policy note. Guidance not applicable External not applicable Strategy Statement This Procurement Strategy defines the role of procurement in the delivery of the Authority s strategic objectives. The critical actions necessary to deliver the strategy are identified. The strategy and policies form part of the arrangements the Authority has made to demonstrate value for money and compliance with this strategy is mandatory. 3

4 This strategy replaces the previous 2013 strategy and reflects additional focus on contract management, visibility of spend, supplier performance, social value and transparency requirements. Scope 1. This strategy applies to all external procurement and commissioning of goods, services and works. Aims and aspirations 2. The Authority recognises the importance of procurement to its core business and the strategic impact of procurement decisions. Purchasing goods, services or works represents a significant interface with the economic community through the contractual relationships developed with suppliers. 3. Effective procurement of goods, services or works to support the front line service provision is vital if the Authority is to meet its core objectives and Corporate Aims. 4. The aim of this procurement strategy is to set a clear framework for procurement throughout the Authority, which reflects the Government s Agenda, the Authority s corporate plan, provides a framework for best value and value for money and which stands alongside the Authority s Standing Orders and Financial Regulations. What is procurement? 5. The term procurement has a far broader meaning than that of purchasing, buying or commissioning. It is about securing services and products that best meet the needs of users. This strategy provides a common framework within which all procurements are to be managed. 6. The Authority will use the definition of procurement as: the process of acquiring goods, works and services from third parties. The process spans the whole life cycle from identification of needs, through to the end of a services contract or end of the useful life of an asset. The Authority s procurement processes promote fair, open competition and minimise exposure to fraud and collusion. 7. The procurement department provides a professional, proactive service to efficiently plan, design and commission procurement activity and then manage the ongoing supplier performance throughout the life of the contract. 8. All procurement activity must comply with the Public Contract Regulations 2015, internal Contract Standing Orders and Authority Financial Regulations. Contract Standing Orders determine the applicable thresholds and appropriate procurement procedures and should be adhered to at all times. 4

5 9. The framework of rules for procurement is determined by UK and European Law and any Domestic and European Procurement Directives must be complied with. 10. All members of staff and members involved in any procurement activity must be aware that procurement procedures require probity, accountability and are auditable. 11. This strategy is underpinned and supported by the Procurement Policy note. Where are we now? Background 12. This Strategy aims to build on the previous strategy to reflect the more strategic role of procurement within the Authority. 13. Fundamental to this strategy are our Procurement Principles. These principles will guide how we conduct procurement and in recognition of the impact of effective procurement the Authority s approach to procurement will; Ensure effective and efficient procurement control and management; Deliver an innovative, cost effective and fit for purpose service to customers; Deliver value for money via modern, economically and socially responsible practices whilst ensuring fairness and transparency; Increase the professionalism and commercial skill in regard to procurement activity; Ensure that contracts are robust, fit for purpose, deliver required outcomes and demonstrate value for money. Continually improve supplier and contractual performance via relevant key performance indicators and improved contract management arrangements. Maximise sustainability and collaboration in our procurement activities; Provide opportunities to local and SME (small to medium enterprises) suppliers to participate by increasing visibility of our procurement opportunities; Deliver cost savings and efficiencies; Consider social value implications in procurement activity; Ensure that all contracts are let in line with the Public Contracts Regulations Monitor and measure procurement performance, promoting continuous improvement; Ensure stakeholder engagement in all contracts. Support the devolution agenda as part of the Greater Manchester Combined Authority (GMCA). 5

6 PESTLE / SWOT Analysis 14. The political issues that will influence this strategy are; The Devolution of powers to Greater Manchester; The appointment of a new Mayor; The increased collaboration between public sector organisations. 15. The economic issues that will influence this strategy are; Continuing budget pressures; The financial standing and wellbeing of our suppliers and residents. 16. The technological factors that will influence this strategy are; The use of online tendering platforms; E-market places; ICT policies; Supplier and product innovation. 17. The legal factors that will influence this strategy are; The Public Contract Regulations 2015; Authority Contract Standing Orders; Authority Financial Regulations; 18. The ethical and environmental issues that will influence the strategy are; Compliance with the requirements of the Social Value Act 2012; Supporting the requirements of the Sustainability Strategy via sustainable procurement; Supporting where applicable, the requirements of a living wage. 19. SWOT table below 6

