Lewisham Procurement Strategy

Transcription

1 Lewisham Procurement Strategy 1

2 Vision The vision of the Council is long-standing, ambitious and forward looking. It is predicated on partnership working and focuses on Lewisham as a place to live, work and learn within the broader London economy. together we will make Lewisham the best place in London to live, work and learn Values We have a series of core values which provide a benchmark for behaviour across the organisation. We put service to the public first. We respect all people and communities. We invest in employees. We are open, honest and fair in all we do. 2

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4 Introduction Definitions for Procurement and Best Value 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 cycle, form 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, which may result in the provision of services external to the Council, in appropriate circumstances. In the context of a procurement process, obtaining best value for money means choosing the bid that offers the optimum combination of whole life costs and benefits to meet the customer s requirement. This is not the lowest initial price option and requires assessing the ongoing revenue/resource costs as well as initial capital investment. The council s requirement can include social, environmental and other strategic objectives and is defined at the earliest stages of the procurement cycle. The criterion of best value is used at the award stage to select the bid that best meets that requirement. Structure of the Strategy Lewisham produced its first Procurement Strategy in 2000 and the document was updated in 2003 as part of the Best Value review of Clienting and Commissioning; and then reviewed by the Audit Commission in 2004/05. This updated strategy sets out the priorities for procurement in the council during this Mayoral cycle of service, and draws together a number of factors including : the National Procurement Strategy for Local Government the National e-procurement Project the Government s existing and developing agenda for public sector procurement the Gershon Report issues identified in the Audit Commission report the best value review of Procurement the Corporate Performance Plan, Community Strategy EU Public Procurement Regime 4

5 Context of the Strategy Procurement is the full range of activities related to purchasing goods, services and works. All Council services involve procurement. Procurement can range from buying in an entire service, say through the private finance initiative; to purchasing key components, such as large capital assets; or buying smaller inputs like office equipment. Any decision to provide a service internally rather than outsource it should also be regarded as a procurement decision. Getting procurement right is crucial for achieving the Council s vision to make Lewisham the best place in London to live, work and learn, and in particular to meet its priority to secure best value public services. It can also help the Council meet wider objectives, offer opportunities for local businesses and regeneration, and minimise administrative costs. Best Value brings new impetus to improving procurement. The growth of opportunities for purchasing services from the private sector rather than acquiring capital assets will also change the nature of procurement and jointworking with other organisations and new technology will offer fresh scope for carrying out procurement in different ways. As the Council increasingly becomes an enabler of change and a purchaser rather than provider of services, the importance of good procurement increases. Aims of the Strategy As part of the Fast Forward and One Lewisham managing change programmes Lewisham needs to act strategically in its procurement role, and an external review in early 2006 pinpointed that supply chain management should be targeted as a strategic aim to enable the delivery of the council s efficiency targets. Increased efficiency is but one of the objectives of smarter supply management; this should be allied to achieving improved sustainable (in economic terms) deals with external supply partners as this is crucial to long-term service improvement and change. And improved sustainable (in environmental terms) procurement is essential if the council s purchasing is to support overall environmental objectives. The aims of the strategy are : to ensure that procurement policies and procedures reflects our vision, values and objectives; for procurement to be well planned and managed, and to continuously improve; to work in collaboration with other public sector bodies and the London Centre of Excellence to develop a supply chain management function within the corporate procurement team 5

6 engage with all elements of the business community including SME s BME s, social enterprises and the voluntary sector to provide Lewisham with a mixed economy of service provision; for efficiency savings and quality to be clearly demonstrated by contracted services 6

