CORPORATE PROCUREMENT POLICY AND STRATEGY · The Corporate Procurement Policy and Strategy provides...

CORPORATE PROCUREMENT POLICY

AND STRATEGY

Shared Nottinghamshire and Derbyshire Procurement Service

(NDPU)

Revised: October 2014 Next review due: September 2018

http://www.mansfield.gov.uk/index.aspx?articleid=1

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FOREWORD

It is with great pleasure that I am able to provide a foreword for the Corporate Procurement Policy and Strategy for the newly formed Procurement Shared Service. The Shared Procurement Service has been in place since June 2013 and is currently made up by four local authorities. Bassetlaw DC are the host council for the provision of Procurement Services for Ashfield and Mansfield District Council’s and more recently Erewash Borough Council.

The Corporate Procurement Policy and Strategy provides a cohesive framework for the Council’s to obtain value in all their procurement activities. The Strategy addresses all elements of procurement activity, from identifying the need, considering options, procuring the appropriate goods, services or works, effective supplier and contract management, through to the disposal of assets. The Strategy also addresses the many solutions available to the Partner authorities, from establishing joint corporate contracts, using collaborative and consortia arrangements, through to developing long-term strategic partnerships.

This Strategy continues to provide a clear focus on balancing two priorities: -

Identifying and delivering efficiencies, but not at the expense of quality;

Developing and embracing sustainable procurement.

Public sector finance is under significant pressure and procurement has a considerable role to play in reducing the Council’s expenditure. Even in the current climate, I still firmly believe that the above two priorities can continue to be reconciled through adopting a mixed economy approach and evaluating on the basis of whole life costs with due regard to risk. The new EU Procurement Directives also provide us with a new option whereby we can now consider Social and Environmental aspects to the tender analysis, where appropriate.

Despite the current economic climate, the Council maintains its commitment to supporting Parent authorities local economy and improving opportunities for businesses to engage with the Council’s.

Each Council’s Contract Procedure Rules (CPR) is currently being reviewed and revised in line with the new UK Procurement Regulations which are due for publication by the UK Government during 2015. They not only reflect current best practice and legislative changes, but also provide a framework to enable all of the Council’s buyers to demonstrate value for money whilst taking account of sustainability issues.

This Corporate Procurement Policy and Strategy is supported by corporate systems in each authority that provides guidance and support for all officers of the Council who procure goods, services and works.

Neil Taylor Chief Executive

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CONTENTS Page

Forward 1

Contents 2

Executive Summary 3

Strategic Procurement in Context 4

Sustainable Procurement 5 - 7

Social Value 8 - 9

Principles for Effective Procurement 10 - 14

Value for Money 15 - 16

Performance Management in Procurement 17

Partnerships and Collaboration 18

e-Procurement 19

Code of Conduct for Procurement 20

The Role of the Nottinghamshire and Derbyshire Procurement Unit 21 – 23

The Role of the Partner Authorities 24

Procurement and the Corporate Plan 25 – 28

Procurement Legislation and Guidance 29 – 30

Appendix 1 - Action Plan 31

Appendix 2 – Sustainable Procurement Policy & Flexible Framework 32 – 33

Appendix 3 – National Procurement Strategy 2014 – District Councils 34 – 44

Appendix 4 – Local government procurement Sixth Report of Session 2013-2014 45 - 46

Appendix 5 – What small and medium sized enterprises can do for Procurement to local Council’s?

47 - 49

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EXECUTIVE SUMMARY

This document sets out the Council’s strategic approach to procurement. It is not intended to be a procurement instruction manual, however, the principles contained within the Strategy are not optional, and it should be read in conjunction with the Contract Procedure Rules (CPR).

In the coming months a review will be undertaken of the four Partnering authorities CPR in a quest to harmonise the procurement process across the Procurement Shared Service.

The Local government Act 1999 places a duty of Best Value on all authorities to secure continuous improvement in the way that functions are carried out, having regard to a combination of efficiency, economy and effectiveness. Effective procurement is crucial in securing high quality, best value public services and the Government has highlighted that the development of a clear Procurement Strategy is a key step towards achieving Best Value and delivering demanding efficiency targets. This is also supported through the clear strategic objectives of the new National Procurement Strategy (NPS) and the recent DCLG report on Local Government procurement.

This Procurement Policy and Strategy also emphasises the increasing importance of Sustainable Procurement: using procurement to support wider social, economic and environmental objectives, in ways that offer real long-term benefits.

Best Value and efficiency targets will not be achieved if the authority fails to approach competition positively, taking full account of the opportunities for innovation and genuine partnerships which are available from working with others in the public, private and voluntary sectors. Importantly, this Strategy seeks to balance two priorities:

Delivering efficiencies and quality;

Sustainable procurement, by engaging with local and regional suppliers to promote the local economy and taking account of the social and environmental impact of spending decisions.

A mixed economy and sustainable approach to procurement also relies on developing a collaborative approach to procurement with other Councils and organisations such as the Pro5 Buying Consortia Organisation and Crown Commercial Services (CCS) to achieve improved economies of scale where appropriate.

This Strategy provides a corporate focus for procurement. It embraces each Council’s commitment to strategic procurement and sets out the Council’s aspirations. It is not a ‘user manual’, and more detail on procurement processes and issues can be found in the CPR and the Council’s Procurement website.

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STRATEGIC PROCUREMENT IN CONTEXT

Strategic procurement is a series of activities and processes that sits at the heart of the Council, providing the framework by which the Council obtains value for money in all of the goods, services and works that it requires. This can be illustrated by the diagram, which shows the inter-relationship between the role of corporate procurement and the Council as a whole:

The term ‘procurement’ relates to the process of acquiring goods, services and works, for example from basic pens, paper and other stationery items to more complex service delivery partnerships, or from bricks to new IT systems, and from the initial concept through to the end of the useful life of the asset or service contract.

It can also range from the negotiation of corporate contracts for the supply of routine goods and services through to the more complex partnership arrangements such as public/private partnerships (PPP), joint commissioning with other public sector organisations, and construction projects.

The Corporate Plan Effective procurement is crucial to achieving continuous improvement and to securing value for money in public services. The partner authorities are one of the largest purchasers of goods and services in the region, and have both legal and moral responsibilities when making procurement decisions. It is important to ensure that procurement decisions are legal, ethical, in accordance with the policies and procedures of each Council, and that consideration is given to the impact on the economic, social and environmental well-being of each district. They should also be achieved in a manner that is open, fair, transparent and auditable. The Council’s vision is made up of two parts. The first is the outward facing Council and its many partners’ vision, and the second is the internal vision for the Council.

Corporate Priorities

Strategic Procurement

Elected Members Senior Management

Purchasing Department

Stakeholders

Suppliers & Partners

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SUSTAINABLE PROCUREMENT

Each Council, along with their policies, is committed to ensuring that services are delivered in a way that protects the quality of the environment and minimises any adverse impact on community well-being. Each Council recognises that procurement can be integral in delivering more sustainable outcomes for each District. To achieve this, it is necessary to ensure that environmental and broader sustainability considerations are taken into account throughout the procurement process, where practicable.

“Sustainable Procurement is a process whereby organisations meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life basis in terms of generating benefits not only to the organisation, but also to society and the economy, whilst minimising damage, or indeed improves the environment”.

Put simply, sustainable procurement is good procurement.

The host Council is working regionally and nationally to develop and promote models of sustainable procurement, and engage with local partners, other public sector organisations, the business community, agencies and the voluntary sector to test these models.

It is important to build internal capacity and local knowledge for implementing sustainable procurement, and the host Council will seek to address this by providing training to increase awareness and build skills, through current resources.

Specific guidance and good practice on sustainability issues in procurement is included in the Sustainable Procurement Policy and Flexible Framework (Appendix 2).

Economic Regeneration

Councils are one of the largest spending organisations in the Region, and the more money that is spent locally, the greater the positive impact this will have on the local economy, particularly for small and medium sized businesses (SME).

EU Procurement legislation limits Councils’ ability to favour local businesses, but there are numerous ways in which it can legitimately support local businesses, including;

Working pro-actively with partners to support local businesses through media and workshops to help explain how to do business with Councils’, and to obtain their feedback in order to improve documentation, policies, procedures and processes;

Providing information about forthcoming procurement activity through advertising tenders on the East Midland procurement portals, www.sourcenottinghamshire.co.uk and www.sourcederbyshire.co.uk and the Councils e-Tendering portal https://www.eastmidstenders.org/procontract/emp/supplier.nsf/frm_home?ReadForm

Running supplier engagement events;

Packaging contracts in a manner, wherever possible, that does not preclude the following from tendering:

Local and regional companies;

Small and medium sized enterprises;

Newly formed businesses;

The voluntary and community sector;

The challenge for procurement is to balance the following conflicting priorities:

http://www.sourcenottinghamshire.co.uk/

http://www.sourcederbyshire.co.uk/

https://www.eastmidstenders.org/procontract/emp/supplier.nsf/frm_home?ReadForm

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Obtaining value for money and the required quality;

Sourcing locally wherever possible within the legislative framework;

Procuring in a sustainable way with regard to environmental, social and economic factors; and

Reducing the number of low value creditors (especially those where annual spend is less than £1,000).

