Procurement Strategy
Contents Foreword 1 Introduction... 1 2 The Strategic Context... 1 3 Strategic Procurement Review... 2 4 Our Tactical Operational Plans for 2014/15... 3 4.1 CPU Staffing... 3 4.2 Service Focus... 4 4.3 Collaboration and Shared Services... 4 4.4 Procurement strategies and Policies... 4 4.5 Processes and Systems... 6 5 Procurement Action Plan... 7 6. Procurement Strategy by function... 14 6.1 Community Resources... 14 6.2 Development & Housing Services... 19 6.3 Education & Leisure... 23 6.4 Social Work... 27 6.5 Finance and Corporate Services... 32 6.6 Chief Executives... 36
Foreword I am proud that Renfrewshire Council has been a leader in the development and implementation of modernised local government procurement practices. Our Corporate Procurement Unit (CPU) has supported the Council to improve its procurement processes and deliver substantial financial and community benefits across all areas of contractual spend. This success has been recognised through the independent Procurement Capability Assessment carried out by Scotland Excel with the CPU being the highest scoring Council in Scotland for the last 3 year and being the first Council to reach the Superior Performance category in 2012. Looking forward, Renfrewshire Council and its Community Partners have a vision of communities, public services and business organisations working together to make Renfrewshire a fairer, more inclusive place where all of our people, communities and business thrive. The Council has developed its ambitious Better Future, Better Council strategy to deliver on this positive vision, but this is being taken forward during a period of unprecedented financial constraints. I believe that Procurement has a vital role to play in supporting the Council successfully deliver this strategy and achieve the positive vision for Renfrewshire s communities. This will require the CPU and their customer Council Departments to build on the strong collaborative working foundations that have been established over the previous period and identify how the procurement processes and capabilities we now have within the Council can add further value going forward. I have no doubt that our Corporate Procurement Unit will meet this challenge and help the Council maintain a position of procurement leadership within the local government sector. David Martin Chief Executive Renfrewshire Council
1 Introduction Renfrewshire Council s initial Procurement Strategy was produced in 2010 to cover the period 2010-2013. The Council invested heavily in developing the staff and capabilities of the Corporate Procurement Unit (CPU) to support the delivery of this strategy. During this period the CPU has successfully supported the Council to modernise its approach to procurement and achieve substantial benefits in the cost and quality of the goods and service purchased. Increasingly it has also been able to achieve a range of Community Benefits through its contracting activities. The Council has now embarked on a further ambitious programme of change to deliver the objectives set out in its Better Future, Better Council strategic plan and Renfrewshire s Community Plan. The CPU recognises that these changes create an opportunity to review the Council s approach to procurement and determine how an innovative and forward thinking procurement function can best support the Council and its Service Departments deliver these objectives going forward. 2 The Strategic Context A positive vision for Renfrewshire Renfrewshire Council and its Community Partners have a vision of communities, public services and business organisations working together to make Renfrewshire a fairer, more inclusive place where all of our people, communities and business thrive. The Council has developed an ambitious Better Future, Better Council strategy to deliver on this positive vision. The Corporate Procurement Unit is determined to play its part in supporting the Council to achieve this vision. The challenging financial environment The Better Future, Better Council strategy has been developed in the context of an unprecedented period of financial constraint on council budgets and therefore includes plans to achieve savings of between 20 and 30m over the 2014/17 period. An initial round of tactical savings are currently being delivered through a programme of voluntary redundancies/early retirements and associated re-structuring, but plans for more fundamental service transformation and new ways of working are in the process of being developed to deliver the required medium and longer term savings. The CPU, like all corporate support functions, will play its part in delivering efficiencies within its own operations during 2014/15 and beyond. More importantly however, the CPU must look at what it can do to ensure it is providing the professional procurement advice that our customers need to support the transformational changes they plan to make within front line services. Diminishing returns from contract re-tendering A consequence of the success of the Council s focus on imbedding best procurement practice over the last five years is that an increasing proportion of the Council s addressable spend has been subject to one or more rounds of rigorous competitive tendering. This is starting to reduce the opportunities for procurement to deliver substantial annual savings from contract retendering activity. The CPU will continue to seek savings opportunities in areas of non-compliant spend and through better contract management, but opportunities may also exist for the expertise and capability within the CPU to add value in other areas of strategic importance for the Council. 1