7 Scope of the Council s Procurement Strategy This document sets out five key objects that the Council considers necessary for the delivery of its procurement strategy : cultural shift providing leadership and building capacity partnering and collaboration doing business electronically stimulating markets and achieving community benefits THE CULTURAL SHIFT The Community Strategy The Lewisham Community Strategy sets out the long-term vision of the borough. It brings together many individual strategies endorsed by different agencies and partnerships into one over-arching document. It aims to establish activity until 2013 to enhance the quality of life of local residents, based on the needs and aspirations of Lewisham s citizens. Establishing priorities for improving the quality of life in the borough requires an understanding and analysis of a number of key factors: the borough - an understanding of the distinctiveness of Lewisham as a place, the broader city and regional context and the economic trends affecting the borough; locality - recognition of the characteristics of different localities within Lewisham; local need - an assessment of the needs of Lewisham s communities; community concerns and aspirations - an assessment of residents attitudes to local public services and to wider concerns about life locally; national government - an appreciation of the Government s aspirations and targets for public service delivery as well as locally agreed targets for Lewisham; performance - an analysis of how well public agencies meet local needs and deliver services that meet quality standards. These priorities are currently reflected in all strategic procurement decisions arising out of service reviews, the Council will ensure that they are considered in all procurement and purchasing arrangements. The Community Strategy is subject to annual reviews and any changes resulting from this will be incorporated into future revisions of the Procurement Strategy. 7

8 Best Value Best Value should form the basis for all procurement decisions, and for deciding whether services should be provided internally or externally. Under Best Value, service procurement, capital investment decisions and private finance initiative (PFI) projects should not be seen as separate issues: they are all part of delivering best value and securing outcomes that the public needs. Best Value requires that all options be considered when assessing services and making individual procurement decisions. Quality and risk must be taken into account as well as cost. Procurement Decisions The main circumstances in which procurement decisions arise are : following a service review; resulting from prudential borrowing; in implementing the capital and repair and maintenance programmes; prior to the expiry of an existing contract; identification of a new corporate contract; as a result of external funding opportunities contract failure, or as a matter of urgency or expediency The principles of the Council s procurement strategy apply to all forms of procurement, however, particular emphasis is placed on those decisions that are high risk and/or high value and/or of strategic importance to Lewisham. Procurement Principles Procurement covers the complete chain of action, from determining what is to be achieved through pre-tender enquiries and purchasing to managing the relationship during the contract. Strategic aims, service delivery and procurement should all be linked in the same process. There are five stages in a good procurement process: approval of the process; designing and setting the specification of outcomes sought; commissioning or purchasing to maximise the chance of achieving the desired outcomes; managing the process to ensure that the outcomes are achieved, including continuous improvement; reviewing the process undertaken. A fundamental question that is likely to arise early in this process is whether to procure a good or service externally or to provide it internally: to make or buy. This is addressed below. 8

9 Whatever process is followed, it must: determine and define the good or service that is to be procured; consider all the possible types of procurement suitable; use best value as the determinant of decisions; try to use and encourage innovation; keep transaction costs as low as possible; develop the necessary relationships with suppliers, service providers and partners; allow and include proper evaluation, measurement and auditing. Value for Money Public sector purchases are not judged on obtaining goods, works or services for the lowest possible price, but on Best Value or value for money. This includes the quality and other attributes of the resulting goods, works or services. It is a judgement based on the best combination of the cost of a product or service, spread over its whole lifetime, and its ability to meet, but not necessarily exceed, user requirements. This is normally achieved through comparing suppliers' prepared bids, and by testing the market. Equality and Procurement Lewisham has a positive duty to promote equality in carrying out its functions. We aim to achieve a consistent approach to equality in the delivery of all services. The Council expects people working on our behalf to practice equal opportunities. They must be clear about the council s position on equality, and be aware of the requirements placed upon them to adhere to our policy. The Council believes that it has an opportunity to hold more organisations accountable for achieving greater equality by using public procurement and commissioning to further equalities goals throughout the supply chain. The EU Public Procurement Directive implemented in the UK in January 2006 makes explicit the scope to take social and environmental issues into account at the relevant stages of the procurement process. Lewisham s commitment to equalities extends to all stages of the contract process, from standard evaluation procedures of tenderers to contract clauses and monitoring. The Directive allows a contracting authority to use award criteria aiming to meet social requirements, provided such criteria are linked to the subject matter of the contract. However it is important to ensure that obligations contained in social legislation are considered at the outset of procurements, to enable an assessment of their impact and relevance to be undertaken. One social aspect that the Council is initiating is to include the provision of a Living Wage proposal in the service contracts awarded by the authority. The purpose of this provision is to ensure that the outsourcing of services or contracting with external providers does not drive down the rates of pay for members of staff employed by companies to work on Lewisham contracts. 9

