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Commodity Profile & Strategy Agreement Title: [insert] Reference: [insert]

Commodity Profile & Strategy Agreement Title: [insert] Reference: [insert].

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Commodity Profile & Strategy Agreement Title: [insert] Reference: [insert]

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  1. Commodity Profile & StrategyAgreement Title: [insert]Reference: [insert] For info – delete prior to issueThe strategy is used in the planning stage of any procurement to determine how key issues will be addressed e.g. route to market, CSR issues, pricing strategy etc which is then translated into the procurement process and documentationIt identifies and minimises risk and assists in ensuring all key factors have been taken into account when conducting the procurement leading to fit for purpose and VFM.

  2. Version Control When drafting and amending the Profile & Commodity Strategy, the Procurement Officer should complete the above table to ensure changes can be tracked and queries can be directed to the appropriate UIG member/others as appropriate

  3. Contents Except where stated as optional the slides contained in this template are the recommended mandatory minimum contents of the Commodity Profile Strategy. Other slides can be added on a commodity specific basis as appropriate . Further slides are contained in the Scottish Public Sector Toolkit V10 24/08/2014 Slide 3

  4. Mandatory consultation with the Head of Collaborative Procurement (HOPC) If consultation with HOPC is required detail outcomes here; For info – delete prior to issue Procurement Manager must consult with the HOPC in the following circumstances: • where Single Tender Action (non competitive action) is proposed • where a procurement has a strong potential to influence CSR issues • where an extension to a contract or framework agreement is proposed • where the negotiated procedure, competitive dialogue, or dynamic purchasing system is the proposed tendering option • where it is proposed to shorten the EU minimum tendering timeframes or use the Accelerated Restricted procedure (NB use of the Accelerated Restricted MUST be highlighted in the Contract Notice. For further information about the Accelerated Restricted Procedure please refer to this Scottish Procurement Policy Note (SPPN 1 2009): http://www.scotland.gov.uk/Resource/Doc/1265/0076383.pdf) • where it is proposed that the duration of a framework agreement will exceed 4 years • where TUPE may apply V10 24/08/2014 Slide 4

  5. Executive Summary Procurement Manager to complete this slide after completion of the Strategy and prior to forwarding for sign off by the UIG/HOPC • Current status: [list] • Spend – total versus addressed: [list] • Scope: [detail] • Strategic recommendations and reasoning: [detail] • Benefits – how much, how, by when? Price parity opportunities: - £a achievable by DATE Benchmarking opportunities: - £b achievable by DATE Market competitiveness: - e.g. new player breaking into the market, driving pricing down but want commitment , £c by DATE Product standardisation/ rationalisation potential: - £d, assuming xyz by DATE Supply chain redesign, moving to ex-works, - £e by DATE • Any major barriers to success: V10 24/08/2014 Slide 5

  6. UIG Role & Input Procurement Manager to agree with the UIG their role, responsibilities, input and actions at each stage in the strategic sourcing process • Agree with the UIG who will agree the final draft of the key stage documentation e.g. all or a nominated number of UIG members re the strategy, award recommendation etc • Agree with the UIG the role UIG members will play in PQQ and tender evaluation and how Tender Evaluation Board scores for PQQ/ITT results will be collated e.g. overall weighted results or the average of score. V10 24/08/2014 Slide 6

  7. Stakeholder (& UIG) Contacts for [Contract/Framework Agreement] List names and contact details of all stakeholders relevant to this commodity: V10 24/08/2014 Slide 7

  8. Business Need and Functional Requirements Sector Requirements Where we are Where we want to be • What does the commodity do, standard v customised, level of customisation, quality requirements, real v perceived function, service requirements, user perception, value to institution, specific specifications • Consider the procurement innovation issues for highly complex procurements • NB use of generic specifications – if these don’t exist the UIG needs to start working on them as soon as possible V10 24/08/2014 Slide 8

  9. Scope of [Name of Commodity] • Scope the commodity to be covered i.e. what is included in this commodity group, breakdown into sub-commodities, which products fall under which sub-commodity V10 24/08/2014 Slide 9

  10. Expenditure Analysis - Spend Distribution • In scope spend distribution by universities and colleges, supplier, by sub-commodities: [detail] • What is the value of the requirement? How does this inform the procurement process? Procurement Officer to add an acknowledgement, for future reference, of the source(s) of data used: V10 24/08/2014 Slide 10