The importance of Community Benefits The Council s Administration has a strong focus on delivering community benefits through procurement and further building on the success achieved by the CPU to date in this area. The UK Government s welfare reform programme and continuing impact of the recession in the Renfrewshire area create a special impetus to develop procurement innovations that can help promote the adoption of the living wage by suppliers, create job opportunities for young people and encourage more local businesses to participate in the Council s supply chain. The need to maximise benefit from the City Deal and other major development opportunities While much of the strategic context outline above is challenging, there are also a number of significant new developments emerging within the Renfrewshire area which offer significant opportunities for procurement to be creatively engaged to support their successful implementation and the delivery of wider community benefits. These include: The ground breaking 1.3bn City Deal programme of infrastructure investment across the Clyde Valley, with Renfrewshire delivering two of the most significant projects with a value of 270m. The Council s Paisley town centre regeneration and Heritage strategy The 220m infrastructure investment at Glasgow Airport The 250m Braehead area development plan The need to engage positively with the national procurement reform agenda The Scottish Government continues to promote a national strategy of procurement reform to drive continual improvement in procurement practice across the public sector in Scotland. This is supported by a mix of policy initiatives and legislative changes including the planned introduction of a new national procurement assessment framework, The Procurement Reform (Scotland) Bill and The Social Care (Self-directed Support) (Scotland) Act 2013. In addition to these Scottish legislative changes, public sector procurement also has to take account of the changes contained within the 2014 EU Directive. Renfrewshire Council has developed a strong reputation as a leader of procurement reform within the Local Government sector. The continued drive for reform at a national level with create further opportunities for the Council to continue to innovate and lead in its approach to procurement. 3 Strategic Procurement Review Given the significant strategic challenges and opportunities outlined above, the CPU has determined that it will be important to conduct a review of its role and operations and identify how it can best support the council deliver on its ambitious change agenda. This review will take place during 2014/15 and be timed to dovetail with the work being undertaken within services to consider new target operating models and ways of working. The CPU will engage with its customer departments, the Council Management Team, Council Administration and other key stakeholders to:
review the current approach to procurement within the Council and lessons learned from the implementation of the previous procurement strategy; assess the impact of planned service changes on the future contracting needs of the council; identify how best to provide strategic professional procurement input to discussions on front line service innovation and new approaches to service delivery; and think creatively as to how best to embed Community Benefits the Council Administrations objectives in relation to promoting the living wage, creating job opportunities for young people and local businesses within the procurement strategy We will draw heavily from the knowledge and expertise of our own staff and ensure that all CPU staff are involved and have the opportunity to contribute their views and ideas through the review process. We will also seek to identify innovative approaches and best practice being adopted by other Councils in Scotland and elsewhere and draw from the learning of others where this would benefit Renfrewshire. 4 Our Tactical Operational Plans for 2014/15 4.1 CPU Staffing The Council restructured its CPU to centralise all procurement activity. There are now three category areas: Social Work, Education & Leisure and Renfrewshire Leisure Development and Housing Services Finance and Corporate Services, Chief Executives and Community Resources There is a further team dedicated to Purchase to Pay (P2P), Compliance and Community Benefits. The CPU is made up of mainly permanent staff, with 20% employed on a fixed term basis, which recognises that resource requirement can fluctuate based on demands within each service area and the Council s focus on benefits to be achieved. The team will concentrate on achieving best value in contract renewals, capital investments and new requirements. Ongoing negotiations and improved contract management with suppliers ensure that our contracts remain best value, we achieve Community Benefits through appropriate contracts and, that we achieve the Council s objectives with regards to Corporate and Social Responsibility (CSR). The CPU has secured a training budget for the last three years which has allowed investment in training staff and development on an ongoing basis. All permanent staff have been encouraged to obtain the Chartered Institute of Purchasing & Supply (CIPS) Qualifications and approximately 82% now have or are working towards the qualification. Ongoing training is provided in areas such as updates to EU Legislation and Procurement Directives. A Procurement specific competency framework has been created and is used to set Individual Training and Development Plans and contributes to setting Goals and Objects for the team.