10 The CPT will work with the Business Advisory Service and the Centre for Procurement Excellence to assist in the planning of the procurement process to ensure its accessibility to a suitable variety of suppliers including bodies like small and medium enterprises, social enterprises, black and minority ethnic enterprises, women s and disabled-owned businesses and the voluntary and community sector. Sustainability In 2001 Lewisham committed itself to achieving continual improvement in its environmental performance and issued an Environmentally Responsible Procurement Policy. The key policy statement stated that the Council aims to deliver services that are resource efficient, that minimise the generation of waste and which contribute to a more environmentally, socially and economically sustainable society, whilst meeting current needs. This policy committed Lewisham to achieving continual improvement in its environmental performance by: identifying the environmental impacts of its services and working practices setting objectives to reduce those impacts and improve performance. In 2006 the Sustainable Procurement task Force published Procuring the Future subtitled the Sustainable Procurement National Action Plan, the main aim of which is to make the UK a leader in sustainable procurement in the EU by Sustainable Procurement was defined as a process whereby organisations meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life basis in terms of generating benefits not only to the organisation, but also to society and the economy, whilst minimising damage to the environment. The action plan identified three building blocks to assess the council s progress and to plan future activities: adopting a consistent approach the Flexible Framework setting and dealing with priorities Toolkit for Procurers The Council will aim to meet the identified milestones to ensure that Lewisham stays on track to improve its performance in sustainable procurement by

11 PROVIDING LEADERSHIP AND BUILDING CAPACITY Leadership in Lewisham Executive Role Mayor (or other appropriate Cabinet Member) The Mayor (or other appropriate Cabinet Member) will take responsibility for all procurement-related issues and act as the Procurement Champion within the Executive. The Mayor (or other appropriate Cabinet Member) role will be to: Agree procurement strategies, polices, procedures and practices for recommendation at Mayor & Cabinet (Contracts) or Council; Agree recommendations on procurement matters related to key decisions or Category A contracts (supplies and services above 500,000 and works above 1,000,000) Scope the Best Value/Service reviews At the Annual Meeting of the Council present the mayoral scheme of delegation, although this can be amended at any time throughout the year Overview and Scrutiny (Business Panel) Lewisham has established an overview and scrutiny function, of which a select committee, the Business Panel may scrutinise and review decisions of the Executive [in case of procurement issues - Mayor & Cabinet (Contracts) committee]. When the Business Panel considers the decisions it may either: take no action, in which case the decision becomes effective at the conclusion of the Business panel meeting; refer the matter back to the decision maker for reconsideration [call-in]; refer the matter to Full Council, if it appears that the decision which the Executive has taken is contrary to the policy framework, or contrary to or not wholly consistent with the budget. The Business Panel also has a role in policy review and development, and once recommendations have been formulated the Panel would submit a report to the Executive for consideration. Corporate Management Role The Chief Executive and the Executive Management Team recognise the benefits of a strategic approach to procurement. The Executive Director for Resources will take responsibility for all procurement related issued discussed at the EMT and act as a Procurement Champion. The Executive Director for Resources will work with the Head of Procurement to provide advice to the Mayor [or other appropriate cabinet member] on 11

12 issues relating to the Procurement Strategy and procurement processes and procedures, and in particular : the scope of any service review the adoption of procurement strategies, policies, procedures and processes for recommendation at the Mayor & Cabinet Committee or Council; the arrangements for procurement and contract management; the key decisions required on the procurement processes for major contracts awarded; any diversity considerations that need to be addressed as part of a procurement exercise; e-procurement arrangements the monitoring of the performance in any partnership arrangement and its impact on staff; the recommendation of individual procurement strategies to be adopted for high risk / high value projects. Management Function The Corporate Procurement Team will be managed through the Resources Directorate and the core procurement expertise is located in the Procurement Group reporting directly to the Executive Director for Resources. The CPT have developed close ties with teams under the Head of Corporate Resources, particularly Systems and Finance in relation to supplier management and the Oracle procure-to-pay system. These teams will carry out periodic reviews to analyse tactical and/or routine procurement spends relating mainly to supply contracts. In the service directorates other nominated staff with procurement responsibilities link with the CPT to form the Corporate Procurement Board. Members of the board will have the authority to speak on behalf of their directorate or service group and to use their influence to impact on implementation activity. Procurement Skills and Training Under the National Procurement Strategy training and development programmes have been put into place for members, senior management and project teams to enable them to acquire the relevant skills. These skills should include the creation of capacity and capability for successful procurement, contract management and supplier relationships. The Head of Personnel and Development will ensure a skills audit is undertaken on a periodic basis. Training priorities for procurement are: Code of Practice for Procurement 12

