Strategic Procurement

1. Strategic Procurement Terry Campbell Project Manager - Procurement

2. What is Procurement? Definition: Process that considers the acquiring of goods, services, or works from the basic identification of a need, considering different methods of delivery including make or buy options, seeking of suitable providers, defining the requirement, method of financing, and the eventual disposal of the asset or termination of the contract.

3. Objectives for today: • To indicate how the public sector’s tendering processes & regulations work • To advise how to complete tender documentation • To identify tendering opportunities • To improve ‘fit to supply’ • To increase your chances of winning public tenders • To advise how tenders are evaluated • To advise how the process may change (modernisation) • To provide a chance for networking

4. The Buyer’s objectives: • To find better sources of supply • To increase competition • To overcome shortages • To try and ensure that the supply base is reflective of local community • To understand vendor’s issues • To review and improve the tender process

5. Advertising Agency Staff Books Building Cleaning Catering & Catering Supplies Computer Consumables Computer Equipment Consultancy Copiers Electricity Furniture Gas Grounds maintenance Insurance IT Infrastructure Janitorial Supplies Mechanical and Electrical maintenance Oil Parking Services Signage Stationery Street Lighting Telecommunications Vehicles Waste disposal Water Water Coolers Window Cleaning What the public sector buys:

6. Local Government • Needs to develop an appropriate mix of large contracts, delivering economies of scale, and, where possible, small contracts giving opportunities to local businesses.

7. To help inform mix, the Council needs to understand spend profile, and have undertaken an impact analysis This involves: • Identifying suppliers • Identifying spend per supplier • Identifying supplier turnover • Calculating spend as a percentage of turnover • Classifying suppliers according to types (SME, BME, local etc) • Identifying whether suppliers are e-enabled? • Identifying number and category of staff employed by supplier • Assessing likely impact of procurement approach

8. Why is public sector procurement different? Council’s and other public sector bodies spend £billions of public funds. £150 billion was spent in 2007 by the whole of the public sector -OGC Subject to UK legislation – competition law, Best Value etc Subject to EU legislation – aimed to remove barriers in the EU single market Subject to audit Accountable to government and the electorate Many services are sensitive or high profile

9. Merton’s spend – some key findings • Non pay Spend of about £162m identified • Spent on 5760 suppliers • 76% (c £123.4 m) is spent with just 260 suppliers • But £1,000 or less per year is spent on 2864 suppliers

10. Top Ten Categories

11. So what do we do…? Strategic approach: • Enhanced procurement strategy • Sustainable procurement • Data analysis • Annual high profile Meet the Buyer • Developing workshops for all sectors • Access to information via Council’s website • Working in partnership with business support agencies • Supplier and Contract Management System • Voluntary Sector Directory

12. Social & Equality Impact Environmental Impact Value for Money Sustainable Procurement Value for Money Economic Impact Sustainable Procurement

13. Procedures The contract value determines whether we need to seek quotations: • Less than £10,000 - A single Tender • Less than £75,000 - Three written quotes • Greater than £75,000 - Tender exercise • Greater than £139,893 - EU tender exercise

14. Procurement Process Explained EU Procurement Rules • Treaty of Rome principles – free trade for member states • Open and fair competition • Service and Supplies contracts with a value above £139,893 • Works above £3.497 million • Must be advertised in the Official Journal for the European Union

15. Tender Advertisement • Where? • Alito • Local and national press • Trade journals • European Journal (OJEU) • What? • Contract title • Description / Project brief • Special circumstances • Estimated value • Closing date • Contact details • Evaluation criteria

16. Procurement Rules Explained Two main types of tender procedure used: • Open Procedure – open to any supplier • Restricted Procedure – initial Pre-Qualification Questionnaire used to shortlist suppliers to be invited to tender

17. Pre-qualification Process To provide information and documents that demonstrate: • Technical capability • Financial stability and commercial understanding • Past performance as demonstrated by references • Commitment to equal opportunities • Commitment to health and safety • Commitment to sustainable environment

18. Exercise – Question 1 Good answer? Question Please outline how your company proposes to manage quality during this contract. Answer “Dedicated Account Manager whose sole purpose is to ensure that 100% satisfaction is achieved”

19. Suggested Answer – Question 1 Product Quality • Internal quality checking procedure including quality checks at critical times throughout the process • Quality management systems in place to record, analyse and resolve problems Service Quality • Monitoring of KPI and reporting with MI • Undertake user surveys and then use this to ensure continuous improvement

20. Exercise – Question 2 Good answer? Question Please detail safety arrangements for the delivery of goods/works/services, specifically including: • Risk assessment procedures • First aid provision • Emergency procedures Answer ‘All of the above are incorporated within our Health & Safety Policy’

21. Suggested Answer - Question 2 Answer the questions, when it asks for detail, you need to respond with detail. Your submission can only be evaluated on your response. Risk Assessment Procedure Employees are required to….. First Aid Provision At least one member….

22. Exercise – Question 3 Good answer? Question Please give examples of how your environmental policy is applied in practice. Answer ‘We have worked for 6 years delivering this service for Merton Council and have always considered environmental concerns’

23. Suggested Answer – Question 3 Where a question asks for examples – give examples. Also do not assume prior knowledge. The only information which can be considered is what is written down. What any of the evaluation panel know about your organisation from previous working arrangements cannot be considered. E.g. ‘Our policy states our commitment to reduction in emissions due to travelling so we have installed secure bicycle racks and shower facilities, we also actively encourage use of public transport and car sharing for business purposes.’

24. Top Tips • Read documentation carefully • Provide all the information requested • Only include information requested • Sign, date and return all required documents by the deadline • Cross-reference additional information • Follow pricing structure, be clear and accurate • Don’t make assumptions – ask for guidance • Answer the questions fully • Be honest!

25. AboutAlito Web based system Supports electronic tendering, supplier & contract management functionality Incorporates approved lists Any organisation can register No fees for suppliers Collaborative projects

26. How does Merton use Alito All procurement in excess of £10,000 profiled on Altio Each opportunity is assigned one or more categories Suppliers registered against these categories are alerted to relevant opportunities Email generated to the primary contact Responsibility of primary contact to follow-up Login to Alito, download the documents The rest is up to you!

27. Organisational profile on Alito Create your company profile: Basic company information e.g. address Create users - primary contact key choice Choose Councils - one or more Select categories - as many as possible Complete any questionnaires - approved lists Submit your profile Important - keep it up-to-date

28. Participating in tenders Use the bulletin board to search for and locate opportunities Click on the tender reference number Notice Tab – Title, description and deadline Registration Tab – Register to access docs Dialogues – Raise questions for clarification Attachments – Download the documentation Responses – Submit your bid electronically

29. Tips Be pro-active – don’t wait for alerts Consider your search parameters when looking for tenders e.g. stage and category Allow plenty of time to submit responses – don’t start five minutes before a deadline Contact the procurement team: Registration issues Tender accessibility problems

30. Next Steps Not registered Visit http://procurement.merton.gov.uk/read the information and download the guide Already registered Check your profile is up-to-date Consider the identity of your primary contact Add Councils and categories where necessary

31. Questions