4.2 Service Focus The CPU works closely with the Council s Service Departments and seeks to tailor operations to suit each Department s procurement needs. We do this by employing Service focussed Category Managers with specialist sector expertise and embedding procurement staff within services. Category Managers develop service specific procurement strategies and these are provided in Section 6 of this document. We will continue to look for ways of strengthening our engagement with Services throughout the year to support the delivery of their priority outcomes. 4.3 Collaboration and Shared Services The Council participates in contracts put in place nationally by the Commercial Crown Service, in Scotland by Scotland Excel and Scottish Procurement and locally by actively participating and leading on collaborative contracts. Planned development in this area is mainly ensuring contract management is carried out at a local level to ensure best value. Local collaboration with neighbouring councils is always considered when a contract strategy is put in place and often implemented. The Council is currently working closely with East Renfrewshire Council with a view to collaborate on ICT services, applications and maintenance and has led on the initial procurement stages and continues to participate in the procurement of the Clyde Valley residual waste solution for five Councils. The Council has worked closely with its Clyde Valley partners in securing the City Deal and will be supporting the procurement of several of the key infrastructure projects within this ground breaking initiative. The Council participates in the roads and transport collaborative working group led by Inverclyde and is in discussion with Glasgow City Council to collaborate, share and participate in more collaborative contracts. The Council is committed to collaborative procurement and actively takes part in many National and Sectoral contracts. We will continue to look for collaborative procurement opportunities where these will support the delivery of benefits for the Council and its communities. 4.4 Procurement strategies and Policies The Council has standardised its procurement documentation and has a dedicated Procurement Subcommittee to approve all contracts above the EU threshold. In partnership with the Legal Department the Contract Standing Orders (CSO s) were reviewed during 2013 to reflect the CPU restructure, changes to the law and best practice. The CSO s will be subject to ongoing review as the procurement landscape changes and in particular when the new EU legislation and directives have been issued during 2014. The Council has implemented a consistent approach to contract and supplier management. A review of the current suppliers managed will be undertaken during 2014 with a view to relevance and appropriateness based on high value, high complexity and/ or high risk contracts. The process will be embedded to drive best value within existing contracts.
In 2013 the new Procurement Sub-committee was formed and sits every four weeks in order to approve contract awards and other procurement activity reports. The Subcommittee was established due to the high volume of contract authorisations required across the Council and to centralise this activity through a consistent and more specialised committee. Over the next year we intend to build closer relationships with Renfrewshire s Third Sector and Small to Medium Enterprises (SME s). The CPU are working closely with the Council s Economic Development Department to identify areas where procurement support is required. We regularly take part in supplier development events to encourage local suppliers, and advertise all contract opportunities above 50K on our website and the Public Contracts Scotland Portal. Contracts between 10k and 50k will be issued to a minimum of six suppliers (where possible) selected from the Public Contracts Scotland portal and administered through this secure etendering system. CPU have committed (where possible) to include 50% of the companies selected with a Renfrewshire post code in this process to support the local agenda. The Council s Corporate Social Responsibility (CSR) and Sustainable Procurement Policy define our approach to these important areas. Whilst sustainability and CSR are considered in all major procurement activity, there is recognition that further community benefits could be delivered using the Council s buying power. This is a key priority moving forward. In June 2013 the Procurement Sub-committee approved the CPU s recommendations to implement a total of 10% evaluation weighting for community benefits (where appropriate) within construction and infrastructure procurements over 250k. The Subcommittee also approved the employment of a Community Benefits and Compliance Manager to manage and monitor the delivery of community benefits. This role will also consider the wider corporate and social responsibility factors including community benefits, the living wage, and sustainability. The Community Benefits and Compliance Manager has been in place since September 2013 and reports directly to the Procurement Manager. The CPU committed to review further areas and spend levels and report back to the Sub-committee with proposals in the form of a Community Benefits Strategy. The Community Benefits Strategy was approved at the Procurement Sub-Committee in June 2014. The CPU has introduced a benefits tracker database showing all contracts to be delivered on a yearly basis. The database records all contracts worked on and is used as a workload planning and allocation tool where reports can be run to identify contracts due to expire allowing advance planning of work load. It also captures any savings achieved with the recurring revenue savings are removed from departmental budgets in the following year. As a result of working with the service departments, in excess of 750k recurring revenue savings were delivered in 2013/14. A target of 500k per annum has been set for 2014/15 and 2015/16. The Council recognises that as an increasing proportion of its addressable procurement spend has been through a rigorous tendering procedure, the opportunities for future revenue savings from re-tendering alone will diminish in the long term. An increasing focus therefore will be given to better contract and supplier management as a route to further ongoing savings. A Savings Working Group was set up to initiate the review of current contracts with 3 team members focused on working with current suppliers to obtain best value from a
number of our existing high value contracts. It is recognised that contracts can be poorly utilised and that there is the potential to achieve cost reductions through a structured process of review and discussion with suppliers. This team will divide their time between negotiating within current contracts and tendering contracts that are identified as good candidates to deliver savings. 4.5 Processes and Systems The Council has a P2P Strategy and Enablement Plan which aims to ensure all purchasing is carried out using approved systems and processes. Spend matched to an electronic purchase order (PO) has increased to over 90% in the last three years. The Council has implemented its No PO, No Payment plan, which has involved agreeing a compliant purchasing approach with all service departments, and communicating to all the Council s suppliers about the need for purchase orders to ensure prompt payment. The Council uses e-tendering which offers clients and their consultants a simple, secure, standard, efficient and cost effective way to managing tenders online. This is complemented with purchase to pay systems which allow the Council to requisition, order, and pay for goods, services and works. Further improvements implemented in relation to P2P include: Further rollout of a purchasing card which has improved rebates and management information. An ICT systems review is being conducted with results and recommendations to be deployed into a revised Systems Strategy. A review and improvement plan of the Council s supplier management processes is underway in liaison with the Business Support Service. PECOS authorisation levels have been reviewed and embedded in the system across the Council. The Scottish Government is working towards implementation of a Contract Management module to compliment the current Public Contracts Scotland Tender system. This is intended to improve contract and supplier management and business. Training and input to the functionality of the new system will be undertaken by CPU staff when it is available for implementation.
