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INFORMATION FOR CANDIDATES The senior assessor’s report is written in order to provide candidates with feedback relating to the examination. It is designed as a tool for candidates - both those who have sat the examination and those who wish to use as part of their revision for future examinations. Candidates are advised to refer to the Examination Techniques Guide (see the following link: http://www.cips.org/en-GB/Qualifications/study-support/ ) as well as this senior assessor’s report. The senior assessor’s report aims to provide the following information:

An indication of how to approach the examination question

An indication of the points the answer should include

An indication of candidate performance for the examination question Each question has a syllabus reference which highlights the learning objectives of the syllabus unit content that the question is testing. The unit content guides are available to download at the following link: http://www.cips.org/Qualifications/About-CIPS-Qualifications/cipsqualifications/ ADDITIONAL SOURCES OF INFORMATION The Supply Management magazine is a useful source of information and candidates are advised to include it in their reading during their study. Please see the following link to the Supply Management website: http://www.supplymanagement.com/

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SECTION A Q1

Explain an appropriate procurement strategy for the appointment of a PSI supplier to Childcentric, including the role of the procurement function.

(25 Marks)

Analysis of the Question The question aimed to test the candidate’s knowledge of, and application to, a case scenario involving setting a procurement strategy, taking in the EU process and other key strategy areas. Analysis of the Answer Many candidates started their answer with a review and agreement of a business case and stakeholder review. The question response required more than the simple listing of a tendering process and an overall strategy was required, and the word “strategy” in the question gave a clear lead. Candidates in the main considered the following areas for a procurement strategy for the appointment of a PSI supplier;

A statement of objectives for the procurement exercise

Stakeholder planning

How the specification can be developed including evaluation criteria and stakeholder engagement plan

A risk assessment for the procurement project

A clear recommendation and justification for the choice of procurement procedure to comply with the EU Procurement Directives

A project plan detailing the timescales for the procurement

Recommendations on the use of any pre-qualification and evaluation criteria that may be applied in the resulting tendering exercise

Approaches that should be undertaken by Childcentric over contract management arrangements with the print services (PSI) supplier

Aggregation issues

Suitability review of chosen strategy

However this list is not exclusive and many candidates were able to expand on strategic areas such as the legal process. There were many opportunities for candidates to score well in Q1 and the above points are only a guide. Areas such as early procurement involvement, appropriate process for EU, Gateway, Project methodologies, Kraljic analysis, option analysis, cross functional teamwork, wide consultation, change management, spend analysis, supply chain tiering and many other areas could have been explored. Better candidates recognised that print is a very competitive market and this will have an effect on a suggested strategy. Such a broad question covers many learning objectives and this was taken into account in the marking.

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Exam Question Summary A well answered question with good referral to the case. If there was a weakness in some papers it was the narrowness of the answers, i.e. only listing (sometimes in minute detail) the EU rules and PCR 2006 without widening out to a procurement strategy. Q2 (a) Identify the correct levels of approval and how Childcentric

should obtain the authority to proceed with the procurement. (15 Marks)

Analysis of the Question To test the candidates ability to identify the correct level of approval to proceed with a procurement. Analysis of the Answer Many candidates noted from the case that it is vital to have clear transparent approval procedures, especially as the case hints at a lack of transparency and collaboration. Better candidates mentioned the EU treaty aims of transparency, equal treatment, non-discrimination and proportionality. Candidates could then go on to identify the correct level of approval to proceed and how to obtain this approval. Approval is much wider than just a “sign off” and many candidates considered the wider aspects of approval in the public sector. The relevance of Gateway, audit and health checks were explored and a range of project and programme techniques relevant to the case, such as PRINCE 2 and managing successful projects (MSP). Other tools were, to some extent, explored such as MoR and PPM tools and their relevance to the case examined. In some cases “dual key” sign off and board procedures were considered. Many candidates demonstrated excellent practical knowledge by suggesting the authority has, in its standing orders, a tabular graduated thresholds level, panel referral, internal rules, standing orders, procurement and finance sign off and related areas. Some candidates went as far as suggesting thresholds for sign off, and this was rewarded accordingly. Exam Question Summary Again a wide scope with the opportunity for candidates to link key areas of the syllabus with the case, and there were some impressive scripts. Approval in the public sector is normally more than just a single event. It involves ongoing checks and balances (such as Gateway) and some candidates failed to review this “bigger picture”.

