Success in uk public procurement
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Success in UK Public Procurement
Wednesday 27 March 2013
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27 March 2013
Success in UK public procurement Sally Collier Deputy Chief Procurement Officer
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Procurement’s role in Government’s response to the UK’s economic challenges
3
Promote Growth Using pan-Government resources to implement existing UK economic policy while looking for new ways to support business and stimulate opportunities for growth.
Efficiency Savings Preventing waste and focusing resources on genuinely beneficial activities.
Public Sector Reform A longer term view of transforming public services while reducing future expenditure.
Reduce the Deficit
2
1
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Historically:
Government lacked a strong corporate centre
Government Departments worked in silos
ERG was created in June 2010 to:
Support the £80 billion reduction in Government expenditure
Join the work of Cabinet Office and Her Majesty’s Treasury
Introduce central controls
Improve co-ordination to exploit economies of scale
Efficiency and Reform Group (ERG)
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5
Government efficiency savings in 2011/12 By tackling wasteful spending across Whitehall, the Government saved over £5.5 billion for the taxpayer in 2011/12 on top of the £3.75 billion saved the previous year.
Francis Maude, Minister for the Cabinet Office:
“This is not the sexy end of politics – it's about the minutiae of procurement and financial management. No one who has been a
supplier to government can honestly deny that there was waste and inefficiency in the way goods and services were
procured and managed in the past”
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A more focussed commercial team at the heart of Government
6
Commercial Relationships
Procurement Policy
Government Procurement
Service
ICT infrastructure
Managing strategic suppliers as a single customer for the
first time.
Supported by tough spending controls, requiring Cabinet
Office approval for all spend over £5 million with strategic
suppliers.
Modernising Government procurement to reduce the cost and speed of doing
business with Government
Strengthening civil service capability and supporting wider agendas including
SMEs.
The largest buying organisation in the UK with
£8.4bn spent in 11/12.
Enabling Government and wider public sector bodies to
secure better deals by aggregating buying power.
Implement smarter ICT platforms including:
PSN, Cloud, EUD strategy
and improve hosting.
Chief Procurement Officer & DG Efficiency
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Early success at reforming procurement
7
Pre-qualification questionnaires cut entirely
for smaller contracts
Contracts Finder launched, with 12,900 contracts
published so far
17 Pipelines published with £84bn of likely future
requirements
700 civil servants trained in LEAN procurement
processes: use of open procedures doubled in 2012
Direct spend with SMEs up from 6.5% to 10%
6,000 pages of procurement guidance replaced with 50
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Introduced the SME Crown
Representative for SMEs – they have a
voice at the top table
Easier to find opportunities to
do business with
Government – Contracts
Finder, Dynamic
Marketplace
Reformed the procurement
process ‘removing barriers’ –
abolished PQQ below
threshold
SMEs given new channels
of communication
including Mystery Shopper
Focus in departments and reporting
spend with SMEs
Big is not always
beautiful – starting in ICT contract length and size will be reduced
SMEs
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EU public procurement rules The UK Government wants significant simplification of the EU public procurement regime to free up markets and support growth: – Reduce lengthy and burdensome procurement processes that add cost to
business and barriers to market competition – Modernise the procurement procedures and provide more flexibility for
purchasers to follow best commercial practice to achieve the best procurement outcomes
– Support measures to enhance SME access to public procurement, where such measure are non-discriminatory and are consistent with a value for money approach
– Allow a flexible approach towards employee-led organisations/mutuals so they can gain experience of running public services prior to full and open competition
Negotiations in Council and European Parliament continue.
Mid-late 2013: EU expected to adopt new rules / national transposition
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For more information
10
Cabinet Office Efficiency and Reform Group www.gov.uk/government/organisations/efficiency-and-reform-group
Government Procurement Service gps.cabinetoffice.gov.uk/
Contracts Finder www.contractsfinder.businesslink.gov.uk/ Cabinet Office Twitter @cabinetofficeuk
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Network Rail Connecting Britain:
Delivering a 21st Century Railway
Simon Kirby Managing Director, Infrastructure Projects
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Passenger Growth = Project Investment
0
5
10
15
20
25
30
CP3 CP4 CP5
Enhancements(£bn)
Enhancements& renewals(£bn)
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A fundamentally different company
• Devolved route business units
aligned with our customers
• National Centre
• A separate projects business working in collaboration with our supply chain
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Hooley Cutting - Stabilisation Principal Contractor: BAM Nuttall Route: Sussex
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Infrastructure Projects ambition
Our ambition is to be the best rail infrastructure project delivery organisation in the UK
We will be a rail infrastructure solution developer, integrator and deliverer; whilst also offering additional support services to our clients such as engineering design and asset protection.
We will be a rail infrastructure solution developer, integrator and deliverer; whilst also offering additional support services to our clients such as engineering design and asset protection.