5 Procurement Action Plan A range of activities have been identified which will allow us to achieve the objectives and outcomes set out in the previous section. These are divided into the following three areas, more detail on which can be found in the following tables: a) Strategy, Policy and Advice b) People and Organisation c) Processes & Systems a) Strategy, Policy and Advice In light of the significant changes being taken forward by the Better Future, Better Council strategic change programme, the CPU will be work with Council Departments during the year to undertake a strategic review of procurement within the Council and identify how it can add most value to support delivery of the Council s strategic priorities. We will continue to CPU act as the procurement centre of excellence for the Council and develops clear procurement policies, providing guidelines to employees on how to purchase goods, services and works. We will also continue to ensure compliance with relevant legislation and integration with Council policies and processes. Current Situation Procurement Strategy 2015/17 A tactical strategy 2014/15 exists with sections for each Council Service area. Individual contract strategies being prepared for spend above 50k. Future Priorities The CPU will work with the Council and Service Departments to build a deep understanding of the strategic challenges and opportunities and to identify how procurement can best support the delivery of Council and Service Department strategic priorities. The conclusions and agreed changes in the Council s approach to procurement resulting from this review process will form the basis of a new Procurement Strategy for 2015/17. All spend above 50k has a contract strategy agreed prior to advertising. A quotation request form is completed and authorised for all spends between 10k - 50k. Target Date New Strategy approved by Mar 2015 Ongoing Community Benefits With a view to increasing community benefits achieved through contracts tendered by the CPU the Procurement Subcommittee approved the CPU s recommendations to where possible implement a total of 10% evaluation weighting for community benefits within construction and infrastructure procurements over 250k. CPU committed to review further other areas and spend levels and report back to the subcommittee with proposals. The subcommittee also approved the employment of resources to monitor and manage the delivery of community benefits. This role also considers the wider corporate and social responsibility factors including community benefits, the living wage, and sustainability. A community benefits and compliance manager took up post in Sept 2013. Included in the objectives of their remit was to set up a forum, to incorporate members from service departments and representatives from the supply base. This is underway and a Community Benefits strategy has Ongoing June 2014
been approved and communicated in June 2014. Local employment The Living wage Standing Orders Contract Standing Orders are revised to give all procurement authorisation to the Head of Procurement and Business Support (HoPBS) The CPU has employed six Interns during 2013 and early 2014 living in the Renfrewshire area. Two of which now have permanent positions within Renfrewshire s CPU. The Council are committed to encouraging payment of the Living Wage to all employees working for or servicing the Council. This is promoted through all tender exercises conducted by the CPU. The Council s Contract Standing Orders were updated for the 3 rd time during 2013 and a register of required revisions has been set up to ensure that any required amendments to the next revision of the Contract Standing Orders are recorded. Revisions may be required in line with new EU legislation and Directives when fully implemented. Ongoing CSOs and Register to be in place August 2014. Document Standardisation Terms & Conditions Terms can vary by department Supplier Management Supplier management is carried out for the top high value and/or high risk suppliers in each service department. CPU is working on an electronic contract register in line with the benefits tracking database. Regular meetings are held with the legal team and documentation is kept up to date according to legislation and lessons learned. CPU staff meet regularly with Legal Services to agree and make changes to terms and conditions of formal contractual documents. Continuation of use of Supplier Scorecards to monitor the supplier performance along with the service department. A review of the supply base is underway early 2014 to consider the contracts currently being managed from a high value, high complexity and/or high risk perspective. The aim is to establish if CPU is managing the correct contracts now or should focus change or more be added for review. The CPU has a Supplier Management strategy which will be reviewed in line with new practices. Electronic contract register to be implemented. Ongoing Dec 2014 Dec 2014 Dec 2014 Sept 2014 Service Delivery The Service Departments have an ongoing objective to review delivery models to save money across the Council. Procurement will support this process through attendance and input to project groups, tendering and supporting alternative delivery models. Ongoing