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Q2 (b) Identify the key internal and external stakeholders with whom consultation might be necessary.

(10 Marks)

Analysis of the Question This part of the question required an indentification of the key stakeholders with whom consultation might be necessary Analysis of the Answer There were many and varied stakeholders to be consulted. Candidates needed to identify these as internal and external. Internal would include staff, managers; government etc whilst external could be suppliers, end users such as single mothers, other agencies, press, police etc. Many candidates specified stakeholders not mentioned in the case and where this had relevance (e.g. accounting officers) this was rewarded. Better candidates then went on to discuss why it is vital to consult stakeholders as early as possible and even used a recognised model such as the Mendelow power v influence model. Different communication methods to different stakeholder groups was also discussed, with reference to the case and again reward given. Exam Question Summary Candidates scored well in this part of the question and were, in the main, able to identify the key stakeholders for consultation. However the question asked for key internal and external stakeholders with whom consultation (e.g. not just list every imaginable stakeholder) might be necessary, therefore for only 10 marks there was a clear framework for the answer. Although there were no real widespread common mistakes or mis-understandings in this part, better candidates were able to identify the key stakeholders, splitting them internally and externally, without too much trouble and scored well. SECTION B Q3 Discuss FIVE factors which could affect the relationship strategy

when considering a contract in the public sector with a large supplier.

(25 Marks)

Analysis of the Question To test the candidates knowledge of the factors affecting a relationship strategy in the public sector.

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Analysis of the Answer Many candidates started their answer with a short outline of some of the unique factors (EU directives etc) which have a key bearing on relationships with commercial partners in the public sector. Candidates were able to observe that the key requirement in this question was for a discussion concerning the factors i.e. give a reasoned for and against citing different options when considering a relationship strategy. Cost, time, duration would all be relevant The factors possibly centred on adversarial or collaborative and though it is more likely that collaborative relationships of some sort will be the preferred option with a large supplier, it is important that the candidate discussed their choices whatever strategy or factor they discussed. Possible expected factors of discussion around advantages of collaborative might be:

Improved quality through close working

Greater opportunities for efficiency savings

Greater use of innovative skills and thinking from the contractor

Opportunity to enhance culture change Advantages of an adversarial approach on the other hand might be:

Quick wins on price

Reinforcement of the need for an arm’s length relationship.

This may be an one-off with no gains to be made in the future There will also be the matching disadvantages. To summarise and taking into account the above, a rounded discussion of 5 areas for 5 marks each was required e.g. Strategic or operational requirement

Degree of clarity and uncertainty about the requirement

EU Procedures

Competitiveness of the supply market

One off transactional, medium term or long term duration needs

Power of the buyer/supplier

IPR

Substitute products The above list is not exclusive and marks should were awarded for other relevant factors such as duration, value, capacity, geographic elements, timeframes, supply risk, complexity of requirements, transaction costs, relationship types, length of contract, deliverables etc. Better responses were supported by relevant models and theories such as Ellram, Porters 5 forces, Kraljic, The Relationship spectrum and supplier preferencing model. Exam Question Summary A popular optional question. The relationship strategy with a large supplier was cited in the question and in the main this would hint at a longer term relationship. Some candidates were tempted to theory dump on “relationships” or “the Kraljic 4 box model/Porters 5

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forces” and whilst credit was given, these were only part of the picture and a stronger discussion of five clear factors was required. In the main a well answered question with “theory dump” being the biggest weakness in some scripts. Q4 (a) Outline the types of financial and technical expertise which

could be available to a public sector purchaser to ensure successful contract delivery.

(10 Marks)

Analysis of the question This question was designed to test application of knowledge of the types of financial and technical expertise which could be available to a public sector purchaser to ensure successful delivery Analysis of the answer Candidates approached the answer in different ways. Many candidates outlined finance and technical expertise separately or as one approach. Both ways of tackling the question were acceptable. There were a number of areas which were outlined. The main ones highlighted were:

In house people expertise both financial and technical

Other PS bodies

Other OGDs

Cross function teams

Consultancy

NAO reports

Audit Commission reports Candidates also commented on the procedure for commissioning professional advice and this scored well. Other areas could be accountancy and finance staff, lessons learnt from commercial staff, quantity surveyors, Dunn and Bradstreet type reports, ONS, GPS (including OGC website), procurement specialists, PFI experts, IT specialists. The types of analysis could be financial, cost, estimates for liquidated damages etc. Exam Question Summary A short outline of four or five areas (the above is not exclusive) was sufficient for good marks and most candidates scored well in this part of the question. The public sector has a very wide choice in the expertise available to it in ensuring contract delivery and at times, in some scripts, the examples given were somewhat narrow with the “people” element sometimes missing. Question 4 was not a popular option. Q4 (b)

Define the term “cross functional team working” and explain the merits of using a cross functional team in developing a specification.