Reducing the number of invoices processed through the use of Purchasing Cards to procure low value, high volume goods.

Specific guidance and good practice on what small and medium sized enterprises can do for Procurement to local Council’s is included in Appendix 5.

Social Development

Councils have a role to play in addressing social impact and cohesion across the Region. Social benefits range from the creation of employment and training opportunities to the reduction and where possible elimination of issues of Corporate Social Responsibility (CSR) in the supply chain.

The Council will encourage ‘supported businesses’ i.e. organisations where 50% or more of their workforce are disabled, through its procurement processes by reserving contracts to supported businesses, where appropriate.

Where relevant to the subject matter of the contract, the suppliers/contractors approach to tackling unemployment and creating training and apprenticeship opportunities should be incorporated into the procurement process.

Furthermore, the Council is continuing to work with the supply chain to continually seek improvement and to address ethical issues, e.g. adopting the use of the Fair Trade products and supporting local suppliers.

Environmental Management

The approach to sustainable procurement reflects the corporate approach to sustainability. Specific guidance on sustainability issues in procurement is available on the host Council’s procurement website.

The host Council has worked with other Councils and agencies to establish and promote minimum recycled content standards for products used in construction, highways maintenance, estates management and all printed matter.

The Partner authorities are aware that public perception of sustainability issues has grown

immensely through focused media attention on climate change, flood defences, waste and

recycling, and have targets to deliver outcomes that support sustainable development.

Procurement in the partner authorities plays a key role in contributing to sustainable

development, through the buildings, goods and services they choose to purchase. With this in

mind each Council recognises it has a vital role in furthering sustainable development and is

endeavouring to take into account the wider issues of sustainable procurement by:

Reducing CO2 emissions produced through Council operations, recycling and reducing

domestic waste;

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Achieving savings for the Council through spend to save and energy efficiency projects

that deliver long term value for money for the Council and the public sector as a whole;

The installation of renewables and the creation of green energy;

Making more efficient use of resources e.g. the re-use and recycling of materials in

capital projects giving rise to reduced energy consumption;

Leading by example and continuing to demonstrate our commitment to sustainable

development;

Considering the costs and benefits of environmentally-preferable goods and services as

alternatives;

Ensuring that vehicles purchased have low emissions of greenhouse gases (GHG’s), and

take into consideration the need to reduce emissions and air pollution.

The partner authorities recognise that further work is to be done on sustainable procurement

and are endeavouring to raise awareness throughout each Council and the general public. They

also intend to promote awareness with contractors by embedding sustainability into engineering

contracts and optimising use of resources. They are building good relationships with other

Councils, in order to seek shared opportunities and benefits. They have adopted mechanisms

and indicators to monitor and review energy reductions and savings, and to monitor progress in

a clear and transparent manner.

Equally important, the Partner authorities will apply procedures for the proper management and disposal of assets to ensure both value for money, and to minimise any adverse impact on the environment.

Equality and Cohesion

Sustainable procurement also includes the duty to ensure that equality and cohesion is addressed in all procurement activity, irrespective of whether provided from within the Partner authorities or indirectly through another organisation.

The Partner authorities are addressing this through:

Where appropriate building equality and diversity terms and conditions into standard procurement documents;

Providing workshops and written guidance for potential and existing bidders that include demonstrating the business case for equality and diversity;

Providing workshops to assist Partner authority officers in addressing equality and cohesion in procurement activity;

Monitoring compliance against equality and diversity requirements in contracts;

Raising awareness and making plans to address the requirements of the Equality Act 2010.

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SOCIAL VALUE

What does the Act apply to?

The Public Services (Social Value) Act 2012 applies to public service contracts and those public services contracts with only an element of goods or works over the EU threshold. This currently stands at £172,514 for the supply of services in local government. This includes all public service markets, from health and housing to transport and waste.

There is an important role for Commissioners of care for vulnerable people, including children, adults in the provision of Social care where they will be required to factor social value in at the pre-procurement phase, allowing them to embed social value in the design of the various services from the outset.

The Act does not require contracts for public works or public supply (goods), or contracts for services under the EU threshold, to consider social value. Whilst this means it will not be compulsory under the terms of this Act to apply social value below the threshold, or to goods and works contracts, this does not mean that commissioners cannot apply social value in these contracts.

Defining Social Value

Social value has been defined as “‘the additional benefit to the community from a commissioning/procurement process over and above the direct purchasing of goods, services and outcomes”.

Whilst there are many examples of providers delivering social value available to illustrate this, there is no authoritative list of what these benefits may be. The reason for this flexible approach is that social value is best approached by considering what is most beneficial in the context of local needs or the particular strategic objectives of a public body. In one area, for example, youth unemployment might be a serious concern, whilst in another, health inequalities might be a more pressing need. In recognition of this, the Public Services (Social Value) Act does not take a prescriptive approach to social value. It simply says that a procuring authority must consider:

• How what is proposed to be procured might improve the economic, social and environmental well-being of the relevant area.

• How, in conducting the process of procurement, it might act with a view to securing that improvement.

In doing this, the Act aims to give commissioners and procurement officials the freedom to determine what kind of additional social or environmental value would best serve the needs of the local community as well as giving providers the opportunity to innovate.

There are examples to draw upon for guidance. A number of public bodies around the UK have pioneered social value led approaches to commissioning and procurement, as well as social enterprises that have been delivering added value across many public services markets for years.

What are the benefits?

There are a number of reasons why social value is being taken increasingly seriously by policy makers. Not only does this approach seek to create maximum benefit for the community and drive up service quality, but it can also lead to cross-departmental savings and support community organisations to enter the market.

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Supporting the social economy

The Government has said it would like to see a much greater role for social enterprises and voluntary organisations in delivering public services, because it believes organisations rooted in the communities they’re working with - and for - are often best placed to understand local needs, deliver personalised services and reach those most in need of support. However, the reality is that all too often public sector markets are created in such a way that only a small number of large providers are able to compete.

One of the obstacles social enterprises and other community organisations face is that commissioning and procurement activity often does not seek out the wider social, environmental and economic benefits that these providers bring to service delivery. This means they often miss out on contracts, even though they deliver a higher value return for communities. There is a very small pool of suppliers in many areas of public services such as waste and welfare, which inevitably limits competition, choice, innovation and value for money, making it difficult for commissioners to always best meet the needs of their communities.

The Act aims to change this and encourage civil society organisations to enter public services markets. As well as helping to organisations to win contracts directly, this could also stimulate a role for social enterprises as part of a wider supply chain, fostering greater partnerships between private companies and social enterprises as contracts require providers to draw on their combined skills and resources.

Specific guidance and good practice on what small and medium sized enterprises can do for Procurement to local Council’s is included in Appendix 5.

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PRINCIPLES FOR EFFECTIVE PROCUREMENT

The following principles will form the basis of all procurement activity in order to achieve value for money:

Strategic procurement will support improved service delivery through the freeing up of resources through lower costs and improving the quality of goods, services and works;

Strategic procurement will ensure that the partner authorities obtain value for money in the acquisition and management of its resources, balancing both quality and cost;

The partner authorities will undertake all procurement activity within a corporate framework to enable all officers to obtain goods, services and works to the required quality in the most efficient manner;

All procurement activity will be sustainable, supporting and promoting partner authorities policies and priorities, including equal rights, sustainability, social cohesion and economic regeneration;

The partner authorities will ensure that procurement activity is undertaken in the most effective and appropriate manner. This should consider, amongst others, the following:

- Develop, promote and enforce the use of all corporate contracts;

- Use Buying Consortia Framework Agreements where practicable (e.g. PRO5 and Crown Commercial Services {CCS});

- Use approved nationally negotiated contracts and Framework Agreements (e.g. those arranged by PRO 5 or CCS);

- Use approved e-procurement solutions (e.g. e-Tendering systems, e-Catalogues and purchasing cards etc.);

- Collaborative procurement with each partner authority and other Councils and organisations;

- Develop strategic partnerships, particularly where these will deliver significant service improvement and/or efficiencies with other East Midlands Authorities.

All procurement activity will be assessed on a whole-life costing and benefits basis with due regard to risk.

Procurement activity will be transparent (and fully compliant with the Freedom of Information Act), fair and consistent, and be undertaken to the highest standards of probity and accountability. Procurement decisions must be evidence based.