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Kings Cross
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Southern Facade
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Thameslink
Brighton
St Pancras International
Bedford
London Bridge Blackfriars
St Albans
Luton
East Croydon
Gatwick Airport
Orpington
Elephant & Castle
Sevenoaks
East Coast Main Line
Kent
Maidstone East
Rochester
Grinstead
Horsham
Key
12 Car Operation 2018
12 Car Operation 2011
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Date 00.00.00 Presentation title to go here 21
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Stow
Galashiels
Tweedbank
Falahill Summit
Borders Rail
Shawfair
Eskbank Newtongrange
Gorebridge
Heriot
Fountainhall
Bowshank Tunnel
Torwoodlee Tunnel
A720 City Bypass
A7 Hardengreen
A7 Gorebridge
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New GSM-R Network has gone live
90.4% Complete 2934 sites
GSM-R Construction FTN Construction
98.4% Complete 14,591 Km
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Hitchin
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Waverley
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ROC
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RSAR, Aerial View, Oct ‘12
28
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Reading Station
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Innovation
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Innovation
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Innovation
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Innovation
Westbury Lane
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A separate projects business working in collaboration with our
supply chain
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Date 00.00.00 Presentation title to go here 35 35
Select partners early
Select the best
Align incentives
Long term relationships
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Looking ahead to CP5
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Passenger traffic and demand Passenger Traffic & Demand
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1.50
1.60
1.70
2004/5 2005/6 2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
Financial Year
Inde
x(2
004-
5 =
1.00
0)
Passenger Train KM IndexPassenger KM Index
CP4 CP5CP3
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Network Rail efficiency
0
10
20
30
40
50
60
70
80
90
100
2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
Actual
IIP
CP3 CP4 CP5
27%
23%
16% %
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Network Rail Connecting Britain:
Delivering a 21st Century Railway
Simon Kirby Managing Director, Infrastructure Projects
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Presentation Title
Success in UK Public Procurement
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Malcolm Stephen
Director, Business Development
BAM Nuttall Ltd
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Royal BAM – Operating Companies
Construction & M&E Services
PropertyCivil Engineering Public-private Partnerships
BAM PPPBAM Utiliteitsbouw BAM Civiel
BAM Infratechniek
BAM Rail
BAM WegenBAM Techniek
AM Real Estate DevelopmentBAM Woningbouw
Heilijgers
Netherlands
Betonac
CEI-De-Meyer
BAM Wallonie
CEI-De-Meyer Immo BAM
Interbuild Kaïros
Belgium
BAM Construction * BAM Properties *BAM NuttallUnited Kingdom
BAM Building ** BAM Property **BAM Civil **Ireland
BAM Duetschland W&F IngenieurbauGermany
BAM International BAM International
BAM Wallonie
Sector
Operating Company
Active in this sector
* BAM Construction and BAM Properties together form BAM Construct UK
** BAM Building, BAM Property and BAM Civil together form BAM Contractors
BAM Utiliteitsbouw, BAM Woningbouw and Helijigers also operate as developers on construction projects in the property sector
AM
Worldwide
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BAM in Europe
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BAM Worldwide
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Construction & M&E
Services 41% Civil
Engineering 46%
Property 7%
PPP 6%
Royal BAM – Performance
Turnover by sector
Turnover by region
Germany 10% Worldwide
7%
Netherlands 36% United
Kingdom 33%
Ireland 3% Belgium
11%
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Royal BAM Results
Turnover - €7,000m
Profit - €100m
Order Book - €10,900m
Share Price - €3.34
Employees - 26,000
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BAM in the UK
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Our Market
Sector 2012 2013 2014 2015 Public Housing 3554
-20 3128 -12
3065 -2
3126 +2
Private Housing 13301 -5
13700 +2
14659 +7
15392 +5
Infrastructure 11351 -13
12085 +6
13428 +11
14502 +8
Public Non-housing 9779 -21
7823 -20
7041 -10
6900 -2
Private Industrial 3289 +1
3453 +5
3557 +3
3699 +4
Private Commercial 21647 -10
19699 -9
18517 -6
18517 nc
Source: Experian Construction Forecasts (Winter 2012 / 13)
Values - £m
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Primary procurement routes
Early Contractor Involvement
NEC Options
ICE Form
JCT Form
Bespoke
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Current Government actions on procurement reforms
Building Information Modelling
BS11000
Supporting the customer business case
Whole life costing
LEPs / DCLG
Frameworks
Government guarantees
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Influences from EU
Overseas competition increasing
JV requirements
Behaviour and culture considerations
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Customer trends in procurement
Early engagement of supply chain
Portfolio finance
Customer support
Quality important to customers
Innovation
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Importance of CSR related activity
CSR (Corporate Social Responsibility)
What is important to the public procurement bodies
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Challenges facing UK procurement over the next few years
Funding / finance Planning regulations
Use of section 106 money
People