13 EU Public Procurement Directives and Community law applicable to contracts Standing Orders and Financial Regulations Project Management Handbook Contract Management The Council will liaise with the London Centre of Procurement Excellence and other professional bodies to access external training or develop in-house opportunities. By 2008 the Council aims to provide a full suite of training packages for Members and staff in discharging their responsibilities in relation to procurement. PARTNERING AND COLLABORATION National Strategy Targets The strategic objective of partnering is the delivery of better services to citizens through the creation of sustainable partnerships between councils and suppliers in the public, private, social enterprise and voluntary sectors for the delivery of services and the carrying out of major projects, including construction. The strategic objective of collaboration is to obtain better value of bringing councils and other public bodies together at local, regional and national levels to combine their buying power and create shared services. Ethics The provision of clear ethical policy statements and codes of conduct are a basic requirement, and should be covered in the following documents: mandatory code of conduct for Members mandatory employee code of conduct a policy statement on fraud contract standing orders, financial regulations, schemes of delegation. These documents emphasize that it is the duty of all members of staff involved in procurement to behave in a professional and honest manner (including adherence to rules on the acceptance of gifts and hospitality) and to treat all suppliers equally. Staff must report any conflicts of interest and any breaches of procurement procedures. Procuring goods, services and supplies ethically will ensure that decisions are made on the basis of best value for money alone. Importantly it will ensure that the reputation of the authority remains good within the market. An authority with poor procurement ethics will attract suppliers with similarly poor ethics, with reduced opportunities for productive working relationships. 13

14 Local Government Act 2003 Lewisham will seek to use the greater powers, freedoms and flexibilities prescribed by the Local Government Act 2003, particularly the prudential capital finance system to borrow funds to procure more works, supplies and services. Partnership Approach to Strategic Procurement Lewisham looks to create partnerships with contractors, suppliers and service providers across the whole range of its contracting function. The characteristics of a typical service-delivery partnership include: brings about a step-change and a cultural change within the organisation; scope includes a large range of services, allowing partners to maximise synergies; generates external investment, assisting step-change or cultural change; provides a major contribution to meeting strategic and service objectives; adopts a partnering ethos rather than a confrontational or traditional contractual approach, helping the Council to meet its goals and to develop strategy; output/outcome-based measures for success, with incentives for the provider to secure continuous improvement; a medium-term to long-term commitment to the partnership. The Council is looking to create partnerships across the broad spectrum of providers; public, private, voluntary, community and social enterprise. Partnering aims to build a more unified approach to procurement, with client and contractor working jointly with mutual objectives and realising mutual benefits. Forms of Partnership Partnerships can take many forms and the choice of service delivery partner includes : public sector consortium not-for-profit organisation voluntary and community sector Arms Length Management Organisation (ALMO) Local authority company / trust Special Purpose Vehicle (SPV) or Joint Venture Company (JVC) Frameworks agreements Partnering contracts PFI and other forms of DBFO contract 14

15 Development agreements Concession or franchise Partnerships will either be strategic, covering a number of inter-linked projects, or specific covering a single project or service area. Whatever the form of partnership chosen it will need to be supported by a formal contract and Legal Services (Contracts section) will provide advice on this aspect. PPP and PFI This type of contract has been widely adopted by local authorities including Lewisham, it has allowed the Council to access capital investment to secure improved performance over the longer term. The private sector partner, (often acting in a consortia), is responsible for the up-front investment in, and provision of, capital assets and their lifecycle maintenance and service operation throughout the contract period. The public sector client pays on the delivery of the service to a specified quality over the same period. PFI s and PPP s are most applicable where capital investment is a primary requisite, the process involves either negotiation or, since January 2006, competitive dialogue and can therefore involve a longer timeframe for the procurement process. Project and Risk Management Lewisham has adopted a project management system, broadly based on Prince2 methodology, with the aim of achieving consistency of approach and adoption of best practice. Projects are based on four management phases (on smaller projects the first two phases may be combined): Project Start Up Project Initiation Managing Project Delivery Closing the Project Prior to phase 1 the project organisation and governance need to be decided upon. The Project Management Handbook is being issued in March 2007, and compliance is mandatory for projects in excess of 20,000 One of the major elements in the system is Risk Management and for each project a risk register must be produced and included within the Project Initiation Document (PID). Having an early appreciation of risks to a project is essential; it will inform the decision on whether to proceed, help choose the best option, inform resourcing levels etc. 15