  11. Future Expenditure Trends • Demand profile: [insert] V10 24/08/2014 Slide 11

  12. Spend Analysis & Conclusions • Demand profile: [insert] V10 24/08/2014 Slide 12

  13. [Commodity] - Typical Cost Breakdown Complete the breakdown for the commodity Profit % Recommendations What are the recommendations? V10 24/08/2014 Slide 13

  14. Total Cost Model [Name of Commodity] (Optional) • List the activities carried out under each step of the product life cycle. • Determine the impact of each step on the total cost of ownership in terms of High, Medium or Low. • Brainstorm the cost drivers associated with the activities under each step and determine the opportunities in each area. • Which costs can be reduced (savings)/avoided (cost avoidance)? • Identify Low, Medium and High Savings Opportunities • Identify the barriers and enablers related to realising the opportunities V10 24/08/2014 Slide 14

  15. Total Acquisition Cost (OPTIONAL) Exampleacquisition costs: Supplier Costs Total Acquisition Costs Organisation’s Costs Product Driven Costs CustomerDriven Costs Order Fulfilment Costs Administration Costs Order Fulfilment Costs Order Fulfilment Costs Order Fulfilment Costs • Material • Labour • Overheads • Warehousing • Special tooling • Quality specifications • Defects/rejects/returns • IT Costs • Customer support • Sales • Inventory handling • Transportation • Picking & Packaging • Requisition to P/O • Order Transmission • Expediting • Invoice Reconciliation • Timely Payment • Queries • Reporting • Defects • Inspection • Rejects • Repackaging • Reshipping • Storage costs • Labour • Overheads • Goods receipt • Delivery • Requisitions Cost Drivers e.g: • Product specification and range • Delivery frequency and location • Order frequency • Order value • Lead time V10 24/08/2014 Slide 15

  16. Supply Market Overview • Market Trends – detail what is happening in the market for the commodity, current and future technologies, changing customer demands, new players, mergers and acquisition • Supply Market Share – detail the key players within the industry, identify size in terms of turnover, sales, number of customers and capacity NOTE: trends can reveal: who is winning/ losing business, who’s trying to win market share in the UK, whose business objectives match the sector, what do profit margins typically look like for the industry. V10 24/08/2014 Slide 16

  17. Current Contract Position– [Contract/Framework Agreement] V10 24/08/2014 Slide 17

  18. Current APUC/Sector Suppliers of [Name of Commodity] V10 24/08/2014 Slide 18

  19. Main Suppliers in the Market in Context of their Total APUC/Sector Business V10 24/08/2014 Slide 19

  20. Benchmarking Opportunities (Optional) • Look to understand opportunities from: internal APUC price parity I.e. if different Institutions pay different prices and all move to the lowest price point; and, from benchmarking with other organisations e.g. PASA, Value Wales, N Ireland Procurement Service, OGC, Scotland Excel, councils, fire and police service, private sector etc V10 24/08/2014 Slide 20

  21. Risk Analysis for [Name of Commodity] Inc Barriers To Change V10 24/08/2014 Slide 21

  22. Corporate Social Responsibility (CSR) • Procurement Officer & UIG to consider CSR issues relevant to this procurement: • General issues: • Result of theRisk Coding Analysis for [goods/services] regarding relevance and risk: • Completion of the Sustainable Procurement Risk Assessment Tool (SPRAT) for [goods/services]: Are there any resulting actions are required to be managed. NB: areas may already be adequately covered by the existing CSR questions. • Which areas in PQQ CSR Questionnaire or ITT CSR Questionnaire are required. • Is EAUC assistance required? If ‘Yes’ approach EAUC via the standard letter of engagement. • Specific CSR Requirements for ITT: V10 24/08/2014 Slide 22

  23. CSR -SMEs, Supported Businesses & Social Enterprises and Community Benefits: • Detail barriers to participation for SMEs and proposals for removing: • Can this be let as a Reserved Contract under Regulation 7 of the EU Procurement Regulations: • Identification of any social clauses or community benefits relevant to this procurement: V10 24/08/2014 Slide 23

  24. CSR • Race Equality – Impact Assessment To determine whether race equality is a core requirement in a contract or framework agreement for goods, services or works, the following questions should be considered: • What is to be provided under the contract or framework agreement? [list] • Is the provision of the goods, services, or works one of the functions or policies relevant to meeting the duty to promote race equality?[Yes/No]. Refer to Appendix 3 of the Procurement Manual • Is the provision of the goods, services or works likely to affect (directly or indirectly) the ability to meet the duty to promote race equality?[Yes/No] • Is it necessary to include requirements for promoting race equality in the contract to make sure the duty is met? [Yes/No] 5. What race equality requirements are appropriate for the contract or framework agreement? [list] If the answer to questions 2, 3, or 4 is ‘Yes’, race equality is a core requirement. Refer to paragraph 3.7 of APUC’s Procurement Manual which details how and where race equality should be implemented into the strategic sourcing process. V10 24/08/2014 Slide 24