However the Partnering authorities will manage strategic procurement through the NDPU host Procurement Team based at Bassetlaw DC. Centralised purchasing will remain with each authority to complement the existing and future contracts. It will be a corporate resource which leads on letting corporate contracts and supporting projects. It will provide support wherever required to departmental purchasing and contracting officers, and monitor procurement activity across each Council. The service will comprise a team of skilled and experienced officers, and the activity of the service will be predicated on maximising benefits for each Partnering authority overall.

The training and development needs of all officers buying for the Partnering authority will be monitored, and the NDPU Procurement Team will maintain a list of all officers that buy for the Council to ensure that they are informed of all new corporate contracts and developments in procurement. It is important that procurement is seen and managed as a component of the commissioning cycle, illustrated in the following diagram:

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Strategic Framework and Corporate Priorities: Procurement activity will operate within a strategic framework consisting of this Corporate Procurement Policy and Strategy, the CPR and each Partnering authorities Constitution. Procurement activity must be carried out in a manner which supports the Partnering authority’s strategic Corporate Plan priorities.

Prioritise and Plan: Strategic procurement activity will be planned over a three-year cycle with detailed annual plans. It will be undertaken in a performance management environment and will prioritise areas of activity that will generate significant savings or improved quality, and/or contribute to corporate priorities and service improvements. Localised service procurement activity should also be planned in order to avoid ‘panic’ buying and ensure that the service optimises its supply of all necessary goods and services. Effective forward planning will allow common areas of spend across the Partnership authorities to be aggregated in order to obtain economies of scale and secure value for money.

Strategic Framework

and Corporate Priorities

Prioritise and Plan

Options Appraisal

Procure Solutions

Monitor and Review

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Options Appraisal: Best Value requires the Partnership authorities to demonstrate economy, efficiency and effectiveness of service delivery. Procurement decisions need to be taken, such as whether it is necessary to obtain good service or works, and whether they should be obtained internally or externally. Decisions also need to be made as to the most appropriate route to procure goods, services and works to ensure that the Partnership authorities achieve value for money. Option appraisals will include alternative models of service delivery, including shared services with other public sector organisations, outsourcing of services and collaborative opportunities.

Procure Solutions: The actual procurement process will depend upon the required outcomes, but a typical process is illustrated in the diagram below. In all cases the process must comply with the Partnership authorities Contract Procurement Rules and the Council’s Constitution.

Monitor and Review: The monitoring and management of contracts is a critical factor, and can make the difference between a successful contract and a failed one. Contractual arrangements should be effectively managed and monitored throughout the contract duration. Where appropriate, contracts should include quality and performance standards which are monitored and reviewed. Contracts will be subject to continual review and supplier/contractor appraisal exercises. Benchmarking can be undertaken on a planned basis in liaison with both public and private sector organisations to measure the effectiveness of procurement decisions. A good working relationship should be developed with suppliers, and liaison meetings with major suppliers will be held at suitable intervals. Plans should be made well in advance of the expiry of a contract for re-letting it, based on a review of previous and current arrangements and performance.

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Diagram: Typical Procurement Process

Procurement Analysis

The choice of procurement method will be dependent on the strategic importance, the value of the goods, services or works, and the potential risk associated with each procurement option. Different procurement options will be suitable for different goods and services and will involve undertaking different practical steps to achieve the desired outcome. The Partnership authorities will develop the overall management of procurement by modelling the requirement on a risk/value matrix, illustrated below.

Equally, individual procurement decisions should also be considered on their own merits following an appraisal of the suitable procurement options. It is important that the option selected is the one most likely to deliver optimum value for money for the partner authority and its citizens, and tenders should thus be evaluated using a balanced scorecard evaluation model.

Identify Requirements & Associated Risks with

Key Stakeholders

Specify Goods/ Services/Works

Required

Market Analysis/ Review Potential

Procurement Options

Undertake Selected Procurement Method

Contract/Relationship Management

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Procurement Analysis Model

RISK

BOTTLENECK

High risk/low value procurement may be critical for service delivery and source is not easily replicated. Examples include:

Raw materials

Insurance The priority for high risk/low cost items is to ensure continuous supply. Price is not important whereas supply failure could be dramatic.

STRATEGIC

High risk/high value procurement is complex and specialist and critical to delivery of services to the public. Examples include:

Property construction and maintenance

Electricity

Gas

Fuel High risk/high cost items call for close management of the suppliers since any failure would have extensive repercussions for the delivery of services. It is in this area that highly skilled procurement staff should be used from the outset to ensure that contracts are fit for purpose, that selection criteria underpin the business need, and to seek out innovative solutions.

ROUTINE

Low risk/low value procurement. Examples include:

Stationery and office supplies

Furniture and fittings

Cleaning, janitorial and hardware

Advertising

Plant, tools and machinery

Washroom supplies Minimise time on low risk/low cost items by using long term contracts and combining with other buyers, perhaps using their contracts.

LEVERAGE

Low risk/higher value procurement. Examples include:

Consultancy and specialist services

IT equipment and services

Telecommunications

Agency staff

Food and drink

Landscaping and grounds maintenance

Design, print and promotional

Vehicle supplies and services

Financial and legal services High cost items, in those markets where there are plenty of suppliers, provide an opportunity for the buying organisation to leverage its purchasing power to obtain financially attractive deals. This calls for buyers with extensive market knowledge or collaboration across organisations.

VALUE

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VALUE FOR MONEY

The Partnership authorities remain committed to achieving Value for Money in order to demonstrate economy, efficiency and effectiveness of service delivery. Procurement decisions such as whether to continue to provide the goods, services or works, and whether to provide them internally or externally (Make or Buy) are central to this requirement.

It is essential that the Partnership authorities not only adopt processes to secure best value, but can evidence the efficiencies obtained to demonstrate delivery of national efficiency targets.

The ability to radically re-think and re-shape the way the Partnership authorities undertake procurement and secure continuous improvement is key.

Achieving procurement efficiency savings requires a combination of: -

- Reducing the number of suppliers used;

- Reducing prices;

- Reducing purchasing transaction time for contracts and major projects;

- Eliminating / automating processes;

- Managing risks better;

- Improved contract management post award;

- Improving supplier performance.

Our approach for procurement efficiencies is therefore: -

- Driven by optimising outputs and results;

- Driving down the cost of goods and services procured by each Council balancing quality and cost;

- Responding promptly and effectively to service and citizen requirements;

- Minimising administrative processes and unnecessary bureaucracy;

- Ensuring simple or routine transactions can be carried out in the most efficient manner;

- Considering all options in obtaining the most appropriate solution;

- Valuing innovation and creativity;

- Using competition to obtain best value;

- Proactively supporting the Council’s policies and priorities;

- Complying with legislation;

- Being transparent and accountable;

- Working in collaboration with other public sector organisations and government frameworks (e.g. CCS) in order to achieve value for money and maximise economies of scale for routine supplies.

In order to demonstrate value for money, the following is built into procurement activity:

Performance indicators and targets (based on both quality and cost) are established as part of procurement processes;

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Procedures to manage contractual arrangements are established with performance measured and reported, including benchmarking arrangements;

Procurement procedures and processes are regularly reviewed;

The management of risk is an integral part of the procurement process;

The Partnership authorities invest in procurement training and systems to support the procurement process.

The Partnership authorities value in-house service providers that demonstrate quality and value for money. Unless otherwise approved by the relevant Chief Officer, external businesses will not be used where the Partnership authorities have their own in-house services. Should the Partnership authorities take a decision that an in-house service be exposed to competition, they will undertake this in an open and fair manner, and ensure that:

Staff and their representatives are fully and properly consulted;

Appropriate outcomes, performance standards and monitoring processes are developed;

All information required for a due diligence process is identified and collected;

Innovation is encouraged;

Relevant Council policies and priorities are incorporated into any specification;

Probity, accountability and competitive neutrality is ensured and conflict of interest is avoided or managed;

The responsibilities and accountabilities of all parties are explicit.

A key objective of this Procurement Strategy is to provide a means to improve quality and efficiency by harnessing competition. This can be through either:

Indirect competition e.g. via benchmarking, market testing or external challenge. The Partnership authorities will assess the competitiveness of different functions by reference to other Councils and organisations. In addition to comparing performance, this provides a vehicle for individual and organisational development, learning from experience and good practice.

Direct competition i.e. alternative means of procurement. The Best Value review process will enable the Partnership authorities to consider whether alternative means of procurement or service delivery is appropriate.

Consultants: The Partnership authorities will have an ad-hoc requirement to use external consultants and advisors to provide specialist advice and services not available within the Partnership authorities and to provide support and challenge for major projects. The procurement, utilisation and management of consultants (and assessment of the resulting required outcomes) should be managed in accordance with the guidance issued in this Policy, the Contract Procedure Rules, and the Constitution.