Sustainability Sustainability is given consideration on all relevant contracts. There is a Sustainability policy and action plan in place. CSR Policy The Council has a Corporate Sustainability Policy (CSR), with recommendations to incorporate CSR in all strategies; where relevant. Fairly traded products This includes the inclusion of use of fairly traded products where applicable Sustainability policy and action plan to be embedded. Sustainability is built into the procurement process. Implementation of the Sustainability Policy will ensure consideration at contract strategy stage. Category Managers have been tasked to identify a minimum of 3 contracts per annum where they believe they can incorporate considerable sustainability measures. CSR and Sustainability rolled out and included as a consideration at a contract strategy stage; where relevant. Emphasis on energy and carbon management Small Medium Enterprises (SME s), equality, ethics etc, in line with the CSR policy. Introduction and implementation of the Renfrewshire 10 point plan which includes initiatives such as: Ongoing Supplier events for SME s to cover areas of concern and help educate on how to become a supplier to the Council. 50% of suppliers selected in the quick quote process will be local (where possible). Encourage main contractors to engage with local suppliers and SME s. All new contracts consider the use of fairly traded products. Complete Ongoing Ongoing
b) People and Organisation Effective implementation of the strategy is dependent on having staff with the right skills and experience in place with close working relationships with CPUs customer service departments Current Situation Training The CPU have secured a training budget year over the last 3 years to ensure staff are professionally trained and all permanent staff are encouraged to achieve certification with the Chartered Institute of Purchasing and Supply (CIPS). Engagement with Services The CPU has developed effective working relationships with service departments through the introduction of service focussed Category Managers and embedded procurement teams. Compliance New EU Procurement Directive came into force in April 2014 The New Regulations are expected to be in place by the end of 2015. Priorities All permanent CPU personnel are CIPS qualified or working towards qualification. During the period 2014/15 it is intended to continue providing professional training for CPU staff. CPU focuses on training staff within their respective service departments and providing training and information to suppliers and third sector partners. An ilearn EU fundamentals course is offered to service department staff and to date since this was launched 820 people have passed the online course. All CPU staff have undertaken training in the latest updates to the Procurement reform bill and EU legislation. The Strategic Procurement Review will provide a significant opportunity to strengthen our engagement with our customers and understand their long term objectives, but we will also further strengthen the ongoing operational engagement between the CPU and Service Department management teams to ensure CPU fully understands service priorities and challenges and is best able to highlight areas where procurement innovation can help support the delivery of Service Department objectives in the short to medium term. Ensure all updates are implemented where not already in place by the completion date e.g. Agree revisions required to the procurement strategy on an annual basis. Continue to promote e-tendering for all tenders. Continue to consider lot structure within tenders to ensure quality and opportunity for SMEs. Implement new rules for Part B services. Increase market research at strategy stage. Consider how to incorporate new rules within tendering and evaluation. Target Date Ongoing Ongoing Dec 2015
Procurement Reform Bill 2014 CPU carries out all procurement activity above 10k, thus ensuring compliance. The CPU team work with service departments and support contract management to ensure full compliance to the contract after award. Collaboration The Council makes use of many of the contracts put in place by the centres of expertise. These are mainly Scotland Excel, Scottish Government and the Crown Commercial Service (CCS). This is considered as part of the contract strategy process. The Council participates in the Scottish Future Trust (SFT) Hub initiative. Consider all actions and implement when in force and guidance is issued. Standardise the end to end procurement processes using guidance and training. Education of all service staff and implementation of user guides to ensure there is an awareness of how to use contracts effectively, efficiently and compliantly in the following areas: Compliance to contract specification and terms, Compliance to Purchase to Pay (P2P), Embed contract management processes. There is a requirement to ensure the best possible pricing is being obtained from frameworks, and that rationalisation and mini-competition exercises are carried out where appropriate. Communication, collaboration and sharing of best practice with other Local Authorities is also an ongoing priority. In particular regular meetings are held with Glasgow, East Renfrewshire and Inverclyde Councils. Various opportunities are being considered including ICT applications and maintenance and roads and transport contracts. The CPU will work to identify and maximise the collaborative procurement opportunities that arise from the Renfrewshire and East Renfrewshire ICT collaboration programme. TBC Ongoing Ongoing
