Procurement Strategy

1. Introduction

1.1 The Council's Cabinet adopted this Procurement Strategy in March 2005 as its definitive approach to procurement.

1.2 The updated Strategy incorporates the themes and principles of modern procurement practice originating from the Egan, "Rethinking Construction" agenda (1998), the Byatt Report, "Delivering Better Services for Citizens" (2001) and the National Procurement Strategy (2003)

1.3 Whilst the Egan Report primarily focuses on procurement techniques within the construction industry it provides a series of principles and processes designed to change the acquisition process. However, the report's recognition that existing procurement techniques and methods of service delivery needed to be challenged had an impact beyond the construction industry. The processes recommended for the management of large procurement projects are also very relevant to local authority procurement.

1.4 The Byatt Report was a thorough and logical review of procurement in local government.  It provided, through a set of recommendations, the means to change the culture in which procurement is managed.  The Report identified the need for local authorities to take a corporate approach to managing procurement issues with the emphasis upon examining whole-life costs and the setting of longer term objectives to secure overall best value. The Report stated that, "without an effective procurement strategy in place a local authority will not achieve best value"

1.5 In October 2003, the National Procurement Strategy established the approach that local government will take towards improving procurement. The key messages and objectives of the National Strategy were developed from the findings and recommendations of the Byatt Report.

1.6 The Government's efficiency review, led by Sir Peter Gershon, in 2004 and the subsequent report, "Delivering Efficiencies in Local Services" sets efficiency gain targets. The target for local authorities is to deliver at least one half of the efficiency gains as financial savings which can then be redirected to make service improvements. The remainder are to be achieved through maximising the use of existing resources to improve performance. The report identifies excellence in procurement as a major contributor to these efficiency savings.

2.0 Definition and scope of procurement

2.1 Procurement is the process of acquiring goods, works or services from third parties and in-house providers. The process covers the whole cycle from the identification of the need through to the cessation of the service provision or the end of the useful life of an asset. Within local authorities procurement is primarily focused on delivering high quality and cost effective services which meet the needs of users and the local community. It involves the detailed analysis of the options available to deliver a service or provide an asset.

2.2 This strategy is applicable to all procurements from routine low value acquisitions of consumables to high value and complex schemes. The method of approach to delivering high value strategic procurements will need to differ from that applied to low value procurement work. However, the guiding procurement principles and concepts will remain consistent. This strategy does not operate in isolation but integrates with other council strategies.  It sets out the contribution which procurement will make to the fulfilment of the council's Corporate Policies. The procurement process is a vehicle for supporting and delivering these policies. 

3.0 The council's vision for procurement

3.1 The council is committed to delivering high quality services which balance the performance, quality and value to the customer with the cost of the provision. Well managed and effective procurement processes are central to delivering this commitment.

3.2 The council will use its procurement process to maximise its use of resources and deliver Value for Money. 

3.3 The council's vision for procurement is that it will:

• reflect and support the Corporate Plan
• be monitored to ensure it is delivering and supporting the Corporate Plan
• be driven by results and outputs which are focused upon improved service provision to users
• balance cost and quality but ensuring value for money
• be flexible and creative in its approach to developing alternative methods of procuring services
• embrace modern procurement practices which will include partnership working and the use of partnering contracts
• use competition to identify and work with high quality service providers
• always be ethical, transparent and accountable

4.0 Corporate procurement – the current situation

4.1 The council recognises that following the Comprehensive Performance Assessment and the earlier Audit Commission report into procurement there is a need to challenge and change existing approaches to procurement. The council has adopted a positive approach through implementing new processes and building the infrastructure to ensure this change.

4.2 Procurements are often approached from a departmental rather than corporate perspective. This can reduce opportunities for improvements. The council is working towards the implementation of a corporate and managed approach to its procurement processes using "Gateway" project management principles.

