Procurement Strategy. June Procurement Strategy

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1 June 2015 Procurement Strategy

2 Contents 1. VISION 2. PURPOSE 3. PROCUREMENT OBJECTIVES 4. PROCUREMENT AIMS 5. PROCUREMENT MEASURES 6. KEY PERFORMANCE INDICATORS 7. REVIEW Page 2 of 10

3 1 VISION Proactive management of our procurement activity across all business areas will play an integral role to help ensure a seamless delivery of our services. Scottish Canals vision is to promote the effective use of procurement expertise across the business to ensure legal compliance, drive down costs and improve efficiency whilst actively promoting the principles of best value, equality and diversity, corporate social responsibility, and sustainability. 2 PURPOSE This Procurement Strategy supports the strategic aims and objectives as detailed in Scottish Canals Corporate Plan ( whilst working within the Scottish public finance manual (SPFM), the wider requirements of the Scottish Government s Public Procurement Reform agenda, and the UK and EU Legislative requirements. Our purpose is to become a high value, high impact area of the business, building a greater level of rigour to existing core procurement processes. This will be achieved by developing strategic tools and systems to deliver a level of service and performance that is recognised and valued by all stakeholders, both internal and external. Procurement is not just about cost and quality, it encompasses the wider elements of sustainability, economic, social and environmental measures to generate savings and identify efficiencies that can be reinvested in other activities. Incorporating these practices will enable procurement to play an integral role in ensuring that Scottish Canals core activities are properly supported. The procurement team has and will continue to analyse and transform procurement processes, and systems to enable a strategic, as opposed to transactional, focus. The team will continue to develop a proactive and collaborative approach to procurement, identifying customer needs through the development of strong internal relationships, understanding market dynamics, delivering against key corporate and public sector wide targets. An action plan will be produced each financial year to support the delivery of the Strategy and ensure it remains aligned with Scottish Canals corporate objectives and the evolving requirements of public procurement reform in Scotland. In summary, procurement priorities will be focussed on policy development, service delivery and sustainable economic growth through: Efficiency & collaboration Delivery of savings and benefits (economic; social and environmental) Improved access to contracts, in particular, for Small and Medium Enterprises (SME s) Making sustainable procurement business as usual Improving procurement capability Page 3 of 10

4 3 PROCUREMENT OBJECTIVES The procurement team will: Provide a value for money service using best practice and, when appropriate, make use of collaborative opportunities to maximise savings and efficiencies. Provide quality advice and contracts that deliver quality products and services. Procure goods and services in an environmentally sustainable manner. Ensure that corporate social responsibility (CSR), including the wider remit of community benefits, equality and diversity, health and safety, and information governance requirements are fully addressed in Scottish Canals procurement processes and resulting contracts. Undertake transparent procurement which encourages SME participation. Exploit opportunities for collaborative procurement across the wider public sector. Ensure effective contract and supplier management. Engage fully with stakeholders to ensure that their requirements are met, and use the knowledge base within Scottish Canals to ensure the best outcome for any procurement process is achieved. Work towards an end-to-end procurement service incorporating e-procurement tools. In order to achieve these Scottish Canals will adopt the Scottish Government procurement framework, the Procurement Journey, as the base process for procurement activity which covers the following key objectives: Leadership & Governance o To ensure that there is clear direction from the Board and Executive Management Team for securing best value in procurement o To adhere to Scottish Canals delegated authority, corporate policies and procurement procedures. o Deliver economic, social and environmental benefits throughout our procurement approach. o Improve transparency and accountability for the procurement decisions we make and improve equality of opportunity for businesses who wish to work with us. o Suppliers will be treated in line with Public Sector best practice. Strategy & Objectives o To ensure that there is a clear, systematic, holistic and well-researched framework to guide purchasing decisions. o Utilise planning processes effectively to ensure that improved value for money can be obtained. Supply Need o Demonstrate a prudent and well-planned approach to defining the supply needs through sound research and openness to challenge the status quo to ensure goods and services are fully specified to maximise value for money to the business and stakeholders. Page 4 of 10