c) Process & Systems, P2P, Benefits Tracking, E-Procurement This element of the strategy is essential if the Council is to achieve the efficiencies identified. If we do not have detailed processes and systems, which are adhered to, savings achieved through the tender process will not materialise. Current Situation Priorities Target Date Purchase to Pay (P2P) 90% plus of the Council s invoices match to a purchase order. Ongoing The CPU are working with Service Departments and Suppliers to increase this percentage as orders place with no purchase order allows for suppliers to be paid without spend being properly authorised. To ensure all purchasing is transparent and in line with the Council Financial Codes, the Purchase to Pay team has introduced a No Purchase Order No Payment Process. It is anticipated that matched invoice payments should remain at 90% plus whilst the process is further embedded. Aiming for a 98% to 100% match rate by March 2015. March 2015 Purchase Cards (PCard) The Council uses a PCard (mastercard); this process was fully functional in Apr 2012 and there are 400+ cardholders covering all service departments. Vendor Management There are numerous systems, and numerous ways to add a supplier to the system. E-Procurement etendering over 50k spend The Council has electronic tendering technology which is used for all procurement requirements. The Scottish Government supply an etender system, which the council is utilising. All procurement requirements are carried out in accordance with the Councils CSOs The PCard system implemented provides: more visibility of spend, greater reporting procedures, faster payment for suppliers 3-4 days. a rebate on all spend going through the card which increases the rebate, more use of Pcards instead of non-matched payments Currently within Renfrewshire Council, there are six unique ordering systems. A review of these systems is underway to identify areas where the purchase to pay process can be improved and management information obtained from these systems. Further investigations are underway by committed resources from ICT to finding a single route to collate management information regarding orders and payments to suppliers. For over 50,000 all contract notices are published through Public Contracts Scotland portal, with all tenders processed through the Public Contract Scotland etender system. This includes minicompetitions and e-auctions. Ongoing June 2014 ongoing
Under 50k spend All Council spend above the value of 10,000 is to be processed through the Scottish Government electronic tendering portals. For spend between 10,000 and 49,999.99, all spend is placed through the public contract Scotland Quick Quote facility. CPU have published an under 50k guide to procurement, for use by the service departments. e-auctions are a simple, transparent procurement method where suppliers compete online. E-auctions are considered at contract strategy stage for some contracts, and employed where there are tangible benefits in doing so. There is recognition that e- tendering is not appropriate for all commodities. Benefits Tracking (BT) Database Benefits tracking records all contracts with planned to confirmed savings achieved after award. The BT displays the category team s workplan for the year s procurement activity, which is agreed with the service department. Continual compliance to Council CSOs, which includes the under 50k guidance. Explore the use of Public Contracts Scotland Tender for quick quotes when available. E-auctions should be considered at contract strategy stage. Currently e-auctions are frequently used for ICT contracts, however consideration should be given to appropriateness and benefits that may be achieved if used to tender other contracts. The Benefits tracker Database includes all tenders within the business area, savings planned through to achieved. ICT have been working with CPU to implement the new database to track and record all benefits. Initial stages of the new tracking system have been implemented. Further development is necessary but CPU has moved to use the new system. CPU intends to develop the database to include awarded supplier thus creating an electronic contracts register. This will be used to highlight contract renewal and be a search engine to identify existing contracts. Ongoing Ongoing 2014 Oct 2014
6. Procurement Strategy by function 6.1 Community Resources 6.1.1 Scope / Key Spend Areas An analysis of the existing spend profile within Community Resources has identified a number of priority areas of focus. These have been captured within the FY14/15 benefits tracker but summary details have been provided within the table below: Key Spends Roads Carriageway and Footway Maintenance, Repairs and Improvements Roadstone and other quarry materials Drainage and Flooding, including capital scheme for North Renfrew Flood Prevention Street Lighting Maintenance, Repairs and Improvements, including Festive Lighting Traffic Signals Maintenance, Repairs and Improvements and Traffic Management Works Road Related Structures Maintenance, Repairs and Improvements Roadside Advertising Anticipated Spend Value FY1/15 3.52M 3.3M 3.5M 2.5M 950K 950K TBC (concessions contracts income generation) Environmental Vehicles, Plant maintenance & Spares 2.5M Waste 2.5M Utilities & Fuel 2.3M CCTV (Renfrewshire Wide) 650K Cleaning Equipment, Services & Supplies 446K Uniforms 250K Fruit and Veg 290K Traffic Management 120K Textiles Concessions Contract TBC income generation 6.1.2 High Level Strategy The embedded CPU team supports Community Resources and have agreed common objectives to maximise the benefits of procurement to improve service delivery and value. CPU will continue to work with the service to develop a forward plan of procurement activity which takes cognisance of the lessons learned and opportunities arising from first generation contracts / framework agreements established. A summary of key priorities is given below. Undertaking a service wide review of recurring contracts to ensure robust market testing informs decisions to renew these contracts and provide a detailed plan of contracts for renewal each year. The CPU will continue to work with the Service to prioritise their procurement requirements, one-off and recurring, in line with budget and to ensure compliance with EU regulations and best practice. Procurement timescales are often driven by operational requirements rather than the time it takes to carry out an effective end to end procurement process. Relationships between