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PERFORMANCE MANAGEMENT IN PROCUREMENT

Procurement activity, like all other Council activities, should be undertaken in a performance management environment. Procurement influences the attainment of some national performance indicators. The partner authorities use a range of national and local indicators to measure their performance in procurement activity, and the Chief Finance Officer (CFO) is required to report progress against performance indicators on a quarterly basis. Key issues to consider in respect of performance management include:

Efficiency: Ensuring that we are driving down the cost of the goods, services and works we procure without compromising quality. Contracts approaching an optional extension period are an ideal opportunity to reduce costs with existing suppliers. A contracted supplier can often suggest ways for the Partnership authorities to make savings so Contract Officers should be in constant dialogue with their suppliers to ensure costs are kept to a minimum.

Planning: Planning annual procurement activity in advance is essential to enable officers to undertake procurement in a more structured manner, identify options and prepare properly for a timely solution to be put in place.

Specifications: Where possible, specifications should include measurable outputs or outcomes, performance standards or other appropriate measures by which the contract can be assessed.

Contract Management: This a major factor in the success or failure of a contract. All contracts should have an associated officer with responsibility for monitoring and managing the contract, including the development of relationship management and the delivery of required outcomes and commercial benefits.

Risk Based Approach to Procurement: Risk will be managed throughout the procurement cycle to ensure that risks are identified and managed by the most appropriate stakeholder. Risk Registers shall be prepared for all major procurement processes in accordance with the Contract Procedure Rules and project management best practice. They will be revisited on the achievement of each key milestone in the procurement process, and throughout the life of the contract.

Review: It is important that lessons are learned (what went well, what didn’t go well), in order to inform future procurement decisions. Problems encountered in a project should be fed into risk analysis models for future projects.

Training and Development: The key to delivery of effective public sector procurement requires people who are suitably trained and qualified to provide the necessary ‘professional’ input. This ranges from a formal procurement qualification and wide experience, to knowledge of basic procurement techniques. The level of expertise required depends on the frequency and complexity of the procurement activity.

Project Management: Any project which involves significant risk will be managed in an appropriate manner using project management best practice, and regular progress reports will be provided to the Corporate Management Team at key milestones.

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PARTNERSHIPS AND COLLABORATION

The partnership authorities acknowledge the importance of partnerships in delivering services. It already benefits form a range of partnerships with private, public and voluntary organisations.

The process of carrying out fundamental performance reviews will foster an open and constructive dialogue with all those involved or who may have something to contribute, be it from within the Council itself, or through partnership arrangements with the private and/or voluntary sectors. The Partnership authorities will encourage the development of new methods or approaches to procurement that will deliver services more efficiently, effectively and economically.

The Partnership authorities currently deliver a limited range of services via the Voluntary and Community Sector. This is an area of potential growth that requires further support and development, and the partner authorities will implement the good practice guidance published by the Home Office of Government Commence ‘think smart…think voluntary sector’ (2004), and support social enterprises.

In specific instances (subject to the evidence of a robust business case), a properly procured and managed strategic service delivery partnership can deliver ways in which the Partnership authorities can realistically achieve step-changes in service quality. Strategic Partnering can provide access to new skills, resources and ways of doing things and allow for innovation and the pursuit of difficult or long-term goals. Partnerships can provide access to investment, skills and new opportunities that the Partnership authorities are unable to acquire alone.

The Partnership authorities are committed to exploring all options in order to provide the quality services required for now and in the future.

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E-PROCUREMENT

E-Procurement is ‘doing business’ electronically. All purchase orders should be placed using centralised purchasing ‘procure to pay’ where available. The benefits of e-procurement include:

Deliver savings through streamlining the internal procurement procedures and processes;

Provide a framework to ease the ordering of goods, services and works whilst maintaining compliance with legislation;

Improve services (e.g. the use of purchasing cards can speed up the process of obtaining materials for maintenance work).

e-Tendering

e-invoicing

The Partnership authorities will adopt a comprehensive set of e-procurement solutions that include:

The introduction of a centralised purchasing ‘procure to pay’ solution across the Council to streamline the process from initial requisition through to the payment of the invoice;

The e-Tendering & Contract Management System (Due-North) for the full tender and quotation process;

Purchasing Cards for low value spot purchases;

e-Auctions (reverse) where appropriate in conjunction with other East Midlands authorities.

Advancements in technology are eliminating unnecessary costs from the procurement process, and releasing resources to be utilised more efficiently elsewhere. An integrated procure-to-pay process across the partner authorities will deliver real savings and improved management information.

E-Procurement also allows authorities to work collaboratively to achieve economies of scale and shared expertise and knowledge. The Partnership authorities are active partners in the East Midlands project for the regional web-based e-Tendering and Contract Management System to manage contracts, i.e. Due-North (including performance information). It will identify collaborative opportunities, streamline the procurement process, and further enhance the use of e-tendering.

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CODE OF CONDUCT FOR PROCUREMENT

All procurement activity must be undertaken to their highest standards of ethics and probity. The Partnership authorities insist on ethical standards from the suppliers, and in turn they must exhibit the highest ethical standards themselves. Officers and Members must not only be fair and above board in all business dealings, but should also avoid any conduct that is capable of having an adverse interpretation put on it.

All employees must adhere to the Bribery Act 2010, the Officers’ Code of Conduct, and the Protocol for Employees on Gifts and Hospitality. In addition, employees undertaking any purchasing activity should consider themselves bound by the Code of Ethics of the Chartered Institute of Purchasing & Supply (CIPS).

RISKS AND MAINTAINING THE STRATEGY

Risks

The main risks that could prevent the Partnership authorities from achieving the benefits from effective procurement include:

Maverick buying;

Not producing and reviewing relevant spend analysis;

Using unreliable data as the basis for procurement decisions;

Lack of support from managers for corporate buying and non-adoption of standard documents and processes;

Non-compliance with corporate contracts resulting in not achieving potential savings;

New procurement processes, documents and standards are unworkable and non-compliant;

Procurements have an adverse effect on local suppliers.

It is anticipated that the actions identified in this Strategy will mitigate against the impacts of these main risks. Specific risks to individual procurements will be identified as part of the procurement project.

Maintaining the Strategy

The Corporate Procurement Policy and Strategy (2014–2018) will be owned by and updated through the Joint Procurement Board.

The Action Plan will be updated annually to reflect changing priorities and developments in procurement legislation and best practice.

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THE ROLE OF THE NOTTINGHAMSHIRE AND DERBYSHIRE PROCUREMENT UNIT (NDPU)

The Nottingham and Derbyshire Procurement Unit (NDPU) was set up and established in June 2013 following the demise of the former North East Derbyshire Procurement Unit operating out of Bolsover DC, earlier that year.

The unit was established following discussions with the relevant Nottinghamshire and Derbyshire Chief Executives. The Unit was set up with Bassetlaw DC as the Lead authority to provide Procurement Services to Bolsover District Council, North East Derbyshire District Council, Ashfield District Council, Mansfield District Council and Chesterfield Borough Council.

In January 2014 Bolsover District Council and North East Derbyshire District Council decided to leave the Procurement Consortium. In April 2014 Erewash Borough Council approached the NDPU to enquire whether their procurement requirements could be transferred to them, following the resignation by their Procurement Officer.

The NDPU is now moving forward to become the lead Procurement Shared Service across Nottinghamshire and Derbyshire Counties. The NDPU has currently undertaken joint procurement activities with the following authorities;

Ashfield District Council

Broxtowe Borough Council.

Derby City Council

Erewash Borough Council

Gedling Borough Council

Mansfield District Council

Newark & Sherwood District Council

Nottinghamshire County Council

Nottingham City Council, and

Rushcliffe District Council.

The role of the NDPU is to challenge and transform the procurement process in order that we can demonstrate improved process efficiency through;

Agree with the Lead Service Procurement Manager the draft Procurement Work Plan

For the respective Councils, notify the Lead Service Procurement Manager of the identity of the Client Officers and of any subsequent changes. If no such Client Officer is so notified the Client Officer shall be deemed to be the Chief Finance Officer for that particular Council

The Lead Service Procurement Manager, will:

Formulate and progress the Procurement Work Plan

Raise any budget issues, quarterly, (or at such other intervals as the Lead Service Procurement Manager may agree with the Joint Procurement Group) at the Joint Procurement Group’s formal meeting;

Provide a report on the Budgets/Finance annually to the Joint Procurement Group;

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Provide a report on Performance annually to the Joint Procurement Group;

Report quarterly (or at such other intervals as the Lead Service Procurement Manager may agree with the Joint Procurement Group) to the Joint Procurement Group on progress made in relation to the Procurement Work Plan;

Report to the Joint Procurement Board as required or any other member-level body in any of the Councils in order to carry out the Shared Procurement Service.

