Procurement Strategy

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1 Procurement Strategy Author Rod Strachan, Procurement Manager Sponsor Mike McCall, Director of Finance Version August 2016 Date of next review August 2017

2 Background and Purpose: The vision of the Robert Gordon University is to be recognised, in Scotland and beyond, as a distinctive university leading and shaping the debate on the future of higher education and placing students at the centre of the education it offers. It will be known for the impact of its teaching, scholarship and translational research, the employability of its graduates, its influence in the region and nation, its growing global profile, and its strong interdisciplinary focus on a small number of key questions and issues of concern to the local and global community. It will achieve its goals in partnership with academic, voluntary, public and business organisations that share its ideals and aspirations. To achieve its vision the University requires the support of a large number of external suppliers. In 2014/15 the University spent 42m (excluding VAT) on non-pay spend, this equates to around 43% of the University s running costs. The University s Procurement Department promotes purchasing professionalism to support the University in engaging with suppliers; the department is responsible for establishing and managing effective commercial arrangements to deliver the University s purchasing requirements at best value for money (to time, quality and budget). Value for money also includes consideration of sustainability objectives (economic, social and environmental) in support of common societal goals. The University Procurement Strategy takes cognisance of the environments within which the institution operates to ensure that external drivers and influences for improvement are addressed appropriately. In the HE sector in Scotland, significant external drivers of strategy planning and formulation are the procurement reform agenda, the implementation of the Procurement Reform Act, and the Public Contracts (Scotland) Regulations. Mandatory legislative compliance is coupled with an awareness of how our procurement processes may be used to support wider public policy strategic aims and desired outcomes such as those identified by Scottish Government. These strands of legislative change and programmes of improvement and reform come together in what is known as the Scottish Model of Procurement. In addition, the University Procurement Strategy will contribute to the University s A Clear Future Strategy through alignment to a number of the University s key objectives and values; it is a statement of strategic intent and a commitment to direction for procurement activities at Robert Gordon University for The purpose is to set out a medium-term strategy for the delivery of procurement arrangements across the University and objectives for success. The overarching objective is to help deliver to the University maximum value, minimum risk and appropriate supplier relationships through fair, efficient and effective processes. The strategy will be reviewed and updated annually to take account of developments and initiatives in purchasing and supply management. The Procurement Office will be responsible to the Director of Finance for the implementation of the Procurement Strategy.

3 Robert Gordon University s Strategic Plan: RGU is committed to obtaining value for money in all of its transactions, and in conducting its daily business staff must always consider the University s wider responsibilities in terms of legal, moral, social, economic and environmental impact. Effective procurement will support the key institutional objectives across these important operational dimensions. RGU has eight overarching objectives expressed in its Strategic Plan, A Clear Future For a Leading University in a New Era; these are set out below; (i) Teaching & Learning - Inspire all individuals to achieve their maximum potential and excel in the world of tomorrow. (ii) Extending Access to Learning - Enable individuals to achieve their ambitions throughout life whatever their circumstances. (iii) Student Experience - Support students and graduates to enjoy, and prosper within, a vibrant learning community. (iv) Research - Be recognised for our contribution to the growth of innovation through advancing internationally excellent translational research in our areas of strategic focus. (v) Commercialisation - Harness our intellectual and physical assets so they generate value to the economy and are profitable to the university. (vi) The Regional Community - Contribute to, and be an active leader in, the development of the regional community, alongside its increasing international profile and role. (vii) Partnerships - Secure strategic partnerships with a small number of globally recognised universities, public and voluntary organisations and companies that will support the university s key ambitions. (viii) Our University - Empower staff, students and alumni to develop a strong and engaged university community. Specific aims from within RGU s strategic plan are supported by good procurement practice, where the University shall; vi (a) vii (c) viii (a) viii (g) viii (h) Make a significant contribution to stimulating and supporting the growth and diversification of the economy. Pool resources and expertise with our strategic partners. Promote a learning environment and organisational culture that enhances the development, health and wellbeing of staff and students. Secure resources that will allow us to achieve our ambitions in a sustainable way. Renew our commitment to an environmentally sustainable campus. The University also takes cognisance of the wider Scottish Policy context, with particular regard to the Scottish Government Purpose to focus government and public services on creating a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth Section 15(5) of the Procurement Reform (Scotland) Act 2014 requires that public sector bodies must indicate in their Procurement Strategy how they intend to meet certain requirements concerning regulated procurements, and confirm certain general statements of policy. Section 5 of the RGU Procurement Policy & Procedure document meets these requirements, and has been reproduced as Appendix A to this Strategy document.