CPU and the Community Resources Senior Management Team will be utilised to ensure early engagement with procuring officers to ensure sufficient time for the procurement process is included within operational programmes. This approach will ensure the most effective procurement approach is adopted and value for money is achieved. The service utilises several collaborative contract arrangements for a variety of commodities (e.g. groceries, frozen food, catering sundries, IT equipment, street lighting supplies and road maintenance materials). The CPU will review existing national and collaborative contracts currently utilised to ensure these still represent value for money. Where relevant, the CPU will work with the service to ensure that opportunities through collaborative arrangements are maximised and will investigate additional collaborative opportunities with other neighbouring authorities/ public sector bodies for commodities. Focus on collaborative and shared service opportunities with other public sector organisations, in particular Glasgow City, Inverclyde and East Renfrewshire Councils. Contribute to the Scottish Governments sustainability targets by signing to the Halving Waste to Landfill campaign. Continue to maximise benefits and savings and rationalise the supply base through aggregation of spend. Ensure community benefits and sustainability is considered within all contract strategies, ensuring compliance with the Council s Community Benefits Strategy. This approach should increase the number of community benefit targets secured, in particular for Services contracts which did not target Community Benefits previously. A review of existing contracts with key suppliers will be undertaken to identify opportunities to secure additional community benefits where possible. Continue to progress the recommendations of The Arbuthnott Report in relation to waste for the Clyde Valley area, to collaboratively contract for a treatment and disposal of residual waste solution. The consideration of whole life costs is conducted at strategy development stage and where possible, the commercial evaluation of bids will focus on whole life costs rather than lowest price. There are some synergies in the contractual arrangements being put in place within Community Resources and Development & Housing Services such as landscaping works and professional technical services. The CPU will strive to achieve efficiency savings and potential aggregation savings by utilising a common supply chain in these areas. To enable CPU team and the service department to continue the integrated working style and to ensure that the optimum working relationships are maintained, a roles and responsibilities document has been included as an appendix to this strategy; this document clearly outlines the roles and responsibilities of the CPU team, the service department and all other departments who are involved in the overall procurement process.
6.1.3 Structural and cultural change Procurement activity within Community Resources has been centralised under the Head of Procurement and Business Support since August 2010. As such, the structure of the team and activity within this area is well established. The CPU team members previously supporting the former Roads and Environmental Services have amalgamated and continue to deliver for the combined Community Resources service. The structure of the embedded CPU team is reviewed on a regular basis to ensure it meets the service demands for Community Resources. A planned programme of training is in place for CPU officers to ensure the team have the necessary skills and knowledge for the role. Training is extended out to Community Resources officers where appropriate. There is senior management support of the embedded procurement function and this is evidenced through CPU representation at the meetings of the Community Resources Senior Management Team and regular meetings with Director of Community Resources, Heads of Services and senior officers. The integration of the CPU and Community Resources and established regular communication enables joint monitoring of progress of planned activities and achievement to date of the agreed programme by senior management. The CPU management team will always aim to ensure that the priority of activities is agreed with Community Resources at scheduled procurement update meetings, which will be held at regular intervals and progress will be discussed, monitored and ultimately agreed against targets set. The CPU will work with the P2P team and the Community Resources to continue to improve the use of the Council s PECOS system and identify further efficiencies in the payment process in terms of catalogues, CPC s and statement billing. 6.1.4 Contract and supplier management Supplier relationship management is a comprehensive approach to managing the Council s interactions with the organisations that supply the goods, works and services it uses. The goal of supplier relationship management (SRM) is to streamline and make more effective the processes and contracts between the Council and its suppliers. The key actions required are: progress with the agreed ownership of the contract and supplier management process; deliver the standardised contract and supplier management processes with key suppliers; identify and implement efficiencies within existing contracts; and implement and monitor achievement of community benefits. A review of the Contract and Supplier Management Strategy is being undertaken taking cognisance of the suppliers currently being managed. Following this review, CPU will apply pareto analysis to ensure the correct suppliers, representative of the majority of spend for Community Resources, are managed. On this basis, the frequency of some suppliers currently managed by CPU will reduce where no issues have previously been identified.