4.3 The council uses Office of Government Commerce framework contracts and actively participates in collaborative procurement initiatives with other Kent based District and Borough councils through the Kent Buying Consortium. The council engages with the South East Improvement and Efficiency Partnership to consider opportunities to undertake appropriate joint procurement initiatives. The council is a member of the LASER energy procurement consortium managed by Kent County Council and comprised of public sector organisations across Southern England. Membership of LASER ensures the council is provided with the necessary market expertise to secure advantageous procurement solutions in complex and volatile markets.

4.4 The council uses partnering principles in its approach to procuring services. These contracts make provision for financial incentives, to the contractor, that are linked to improved performance delivery. Partnering contracts have been awarded for the provision of the repairs and maintenance services and the capital improvement works. The procurement process was project managed through a multi-discipline team and the contracts designed to facilitate the development of a long term and strategic relationship with the successful contractors.

4.5 The development of the supplier and contractor database is undergoing continuous enhancement through working with the council's contracted supplier accreditation service. Using this service provides a consistent and transparent methodology to supplier accreditation. Suppliers are assessed to ensure their technical competence, financial solvency and compliance with council policies including those covering environmental and equalities issues.

4.6 The council is a member of the Contractor's Health and Safety Assessment Scheme (CHAS). The Scheme provides the council with quality assessed information in relation to contractors' health and safety qualifications. The council encourages its contractors to become approved to CHAS standards.

4.7 The development of electronic procurement is progressing through membership of the "Kent Connects" project which involves collaborative working with other Kent Councils. The council's Financial Management System and integrated purchasing module are being used to implement an electronic purchase to pay system. Further initiatives include the introduction of purchasing card use into Operational Services.

4.8 The South East Improvement and Efficiency Partnership (SIEP) has developed an electronic procurement portal which has a number of electronic solutions. These include e-tendering, a contracts register and a supplier portal. The council is providing information to the contracts register and will use the supplier portal.

5.0 The purpose of the procurement strategy

is to:

• provide the framework for all corporate procurement activity
• take the council from its current position to delivering best practice procurement
• inform the following about the council's approach to managing procurement:

1. members
2. officers
3. the community
4. stakeholders in the private, public and voluntary sectors
5. suppliers and contractors
6. potential service providers

6.0 The strategy's contribution

6.1 The strategy will change the way the council approaches procurement through:

• being the driver in building the capacity to deliver a corporate and strategic approach to procurement
• developing a commercial rather than a legalistic approach to contracting and service delivery initiatives
• refine the approach to the management of procurement processes through the effective use of project management skills
• using management information to identify opportunities to achieve financial and administrative cost savings
• harnessing the benefits of electronic solutions to efficient procurement processes
• structuring and developing procurement in accordance with the principles of the National Procurement Strategy and recent thinking.

7.0 The Corporate Plan 2008-2012

7.1 Procurement is an essential contributor to the delivery of value for money and the wider efficiencies agenda. All procurement decisions must be taken against this background and the objectives of the Corporate Plan. Procurement will be measured by the financial savings, environmental and community benefits it helps to achieve.

7.2 The council's vision, values and goals are:

Our Vision

We wish the borough to become The Place of Choice:

    A great place to live, work and relax in and to visit; to be proud of, with a strong sense of identity;
    that is safe, clean and green;
    that is good to do business in and to invest in;
    with good quality and affordable housing; with vibrant, inclusive communities celebrating cultural diversity and;
    where the council strives for excellence and value-for-money;
    with strong community leadership and engagement;

The Place of Choice for many reasons.

    Our Values
    Our core value will be 'Excellence in all that we do'. We will work to achieve:
    Excellent customer care;
    Excellent services;
    Excellent value for money;
    Excellent engagement with communities;
    Excellent partnership-working; and an 
    Excellent place to work.

Our Goals

1. Environment – to achieve a safe, clean and green Place of Choice.
2. Communities – to foster vibrant and cohesive communities that promote engagement, diversity, social inclusion, health and well-being, leisure and culture.
3. Housing – to seek to provide and work with others to ensure quality and affordable housing.
4. Business – to secure a sustainable and buoyant economy, particularly in the town centre and Ebbsfleet, with attractive investment opportunities and a developing tourism market,
5. Regeneration – to maximise regeneration opportunities for the benefit of existing and new communities.
6. Transformation – to transform the council into an economically sound organisation delivering excellent accessible services that provide value for money.