Prepare and supply to the Councils an Annual Report and a separate Performance Report for each of the Councils’ consideration and such reports shall contain information as agreed by all parties as detailed in the Service Level Agreement.

The service outlined under this agreement will be provided to management and designated employees within each member authority of the Partnership.

The service will be managed and administered from Bassetlaw District Council’s offices based at Queen’s Buildings, Potter Street, Worksop.

The standard service will be provided from 09.00 am to 17.00 pm Monday to Friday, with the exception of Bank and statutory holidays.

Employees shall be trained to the highest of standards of customer service;

Employees are kept fully aware of corporate issues as they impact on the service;

Employees shall ensure that confidentiality is maintained in all matters relating to customers, partners, and suppliers, and the information they provide and are provided with;

We will deal with customers, partners, and suppliers promptly and efficiently.

Flexible approach to providing advice and assistance throughout the procurement process either on-site, at the NDPU office, or by telephone;

Provide examples of tender specifications where possible;

Responsible for the management and administration of the procurement process;

Participate in tender evaluation groups, as set out in the Council’s Contract Procedure Rules;

Provide written feedback to successful and unsuccessful contractors;

Assist managers and Officers with the feedback regarding disputes and challenges from successful and unsuccessful contractors;

Standardise documents where possible;

Have a single shared Procurement Strategy where possible;

Work with the Council’s to have a uniform set of Contract Procedure Rules (CPR)

Have a precedent Contracts Register and savings record where possible;

Consider, review and harmonise contract end dates to facilitate a strategic approach to be taken to procurement of services across the partnership;

Review of spend in partner authorities to address non-compliant areas of spend by formulation contracts;

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Explore existing framework agreements and best routes for procurement activity;

o Provision of quality management information;

o Consideration of local suppliers, where possible through appropriate paragraphs and clauses in the specification and/or contract conditions;

o Arrange fortnightly clinics on-site (half a day), or as agreed locally;

o Consideration of equity of service amongst partner authorities;

o Review and amend with the consent of all parties the procurement process to improve efficiency.

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THE ROLE OF THE PARTNER AUTHORITIES

A Procurement Work Plan shall be established between the Lead Service Procurement Manager and Client Officers at each partner authority.

The Lead Service Procurement Manager shall provide the Councils with monitoring data in relation to the Procurement Work Plan each quarter or at such intervals as agreed by all Parties

The Lead Service Procurement Manager shall report to the Joint Procurement Board or any other member-level body in any of the Councils

In Consideration of this Agreement and the undertakings of the NDPU the Partnering authorities hereby agree and undertake with the NDPU they will:

Co-operate with the Host Council in applying their general policies and practices in a way which is consistent with the Host Authority’s rights and duties as employer of the Unit staff. For example, in relation to Health and Safety all Councils shall be responsible for providing a safe working environment for Unit staff based at or visiting their offices so that the Host Council can comply with its Health and Safety obligations as employer of Unit staff.

To fully support the work of the NDPU and to engage, instruct and motivate staff to use the NDPU for all procurement activity and advice (above a pre-determined financial threshold).

To understand the role of the NDPU staff and to treat them with professional respect and courtesy.

To recognise that the NDPU will provide advice and support throughout the entire procurement process, but only officers of the contracting Council can write the specification for works, goods and services in accordance with their needs.

To highlight as soon as practicably possible proposed or new procurement projects in order that the relevant procurement process can be delivered on time. In the event of OJEU tenders to comply with the timescales set within the OJEU process

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PROCUREMENT AND THE CORPORATE PLAN

Coordinated and forward procurement activity enables the Council to proactively contribute to the Corporate Plan in arrange of areas including;

Bassetlaw District Council’s Corporate Plan

Our four corporate priorities for 2014/17 are:

Strategic Priority Procurement Actions

A Viable Co-operative Council

We need to work in different ways to survive the annual Government funding cuts Bassetlaw faces

Addressing and promoting equality and diversity in procurement activity.

Providing information about future procurement activity, and advertising tenders on the Council and local Trade Associations’ web sites.

Ensure that the Council obtains value for money in the procurement and management of resources, balancing quality and cost.

Procurement activity will be transparent, fair, and consistent, and be undertaken to the highest standards of probity and accountability.

Local Growth

Jobs are at the heart of any local recovery and we want to encourage the local economy with the work that we do with local businesses.

Working pro-actively with local business via Trade Associations to explain how to do business with the Council.

Engagement with local and regional suppliers from all business sectors e.g. the voluntary and community sector, and Black and Minority Ethnic suppliers.

Carrying out Supply Chain work including Meet the Buyer and Meet the Supplier events.

Implementing electronic procurement processes to reduce business costs.

Quality Housing and Decent Neighbourhoods

We will increase the supply of affordable homes in the District and reduce the number of empty homes. We will ensure that our local neighbourhoods are clean, safe and welcoming.

Working pro-actively with local housing providers and local businesses to ensure that there is a supply of quality mixed accommodation that meets the District’s needs.

Local Living Standards

Meeting the challenge of Welfare Reform and standing up for local people with our work through Bassetlaw Community Partnerships.

Minimising the environmental impact of the Council’s procurement activity and addressing quality of life issues.

Introducing processes which identify the social, environmental, and economic benefits that Council contracts bring to the District.

Deliver quality services through well planned commissioning which achieves value for money outcomes for the community.

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Mansfield District Council’s Corporate Plan 2014

Our five corporate priorities for 2014/15 are:

Strategic Priority Procurement Action

Regeneration & employment





Protecting the environment




Housing


Reducing crime & disorder





Vulnerable people

Supporting the most vulnerable people in the District to help them live independent and fulfilled lives.

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Erewash Corporate Plan 2012 – 2016 Our vision for Erewash is supported by our four priorities that will guide the services we provide over the next four years. Our priorities are supported by the annual actions and success measures and can be viewed on our website.


To deliver excellent Services;

i). To provide accessible services that meet the needs of our customers;

ii). To enable more people to feel listened to and involved;

iii). To deliver yet further efficiency and value for money services





Making Erewash cleaner, greener and safer:

i) Keep the Borough clean;

ii) To support the provision and maintenance of high quality public spaces for all;

iii) To reduce Erewash’s impact on the use of natural resources;

iv) To reduce crime and anti-social behaviour, and the fear of crime and anti-social behaviour.





Working towards a brighter future:

i) To support our local businesses, economy and employment;

ii) To increase the availability of suitable housing;

iii) To promote suitable new development while protecting the Borough’s natural , historic, and built environment;

iv) To build vibrant communities where people get on well together and have pride in their neighbourhood.


Making Erewash a good place for all to live life to the full:

i) To increase access to services and benefits;

ii) To promote health for all;

iii) To increase participation in culture and



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leisure activities.


Ashfield District Council’s Corporate Plan 2014

Our four corporate priorities for 2014/15 are:


A dynamic, productive, competitive and rewarding local economy





Community responsibility for an attractive and safe environment





Stronger and more resilient communities where people want to live, work, play and to be involved


Ashfield district Council is an enabler of local leadership in Ashfield




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PROCUREMENT LEGISLATION AND GUIDANCE

The Government in conjunction with the Local Government Association (LGA) recently set out a new strategic procurement document titled the National Procurement Strategy (NPS) 2014. This document sets out a plan of what Procurement outcomes and milestones are necessary at each level of the hierarchy, i.e. County, Unitary, Districts.

The partnership authorities’ response to this requirement is as set out in Appendix 3.

Local government procurement – DCLG Select Committee

In May 2014 the Communities and Local Government Select Committee published a report on local government procurement (“Local government procurement”).

The Committee called on the sector to invest to ensure procurement skills are embedded across councils and all staff involved in the design, commissioning and management of services and not just procurement officers.

It believed that an £1.8 billion of additional savings could be made per year if councils improved their collaborative procurement arrangements. But they rejected any moves towards centralisation and/or compulsion to collaborate.

They also called on councils to exploit the potential of procurement to deliver local priorities by letting contracts not just on the basis of price but also wider social value; and to resist an over-zealous culture in the application of EU procurement rules to cut unnecessary costs to small businesses.

The Committee focuses its recommendations on the Local Government Association and individual councils around: increasing collaboration across councils; spreading best practice on maximising social value; streamlining procurement processes; managing complex contracts; and skills development.

But the Committee also calls on central government to review the effectiveness of the statutory framework, including on social value and on the Community Right to Challenge.

This briefing will be of particular interest to cabinet portfolio members for finance and efficiency and officers with responsibilities for commissioning and procurement and those in related finance and legal functions.

A more complete summary of the report can be found in Appendix 4.