7 Strengths Upskilled, more flexible, proactive procurement function with track record of delivery. Can do attitude and ability to add value and deliver required outcomes. Able to build on a number of strategic relationships both internally and externally to deliver savings. Thorough knowledge of Public Contract Regulations Contract management expertise and experience of delivery. Opportunities Visibility and reporting of third party expenditure to assist in procurement planning. Early involvement in projects allowing additional value to be added. Contracts database highlighting current position and future planning. Ability to make cashable savings and efficiencies through increased competition. Ability to add value to strategic projects and deliver required outcomes. Improved contract management with strategic suppliers can lead to additional benefits and improved performance. Weaknesses Lack of awareness of the benefits that procurement can offer. Forces improved planning which can sometimes be viewed as delaying the process and contrary to short term demand. Historical view of function and/or ability. Ownership of contracts, supplier relationships and historical arrangements at a team or directorate level. Threats Non-involvement of procurement on key projects may lead to contracts being let that are not fit for purpose. Opportunities may be missed to add additional value to projects if not tendered via procurement. Potential for staff to be influenced by suppliers. De-aggregation of spend to avoid Contract Standing Orders and tendering thresholds. Lack of understanding of governance requirements. Where do we want to get to? Corporate Aims Supported 7

8 This section of the template is to identify the purpose of the strategy and how it will help us to achieve any of our Corporate Aims: (Prevention; Protection; Response; Public Value; People; Principles) Corporate Aim Prevention Protection Response Public Value People Principles Commentary Will support the delivery of strategic projects within Emergency Response to facilitate operational service delivery. Will assist in delivering value for money, cashable savings and efficiencies. Goals 20. The strategy will assist in achieving; DL7 Support business resilience and growth; DL10 Continually improve our service, providing value for money and a balanced budget How and when will we get there? General 21. For all procurement activity, the outcomes and objectives to be achieved and the steps that will achieve them need to be clear. The assessment of risk associated with any procurement will be assessed and minimised accordingly. 22. All major procurement should be adequately planned and consideration given to the resources required in achieving the desired outcome. 23. Wherever possible, requirements/specifications will be expressed in terms of outcome and performance based to provide scope for supplier innovation. Value for money 24. Procurement procedures should be effective and focussed to enable the achievement of value for money. 8

9 25. Whole life costing methodologies should be used when appropriate i.e. consideration of the total cost associated with any purchase. An example may be the procurement of a fire appliance costs associated with spare parts and ongoing maintenance needs to be considered. 26. Collaborative working will provide the opportunity for working with other fire authorities, local authorities, public sector bodies and agencies. The Authority will review all options for the procurement of goods, services and/or works and consider potential collaboration with other fire authorities, local authorities, Consortia and the private sector where appropriate. 27. The Authority will continue to promote and invest in existing collaborative and partnership arrangements. 28. The consistent use of corporate Contracts and contracted suppliers across a wide range of areas whenever possible ensures that risk is reduced i.e. the contracted suppliers have been evaluated, governance has been undertaken and that internal systems have been set up to receive and promptly pay invoices. The Procurement department will have undertaken the appropriate process to ensure that improved terms e.g. extended warranty and improved pricing e.g. fixed prices for the term of the Contract are applied to the Contract. Failure to use contracted suppliers and/or existing arrangements can increase transaction costs. Sustainable procurement 29. Sustainable procurement is not simply about purchasing environmentally friendly products. 30. The Authority intends to use the way in which it procures goods and services to support the five goals of its Sustainability Strategy, the five aims of which are; A 50% reduction in CO2 equivalent emissions vs. 2008/09 A 25% reduction in total waste volume vs. 2008/09 Environmental salvage a daily part of fire fighting Fully quantified cost and volume of water used operationally All GMFRA employees trained in carbon literacy 31. Suppliers are encouraged to adopt practices that minimise their environmental impact and deliver community benefits in relation to their own operations and throughout their supply chain. Sustainability enhancements and targets both internally and with the supply chain, both upstream and downstream, will be sought to support continuous improvement. 32. Small to medium sized Enterprises (SME s), local suppliers and the voluntary sector are encouraged to bid for appropriate contracts. 9