(15 Marks)

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Analysis of the Question This question was based around developing specifications and the merits of using a cross functional team. Analysis of the Answer Many candidates started with an attempt at a definition; a cross-functional team is a group of people with different functional expertise working toward a common goal, in this case development of a specification. It may include people from finance, marketing, operations, and human resources departments. Typically, it includes employees from all levels of an organisation. Members may also come from outside an organisation (although quite rare in the public sector), in particular, from suppliers, key customers, or consultants in purchasing and supply. Cross-functional teams often operate as self-directed teams responding to broad, but not specific directives. Decision making within a team may depend on consensus, but often is led by a manager/coach/team leader. In many cases, the team would make unstructured strategic decisions regarding the specification—such as what markets to compete in, what new production technologies to invest in, and what return on investment to require; tactical decisions like whether to build a prototype, whether to concept-test, whether to test-market, and how much to produce; and structured operational decisions like production scheduling, inventory purchases, etc. In other cases, the team would confine itself to tactical and operational decisions around building the specification evaluation criteria. Candidates often highlighted cross-functional teams as consisting of people from many parts of an organisation therefore information must take a form that all users understand and some good examples were given. Candidates who really understood the concept were able to develop areas such as technical, financial, marketing, and all other types of information must come in a form that all members of a cross-functional team can understand. This involves reducing the amount of specialised jargon, sorting information based on importance, hiding complex statistical procedures from the users, giving interpretations of results, and providing clear explanations of difficult concepts. Slicing and dicing techniques may prove useful in providing different views of the information to different users of the specification. Exam Question Summary Cross functional teamwork is a very wide area and the above gives an overview. Candidates made many other points linked to developing the specification using cross functional expertise (e.g. procurement leadership, value added etc.).If there was a weakness in a few responses, it was that the word “specification” was missed in the question and some candidates wrote all they knew about cross functional teams without too much reference to developing a specification.

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Q5 (a) Examine the factors affecting the sharing of benefits and costs between the parties to a public sector contract.

(13 Marks)

Analysis of the Question To test the candidates knowledge of the factors affecting the sharing of benefits. Analysis of the Answer Many candidates used the Kraljic matrix and although a pass mark could be obtained without it, it did provide a good basis for the answer as it reviews the nature of the requirement e.g. strategic, bottleneck, non-critical, leverage. There were many factors for the candidate to examine including Time, size, duration terms, relationships, resources, targets and goals of organisation. Many then reviewed the nature of the relationship e.g. cost of provision, duration, partnerships, nature and allocation of risks, political imperatives, dependencies and more. Other factors examined were;

Nature of the relationship

Nature of the requirement

Cost of provision

Nature and allocation of risks

Penalties v Incentivisation

Target costing and fees

Pain and Gain strategies

Gain share strategies An examination of three or four factors well examined scored well and a balance between costs and benefits also scored well. Also key was examination of government policy (SME’s etc), lack of experience and understanding of this type of contract by public sector procurers and what the costs are when a relationship breaks down.

High Risk Low Value

Security of Supply

Minor operational items

Specialist Equipment

High Risk High Value

Long Term relationships

PPE, Fleet.

Major Construction

Support Services, Partnerships

Benefit Sharing possibilities

Low Risk Low Value

E-procurement

Office Equipment, Stationery,

Consumables

Price sensitive

Low Risk High Value

Collaboration and aggregation

Energy, Fuel,

Professional Services,

Occupational Health,

Scientific Services

RISK

EXPENDITURE

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Exam Question Summary Q5 was not a popular option. A common misbalance in some papers was the concentration of factors toward benefits, however the better candidates were able to balance this equally with the costs involved (hard and soft) of sharing benefits. A well answered optional question with good understanding of the requirements generally. Q5 (b)

Summarise THREE opportunities for the incentivisation of suppliers within public sector contracts.