Equality

When conducting their procurement activities, central Government departments and their agencies must ensure that they meet their legal obligations under the Equality Act 2010 and its associated Public Sector Equality Duty in a way that is consistent with the Government’s value for money policy and relevant public procurement law.

What is the Public Sector Equality Duty (PSED)?

The PSED is contained within section 149 of the Equality Act 2010. It requires those public bodies which are subject to the duty, to have due regard to the three aims of the duty:

- Eliminate unlawful discrimination, harassment, victimisation and any other conduct prohibited by the Act;

http://links.govdelivery.com/track?type=click&enid=ZWFzPTEmbWFpbGluZ2lkPTIwMTQwNTI4LjMyNTY2MTgxJm1lc3NhZ2VpZD1NREItUFJELUJVTC0yMDE0MDUyOC4zMjU2NjE4MSZkYXRhYmFzZWlkPTEwMDEmc2VyaWFsPTE3MDM5NTkwJmVtYWlsaWQ9cG9saWN5QGJhc3NldGxhdy5nb3YudWsmdXNlcmlkPXBvbGljeUBiYXNzZXRsYXcuZ292LnVrJmZsPSZleHRyYT1NdWx0aXZhcmlhdGVJZD0mJiY=&&&103&&&http://www.parliament.uk/business/committees/committees-a-z/commons-select/communities-and-local-government-committee/news/procurement-substantive/

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- Advanced equality of opportunity between people who share a protected characteristic and people who do not share it; and

- Foster good relations between people who share a protected characteristic and people who do not share it;

The PSED should help ensure that public goods and services are acceptable to, and meet the diverse needs of all users to ensure that no one group is disadvantaged in accessing public goods and services.

For information and guidance on The Public Services (Social Value) Act 2012, please refer to page 8 of this document.

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APPENDIX 1 - ACTION PLAN

Action Title Action

Description

Due

Date

Managed

By

Assigned

To

To refresh the Corporate Procurement Policy and Strategy.

To produce an updated Strategy that meets modern requirements.

Nov ‘14 Joint Procurement Group

Lead Service Procurement Manager

Update “How to do Business” guide.

Councils update their “Selling to” guide and publish it on their web pages

Dec ‘14 Joint Procurement Group


To improve the website in relation to procurement documentation.

To provide external suppliers a unified approach to procurement activity for Bassetlaw Council.

Jan ‘15

Joint Procurement Group


To update and publish the contracts register for each of the four authorities.

To have a complete list of contracts and relevant expiry dates to enable further work programmes to be developed.

Mar ‘15 Joint Procurement Group


To examine current contracts against spend to identify new procurement opportunities.

To identify opportunities for negotiating new contracts and save money.

Apr ‘15 Joint Procurement Group


To produce a consolidated Contracts Register for the four authorities

To identify where we can harmonise contract start and end dates in order to process fewer higher value tenders, thereby achieving improved economies of scale.

Jul ‘15 Joint Procurement Group


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APPENDIX 2 – SUSTAINABLE PROCUREMENT POLICY AND FLEXIBLE FRAMEWORK

NOTTINGHAMSHIRE AND DERBYSHIRE PROCUREMENT UNIT

SUSTAINABLE PROCUREMENT POLICY

The partnership authorities recognise that they have a vital role in furthering sustainable development, through the procurement of buildings, goods, works and services. Procurement decisions have a major socio-economic and environmental implication, both locally and globally, now and for future generations.

The Partnership authorities will therefore strive to:

People, Education and Awareness

Educate, train and encourage internal procurers and commissioners to review their consumption of goods/services, reduce usage and adopt more environmentally friendly alternative products;

Communicate the Sustainable Procurement Policy to all staff, suppliers/contractors, Members and other stakeholders.

Policy, Strategy & Communications

Consider the costs and benefits of environmentally preferable goods/services as alternatives;

Investigate the impact of the Partnership authorities expenditure on goods and services, via purchase spend analysis, to identify potential environmental impacts;

Investigate opportunities for the recycling and re-use of materials where appropriate;

Assess the environmental and corporate risks to the Partnership authorities with a commitment to continually improve sustainable performance that relates to the supply chain;

Work in partnership with other organisations, such as buying consortia to improve sustainable procurement.

Procurement Process

Promote best practice for sustainable procurement;

Ensure that where appropriate, suppliers’ environmental credentials are, as far as legally practicable, considered in the supplier evaluation process and that environmental criteria are used in the award of contracts;

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Ensure that consideration is given to inclusion, within all specifications, of a facility for suppliers/contractors to submit offers for environmentally friendly alternatives;

Specify, wherever possible and practicable, the use of environmentally friendly goods.

Engaging Suppliers

Ensure that low value and OJEU contract opportunities are made available via local advertising, including Source East Midlands sites and the Due-North e-Tendering system;

Address barriers to entry in order that Small and Medium Sized Enterprises (SMEs), local suppliers and the voluntary sector are encouraged to bid for the Council’s business through working with and in co-ordination with the Federation of Small Businesses (FSB) ;

Work with the local economy to educate our suppliers with regards to the Partnership authorities environmental and sustainability objectives and the requirements of their procurement process;

Encourage and persuade suppliers/contractors to adopt environmentally friendly processes and supply environmentally friendly goods/services, where appropriate;

Work with key suppliers/contractors to make changes and thereby extend sustainability improvements throughout the supply chain.

Measurements and Results

Comply with all relevant environmental, health & safety, diversity, disability and employment legislation, including researching and understanding the potential impact on the supply chain;

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APPENDIX 3 - NATIONAL PROCUREMENT STRATEGY (NPS) 2014 for District Councils

Theme A: Making Savings & Addressing Financial Pressures

Overview Councils are dealing with significant reductions to finances and increasing demand. They recognise the need to use their spending

power wisely and strategically and are therefore setting spend targets for procurement and contract management.

In order to demonstrate leadership of key spend categories to address financial pressures, drive market management and to develop new models of service delivery through procurement councils are increasingly adopting a ‘category management’ approach in some Council’s. Category Management in procurement can help to reduce the cost of buying goods and services, reduce risk in the supply chain, increase overall value from the supply base and gain access to more innovation from suppliers. It is a strategic approach that focuses on the vast majority of organisational spend and if applied effectively seeks to reduce demand, simplify the way we buy and aggregate spend across the entire organisation or multiple organisations. The results can be significantly greater than traditional transactional based purchasing negotiations.

As part of the work underpinning this approach National Advisory Group (NAG) is exploring a category management approach in three main categories of spend, Energy, ICT and Construction all of which will have their own category strategies underpinning this National Procurement Strategy (NPS).

Councils have been encouraged to establish partnering and collaboration arrangements for at least a decade and many have been doing just so for much longer. Indeed this element of work was an important part of the 2003 National Procurement Strategy. Much has been done since then, including a move to more joint and integrated commissioning but the increasing issues relating to budget cuts and the need to get more for less makes this even more important going forward.

Bassetlaw District Council is the lead authority for a Procurement Shared Service for four Councils in Nottinghamshire and Derbyshire.

Working with the wider public sector is becoming more and more normal practice, councils need to consider vertical (i.e. within their ‘place’) and horizontal (across geographies) integration of their demand and supply chains with their colleagues in health, police and other wider public sector organisations to appropriately aggregate spend, use wider experience and greater expertise and to reduce duplication of work. Through this arrangement the Partnership authorities are striving to better achieve better economies of scale in buying, resulting from a smaller number of large value tender which are more attractive to the supply market. As a Shared Procurement Service we will also have greater visibility of what we buy and when, leading to better planning and improved visibility of tenders.

Councils spend significant and increasing amounts via contracts with suppliers, often as part of their transformation to meet financial

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challenges. Councils need to be more effective in contract management to ensure they maximise both the opportunities and the potential savings these bring. Contract management is more than ensuring suppliers meet their contractual obligations, it can also help councils to identify and manage their own and their suppliers’ risks, and achieve savings and continuous improvement throughout the life of the contract.

Councils should be engaging more with each other to benchmark costs and performance of suppliers as long as this is proportionate to the budget and level risk in the contract.

Local government is already one of the most transparent parts of the public sector, publishing information to inform citizens, communities and business about local authority democracy, accountability and finances, services and performance, and activities. Councils are working towards complying with the transparency code 2014.

Outcomes Milestones Position

Category management helps councils to make savings by maximising synergies from their spend

Councils recognise the benefits and tap into category management plans of other public sector organisations and through PBO’s

For a number of years Bassetlaw DC have been working with Nottinghamshire and Derbyshire authorities to put frameworks in place which are open to interested authorities. NDPU also use CCS and ESPO frameworks where appropriate.