16 Collaborative and Joint Procurement initiatives In line with the National Strategy the Council will continue to explore joint working arrangements with other councils for all types of procurement initiatives. These opportunities will also be extended to other public sector organisations, for example Lewisham Primary Care Trust. The Council will work in partnership with the CPE and the LCSG in collaborative procurement exercises. Recently the lead officers for procurement in all the South London boroughs have inaugurated meetings to explore joint working and to develop common approaches to procurement processes and procedures. On long term procurement processes and those involving PFI s or PPP s the Council is committed to establishing a partnering culture to gain added value from the contract, and to continually improve the service performance. DOING BUSINESS ELECTRONICALLY (e-procurement) e-procurement is a collective term for a range of technologies that can be used to automate the internal and external processes associated with strategic sourcing and purchasing : examples are e-tendering, e-auctions, e- marketplaces and purchase cards [p-cards]. National Strategy Targets The two strategic objectives in the National Strategy are: to achieve efficiencies in the procure-to-pay cycle including reduction in cycle time and reduction in transaction costs. This will free resources that can be directed into front line public services. To use e-marketplace to assist councils to access framework agreements and contracts. Lewisham has now fully adopted an i-procurement system by implementing an additional module to the Council s integrated Oracle Financials Accounting System (Oracle 11i). It is mandatory for all contractors, suppliers and service providers to be set-up on the i-procurement system, and if applicable, this includes participation in the Council s electronic marketplace, currently provided PLC. Lewisham together with four other London Boroughs [lead authority Newham] were at the forefront of the adoption of marketplace technology in 2001 as part of a NePP pathfinder project. Four catalogues were accessible through the Vantage London Marketplace and the system has also been used successfully to run e-auctions (first EC compliant use by a UK Local Authority) for the procurement of IT equipment for Looked After Children, bottled water and electricity. It also facilitates Requests For Quotations (RFQs) for Social Care agency staff. 16

17 Council s are also expected to make appropriate use of a procurement card to facilitate low value purchases electronically; Lewisham has adopted the Government Procurement Card (GPC) for such transactions. The next stage of implementing the e-procurement business case is to consider the purchase of another Oracle module to facilitate e-sourcing, which provides electronic tendering. This in turn will speed up the tender process both for low value and EU compliant processes. E-procurement matters to Lewisham as it is encompassed in government targets, which impact on the CPA rating; but more importantly the benefit of better value for money with less work and cost and efficiency savings [both cashable and non-cashable]. STIMULATING MARKETS AND ACHIEVING COMMUNITY BENEFITS Selling to the Council Guide Lewisham has published guidance on its website in the format of a Buyers Guide which explains how to do business with the council, together with details of current and forthcoming bidding opportunities and contact details for each contract. The procurement strategy, code of practice and guidance material are all available together with details about Lewisham s approved list for construction contracts. The council s commitment to the Small Business Friendly Concordat [see below] is also shown and there are links to other websites including supply2.gov [portal for small value contracts], London Centre of Excellence, and London Contracts and Supply Group. Market the Council to suppliers Lewisham advocates that client officers engaged in a procurement process carry out research to establish the source of potential suppliers, and to inform the market of our contracting intentions. For uncommon services or a new combination of services it may be necessary to hold some discussions with potential suppliers to establish the likely response from the market. This 'soft market testing' will help ensure that the project is suitably packaged to attract competition; your specification, although possibly not finalised at this stage, should take account of any such testing. Market testing is an important tool it is conducted to determine quality, price and service factors in the current market. It is essential to focus on service and quality as well as cost and price. It must be carried out openly and transparently. 17