4 RGU Procurement Strategic Objectives: Leadership & Governance - To work with internal academic budget holders, professional support service colleagues and suppliers to deliver innovation and best value to the learning, research and service support communities through the development of an effective and co-ordinated purchasing effort within the University. - To develop policies and procedures that are based on national and sectoral strategies and policies, as promoted by Scottish Procurement and APUC. - To ensure that the most appropriate, efficient and effective procurement systems and processes are utilised. Value for Money: Category Management - To analyse the University s non-staff expenditure and apply appropriate measures to identify contract opportunities and deliver value for money. Value for Money: Collaborative Procurement - To sustain and further develop partnerships within the sector, with other publicly funded bodies, with professional bodies and appropriately with supply markets that will yield intelligence, innovation and deliver value to users of procurement services. - To promote the delivery of value for money through good procurement practice and optimal use of available collaboration opportunities. - To promote cooperative procurement within the University and contribute to sectoral, regional and national initiatives. Value for Money: Contract & Supplier Management - To develop and implement a contract management approach within the University, to ensure that anticipated benefits are delivered and service levels are met. - To work with the supply chains to ensure continued value, managed performance and minimal risk throughout the life of contracts for the benefit of customers and students. Sustainable Procurement - To embed sound ethical, social and environmental policies within the Institution s procurement function - To comply with relevant Scottish, UK and EC legislation in performance of the sustainable procurement duty. Developing People - To seek out professional development opportunities to enrich and enhance experience and capability of procurement practitioners. - To ensure that all staff involved in procurement continue to improve knowledge, competence and skills relevant to their role.

5 Annual Procurement Report RGU Procurement will produce a report on progress against its objectives annually and publish this on the University website. This report, produced as soon as practicable after the end of the financial year, will describe how the University has discharged its obligations under the Procurement Reform Act and how it has exercised discretion and judgement as permitted by the public procurement rules to secure strategic objectives in compliance with the Act. The Annual Report will include a summary of the regulated procurements that have been completed during the year covered by the report a review of whether those procurements complied with the University's procurement strategy to the extent that any regulated procurements did not comply, a statement of how the University intends to ensure that future regulated procurements do comply a summary of any community benefit requirements imposed as part of a regulated procurement that were fulfilled during the year covered by the report a summary of any steps taken to facilitate the involvement of supported businesses in regulated procurements during the year covered by the report a summary of the regulated procurements the University expects to commence in the next two financial years, such other information as the Scottish Ministers may by order specify.

6 Appendix A Extract from RGU Procurement Policy & Procedure (pertaining to mandatory requirements of Procurement Reform (Scotland) Act 2014)

7 5 Statements of Policy It is University policy that: 5.1 Legality, Compliance and Ethics - Purchasing activity will comply with all legal and regulatory requirements determined by Scottish, United Kingdom and European Union legislation, including the Public Contracts (Scotland) Regulations 2015, Procurement Reform (Scotland) Act 2014 and the Procurement (Scotland) Regulations Purchasing will be carried out in accordance with the University s Financial Regulations, Procurement Procedures and Contracts Policy. - The procurement process will take due account of all social, ethical and environmental impacts (see separate Sustainable Procurement Policy) and purchasing activity will support the University in fulfilling its obligations and public sector duty under the Equality Act. - For every procurement over 4m, RGU will consider how it can improve the economic social or environmental wellbeing of its area through inclusion of community benefit clauses, to assist with its strategic objective relating to The Regional Community. Such improvements could be implemented through mandated delivery of training opportunities or subcontracting opportunities within the University s area. Where possible and proportionate, such clauses may be included in procurements below 4m. - For each procurement, RGU will consider the community affected by the resultant contract and ensure any affected organisations/persons are consulted (e.g. impact on service for students, or a local contract that could be combined with other similar institution s needs). Such consultation will always be on a scale and approach relevant to the procurement in question. - RGU recognises the values of a well-motivated and dedicated workforce both in its own organisation and in those of its suppliers. Where relevant and proportionate, the institution will consider the fair work practices of suppliers in its procurements, including application of the Living Wage. - RGU is committed to contracting only with suppliers that comply with all appropriate and relevant legislation, including Health and Safety legislation. Where appropriate, and on a contract by contract basis, the University will assess the legislation applicable to a procurement and take steps to ensure bidders comply with such legislation. Where proportionate, the University may assess such compliance of subcontractors also. - RGU supports the sourcing of goods that are fairly and ethically traded. Where relevant it shall make use of appropriate standards and labels in its procurements to take account of fair and ethical trading considerations, and will consider equivalent offerings from suppliers in its tenders. - RGU will find practical ways to supply healthy, fresh, seasonal, and sustainably grown food which represents value for money whilst

