London Centre of Excellence Bids/Projects - Update. ( ) by the Head of Procurement THE REGIONAL CENTRES OF EXCELLENCE PROGRAMME

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1 MEETING Finance Procurement and Property Panel AGENDA ITEM 10 MEETING DATE SUBJECT REPORT 21 November 2005 DOCUMENT NUMBER London Centre of Excellence Bids/Projects - Update ( ) by the Head of Procurement FPP 244 Summary This report provides an update to the Panel on matters relating to the Authority s involvement in the London Regional Centres of Excellence (LCE). RECOMMENDATION That this report be received INTRODUCTION 1 There are two LCE projects which involve the Authority s Procurement Department. We are leading the project on contract and relationship management; we are also a partner authority in the Sustainable Procurement project for London. THE REGIONAL CENTRES OF EXCELLENCE PROGRAMME 2 The Regional Centres of Procurement Excellence programme is initially a 2-year programme and is a major component of the ODPM/LGA National Procurement Strategy for Local Government. Centres of Procurement Excellence are being developed in the nine English regions. The programme is being managed by 4ps for its sponsors ODPM and LGA and is working to ensure every English Authority is part of the Centres of Excellence network by ps and IDeA are the key service providers and are developing the centres of excellence in procurement and project management in each of the 9 English Regions. London is one of the nine regions. The Association of London Government is representing the London Authorities and is working in partnership with Westminster City Council and Hammersmith and Fulham, who are the host authorities. CONTRACTS AND RELATIONSHIP MANAGEMENT PROJECT 3 On 15 September 2005, the LCE Management Board approved the funding of 25k for LFEPA s bid to lead the project on contracts and relationship management. The funding is required to be spent and invoiced this financial year. The project will undertake a status review of contract and relationship management within London Authorities. This will include a health check of contract relationship management, as well as making recommendations for improvement (see Appendix for the original bid). 4 The funding will be used to acquire additional administrative resource required to deliver the project. 1

2 5 The Authority s Contracts Management Group (CMG), within the Procurement Department, has gained considerable knowledge and experience, especially on account of the management of the PFI contract for vehicles and equipment. CMG have developed many best practice techniques in this field. The LCE team has recognised this and wish to make use our knowledge and experience. 6 The project will involve a questionnaire and a sample audit of London Authorities to identify the following with regards to contracts and relationship management activities : - whether or not contractual relationships are managed in local authorities after award stage - what resources are allocated - the skills, knowledge, experience and qualifications of staff - the quality and professionalism of existing activities - what skills and competency gaps exist - what guidance and best practice is available and whether there are any gaps The project will also assess the effectiveness of existing activities and their impact on achieving best value procurement. Particular attention will be given to assessing performance management, risk management, and whether contracts and relationship management activities are securing ongoing value for money. The project will also make recommendations for improvement. 7 Further updates will be reported to the Panel in due course. SUSTAINABLE PROCUREMENT PROJECT FOR LONDON 8 The London Centre for Excellence management board met on 15 Sept 2005 and approved funding for this project. Camden Council s Strategic Procurement Unit is currently leading on the project and it is anticipated that a Project Officer will be appointed in the very near future. 9 This project aims to deliver a London wide toolkit for procurement professionals in terms of sustainable procurement best practice. The project will check for synergies in its work programmes with the London Sustainability Exchange. APPENDIX BID FOR CPE EXEMPLAR PROJECT FEASIBILITY STUDY Project Title: A Status Review of Contract Relationship Management and Recommendations for Improvement Contract relationship management (CRMGT) involves the active management of suppliers and contractors during the live contract phase to ensure that contracts continue to deliver and optimise: - best value - ongoing value for money - ongoing quality - continuous improvement - realisation of all the intended benefits identified pre contract - sustainable service delivery and equality - performance compliance by continual measurement - the fulfilment of ongoing demand 2