(12 Marks)

Analysis of the Question To test application of knowledge to review the opportunities of incentivisation of suppliers within public sector contracts Analysis of the Answer Many candidates brought in to this question relevant examples around areas as diverse as gain share, target cost (see below), share of savings, pricing and delivery mechanisms, performance monitoring and collaborative working with incentives. Specific examples cited included the Home Office contract with G4S and others. Three opportunities were required and the most popular were;

Target cost

Target fee

Share formula And although when summarised well and related to the public sector provided a bare pass, better candidates went on to summarise wider using;

Technical Performance indicators

Selection of the performance or parameters, definition of performance target, framing of an incentive arrangement Delivery Incentives

Safeguards to control costs, firm delivery requirement agreed, realistic target dates, flexibility in the delivery requirement, ensuring no penalties exist Multiple Incentive Contracts

Encouragement of the contractor to work for outstanding results in the incentive areas plans in place if non achievement of outstanding results in incentivised areas indicating decisions re cost, technical performance and time to meet the clients best interests.

There were more specific opportunities to develop including early payment, supplier awards, preffered supplier status (where legal), share of savings, pricing mechanisms, performance monitoring, collaborative working, and more. Exam Question Summary This part of the question proved to be a little more challenging than Pt. a, however latitude was allowed in the marking for innovative ideas and examples. Q5 was not a popular option as mentioned above and candidates failed, in the main, to use examples from the workplace

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which could have gained them marks(especially if they were struggling for ideas from workbooks etc). There has been much press comment on incentivising contractors (good and bad) and better candidates were able to demonstrate this wider reading. Q6 Analyse FIVE obstacles to accessing public contracts that may be

perceived by suppliers, giving suggestions how each one might be overcome by the purchasing authority.

(25 Marks)

Analysis of the Question Most candidates observed that this question asked for two things; analysis of the obstacles and suggestions on how they can be overcome and equal marks were allowed for both elements generally. Analysis of the Answer The majority of candidates recognised that this question related to suppliers and not only SME’s. The areas in LO 3.2 are now a little outdated (compliance with standards etc, but are still valid) so the summary of obstacles below is fairly comprehensive covering; the main areas of;

where to find opportunities,

contracts are too big,

pre-qualification procedure,

understanding the requirement,

lack of feedback,

cash flow requirements

ambiguous specifications

lack of communication from the authority

lack of transparency

costs of submitting a tender

lack of experience

excessive documentation

bureaucracy

framework usage being made mandatory

and more There are perceived and real barriers faced by suppliers in doing business with the public sector. While there is no simple remedy for helping suppliers to participate more fully in public sector business many potential suppliers, including small firms, may be discouraged from tendering for public sector contracts because of a number of perceived or real barriers. The Government have taken an interest in this area and marks were awarded for quotes from Mr Cameron or Mr Maude. THE GENERAL BARRIERS Suppliers perceive the process as long and complex and can therefore be discouraged from bidding. Those new to the public sector market may not know what is involved and may have difficulty in understanding requirement documents and in constructing good quality proposals or tenders. On the one hand, Suppliers can find the cost of long tendering processes to be prohibitive.

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On the other hand, a supplier with limited resources may find procurement timescales too tight, and struggle to ‘keep up’ with larger competitors. OVERCOMING THE BARRIERS Candidates for the second part of the question provided some good ideas including;

Provide a single point of contact in the authority.

Explain the process, and what will be required to suppliers at the outset.

Ensure the process is appropriate to the size and complexity of the requirement.

Keep tender documentation concise and jargon-free.

Ensure that the procurement is based on a sound business case to avoid an aborted procurement, or delays whilst funding is approved.

Ensure that the project and budget have been fully approved.

Set a realistic timetable, let suppliers know what it is and keep them informed of any changes. This allows them to assess their involvement and the cost of bidding.

Try to avoid slippage as this introduces additional, unplanned costs for suppliers. Candidates observed that companies new to public sector bidding may need longer to respond to requests for information than more experienced players and take this into account in planning and be prepared for more requests for clarification. (However favouritism should be avoided) Exam Question Summary This was the most popular optional question. Q6 was a very wide question and candidates who provided a broad analysis with realistic suggestions on how barriers can be overcome scored well. Up to date reading was also be rewarded. Candidates who were able to recognise both the obstacles and how they can be overcome, in equal part, were able to produce a balanced answer. In a number of scripts candidates dwelt exclusively on SME’s whereas the question related to “suppliers” so the answer should have been related to all suppliers. The question caused few problems for candidates who had revised well. APPENDIX: Syllabus matrix indicating the learning objectives of the syllabus unit content that each question is testing

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