Roads contracts have adopted a standard form of contract (NEC3) which promotes partnership working with contractors rather than traditional adversarial relations. Through this approach, issues are flagged and addressed as they arise; risks are identified, costed and allocated to the parties best equipped to manage that risk, from the outset. Work and training is required for both CPU officers and technical officers to ensure this is implemented fully in contract documentation and contract management. The opportunity to rationalise and deliver savings through the 2nd and 3rd tier supply chains will also be targeted and contractors will be measured on their approach to their 2nd and 3rd tier supply chains, e.g. ability to pay subcontractors quickly. The success of the overall partnering approach will be closely monitored and together with any lessons learned, will be applied to future contracts and framework agreements. Consideration is given during the development of contract strategies to maximise opportunities for SMEs and third sector organisations whilst exploiting opportunities that may arise from aggregation of spend. This approach will include consideration of proportionality in terms of minimum financial criteria, indemnity levels and the requirement for bonds etc. Consideration is also given to lotting contracts and framework agreements based on value band, the encouragement of consortium bids and reserved contracts. As part of the SME engagement process, the views / input of SME s are sought during the market research phase of strategy development. Further, it is intended that Supplier Awareness events will be held at the point of tendering any new, high value or high risk contracts and framework agreements. When tendering any high value arrangements, tenderers are asked to submit proposals on supply chain development including how they will engage with and create opportunities for SMEs. 6.1.5 Short term strategy The short term strategy for Community Resources is: implementation of key strategic framework agreements and ensuring core spend goes through these; ensure all spend is compliant; continue to work with service to prioritise work plan to enable effective resource planning; review, develop and implement the supplier management process for all key contracts and suppliers as outline in section 4.1.4 above; negotiate additional savings and community benefits from existing contracts with key suppliers; continue to create opportunities for SME s whilst exploiting opportunities available through aggregation of spend; continue to provide training and awareness sessions for those service staff actively involved in the tendering process; put work plan in place to ensure savings plans are being resourced to deliver savings targets for contract renewals and negotiations for existing contracts;
review and develop an approach which ensures value for money for the renewal and maintenance of vehicles; develop a collaborative approach for delivery of the roads maintenance programme, with Inverclyde Council recognising lessons learned from the Council s existing framework agreements and from neighbouring local authorities recent experiences implementation of a priorities tracker work plan tool to ensure best value is achieved and sufficient resource is available to meet operational requirements; implementation of a contract renewal plan to feed into work plan for future years; utilisation of Public Contracts Scotland Tenders e-tender system, where appropriate, in accordance with the Council s Contract Standing Orders. This will in turn support the development of a contracts register; and ensure that the Council supports CAT A and B contracts from both a technical and commercial perspective to maximise the benefits. 6.1.6 Long term Strategy The long term strategy for Community Resources is: ensure that performance and opportunities across contracted spend is optimised, driving value from existing contractual arrangements; develop greater engagement with our supply based and partners with the aim of promoting best practice, continuous improvement, delivering innovation, increased collaborative working and consideration of shared service opportunities; greater engagement with potential partnerships with consideration to more collaborative working; shared services and outsourcing opportunities; and utilisation of the work plan and service wide review to ensure contract delivery timescales support best value.
6.2 Development & Housing Services 6.2.1 Scope/Key Spend Areas Key Development and Housing Services (D&HS) areas include: Scottish Housing Quality Standard (SHQS) the requirement for social landlords to ensure their property portfolio meets the defined minimum quality standard by 2015. Major capital works include - School Estate Management Plan (SEMP) Project, new builds, extensions and refurbishments. Intermediate capital works demolition, extensions and refurbishments. Minor capital works trades, environmental, securities, upgrades and refurbishments. Professional technical services and agency staff. Facilities; asset management; statutory compliance; energy and carbon management. Trades materials stock items and direct purchases. An analysis of the existing spend profile within D&HS together with a review of confirmed budgets and contracts in place, has identified a number of priority areas of focus. These have been captured within FY13/14 benefits tracking sheets for each service but summary details have been provided in the table below: Key Spends Approximate Spend Level Building Services 3,500,000.00 Housing Services 50,000,000.00 Planning; Economic Development; Regeneration & Events 80,000,000.00 Property Services 20,000,000.00 Education (SEMP project) 32,500,000.00 6.2.2 High Level Strategy The embedded CPU team have integrated well within the D&HS function where common goals and objectives have been agreed and an integrated team approach developed with agreed processes and procedures for identifying the need through to managing the resulting contracts. CPU will continue to work with the service to develop a forward plan of procurement activity which takes cognisance of the lessons learned and opportunities arising from first generation contracts / framework agreements established and to maximise the benefits of better procurement practices to improve both performance and value. Priorities include: to progress and support the project activity, in line with the councils SEMP, to offer procurement services, support and advice; to continue to progress the Town Centre Regeneration program which has superseded the Building Better Communities (BBC) programme and to support activity relating to the Renfrewshire Local Plan and Local Development Plan;