PROCUREMENT STRATEGY

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1 APPENDIX R PROCUREMENT STRATEGY October 2011 Author: Jennifer McLaren, Assistant Principal, Finance & Resources Impact Assessment Date: Date: October 2011

2 Contents 1 Strategic Context Strategic Objectives Strategic Development Implementation Plan Review... 6

3 1 Strategic Context The College s expenditure on bought-in goods and services is 3 million per annum. At all times the College has an obligation to ensure that all income, regardless of source, is expended wisely in the best interest of the future direction of the College with operational evidence of having procured best value. Best value procurement will be transparent; be driven by desired results; create the most economically advantageous balance of quality and cost; reduce the burden on administrative and monitoring resources; lead to simplified or routine transactions; encourage open and fair competition; follow all appropriate regulations and legislation. The Public Procurement Reform Programme will focus on targeted efficiencies through use of appropriate models and information systems, of effective procurement policies and practices and collaborative contract arrangements. The College s Vision is To be a high performing and creative College with a national reputation for excellence in demand led learning and skills development. Cost-effective and best practice procurement is an essential factor in ensuring that the College makes the most of its limited resources to attract the best students and staff. By purchasing appropriate and reliable goods and services, the College is able to stretch budgets in support of its teaching, community and business support objectives. There is currently no specifically assigned responsibility in the form of a procurement specialist within the College. While purchasing activities are undertaken in a variety of ways within academic and support functions, the Assistant Principal, Finance and Resources has overall responsibility for the role and purpose of the procurement process within the College. The intention of the Procurement Strategy is to set out a number of key objectives to encourage, monitor and deliver the most effective procurement process. Procurement Strat/APF&R/Aug

4 2 Strategic Objectives To promote the delivery of value for money through good procurement practice. To facilitate the development of an effective and co-ordinated purchasing effort within the College. To analyse the College s non staff expenditure and apply appropriate procurement strategies to deliver value for money and reduce commercial risk. To develop appropriate management information in order to measure the performance and value for money achieved by the College. To embed sound ethical, social and environmental policies within the College s procurement function and to comply with all relevant UK Legislation in all aspects of College purchasing. 3 Strategic Development The Assistant Principal, Finance & Resources will be responsible to the Principal for the implementation of the Procurement Strategy, reporting annually on progress to the Finance and General Purposes Committee. 4 Environmental The College has an Environmental and Sustainability Policy through which it will: comply with, and exceed when possible, all applicable legislation, regulations and codes of practice; ensure that all staff are fully aware of the Environmental and Sustainability Policy; ensure that all environmental risks are assessed, managed and controlled; integrate sustainability considerations into all our business decisions; minimise the impact on the environment and our sustainability of our core activities; and review and continually strive to improve our sustainability and lessen our impact on the environment. The College shall meet its objectives set out above and where relevant, consider Environmental and Sustainability impacts on its procurement activities. Procurement Strat/APF&R/Aug

5 5 Implementation Plan STRATEGIC OBJECTIVE 1 - to promote the delivery of value for money through good procurement practice and optimal use of procurement collaboration opportunities Support for Category A and B contracts where appropriate. Aggregated purchases (time and volume) to tender at institutional level. Procurement practice referenced to Procurement Journey or CoE guidelines. Embed procurement policy. Conduct expenditure analysis. Establish a contracts register. Identify key purchases and key suppliers through development of supplier and contract management processes. Review procurement processes and responsibilities for appropriateness. Key Performance Indicators Assess % spend on Cat A, B and C Contracts of top 50 suppliers. Increase assessment by 50 suppliers on an annual basis. Maintain contract compliance on an annual basis. Assess expenditure. Reduce supplier base by 100 suppliers by December 2012 Implement Customer and Supplier Surveys for key contracts and suppliers. Use feedback to improve contracts and supplier performance. Procurement Strat/APF&R/Aug

6 STRATEGIC OBJECTIVE 2 - to facilitate the development of an effective and coordinated purchasing effort within the College Co-ordinated purchasing activity with advice on process communicated internally and externally to present and potential suppliers on how to do business with the College directly or through APUC. Maximise use of approved contracts and opportunities for collaboration. Efficient procurement processes in terms of e.g. requisitions, approvals, order and invoicing processes. Develop intranet and internet communications pages to explain contracts availability, access and implementation (intranet) and ways of doing business with the College (procurement web page) Make best use of internet and website and head of procurement process to engage APUC account manager for support. Establish a contracts register and monitor usage of contracts. Consider and exploit potential of collaborative contracting opportunities with neighbouring institutions or other publicly funded contracting authorities (LA, NHS, blue light services). Liaise with APUC account manager. Optimise the use of: electronic requisitioning and approval, e- procurement, e-tendering, procurement cards, consolidated invoicing. Key performance Indicators Increase use of PCS for quick quotes in two areas of the college by Implement Supplier Survey for key suppliers Use feedback to improve contracts and supplier performance. Analyse expenditure on an annual basis assessing supply base and identify collaborative opportunities. Investigate small value orders and possible e-procurement solutions to manage suppliers and spend on an annual basis using APUC Expenditure Analysis Spreadsheet. Procurement Strat/APF&R/Aug

7 STRATEGIC OBJECTIVE 3 to analyse the College s non-pay expenditure and apply appropriate procurement strategies to deliver value for money and reduce commercial risk Improved, accurate and comprehensive management information. Establish measurement and monitoring processes in respect of procurement function and process costs. Key performance Indicators Develop performance management reports Report these to Senior Management Team on an annual basis from STRATEGIC OBJECTIVE 4 - to develop appropriate management information in order to measure the performance and value for money achieved by the College Regular review of benefits and outcomes agreed with APUC account manager. Improved management of suppliers by means of performance review with key suppliers. Develop benefits measurement appraisal to record efficiencies generated by procurement activity. Performance data collated on key suppliers using contract management data this data regularly discussed with suppliers to manage areas for service improvement or opportunities for innovation. Support from APUC account manager useful here. Key Performance Indicators Improve vfm Develop reports on cash/non cash benefits in line with APUC guidance on benefits and efficiency measurement and the benefits statement by July Develop formal contract management process for MFD contract. Assess management information to ensure contract compliance and improvement Procurement Strat/APF&R/Aug

8 STRATEGIC OBJECTIVE 5 - to provide leadership and policy guidance to ensure that corporate and social responsibilities are appropriately reflected in the College s procurement objectives and practices The College gives appropriate consideration to corporate and social responsibility issues throughout the procurement cycle. Regular reviews made of the College s procurement strategy, initiatives and achievements. The Procurement Journey is used as a reference for procurement strategies and operations. The Suppliers Charter is a reference for procurement practice. Progress on sustainable procurement is referenced against the Flexible Framework. Work with APUC and sector representative bodies to strengthen good practice. Liaise with APUC account manager to ensure that the procurement process remains consistent with good practice and regulatory compliance Key performance Indicators Implementation of the Procurement Sustainability Test during Consider assessing against the FF during Through APUC Acct Management meetings, review procurement processes and regulatory compliance in line with any changes required. 6 Review The strategy will be reviewed on an annual basis by the Assistant Principal, Finance & Resources, and monitored by the Finance and General Purposes Committee. Procurement Strat/APF&R/Aug

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