«JOINT PROCUREMENT SERVICE SUSTAINABLE PROCUREMENT STRATEGY 2011 – 2014 1. DORSET PROCUREMENT – WHAT IS IT AND HOW DOES IT WORK? Dorset ...»
JOINT PROCUREMENT SERVICE
STRATEGY 2011 – 2014
1. DORSET PROCUREMENT – WHAT IS IT AND HOW DOES IT WORK?
Dorset Procurement is a Joint Procurement Service between the local
authorities in Dorset that became operable on 1 April 2010. Dorset County
Council will host Dorset Procurement on behalf of the following councils:
Christchurch Borough Council East Dorset District Council North Dorset District Council Purbeck District Council West Dorset District Council Weymouth & Portland Borough Council Procurement is part of a wider Dorset Councils Working Together programme which aims to be innovative in transforming the way in which services are organised and delivered to improve the customers’ experience.
The agreed aims and objectives Dorset Councils Working Together are:
To take a customer-orientated approach to the design and delivery of shared services To maintain existing service quality (and where possible improve it) while maximising the opportunity for on-going efficiency savings To build a sustainable approach through an agreed proportion of any savings accruing to the individual partners being ring-fenced to fund the programme.
2. What is Procurement?
Procurement has been defined as:
“….the process of acquiring goods, works and services, covering both acquisition from third parties and in-house providers. The process spans the whole life cycle from identification of needs, through to the end of a services contract or the useful life of the asset including its disposal. It involves options appraisal and the critical make or buy decisions which may result in the provision of services in-house in appropriate circumstances” (Source: National Procurement Strategy for Local Government – October 2003) Guidance on best procurement practice, including Office of the Deputy Prime Minister (ODPM) Circular 02/2003 published on the 13 March 2003, (which made reference to the Byatt report on Best Value Procurement and the Government Best Value Review), called for innovative approaches to commissioning, procuring and providing services. The circular makes clear that successful procurement strategies are likely to be based on whole life cost considerations that include subsequent revenue implications and not simply the lowest initial tender price. Consideration of whole life costs allows factors such as fuel efficiency, asset disposal and replacement cycles to be taken into account as well as social factors, including, environmental sustainability, benefits to local people, good work force management, community safety, diversity and fairness as well as initial tender price.
In its Comprehensive Spending Review of 2007, the government further strengthened the role of procurement stating that smarter procurement would be the most significant tool, especially through collaboration and shared services, in the delivery of efficiencies,.
In addition, a report of HM Treasury’s Operational Efficiency Programme of April 2009 recommends as one if its key strands that 50% of spend not currently in procurement contracts be procured collaboratively by 2010/11.
A report by The National Audit Office in May 2010 on “A Review of Collaborative Procurement across the Public Sector” identified that all public bodies should adopt a more strategic approach to procurement. It reports further that collaborative procurement has long been seen as a way to save money. Standardising specifications allows for the aggregation of demand and allows for comparison of unit costs. Lower prices should result either from economies of scale or from using price information to challenge suppliers.
Collaboration should result in fewer tendering exercises leading to lower administration costs and allow public bodies to concentrate on more specialised purchases that are unique to them.
For further information on the National Procurement Strategy click on the
following web link:
www.odpm.gov.uk/stellent/groups/odpm_localgov/documents/page/odpm_loc gov_029233.hcsp For further information about the Governments Efficiency Agenda click on the
following web link:
3. Dorset Procurement Objectives This strategy will set out how Dorset Procurement will adopt a strategic approach to
sustainable procurement in order to meet its stated objectives, which are:
To build capacity and capability within procurement across Dorset To release efficiencies for reinvestment To streamline business processes and modernise systems To develop the market, by increasing competition, innovation and choice, and by maximising supplier relationships To support and develop the local economy To provide procurement excellence in the region and beyond.
To ensure compliance with European and English legislation The harmonisation of relevant procurement policies and strategies across all seven Authorities.
This Sustainable Procurement Strategy, whilst meeting the last objective above, is not intended to be a procurement manual although reference will be made to both the Dorset Procurement Handbook and the Dorset Procurement Toolkit throughout this strategy document. In addition to its stated objectives, the justification and business drivers for a joint procurement service are the
Support the government’s requirement “…..to pursue new working arrangements to achieve the same level of improvement and efficiency gains as we expect the new unitaries will be achieving” Provide additional capacity and betters skills in order to identify and deliver cashable savings for reinvestment To improve service quality by ensuring that goods and services purchased better meet our customers’ needs.
To improve and standardise business processes to identify and deliver additional process savings To deliver a positive and consistent experience for organisations wishing to trade with the seven Dorset Councils, by adopting common approaches, policies, and documentation.
To ensure governance and compliance with European Union (EU) and English legislation.
To help with the business continuity planning to help secure essential services in the event of emergencies or pandemics (e.g. Swine Flu Pandemic).
This strategy will also set out how Dorset Procurement will actively develop more formalised collaborative arrangement with the two Unitary Boroughs of Bournemouth and Poole, local Parish & Town Councils as well as other local and regional public sector organisations.