5 Sourcing Strategies and Collaborative Procurement o Demonstrate clear understanding how sourcing can best satisfy core supply needs o Use our buying power, knowledge and experience to create competitive markets. o Deliver improved quality services which meet the needs of the business. o To work closely with partner organisations, such as other public bodies, private companies, not-for-profit organisations and the voluntary sector, to ensure the delivery of better value for money solutions. Contract & Supplier Management o Scottish Canals will develop a consistent and appropriate contract and supplier management toolkit which will drive improved supplier performance and delivery of efficiencies. This will include improved communication with suppliers, the development of more consistent and simplified processes for improved contract monitoring and reporting including the inclusion of appropriate KPIs. o Commit to transparency of the procurement process and the equal treatment of all prospective suppliers within Scottish Canals procurement activity. o All procurement processes will be fully documented to provide an audit trail for any enquiries under the Freedom of Information Scotland Act (FOISA) and for the provision of feedback to Suppliers. o Should suppliers have issues with our procurement process, we are fully supportive of the Scottish Government Single Point of Enquiry as a route to resolving issues that may arise. o Procurement will engage with suppliers to ensure that appropriate training and awareness of public sector tendering guidelines is provided to suppliers across the full geographical scope of Scottish Canals. Key Purchasing Processes and Systems o Ensure efficient and robust processes and systems are in place to support and advance procurement, including the introduction of e-tendering tools and standardised documentation in line with the Scottish Government standard. Staff Awareness and Training o Procurement is committed to the continuous training to both the procurement team and staff involved in procurement activity in line with an agreed procurement financial framework fully endorsed by the Executive Management Team. o Training will be tailored to roles and responsibilities, ranging from improving visibility and general awareness, to hard skills as part of delegated procurement. o Work with Scottish Canals Heritage & Environment team to embed sustainable best practice objectives into procurement contracts. Page 5 of 10

6 Performance Measurement o Ensure sound approach to assessing and demonstrating procurement performance by participating in the revised Scottish Government assessment regime. o The results will be published and outcomes will be incorporated into procurement work plans. o Achieve continuous improvement in all categories of procurement expenditure by putting in place mechanisms for the measurement of performance and by supporting these mechanisms. 4 PROCUREMENT AIMS The Strategic objectives will be achieved by focusing on a number of key aims: 1 Reduce costs with improved efficiency and effectiveness: Scottish Canals continues to face financial constraints which will put pressure on efficient tender procedures and contract delivery. Procurement will continue to evaluate tenders using a price/quality ratio, to maintain or increase value for money within contracts. Page 6 of 10

7 A key area in which Procurement will contribute to reducing costs is through acting on management information and increasing the analysis on spend across suppliers. Effective spend management is key to reducing off contract spend and Procurement will work with key staff within Scottish Canals to identify areas where spend should be aggregated and competitively tendered to enable cost reductions through economies of scale whilst ensuring compliance with EU Procurement Regulations. 2 Develop flexible contracts which provide maximum benefits to Scottish Canals and assist key business areas to identify the appropriate solutions: Procurement will ensure that contracts appropriately deal with the day to day needs of Scottish Canals with a mixture of collaborative contracts through Scottish Government, other public sector bodies and Scottish Canals own frameworks or individual contracts which benefit Scottish Canals both from economies of scale and suitability. 3 Influence Scottish Canals to deliver goods and services as sustainably as practical by embedding environmental criteria into procurement tender opportunities: Scottish Canals is currently represented within a Scottish Government Procurement Cluster Group, ensuring that the business has a strategic influence in the formation of procurement policy and is kept abreast of developments in public procurement best practice. All procurement activity is undertaken with consideration for the environmental and social impacts of procurement by extending the principles of sustainable development and community benefits to all suppliers and contractors where this is applicable to the product or service delivery. Scottish Canals Procurement is committed to delivering sustainable procurement solutions in alignment with the Environment Strategy. 4 Develop sourcing strategies which encourage contracts with Small to Medium sized enterprises (SME s): Procurement recognises the importance of SME s to the Scottish economy and is committed to ensuring that all procurement activities are conducted in adherence with good practice in line with public sector. Scottish Canals is committed to ensuring that SME s are given an equal opportunity to bid for contracts, by advertising all contract opportunities over 50,000 on the Public Contracts Scotland portal, and incorporating lots within larger framework contracts where applicable. 5 Increase the usage of collaborative national contracts, and assist other organisations to procure by sharing best practice: Page 7 of 10