  25. Strategic Tendering Options On the basis of the internal and external analysis, plus opportunity assessment, detail the available options and the pros/cons of each. Several examples are detailed below: Option 1: Negotiate and extend current contract Pros: analysis shows limited opportunity in this area compared with rest of portfolio, would achieve savings whilst minimising resource effort; would also allow APUC to approach the market jointly with PASA next year Cons: will not optimise savings as suppliers looking for volumes commitments which is dependant on extended work with stakeholders Option 2: Use OGC framework for next 12mths to allow quick win and gathering of better management information Pros: initial assessment shows saving of 3% on OGC contract, this could be quickly implemented and allow management information to be collated as currently data is poor Cons: comparisons with industry suggest savings of 20% if had APUC commitment contract Option 3: APUC tender and contract for x years, with the aim of being in y position in z period of time e.g. product rationalisation as part of contract requirements. Intention would be dual supply award to maintain competitive tension etc Pros: Maximise savings Cons: Resource effort involved given other portfolio opportunities have higher potential V10 24/08/2014 Slide 25

  26. Strategic Tendering Options • Lead-In Period - detail period required: NB: consider the period for implementing the commodity onto PECOS agreed with Supplier eEnablement during the project start up stage • Extension Period: detail proposed period (s): • Tendering route to demonstrate competition: Detail and insert justification • A framework agreement will be established as follows: Framework route:[single supplier/multi-supplier] Multi-supplier framework lots:[insert number proposed] Call off contract mechanism: [direct/ranked/ mini competition] V10 24/08/2014 Slide 26

  27. ITT Considerations (particularly relevant to consider at this stage in more detail when the Open Procedure is proposed so as to reduce the time taken to compile the ITT at the ITT composition stage) • Statement of Requirements (SoR): Detail the main areas and issues needing to be inserted into the SoR • IPR: Does IPR apply and what is the impact. • Access by institutions: detail the number of institutions, affiliated bodies, and if APUC requires to access the contract or framework agreement. Estimate number anticipated to access the contract/framework agreement from commencement date • TUPE: establish if TUPE is likely to apply. If yes, obtain the detail of name(s), sex, employment location of individuals who may be subject to TUPE and consult with the HoP or Human Resources or seek legal advice • Pricing Strategy: detail the how the commodity will be priced (taking into account whole life costing and cost avoidance). Can an e-Auction be utilised for this commodity?State the period of price stability (e.g. 1 year etc) and the reasoning for this. V10 24/08/2014 Slide 27

  28. ITT Considerations • Mechanism for addressing variation in the charges e.g. via RPI/CPI etc: More info can be found at www.statistics.gov.uk/statbase/product.asp?vlnk=868 • Payment period: The default position under the Late Payments of Commercial Debts Act 1998 is 30 days • Parent Company Guarantee/bond: state if either is to be included in the ITT for the framework agreement and/or call off contracts or a contract and why use would be beneficial. • Ts&Cs: list any clauses required over and above the standard ts&cs. • For Part B services: If the procurement is considered to be high risk/high value, a standstill period should be considered (with reference to Federal Security Services Ltd vs Police Service of Northern Ireland). V10 24/08/2014 Slide 28

  29. Information re Evaluation of References, Site Visits, and Presentations References: In a Restricted procedure, ascertaining an applicant’s past experience in terms of “technical or professional ability” (as determined by Regulation 16(7)(b)(ii) of the Public Contracts (Scotland) Regulations 2006) can be included in a Pre Qualification Questionnaire as a section criteria.  Written evidence of past performance, which can be objectively evaluated, can be used but it is not recommended written evidence is used as a Minimum Standard. Standard forms can be used to request references , but returned references should then be used for information purposes only.The above also applies to an Open procedure. Site visits: If a site visit is required before tender return i.e. to be used to inform tenderers more clearly regarding the outputs of the requirement e.g. visit to an Institution's property or visit to a new build, then this is not evaluated. If a site visit is deemed to be required post tender return and as part of evaluation process (because the information to be ascertained from the site visit directly relates to the subject matter of the Contract or Framework Agreement), this must be detailed as an award criteria in the Contract Notice or ITT, be capable of evaluation, and make clear what is being assessed in the site visit. Presentations: If a presentation is deemed to be necessary as part of tender evaluation and/or bid clarification,  it can only be used for information purposes and cannot be detailed as an award criteria in the Contract Notice or ITT and used to evaluate tenders because it is subjective, and not capable of objective evaluation i.e. performance at interview is not an evaluation criteria.  Evaluation of a presentation’s written output is permissible where as part of bid clarification tenderers are requested to present on common areas in the submitted tenders (which following tender evaluation have been revealed to be areas where clarification would be needed).  These areas cannot be in addition to the award criteria detailed in the Contract Notice or ITT.  Ensure any area of concern remaining after the presentation is followed up in writing as part of bid clarification. V10 24/08/2014 Slide 29