18 Promote a diverse and competitive market Lewisham s contracting policy is to have a mixed economy of provision. As a large purchaser, the council has the opportunity to try and influence the market. It can encourage a wider range of suppliers to bid for contracts by being open, consistent and straightforward in the way it deals with potential suppliers, including local businesses. To develop a market for services, the Council should aim to: group or package activities to reflect prospective market competencies, while meeting its own requirements; demonstrate that long-term relationships with potential new contractors, suppliers and service providers are highly desired; where appropriate, develop, maintain and renew lists of accredited suppliers, including the criteria by which they were selected; create conditions in which new contractors, suppliers and service providers can enter the market, by encouraging diversity and innovation. Develop a local compact with the voluntary and community sector Lewisham Compact was launched in 2000 with the aim: to increase understanding, improve working relationships and extend co-operation between the Council and voluntary and community organisations; to develop the voluntary and community sector s capacity to provide services to the community and achieve high quality outputs; to support initiatives to achieve Best value in the provision of community services by the council; to enhance the effectiveness of both the council and voluntary and community organisations in meeting the needs of the community. The Lewisham Strategic Partnership is the body overseeing the Compact and in 2003 it published its 10 year Community Strategy [see Cultural Shift section] Small Business Friendly Concordat The purpose of the Concordat is to set out what small firms and others supplying local government can expect when tendering for local authority contracts. It is not intended that smaller suppliers automatically be given a competitive advantage when tendering for local government contracts due to the Concordat, but there are certainly steps that all contracting authorities can take to ensure that suppliers of all kinds are treated equally. The Concordat represents a commitment from local government to encourage and develop appropriate levels of competition in local government markets in 18

19 order to increase value for money and foster innovation, particularly from those businesses/suppliers who may find it difficult to break into this market. These may include small and medium-sized enterprises (SMEs) which themselves could include local businesses, ethnic and minority owned businesses (EMBs), women-owned businesses, social enterprises and voluntary and community organisations (VCOs). These sectors of the business community that can find themselves under-represented in local government procurement. It may also include suppliers that prefer not to use e-procurement on religious and other grounds. Lewisham adopted the Small Business Friendly Concordat in May Develop supply chain partnerships The CPT has recently incorporated within its core services the role of supplier management to ensure continued diversity in the council s supply chain. This will necessitate working with its strategic partners to facilitate greater social and economic benefits from its contracting arrangements, which might include enterprise opportunities for small firms and / or employment opportunities for local people. Develop suppliers The market will not always be able respond to the council s requirements, however, there is a role for the Centre of Procurement Excellence to research and develop supply markets in London and the council will fully engage in this process. Lewisham recognises the need to stimulate the local economy and aims, within the applicable legal constraints, to meet the recommendations of the National Procurement Strategy. Use buying power to stimulate innovation The Centre of Procurement Excellence plays a leading role in researching and developing supply markets in London; Lewisham will fully engage with this process. Lewisham is developing closer relationships with suppliers over longer time frames, working together on outcome-focussed solutions and encouraging SME s and local companies to apply for contracts to benefit the local economy and help in the development of products and services more suited to end users needs. Lewisham plans to use supply chain management methods to create investment in innovation so as to meet its aspirations for sustainability in products and services at acceptable costs. There is also scope for establishing partnering arrangements with industry to involve them more closely in discussing and developing operational requirements and working towards outcome-based, sustainable solutions. 19

20 Achieving community benefits Adopt whole life costs and benefits as contract award criteria Lewisham uses the most economically advantageous tender criterion to award contracts; and has adopted the CIPFA evaluation model to score the financial and non-financial criteria. Consult staff and build employment considerations into procurement processes and contracts, where relevant to contract Lewisham complies with the 2003 Act and the ODPM Circular 03/2003 with 2004 addendums Implement sustainable design and sustainable procurement strategies and build sustainability into procurement processes and contracts, where relevant to contract Lewisham will include environmental requirements in the user needs and specification at the earliest stages of the procurement process; an example of this is the adoption of the Guide to Green Procurement. Build diversity and equality considerations into procurement processes and contracts, where relevant to contract Lewisham uses the guidance by the CRE in Race Equality and Procurement in Local Government as a model for all diversity and equality issues Invite proposals for the delivery of community benefits Lewisham s Community Strategy [see Cultural Shift section] Build choice into the procurement process In Lewisham s project management process the initial phase [Project Start-up] includes the need for an options analysis and a justification for the chosen approach 20