4. Dorset Procurement & Category Management As part of its ‘Fit for the Future’ programme, Dorset County Council in 2008 formally centralised its strategic procurement function, building on the success of the former Procurement & Contracts Management Unit and created Dorset Procurement.
Dorset Procurement has successfully embedded the principles of Category Management in delivering the necessary efficiencies to support one of the Council’s aims of being a “well managed council” as well as contributing to its other aims through the strategic procurement approach in the delivery of all its services.
The introduction of Category Management completely changed the way in which Dorset Procurement operated. Category Management has been widely used in the private sector but only adopted by a handful of public sector organisations.
Category Management has been defined by the London Borough of Camden
as a tool that:
“provides a single point of responsibility for the procurement of
goods and services across the council which :
Under the Category Management approach, Dorset Procurement has clustered similar expenditure groups into categories, with a Senior Category
Manager heading each category of spend. The categories are:
These categories have sub-categories which are assigned to individual Category Managers who then develop a strategic sourcing process. The sourcing process flows from very close stakeholder engagement to supplier relationship management.
To support the Category Management process, a Dorset Procurement Toolkit has been developed that sets out the procedures and stages that officers have to follow in order to successfully deliver a procurement project. The process of Category Management has an inbuilt ‘milestone’ review process which examines a programme or project at critical stages in its lifecycle. Each milestone of the four stages of the process has to be ‘signed off’ by the Procurement Manager in order to progress through to project conclusion. The
four sections are:
Category Management will deliver best value in the procurement of goods, works and services by procuring delivery partners on the basis of whole life costs and benefits to meet customer needs.
The success of the County Council’s Dorset Procurement unit was identified as a key factor in the acceptance of a Dorset Councils Working Together Business Case to develop a Joint Procurement Service, led by Dorset County Council, which came into effect on 1 April 2010.
The Joint Procurement Service received further recognition when, in the autumn of 2010, the service was judged on the original business case, to be a finalist in the Society of Procurement Officers (SOPO) Awards for Procurement Excellence.
Dorset Procurement is not a central processing unit. It is a resource which leads on letting corporate contracts and supporting significant projects, whilst allowing departmental purchasing staff organise their own small contracts and to place orders themselves against corporate contracts within a clear corporate framework. Dorset Procurement provides support wherever required and assist stakeholders to monitor procurement activity across all borough and district councils. Dorset Procurement comprises of a team of highly skilled and experienced staff and its activity, together with those similar staff in other local councils, is measured on maximising benefits for all Dorset councils as well as specific targets for particular projects.
Dorset Procurement will undertake its procurement activities in an open and fair manner without discrimination.
5. Staff Development The development and training needs of all staff will be assessed through the use of a competency framework, building on from Dorset Procurement’s successful investment of a unique ‘Development Needs Analysis’ (DNA) tool.
Where identified capabilities are lacking, training will be provided to close any skills gaps, subject to satisfactory budget provision.
Refresher training will continue to be a core element of ensuring that all staff engaged in the procurement process maintain and improve their skills and remain motivated in delivering the ever changing requirements of a successful procurement organisation.
A structure chart of Dorset Procurement is shown below.
The Sustainable Procurement Strategy will support each of the Dorset Council’s corporate aims and objectives. It will deliver best value in the procurement of goods, works and services by procuring delivery partners on the basis of whole life costs and benefits to meet customer requests. The Sustainable Procurement Strategy will contribute to the Dorset Procurement aim of continuing to be recognised as providing procurement excellence in the region and beyond. In particular, the Strategy will support each council’s aim to deliver more efficient and effective public services that represent value for money.
7. Aims of the Strategy In delivering an effective and efficient procurement service across all Dorset Councils Working Together, Dorset Procurement will have a responsibility to ensure that all procurement activity is undertaken in a socially responsible manner. The impact of risk, diversity and sustainability will need to be identified, measured and managed throughout the procurement process.
Dorset Procurement will also have responsibility through the leverage of its significant spend to ensure that the marketplace in all its totality is made aware of its obligations to understand and deliver on these important areas of activity.
As part of the Category Management process, opportunities for local, regional and national collaboration will be given prime consideration and, as appropriate, implemented. Such collaboration will include continuing membership of the Central Buying Consortium (CBC) and the wider Pro 5 as well as our involvement with the South West RIEP.
The aims of the Strategy are:
Incorporate current best practice government initiatives such as Best Value, the Byatt report, Local Government Construction Task Force, Constructing Excellence in the Built Environment, the work of the Strategic Partnering Task Force, South West Councils, Business Link Organisations, IDeA, the Localism Bill, and the corporate objectives of each of the Dorset Councils Working Together.
Assess the competitiveness of services and especially how performance compares with those provided by other public bodies and the private and third sectors.
Deliver significantly better quality public services for all local citizens through strategic partnerships forged with a range of public, private and voluntary and community services and social enterprise sector suppliers.
Procure service delivery partners using Best Value criteria and added value over current arrangements or existing resources.
Consider the relevance and impact of diversity issues on service users, suppliers and employees in the management of all procurement activity, including the promotion of equal opportunities and the possible diversity impacts. Such issues will be managed within the requirements of the Equalities Act 2010.