Councils achieve savings through developing and using more standard specifications for appropriate goods and services

Councils review existing framework arrangements at early stages of procurement to reduce duplicated effort

The NDPU does consider using existing framework agreements, but one-size does not fit all. It is our policy to benchmark and assure that we achieve best value from such agreements.

A broad understanding of the local government supply market is gained through appropriate spend and supplier analyses

Councils recognise the benefits from engaging with a national approach and ensure timely publication of data to ensure a robust analysis can take place

The Shared Service Partners are currently engaged on publishing such procurement data through the transparency agenda and the use of Source East Midlands portals.

Contract management

A corporate approach to contract management means councils can demonstrate their effectiveness in gaining

Contract management is part of the responsibilities of the councillor champion

Councils measure contract outputs and

The Shared Procurement Service Partners will consider appointing a councillor

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most value from contracts. key performance indicators to ensure competitiveness over the life of the contract

champion for each authority.

The Shared Procurement Service Partners will consider establishing key performance indicators.

Local authorities obtain best value from supply chains through proper relationship management

Councils have visibility of their supply chains.

Councils expect main contractors to act fairly with supply chains and mandate timely payment to subcontractors through contract clauses

Generally in local government opportunities the supply chain is not visible as part of the procurement process, apart from Construction projects where NDPU does have some knowledge of the supply chain. In this area of work NDPU does mandate fair payment terms through contract clauses.

Benchmarking and Performance

Supplier performance on contracts increases, and costs decrease across the whole sector through effective monitoring and benchmarking

Councils baseline and benchmark their contract spending and outcomes internally over time and with other councils

Councils use this information to inform their contingency planning and re-competition strategies

The intention is to baseline and benchmark contract spending and outcomes through the partners in the Procurement Shared Service. This should be facilitated through the common e-tendering system.

Councils share commercial data relating to price on common goods and services

This is a common feature of work through the various regional Procurement Forums.

Innovation and transparency is improved because councils make their data more widely available to the supply markets.

This may become a specific area of activity in the future months, based upon workload priorities at the time.

Councils ensure all opportunities for collaboration are captured to maximise cost and efficiency savings

Councils join together with other councils to share information that makes prices and performance more open and transparent

This is one of the strategic priorities of the Shared Procurement Service.

Fraudulent procurement practices are considered in the corporate risk register

Councils include whistleblowing policies as part of contract conditions

This is already in place across all of the

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and mitigated against Shared Service Partners.

Transparency

Published data, under the transparency code opens new markets for local business, the voluntary and community sectors, and social enterprises to run services or manage public assets.

Councils publish data in relation to contracted-out services in accordance with the Transparency Code

This will be the responsibility of each authority to publish the required own specific data in a timely manner.

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Theme B: Enabling to Develop Local economies and Creating Wealth and Economic Growth

Overview Councils, with their economic development role, take responsibility for generating economic, environmental and social growth in local communities. The Public Services (Social Value) Act of 2012 requires councils to consider social value in all services contracts with a value above the EU threshold. Social Value can mean many different things, for example the inclusion of targeted recruitment and training opportunities in public contracts that can make a contribution to addressing the issue of poverty and reduced social mobility.

The private and the voluntary sector organisations that are so important to local and regional economies need to view council contracts in a positive way and want to do business with their local authorities. Councils, too, should better use their purchasing power to create opportunities; for jobs and training, for regeneration and to maximise value for money.

Through the arrangements they make for procurement councils can develop essential local infrastructure. They enjoy wide powers in this area including the power to promote ‘community well-being’ and through the Localism Act 2011 have acquired a ‘general power of competence’. Through the Localism Act, councils - often working together and through Local Economic Partnerships - are able to take on new functions that help them in this task.

The Community Right to Challenge (CRtC) allows voluntary and community groups, charities, parish councils or council employees to bid to run a local authority service where they believe they can do so differently and better. The CRtC applies to the majority of services provided by or on behalf of councils and can be an entire service or part of a service. A number of barriers have been highlighted to its uptake, including cost to councils and would-be suppliers of entering into a full scale procurement.

Councils must focus on providing the maximum benefit into their communities from every taxpayer pound that is spent.

In order to encourage a mixed range of suppliers to deliver value for money services councils need to encourage suppliers to bid for new or emerging requirements, to be innovative and to work collaboratively with other providers in the economy.

Councils can help to remove barriers to effective working by improving access to council tendering opportunities, being open and transparent about what we have already procured and as far as possible identifying and publishing future requirements as early as possible.


Economic, Environmental and Social Value

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Councils gain maximum value from procurement through inclusion of economic, environmental and social value criteria in contracts for good/services and works

Councils consider how they can obtain social value in all contracts over the EU threshold

Consideration should be given to such matters as environmental and social value criteria in contracts for good/services and works as required by the EU Procurement Directives 2014.

Living wage Each Council will consider the use of Living wage requirements for sub-OJEU bids.

Councils reduce waste by making sustainable choices when procuring products and services - helping them to cut costs, and meet their social, economic and environmental objectives.

Sustainability is considered at the earliest stage of the procurement cycle (identify need)

This key element is embedded into the Corporate Procurement Strategy.

Improving access for SME’s and VCSE’s

A wide range of suppliers are encouraged to do business with councils through use of Portals to advertise tender opportunities

All procurement opportunities over £10,000 are identified through regional portals

Communication channels for SME’s and VCSE’s are made available

NDPU already advertise opportunities over £10,000 through regional portals. The visibility of these opportunities will also be improved through the use of the East Midlands e-Tendering portal. This will mean that suppliers register one only for all regional opportunities through this portal.

Barriers to doing business with the council are removed without compromising due process

Councils update their selling to guide and publish it on their web pages.

This was reviewed and updated in December ’14.

Councils engage with single, simplified PQQ’s such as PAS 91 for construction

NDPU currently use the former OGC PQQ template. This has recently been superseded by PPN 14-08 publication from DCLG. This is currently being reviewed.

Councils ensure their lotting strategies do not create unwanted barriers for smaller

NDPU already apply a lotting strategy to tenders, where appropriate and beneficial

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businesses to the Council.

SME’s and VCSE’s are able to identify potential ‘partners’ with whom to form consortia to bid for council contracts

Councils link into existing framework contracts which outline how consortia can be encouraged

Engage with other councils at Market days etc.

Existing frameworks in place through ESPO, CCS and empa do already identify improved opportunities for SME’s and VCSE’s.

A “Meet the Buyer” Event in conjunction with the Federation of Small Businesses (FSB) took place in Worksop on 16th October ’14.

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Theme C: Influencing / Influence and Impact

Overview Councils, with their economic development role, take responsibility for generating economic, environmental and social growth in local communities. The Public Services (Social Value) Act of 2012 requires councils to consider social value in all services contracts with a value above the EU threshold. Social Value can mean many different things, for example the inclusion of targeted recruitment and training opportunities in public contracts that can make a contribution to addressing the issue of poverty and reduced social mobility.

The private and the voluntary sector organisations that are so important to local and regional economies need to view council contracts in a positive way and want to do business with their local authorities. Councils, too, should better use their purchasing power to create opportunities; for jobs and training, for regeneration and to maximise value for money.

Through the arrangements they make for procurement councils can develop essential local infrastructure. They enjoy wide powers in this area including the power to promote ‘community well-being’ and through the Localism Act 2011 have acquired a ‘general power of competence’. Through the Localism Act, councils - often working together and through Local

Economic Partnerships - are able to take on new functions that help them in this task.

The Community Right to Challenge allows voluntary and community groups, charities, parish councils or council employees to bid to run a local authority service where they believe they can do so differently and better. The Community Right to Challenge applies to the majority of services provided by or on behalf of councils and can be an entire service or part of a service. A number of barriers have been highlighted to its uptake, including cost to councils and would-be suppliers of entering into a full scale procurement.

Councils must focus on providing the maximum benefit into their communities from every taxpayer pound that is spent.

In order to encourage a mixed range of suppliers to deliver value for money services councils need to encourage suppliers to bid for new or emerging requirements, to be innovative and to work collaboratively with other providers in the economy.

Councils can help to remove barriers to effective working by improving access to council tendering opportunities, being open and transparent about what we have already procured and as far as possible identifying and publishing future requirements as early as possible (check with BR)


Procurement at the Top Table

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Central Government policy takes into account the needs and differences of local government because local government procurement speak with one cohesive voice

Council officers engage with procurement networks to ensure visibility of and input into policy

NDPU already participate and contribute to the Nottinghamshire, Derbyshire and East Midlands District and Unitary Procurement forum meetings.

Procurement is recognised as strategically important by chief executives, members and senior officers within local authorities

At least one senior level annual discussion on implementation of good practice (set out in this NPS) and relevance to organisation

Refer to the role of the Board in the Legal agreement.

