What You Need to know about Procurement- Working together to get Best Value
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What You Need to know about Procurement-
Working together to get Best Value
Pippa Dooley, Northern Representative for
Crescent Purchasing Consortium
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AGENDA Legislation and Rules for Academies
-EU Rules, the basics
-Academies Financial Handbook
Importance of procurement
-Difference between purchasing and procurement
-How to manage the risk of buying the wrong thing/paying too much
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AGENDA How to achieve value for money
-Both as an individual institution and through collaboration
Benefits of using Consortia
What help is out there
What CPC can offer
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Rules and Legislation
Public procurement rules and EU Procurement Legislation
Academies Financial Handbookhttp://media.education.gov.uk/assets/files/pdf/a/
academies%20financial%20handbook%20sept%202012v11.pdf
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Rules and Legislation
Academies must: Ensure regularity, propriety and value for money in their management of public funds Avoid waste and extravaganceEnsure efficient and effective use of all the resources in their chargeEnsure a competitive tendering policy is in place and applied
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Rules and Legislation
EU Rules – the basicsTHEY ARE LAW!
Public Contracts Regulations 2006 (SI 2006/05)
Fundamental principlesTransparency, non-discrimination, equal treatment and proportionalityPublic spending is open to competition
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Rules and Legislation
EU Rules – the basics
Contracting Authorities MUST tender via OJEU requirements where aggregated spend for is above threshold
Outcome of OJEU exercise must be published
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Rules and LegislationThresholds Supplies and Services £173,934 (€200,000)
Works £4,348,350 (€5,000,000)
Aggregated spend over contract period or 4 years (maximum framework period).
Change every 2 years on 1st January next change in 2014
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Importance of procurement
Purchasing vs Procurement
Purchasing is…
The specific activity of committing expenditure
It tends to focus on issues of price rather than of value
It’s placing the orders – doing the buying
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Importance of procurementPurchasing vs Procurement
Procurement is…
The entire process of acquiring goods and services
The identification of requirements, specifications, assessment of risk, management of tendering processes, ordering, contract award and the management and monitoring of suppliers‘ performance
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Importance of procurementPurchasing vs Procurement
Procurement is…
It takes into account factors such as the cost over the life (whole life costs) of the good or service, and the quality necessary to meet users' requirements
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Identify the Need
Identify Potential Suppliers/
Procedures
Evaluate Proposals
Award & implement
Contract
Invite ProposalsAgree Prices & Terms
Specify the Requirement
Manage Performance
Develop Market
Purchasing is the ‘buying’
Importance of procurementThe Procurement Cycle
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Importance of procurement
Organisation’s total expenditure
A – Staff Pay
B – Capital
C – Revenue
Sound procurement practices will improve the School or Academy’s overall value for money activities on both these areas of expenditure
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Importance of procurement
Planning your purchaseBudgets are tight, so you must plan before you purchase
Assess the need
Consider alternatives to purchase
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Importance of procurement
Planning your purchaseCould you collaborate with other schools to increase your buying power?
Check if there is an existing deal available to you
Estimate the total contract value
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Importance of procurement
Possible thresholds less than £10K, low value purchase, write a
statement of requirement, framework or 3 quotes (written ideally)
£10k to £40K, medium value purchase, write a business case and a specification, framework or at least 3 written quotes
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Importance of procurement
Possible thresholds £40K + (but below the EU threshold), high
value purchase, write a business case and a specification, framework or tender
purchases with a value above the EU thresholds, write a business case and a specification, must use the OJEU
tendering process
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Business Cases
Regarded as good practice
Adopt for all new projects / initiatives over a specific value
Opportunity to explore alternative sourcing options and truly test out the actual need
Importance of procurement
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Importance of procurement
Contract Managementkeep copies of all related documents
build a good relationship with your supplier
ensure the goods or service is delivered correctly, meeting your requirements
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Importance of procurement
Contract Management
manage risks effectively
change control procedures
exit strategy
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How to achieve value for money
What is value for money?
Achieving financial savings that can then be re-invested in your priorities for driving up standards
Ensuring that the goods or services purchased are fit for purpose
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How to achieve value for money
What is value for money?
Ensuring suppliers deliver (and continue to deliver) as agreed
Ensuring legal and financial obligations are complied with
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How to achieve value for money
What is value for money?
Paying less for the same product
Paying the same for a better quality of product
- Where you need the better quality
Getting added value at no extra cost
Reducing the Academy’s exposure to risk
Streamlining your processes
Becoming more sustainable
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How to achieve value for money
Practical Steps
Analyse expenditureReview your contracts Identify opportunities for rationalisationDeliver admin savingsCollaborate across key spend areas
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How to achieve value for money
Practical Steps
Benchmark and compareUse consortia frameworks to access compliant and competitive arrangements
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Benefits of using Consortia Compliance with legislation
Use of frameworks that have followed best practice procurement protocols
Terms available that represent collaborative spend, not just your Institution’s spend
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Benefits of using Consortia
Support from professional procurement team if suppliers are not performing
Reduces time spent on procurement activity and frees up resource for front-line delivery
Freeing up savings to re-invest in
educational priorities
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Benefits of using Consortia
What is a framework?
A purchasing framework is an ‘umbrella agreement’ that sets out the terms (particularly relating to price and quality) under which individual purchases (call-offs) can be made throughout the period of the agreement.
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Benefits of using Consortia
What are the benefits of using a framework?The panel of suppliers has been vetted and approvedEconomies of scale, competitive pricingWhere a panel has more than one supplier, the suppliers are engaged in constant and repeated competition for business throughout the life of the framework, which tends to keep them on their toes!
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Benefits of using Consortia
What are the benefits of using a framework?‘Calling off’ from a framework is typically a quicker and simpler process than setting up a new contract by yourself from scratch.Better service levelsReduced riskOn-going support from the Consortia
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Who can help? www.buyways.co.uk Free online training course developed to provide
an introduction to procurement for non-procurement professionals working in schools.
www.education.gov.uk/procurement Contains information about the procurement
process, including useful links to deals, training and further resources.
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Who can help?
Crescent Purchasing Consortium 1500+ Academy and School memberships Dedicated website for Academies and Schools www.thecpc.ac.uk
Government Procurement Service http://gps.cabinetoffice.gov.uk
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What can CPC offer?
Free membership (no cost, hidden or otherwise, to join)
75 Framework Agreements Successful Academies Insurance Framework Proven value for money on all arrangements Contract management Access to free professional purchasing advice
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What can CPC offer? Procurement related resource – template
policies / procedures / guidance Benchmarking Professionally operated consortium web site E-Newsletters No obligation to use CPC deals once a member Low cost Introduction to Procurement training
workshop for CPC members in the North East, Sept ‘13
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And to Finish….
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And to Finish…. Questions?
Contact information Pippa Dooley, Northern Representative
[email protected] 07788 285941
Customer Helpdesk 0161 295 5354
[email protected] 0161 295 6729