21 Appendix A National Procurement Strategy (2003) Action Point Comment Achieved Commitment from the leadership of the council to procurement excellence Mayor and senior officers provide leadership on procurement matters On-going Adoption of procurement strategy, reviewed regularly Involvement in the London Centre of Procurement Excellence Procurement strategy includes Council s approach to partnering in service delivery and collaborative procurement Average time taken from OJEU notice to contract award in a project of more than 1 year s duration reduced by 25% on 2003 base Implementation of e- Procurement solution Use of Government Procurement Card or suitable alternative Use of appropriate e- Marketplace Staff consulted on employment issues in procurement processes and contracts Local Government Act 2003 and ODPM Circular 03/2003 built into processes and contracts Publish Selling to the Council guide on Council s website Community Plan, diverse market, sustainability and Procurement strategy first published in 2000, reviewed 2003, 2005, rewritten 2007 Lewisham regularly attend CPE meetings and are actively engaged in certain projects. Lewisham has entered into a number of partnering arrangements and is continuing to do so. Uses collaborative procurement, and has been lead council for certain projects Implementation of Oracle-I rolled out throughout the council Lewisham uses credit cards for low value goods, supplies and services. Transferring to GPC in near future Lewisham was a founder member of the London Marketplace. Review of provision took place in 2006 and the council now plc Council has historically consulted with Trade Union s on staff transfer and TUPE issues The council has established a Buyers Profile on its website with details of tendering processes and contract opportunities. Lewisham has developed strategies for all these areas On-going On-going On-going reviewed As required 2006 Reviewed and updated on regular basis On-going 21

22 equality issues addressed in procurement strategy Conclude a compact with voluntary and community sectors Information memorandum to prospective bidders included in process Use of variant or optional bids for specified benefits Sign-up to Small Business Friendly Concordat and they are reviewed and updated as required. Lewisham launched its compact with the voluntary and community sector six years ago and has worked actively since then. This style of documentation is used for projects where it is viewed that publishing project details at an initial stage would be beneficial. Lewisham requests variant and optional bids where it is viewed that this will add value to the contract Lewisham signed-up to Concordat in May On-going where relevant On-going where relevant

23 Appendix B National e-procurement Project (2003) Action Point Comment Achieved e-procurement is expected to be a significant source of the annual 2.5% efficiency savings Implement an appropriate e- procurement solution (as a minimum delivers paperless ordering, invoicing and payment) and use p-cards for low value purchases See comments in National Procurement Strategy action points above % invoices paid within 30 days of receipt Use of appropriate e- Marketplace Regional collaboration on e- procurement between councils (Good Outcome) Access to virtual e- procurement marketplace, inclusion of SME s in the e- procurement programme and agreed target for efficiency savings (Excellent Outcome) **% of undisputed invoices paid within 30 days. Lewisham was a founder member of the London Marketplace. Review of provision took place in 2006 and the council now plc The London Marketplace was a collaboration between five London boroughs, Best Value Procurement and LloydsTSB. Expansion of the marketplace has taken place and SME s are included in the programme reviewed /07 23

24 Appendix C Audit Commission recommendations (2005) Action Point Comment Achieved Review the Procurement The latest Procurement 2007 Strategy and formulate links with the Commissioning Strategy so that the two strategies complement each other Strategy has been written with linkage to the Commissioning Strategy Develop the procurement strategy in order to meet the criteria set out in the National Procurement Strategy, addressing relationships with SME s, EMB s and the voluntary and community As above 2007 sector suppliers. Develop and agree a Compact with the voluntary and community sector setting out procurement activities and aspirations Resolve to sign-up to the Small Business Friendly Concordat Develop protocols and procedures to ensure that clienting and contract management areas and dispute resolution procedures are considered at procurement/specification design stage Undertake skills audit and develop training programmes to enhance contract management and clienting skills, project management and procurement skills across the Council Review the capacity of the corporate procurement team to enhance its scope to deliver a co-ordinated approach to procurement across the Council, with appropriate mechanisms in place for learning and sharing of good practice within the Council Compact launched six years ago, review of Commissioning and Funding currently being undertaken. On-going Achieved 2006 Clienting is managed by the service directorates, further work is required in this area particularly with regard to dispute resolution. Procurement team undertakes regular professional training to maintain skill level. Training for other managers is provided by Learning Unit. Programme and project management training is being rolled-out across the Council, together with launch of Project Management Handbook Review is in progress at this time. Oracle-I implementation complete, which provides mechanism to co-ordinate procurement across the Council On-going On-going