3 (refer to Gershon s Independent Review of Public Sector Efficiency July 2004). This project will carry out a health check of contract relationship management within London Authorities and make recommendations for improvement. NAME OF LEAD AUTHORITY AND PARTNERS The London Fire and Emergency Planning Authority (LFEPA) will be the lead Authority on the project. PROJECT OBJECTIVES To identify: - whether or not contractual relationships are managed in local authorities after award stage - what resources are allocated to CRMGT activities - the skills, knowledge, experience and qualifications of staff involved in CRMGT activities - the quality and professionalism of existing CRMGT activities - what skills and competency gaps exist - what guidance and best practice is available and whether there are any gaps To assess the effectiveness of existing CRMGT activities and their impact on achieving best value procurement. Particular attention will be given to assessing performance management, risk management, and whether CRMGT activity is securing ongoing value for money. To make recommendations for improvement. PROJECT SCOPE AND DESCRIPTION The scope of the project is twofold: to carry out a status review of contract relationship management within London s local authorities; and to make recommendations for improvement. - A questionnaire will be developed to gather the relevant data. This will form the basis of the health check. - Arrangements will be made with a number of local authorities in London to undertake face to face meetings. - After gathering the data, an analysis will be made of the current state of CRMGT activities within London. - The findings of the analysis will then be used to make recommendations for improvement. The project will make a distinction between contracts that are of key strategic importance to the authority and those contracts that are not. Both types will be examined and included in the analysis and reporting. OUTLINE PROJECT PLAN To be forwarded. DELIVERABLES 3

4 The main deliverable is a report detailing: The current state of health of CRMGT within local authorities in London What best practice and guidance is available and whether there are shortfalls Whether existing CRMGT activities are effective in achieving best value procurement Recommendations for improvement. SPEND PROFILE The cost for the project will be 25k. This will cover an interim project officer or consultant. The following additional personnel will support the project: - Head of Procurement (LFEPA) will be project sponsor - Head of Contracts Management (LFEPA) will be project manager - LCE Director will provide independent Quality Assurance BENEFITS The key benefits are: The project will deliver a clear picture of what level of CRMGT is being undertaken within local authorities in London. Gap analyses will inform LGA about shortfalls in staff competencies and the availability or lack of availability of best practice guidance. Opportunities will be identified where existing CRMGT could be improved to achieve best value procurement thereby enabling authorities to achieve continuous improvement within their contracts (duty under Best Value). The outputs of the project can be used as a foundation for further development work in this area. This would facilitate progress in fulfilling Gershon s requirements to: - ensure ongoing value and quality from existing contracts - ensure that contracts continue to meet ongoing demand PROJECT TEAM See spend profile above. PROJECT REVIEW AND MONITORING ARRANGEMENTS Progress of the project will be overseen by the Project Sponsor. The project plan has been drafted into phases. The authority to proceed to the next stage will be managed by the Project Sponsor. Regular reports will be submitted to the ALG as outlined in the project plan. The Project Manager will ensure the regular use of checkpoint reports for monitoring the progress of project work. 4

5 RISK ASSESSMENT A separate risk assessment will be forwarded after the completion of the Feasibility Study RELEVANT EXPERIENCE AND EXPERTISE LFEPA (Lead Partner) In 2000, LFEPA set up a devoted Contracts Management Group (CMG) to manage the Authority s public private partnerships, and business relationships within other contracts. This includes the 20 year Pathfinder PFI contract for the total managed service provision of fleet and operational equipment items. CMG is a multi-disciplined department consisting of procurement, financial, administrative, technical, engineering and operational staff. The department is experienced and skilled in many best practice strategies and techniques in contract and relationship management. Specific skills include: Partnering Performance Management Risk Management Financial Management Benefits Management Supplier Development Project Management Quality Management Contingency Management Contract Monitoring Technical Management Client and End User Liaison and Consultation Output and Outcome Based Specifications Private Finance Initiative Relationship Processes PR and Communications Dispute Resolution Service and Commodity Procurement Benchmarking Intelligent Client The collective experience and skills within the department cover service areas such as transport and engineering, construction and facilities management, health and safety, insurance, training and development, emergency services, scientific services, plant and equipment, personal protective equipment, IT project management, temporary staff, and occupational health. 5

6 LOCAL GOVERNMENT (ACCESS TO INFORMATION) ACT 1985 List of background documents PFI vehicles and operational equipment project As stated in the report Proper Officer: Terry, Brewer Head of Procurement Contact Officer: M Atkinson Head of Contracts Management Group Room 714 HH London Fire Brigade HQ, 8 Albert Embankment SE1 7SD mark.atkinson@london-fire.gov.uk FREEDOM OF INFORMATION ACT 2000 LFEPA Publication Scheme This document appears in the publication scheme under: It also appears in the publication scheme under: Information Access Team Contact: Category: Topic: Class: Category: Topic: Class: P-FP244 P-FP 244 p-fp244 p-fp 244 infoaccess@london-fire.gov.uk Management arrangements and decision making Authority, committee and panel meetings Panel agendas, minutes, reports and decisions 6