8 improving the health, wellbeing and education of our teaching and learning communities, coupled with promoting the highest standards of animal welfare. The University will work to put in place affordable contracts, which meet the nutritional requirements for food for all users of our catering services. - RGU complies with the Late Payment legislation and will review on a contract by contract basis whether such obligations should be enforced and monitored further down its supply chain. - RGU will undertake regulated procurements in compliance with the sustainable procurement duty of the Procurement Reform Act. Consideration of environmental, social and economic issues and how benefits can be delivered through the procurement will be made, where appropriate and on a contract-by-contract basis. The University will utilise available tools and systems such as Prioritisation, Life Cycle Impact Mapping, Sustainability Test, Flexible Framework, APUC s Code of Conduct, Sustain and Electronics Watch where relevant and proportionate to the scope of the procurement. - RGU will conduct all regulated procurements in compliance with EU Treaty Principles of equal treatment, non-discrimination, transparency, proportionality and mutual recognition. - RGU will take steps to make it easier for smaller businesses to bid for contracts. Legislative constraints preclude preferences for only local suppliers but the local dimension can be addressed through the structure of tenders, the use of Public Contracts Scotland and Quick Quotes, training and information to build capacity and publishing a contracts register to highlight contracts for which local organisations may be interested in bidding. - RGU shall utilise portals including PCS and PCS-T to publish its procurement opportunities and shall strive to ensure appropriate use of lotting, output based specifications and clear evaluation criteria to ensure the procurement is accessible to as many bidders as possible. - University staff involved in purchasing, at whatever level, will act ethically at all times. - Any employee who makes an unauthorised purchase is personally responsible for payment of any costs incurred. Disciplinary action may also be taken which may lead to termination of employment. 5.2 Value for Money and Collaboration - The primary objective shall be to meet our needs for goods, services and works in a way that achieves value for money on a whole-life basis and generates benefits not only to the University but also to society, the economy and the environment. - RGU Procurement will analyse third party expenditure, identify EU regulated procurements [goods and services worth more than 164,176 works worth more than 4,104,394] and lower value regulated procurements [goods and services worth more than 50,000, works worth more than 2 million].

9 - RGU Procurement will sort regulated procurements into procurement categories. How these goods, services and works are bought - joint purchasing, use of local, regional and national framework agreements, consolidated contracting will be subject to annual review with APUC and through user consultation, optimal category strategies agreed, sensible aggregation opportunities exploited, category and commodity strategies developed, recorded and the most appropriate procurement routes to market chosen. - RGU will make appropriate use of collaborative contracting arrangements (e.g. national, sectoral or local framework agreements or contracts) to deliver improved contract terms, contract and supplier management, sustainable procurement outcomes and value for money. - RGU will ensure that it awards regulated procurements only to businesses [and sub-contractors] that are capable, reliable and, where relevant, that can demonstrate that they meet high ethical standards and values in the conduct of their business. - In making regulated procurement contract awards, quality, risk and sustainability factors will be considered along with cost according to declared score weightings on a contract-by-contract basis. 5.3 Operational Responsibilities - The Procurement Department will support all Schools and Departments in their duty to procure goods and services in line with value-for-money criteria, within the decentralised procurement structure. - Purchasing activity will adhere to a value threshold system, whereby contract value dictates the procurement process. - Staff development and training opportunities will be provided for all those involved in purchasing, at whatever level. - Through the Finance and General Purposes Committee, the Director of Finance will report annually on the effectiveness of purchasing within the University, using appropriate performance indicators. - In addition, this Policy and its supporting Procedures shall be subject to review and assessment by the Audit Committee in discharging its duties relating to assessing internal control systems. - Any significant breach of this Policy or the supporting Procedures will be reported immediately to the Director of Finance who will take appropriate action.

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