  30. PQQ Selection CriteriaFurther information OGC Selection/Award criteria PPN Refer to PQQ GUIDANCE NOTE Criteria Selection Criteria Part A – Background Information Part B – Economic & Financial Standing Part C – Conviction of Criminal Offences Part D – Business Probity Part E – Technical & Professional Ability Part A - Section not scored – for info only Part B - Insert minimum standards in the Contract Notice or list as objective criteria in section III.2 in the Contract Notice .See APUC’s of Financial Analysis of Accounts for recommended levels. NB: if minimum standards are set and aren’t met, the applicant should be excluded from the process Part C - If the applicant answers ‘Yes’ to any question they MUST be excluded from the process Part D - If the applicant answers ‘Yes’ to any question they MAY be excluded from the process Part E - If minimum standards are set and aren’t met, the applicant should be excluded from the process otherwise use objective scoring criteria to shortlist those applicants meeting minimum standards EXAMPLE V10 24/08/2014 Slide 30

  31. ITT Award & Weighting Criteria Further information OGC Selection/Award criteria PPN Award Criteria: award criteria is based on [MEAT/lowest price] Price Quality Ratio:[insert] Weighting Criteria: EXAMPLE EXAMPLE V10 24/08/2014 Slide 31

  32. ITT Call Off Contract Award Criteria Award Criteria: award criteria is based on [MEAT/lowest price] Price Quality Ratio:[insert] Weighting Criteria: [insert criteria] [insert weighting] V10 24/08/2014 Slide 32

  33. Contract Implementation – Lead-In Period • Detail what will need to happen, when, and who has responsibility • Communicate with universities and colleges to prepare them for any changes • Conduct product trials (if applicable) • Start running down stocks of current product ranges (if applicable) • Prepare/ complete any required training • Clarify supplier change management/ implementation expectations • Ensure smooth transition • Follow-up on progress • Note requirements for completion later in the strategic sourcing process: • Systems updates, CUPID, SharePoint • Savings notification to individual institution • Notification and award letters • Buyers Guide/ Commodity Action Report (CAR)/ ePS Bulletin etc V10 24/08/2014 Slide 33

  34. ePS Trading Strategy • Detail how End Users will see and access the Framework Agreement content in PECOS: • Use APUC’s Supplier Report showing ePS active suppliers through Institutions & ePS Supplier Report to determine PECOS: • Content Availability • Connection Type 2. Develop a list of specific and general ePS issues / requirements relevant to the commodity: [list] Plan how these will be accommodated on PECOS: [detail] • Decide PECOS trading strategy: • on catalogue • Catalogue • Punchout V10 24/08/2014 Slide 34

  35. Strategic Contract and Supplier Management • All contracts or framework agreements will be contract managed by the Procurement Officer. Refer to ITT for Procurement Officer and User Group roles and responsibilities. Detail considerations for Contract and Supplier Management GuidanceScotland strategic contract and supplier management guidance, processes, and templates are available at http://www.scotland.gov.uk/Publications/2006/11/16102303/0#a10. These are currently being develop and once finalised will be incorporated fully into strategic sourcing documentation. V10 24/08/2014 Slide 35

  36. Timelines V10 24/08/2014 Slide 36

  37. Prior Information Notice (PIN) • Use of PINs is not mandatory. PINs can be published through OJEU in order to alert the market to forthcoming contract opportunities. • Once a PIN has been published, reductions in timescales for competitions identified in the PIN are possible. • PIN should be published at least 52 days before and not more than 12 months before the contract notice. • The PIN should contain details of supply and services contract for which the public body expects to seek tenders in the next 12 months. • PINs must be published on OJEU website (this can also be done through the Public Contracts Scotland website). V10 24/08/2014 Slide 37

  38. Commodity Strategy Sign-Off – UIG & HOPCUIG: HOPC: Profile & Commodity Strategy approved by HOPC, APUC: ……………………………. Date: ……………………………... V10 24/08/2014 Slide 38

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