Best overall value has been considered in all council’s addressable third party spend

A senior level director takes overall responsibility for procurement and ensures full value is extracted from all procurement decisions

Refer to the role of the Group in the Legal agreement.

Procurement is a driver to implement council policy.

Council’s procurement strategy is linked to the corporate strategy

Councils should adopt NPS good practice by 2014

This has been embedded into this Corporate Procurement Strategy refresh in a timely manner.

Procurement is supported in each authority through the appointment of a councillor champion

Should encourage an elected member champion for procurement

Each Partnering Authority will be encouraged to formally nominate a Member champion.

Procurement Training

Councils build procurement competencies across the organisation by ensuring staff are equipped with the knowledge, training, and practical skills needed to derive maximum benefit from procurement practices.

Councils engage with single tier and county councils to ‘piggy back’ onto training and development programmes

Procurement training is an issue in all Council’s at this particular time as a result of the impending changes to the EU Procurement Directives and the UK Procurement Regulations.

At an East Midlands level this is being progressed through the various Procurement Forums and close liaison with

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ESPO and CCS.

Councils are more influential with suppliers through taking a more commercial approach to procurement

Recruit consultants with these skills

Staff training

The use of Consultant in this area of work does not always deliver the desired outcomes and often does not delivery Value for Money. NDPU are focusing on a Mentor approach and shadowing for Procurement training.

Procurement processes are modernised because council officers understand and implement the flexibilities afforded by the new EU Procurement Directives

Councils engage with training on new EU Procurement Directives either through other councils or directly.

At an East Midlands level this is being progressed through the various Procurement Forums and close liaison with ESPO and CCS.

Commissioning

Councils identify strategic outcomes in relation to assessed user needs, and design and secure appropriate services to deliver these outcomes

Not applicable.

Councils manage reductions in service activity or terminating contracts through a proper process of decommissioning

Not applicable.

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Theme D: Shaping Markets and Improving Processes or Procurement Innovation, including modernising Procurement

Overview There is an increasing role for procurement in commercialisation and income generation. Renegotiation of existing contracts may be a useful source of further savings or income but procurement officers need to see each new contract they negotiate as an opportunity for a more commercial approach. This will include cost/benefit analysis, considering their appetite for risk and encouraging a ‘risk based’ not ‘risk averse’ approach, encouraging supplier innovation, realising maximum benefits from framework contracts and taking advantage of the new flexibilities afforded by the Public Contracts Regulations for England and Wales 2014.

A wide range of e-procurement tools exist, for example e-marketplaces, e-tendering and e-invoicing. Studies have concluded that the UK Public Sector falls behind our European counterparts, particularly the Scandinavian countries and particularly in the area of e-invoicing which is due to be adopted as a new EU Directive in 2016. Councils should be looking to realise the benefits from e-invoicing and should now be encouraging their suppliers to embrace this technology at the earliest opportunity.


Commercialisation and income generation

Councils are more commercially minded when developing contracts, and consider how contracts can be developed to generate income.

There are a number of areas whereby this aspect is being considered as an opportunity to generate additional income.

Supplier Innovation

Suppliers demonstrate innovation through all stages of procurement cycle.

NDPU will engage with appropriate suppliers in our quest to demonstrate innovation.

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Appendix 4 - Local government procurement

Sixth Report of Session 2013–14

This report makes a wide range of recommendations for improving local authority culture and processes in recognition that procurement should not be seen as a niche function conducted in silos, rather as an activity central to delivering high value, cost-effective services to communities.

Evidence to this report demonstrates a drive by local government to improve its procurement practices. However, this is work in progress and requires sustained commitment to partnership working from local authorities, central government and from the third and private sectors in order to raise standards.

The report highlights that devoting resources to bringing the performance of all local authorities up to the levels of the best is more than a worthwhile investment. At a time of financial constraint, spend now will enable savings both now and in years to come which should pay back initial costs many times over.

Embedding effective approaches across all council functions will require leadership from the top and a focus on new commercial skills to manage the challenges of procuring in new ways and for different purposes. In keeping with our support for a localist approach, most of the action recommended in the report is for the sector itself to deliver, but it is recognised that this requires leadership and co-ordination, not least from the Local Government Association. Key areas for the sector to focus on are:

• improving collaboration across councils;

• spreading best practice on how to maximise the social, economic and environmental impact of procurement;

• developing streamlined processes to minimise costs to councils and suppliers and potential suppliers;

• managing complex contracts to secure better value, and to reduce risks to service delivery and the likelihood of fraud; and

• skills development, particularly of new commercial skills for an increasingly complex procurement landscape.

The report identifies that local government has a responsibility to show that it can put its own house in order. If it does not, the report highlights that DCLG may opt for compulsion, e.g. control and compliance.

Nonetheless, the report highlights that local government can learn from central government and vice-versa.

The report emphasises the need for effective partnership with, as well as support from, DCLG and other central government departments. Key areas for local government procurement to focus on are:

• maximising the effectiveness of current statutory measures, for example in enabling procurement to deliver strategic public sector objectives and reviewing the effectiveness of the Community Right to Challenge

how new EU public procurement measures enable and require new council approaches to procurement;

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• monitoring national patterns such as social care sector pay and conditions; providing councils with guidance, for example on how new EU public procurement measures enable and require new council approaches to procurement;

• with local government sector organisations, disseminating advice to councils, for example on tackling fraud.

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Appendix 5 – What small and medium sized enterprises can do for Procurement to local Council’s?

Opening up public procurement markets to small and medium sized enterprises (SMEs) can encourage greater competition in supply markets.

Value for money

Opening up public procurement markets to SMEs can encourage greater competition in supply markets, thereby reducing the costs of procurement for Local Authorities.

SMEs may have lower administrative overheads and management costs than larger firms. Depending on the nature of the procurement, this can result in lower prices.

Quality of service

SMEs tend to have short management chains and approval routes, which enables them to respond quickly to changing requirements. SMEs may also be highly focused on particular markets, making them especially responsive to changes in those markets. SMEs are often well placed to offer a more personalised level of service, developing bespoke products and services or tailoring existing ones to meet the specific needs of customers. They are often able to develop sound long-lasting relationships with their customers. SMEs may also be better positioned to supply higher quality specialist products or services than their larger competitors, either because larger suppliers are discouraged by the limited demand, or because, by concentrating on niche markets, SMEs can retain skills, originality and commitment to their specialist field.

Innovation

SMEs can bring innovation through the early exploitation of new technology, providing products or services in new or underdeveloped markets, or by using innovation to differentiate themselves from established market players.

Identifying opportunities for small and medium-sized enterprises (‘SME

flagging’)

The Nottinghamshire and Derbyshire Shared Procurement Service, hosted by Bassetlaw District Council has adopted a new practice of indicating those contract opportunities which are thought to be particularly suitable for small and medium enterprises (SMEs).

This practice is a result of the Glover Review commissioned by the Government. One of the recommendations made by the report was that the public sector should indicate or “flag” during the advertising process those contracts which are thought particularly appropriate for SMEs.

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Flagging

Bassetlaw District Council and the partner authorities use the following aspects to assess whether a contract may be of particular interest to SMEs and where flagging is appropriate.

SME positive SME negative

Strong SME market presence ←→ Weak SME market presence

Low contract value / volume ←→ High contract value / volume

Innovation required ←→ Routine required

Tailored product / service ←→ Standardised product / service

Local delivery ←→ National delivery

Limited scale economies ←→ Major scale economies

Unregulated market ←→ Regulated market

Once a contract seems particularly suitable for SMEs, we indicate this in the contract notice which is used to advertise the contract opportunity. Below is the wording we have adopted for those larger contracts which we are required to advertise in the Official Journal of European Union (OJEU):

“The contracting authority considers that this contract may be suitable for economic operators

that are small or medium enterprises (SMEs). For avoidance of doubt , the contracting authority

points out that no weight will be attached to whether or not an economic operator is an SME in

selecting economic operators to [submit tenders, participate in dialogue or negotiate*] or in

assessing the most economically advantageous tender.”

*Select whichever is appropriate

The wording we have adopted for non-OJEU advertisements is as follows: “The

contracting authority considers that this contract may be suitable for economic operators that

are small or medium enterprises (SMEs). However, any selection of tenderers will be based

solely on the criteria set out for the procurement, and the contract will be awarded on the basis

of the most economically advantageous tender.”

If SMEs see either of these statements, they should be particularly alert to the possibility of bidding for the contract. Flagging is a part of a wider initiative where the Government has recognised the need to better support SMEs during the procurement process and make it easier for them to supply to the public sector.

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Bassetlaw District Council and its Partner Authorities support usage of SMEs flagging as an example of good practice. SME’s are encouraged to bid for any contract which they believe they can adequately compete for, however, flagging allows SMEs to prioritise the contract opportunities they pursue.

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