25 Develop plans to introduce appropriate systems to help produce robust and reliable information to inform future strategies and development of procurement activities Review the Overview and Scrutiny work programme to include detailed scrutiny of procurement activity across the Council with any revised procurement strategy and capacity of the procurement team to be used to inform the outcomes of the scrutiny review Commission and develop bespoke management systems enabling better information on contracts, ensuring all information is captured to inform the register Formulate an e-procurement strategy, which should be informed by robust baseline information of activities and policies, to ensure that the Council is able to maximise efficiencies as a result of development of the modernisation agenda Identify and agree-champions at senior management and Member level to ensure that progress towards e- procurement is maintained and championed across the Council See above Investigating next stage of e- procurement system (escourcing) An Overview and Scrutiny process is in place, whereby Mayor & Cabinet (Contracts) decisions are scrutinised by the Business Panel. The process could be strengthened by providing additional training for Members to allow them to carry out the scrutiny function on procurement matters Lewisham has linked with the CPE, as a member of the Pan- London contracts register. This allows officers to identify the other types of contract available, to benchmark with other authorities and to collaborate with other boroughs in the procurement and management of contracts. An e-procurement strategy was initially formulated in 2002, the launch of oracle-i is a stage of the process. This system provides a number of benefits strengthen accounting practices, eliminate maverick spend, provides detailed management information, produce cost savings as processes are refined and assist in supplier management. E-Champions have been identified across the organisation, and senior officers in the Resources Directorate, familiar with the e- procurement programme ensure that progress is maintained on-going 2006 on-going on-going 25

26 Appendix D Sustainable Procurement National Action Plan (2006) Action Point Comment Achieved Public sector organisations must link incentives to organisational capacity and to delivery in priority areas and these must be cascaded through their performance management systems Public sector organisations must produce sustainable procurement policy statement Public sector organisations must define clear objectives and targets and put monitoring/reporting mechanisms in place Public sector organisations must work with business to identify and set future minimum requirements and so encourage investment in R&D by suppliers Public sector organisations must ensure that their national and regional contracts do not offer any products/services that fall below these minimum sustainability standards Public sector organisations must establish effective Management Information Systems to support delivery of sustainable procurement Public spenders must upgrade procurement capacity and train staff making spending decisions, including Gateway Review process issues as appropriate Lewisham produced an Energy Policy in 2000 followed by an Environmentally Responsible Procurement Strategy in It became a Beacon Council for Sustainable Energy in A Guide to Green Procurement was produced in 2006 Procurement team undertakes regular professional training to maintain skill level. Training for other managers is provided by Learning Unit. Programme and project management training is being rolled-out across the Council, together with launch of Project Management Handbook 2001 Documents are reviewed and updated on a regular basis On-going

27 Public sector organisations must reach Level 1 (or above) of the Flexible Framework by April 2007 and Level 3 (or above) of the Flexible Framework, with leadership (Level 5) in at least one area by December 2009 Public sector organisations must ensure that budgeting arrangements support sustainable procurement, including co-ordinated management of capital expenditure and operational expenditure, and explore innovative ways to overcome upfront affordability problems Public sector organisations must work with key markets on joint improvement programmes delivering sustainability and value for money, including appropriate allocation of risk in priority sectors Public sector organisations must integrate sustainable development and procurement through use of risk-based approach With the roll-out of the Guide to Green Procurement the council is making efforts to identify the budgeting arrangements to support sustainable procurement. Lewisham adopted a green electricity policy in **** and became the first council to only purchase green electricity across its estate. It has now entered a 12 year contract for deep green electricity for 25% of its needs, produced by wind technology. Guide to Green Procurement developed from a prioritisation of risk exercise

28 Contacting us Corporate Procurement Team London Borough of Lewisham Resources Directorate Lewisham Town Hall London SE6 4RU Telephone: Fax: Website: 28