10 33. Whole life costs, both financial and environmental are to be considered when making purchases or tendering, to investigate not only the product purchased but also maintenance, re-use and disposal etc. to ensure value for money is achieved. 34. The Authority aims to reduce the amount of waste going to landfill by encouraging re-cycling of reusable materials and minimise wastage generally by encouraging staff and stakeholders to consider whether a product or service is required before they buy. Social Value 35. Compliance with the requirements of the Social Value Act 2012 is mandatory and requires the Authority to take into account economic, social and environmental well-being in connection with public sector contracting arrangements. The Authority is signed up to the (GMCA) Social Value Procurement Policy and this must be included within all tender documentation. 36. The Authority seeks to make a positive contribution towards social inclusion, securing improvements to the environment and minimising environmental impact through its procurement activity. Evaluation criteria involving social considerations will be used as part of the tender evaluation process where appropriate. Contract Management 37. A more robust approach to supplier performance, visibility of spend, performance via key performance indicators (KPI) will allow for more rigorous contract management to be undertaken. 38. Contract management to be led initially by the procurement team with the inclusion of key stakeholders that will allow for and address the following; Effective monitoring of contracts within a standardised approach; Use of contracts database and spend data to plan projects and contract renewals. Inclusion of KPIs within tender documents and contracts aimed at improving visibility of performance; Identifying and addressing poor supplier performance and enhancing supplier relationships through regular contract review meetings; Leads to more informed procurement approaches in the future; Ensure robust contract and performance management information is included within tender documentation and contract terms and conditions; Driving out potential savings and efficiencies from contracts; Procurement led, but an agreed understanding of roles and responsibilities with stakeholders; 10

11 Raising contract management skills within the Authority; Underpinning of strategic objectives through contracts for initiatives such as Social Value and Sustainability. 39. A contracts database shall be utilised and contain all AGMA, GMFRS specific, regional, national and contracts let via framework agreements. All documentation and information relating to the contracts, tenders, pricing schedules, supplier performance and management information, shall be stored in a consistent manner allowing the procurement team to have access to all relevant information regarding specific contracts. Electronic Procurement 40. E-procurement systems streamline all aspects of the purchasing process. All the Authority s procurement activity should be processed via the Authority s electronic financial or e-tendering portal. 41. The Authority seeks to process transactions electronically as far as possible. E-procurement solutions that provide efficiencies will be implemented as appropriate to deliver lower transaction costs, reduce off-contract spend* and minimise paperwork therefore providing efficiencies and environmental benefits. 42. EU Procurement Directives (for goods and services with a total contract value above 172,513 and for works above 4,322,000) e-procurement is mandated, specifically publishing notices to OJEU (Official Journal of the European Union). The Procurement department must be included in any EU procurement process and will publish the relevant documentation in adherence to internal Contract Standing Orders and the Directives. 43. Suppliers are encouraged to register on the Authority e-tendering system. 44. The Procurement department will ensure guidance, support and training is provided where necessary. 45. *Off-contract spend is expenditure for goods, services and/or works from a source outside of a formal existing arrangement. Purchase cards 46. The Authority shall continue to use Purchasing Cards for low-value purchases direct from suppliers, primarily to replace petty cash but also in instances where low value goods and services can be purchased that are not covered by a corporate contract. This will be reviewed continuously with a view to increasing the scope of products and services that are procured via purchase card. 11

12 47. Purchase Cards must be utilised as per the guidance and purchase card user guide. The purchase cards incorporates key controls: Monthly or period limits of spend Point of sale controls at cardholder level Supplier category blocking Risk Management 48. Procurement is subject to risk and uncertainty. The risk that procurement outcomes will not match the initial objectives need to be recognised from the outset and suitable risk management response developed. This may involve consultation with various directorates or departments at varying stages of the procurement cycle. 49. Commercial risk to the organisation should be managed effectively through best and robust procurement practice. 50. Risks should be managed and reside with those most able to effectively manage them. This may require the supplier to accept risk within the Contract terms. Business Continuity Management (BCM) 51. BCM is an integral part of the business planning strategy utilised throughout the Authority. Procurement projects must seek to protect all services and functions by increasing levels of preparedness and reduce risk to the organisation via a proactive approach to BCM. 52. Suppliers are encouraged to follow the same philosophy and consideration within complex, high value procurements must be included. Training and Development 53. The procurement department will deliver procurement training, guidance and advice at a local level as required within the Authority to raise awareness and improve compliance with Procurement rules and regulations. 54. Corporate Governance training will be provided to all ELT staff. 12

13 Delivery plan summary No. Development Goal 2015/ / /18 DV8 DV18 DV34 Review the fleet of special appliances, make recommendations for improvements and implement as required. Identify opportunities for greater collaboration, integration and/or sharing services with other public, private and third sector organisations, make recommendations and implement as required. Support the delivery of Public Sector reform and the Greater Manchester Strategy. X X X X X X X X X Performance reporting 55. KPIs relating to local and regional third party expenditure will be reported monthly and quarterly via Corporate Planning and Intelligence to the Leadership Team. 56. Spend data is published monthly as part of the Government s Transparency data requirements. Appendices 13

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