8 Scottish Canals is committed to improving collaborative procurement to achieve value for money through economies of scale. Procurement will maximise opportunities to work with other public sector bodies, this will be achieved by being open to any collaborative opportunities throughout the wider public sector to ensure value for money for all organisations and best use of the public purse. 6 Maintain compliance with EU and UK regulations, Scottish Government policy and internal processes: It is recognised that the procurement landscape is continually changing, with the introduction of EU Directives into Scots Law and the Procurement Reform (Scotland) Act Procurement is committed to ensuring that all staff participate in continuing professional development, (CPD) and are knowledgeable of current and pending applicable procurement law to mitigate any potential business risk of noncompliance. Procurement will strive to be well informed of emergent new regulations and policies by attending training courses and by continued review of Scottish Procurement Policy Notes. Procurement will communicate and advise the business of the compliance requirements of the EU and Scottish Government. They will strive to achieve full compliance with all relevant public procurement legislation whilst ensuring processes are efficient and maintaining appropriate controls. This includes informing and updating procurement policies and procedures to take account of changes to the legislation and the impact/risks these may have on the business. 7 Improve contract management: Procurement will continue to develop post-award contract management strategies, which will be decided in the project planning phase, for all contracts. This will ensure that all high value, high risk contracts are continuously monitored and managed throughout the contract life cycle, to mitigate risk to the business. Procurement will conduct a detailed expenditure analysis in conjunction with the Finance department. This analysis will be used to develop a contract management strategy for all suppliers with high value spend which will reduce off contract spend and risk to the business. The procurement team will conduct scheduled planned meetings with the designated contract managers and suppliers for key contracts to review spend and receive feedback on performance. Page 8 of 10

9 5 PROCUREMENT MEASURES The following criteria will be used to measure the procurement team s performance: Procurement Assessment Regime, which will be undertaken every two years by the Scottish Government, benchmarking against procurement departments of other public bodies. Increase the percentage of contracted spend. Development of a customer feedback form. Savings recorded and published on an annual basis. The timescales for tenders agreed with internal clients. Maintain and publish a contract register on our website. Undertaking contract management and developing a feedback procedure. Reporting on performance by way of internally developed and agreed reports and KPI s. Scottish Canals is committed to ensuring that the quality of the goods and services purchased on its behalf are appropriate to its requirements. To ensure this the following criteria will be used: By October 2015 Scottish Canals will undertake to set up a central database of all awarded contracts. Procurement will review the past performance of suppliers prior to any procurement process, addressing areas of non performance of suppliers, and developing suppliers whose performance fall short of expectations. 6 KEY PERFORMANCE INDICATORS To ensure the procurement team deliver on the strategic outcomes the following key performance indicators will be managed Key Performance Area Measurement 1. To provide a value-for-money service that delivers financial savings 2. To provide quality advice and contracts which deliver quality products and services in accordance with Public Sector and EU regulations 3. To procure goods and services in an environmentally sustainable manner Page 9 of 10 Total savings achieved year-on-year financial savings non-financial benefits provided by the contract which deliver efficiency savings % of contracts awarded within agreed timescales % of advice delivered within agreed timescales %contracts which include environmental evaluation % weighting criteria applicable to the environmental impact within the contract

10 4. Ensure that corporate social responsibility (CSR)-including the wider remit of community benefits % contracts including community benefits and delivered benefits %of contracts including ethical procurement measures 5. Undertake transparent procurement which actively encourages SME participation % private sector suppliers with a formal contracted agreement % spend with SMEs % contract split into lots 6. Working effectively across public procurement sectors, other public sector organisations and Third sector businesses % of annual procurement spend that is channelled through a collaborative contract with other publicly funded bodies % third sector suppliers with a formal contracted agreement 7. Ensuring effective contract and supplier management 8. Encourage stakeholders engagement to ensure their requirements are met, following compliant procurement practice 9. Adopting an end-to-end e- procurement service as per Scottish Government Procurement target Monitor via quarterly Customer & Supplier reviews, maintaining log of issues/standards maintained number of issues raised number completed without incident o at level 1-by Contract Manager o at level 2-by Procurement Compliance monitoring actual procurement spend outwith approved contracted suppliers number of incidents of invoices received without purchase orders The following measures will be recorded % electronic contract notice % electronic award notice % contracts through e-sourcing (e.g. electronic tendering systems) 7 REVIEW This Strategy will be reviewed and updated annually, or more frequently, as changes impact on the Strategy to ensure that it remains in line with business requirements. Page 10 of 10

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