7.3 Procurement will support the realisation of the vision and themes of the Corporate Plan by:

• using procurement processes which balance cost with quality and deliver services that are sustainable, innovative and structured to achieve value for money and continuous improvement
• ensuring that the procurement process promotes and supports key council policies which include diversity and equality, health and safety, employment, customer services and the environment
• establish stakeholder partnering arrangements that engage the community in the development and monitoring of services designed to meet their needs
• encouraging the business community to seek work with the council through providing clear guidance and transparent processes that give equal opportunities to compete
• using the supplier selection and tender evaluation process to identify quality providers who are committed to supporting the council's policies and objectives through their service provision
• ensuring that the procurement process incorporates the inclusion of sustainable design and environmental issues into technical specifications as appropriate
• using procurement skills and practices to support the transformation agenda

8.0 The council's procurement principles

8.1 The council's procurement principles support the objectives of the Corporate Plan and apply to the conduct of all procurement activity.

8.2 Procurement will:

• be legal, ethical and transparent
• seek continuous improvement in the delivery of services through the application of value for money and innovative solutions
• be planned, managed and reviewed by officers and members who are trained in key skills
• balance costs and quality and effectively monitor the provision of services to the community
• use modern procurement practices, including e-procurement, to reduce the burden on administration and monitoring resources
• engage in joint procurement activity with other public, private and voluntary sectors as appropriate and use consortium arrangements where they are advantageous
• be supported by clear technical guidance which is accessible through electronic means

9.0 Applying the procurement principles

9.1 The council will apply its principles by:

• adopting a corporately managed and co-ordinated approach to procurement
• developing robust supplier and selection mechanisms to produce quality service providers
• using project management practices and skills in the delivery of strategic procurement projects
• developing and publishing an annual Procurement Plan. The Plan will inform officers, members and suppliers of the programming for future procurements
• engaging members in the reviewing and scrutinising strategic procurement initiatives
• providing clear and detailed technical guidance through the development of a managed procurement process to be used when a procurement is being initiated. Supporting guidance will be regularly reviewed to ensure it is consistent with the council's Constitution and best practice procurement
• using modern procurement practices including strategic partnering contracts, sharing services and consortium working
• consulting with the stakeholders and service users, both internal and external to the council, throughout the procurement process
• convening tender panels to engage stakeholders in the evaluation and decision making process
• developing tender and evaluation models which reflect quality, service and whole life costs
• providing clear and detailed briefs to tenderers stating the requirements and objectives of the procurement to assist them in producing high quality responses
• developing processes through the tendering mechanism to allow bidders to inform about how they will support the objectives of the Corporate Plan
• informing tenderers of the contract award criteria in advance of the submission of bids
• participating in and promoting the use of joint procurement working with voluntary, public and private sector partners
• managing the procurement process to ensure compliance with statutory obligations and best practice in respect of all matters concerning racial and equal opportunities. The procurement process will support service delivery improvement through contributing to the scoping of the requirement to ensure that it is both relevant and appropriate to the needs of all sections of the community. The council will ensure that its contractors are compliant with equalities legislation and it will use the accreditation process to raise awareness amongst potential contractors of its commitment to equal opportunities
• continuing to develop the council's role within the Kent Buying Consortium.
• using, as appropriate, consortium based contractual arrangements including the Kent Buying Consortium (KBC), framework contracts from the Office of Government Commerce (OGC) and contracts arranged by other public sector bodies
• managing stocks efficiently and maximise opportunities for stock reduction through efficient ordering systems and arrangements with flexible suppliers who are responsive to fluctuating demand patterns
• using technology, including electronic ordering and tendering, to support best practice procurement
• establishing a technical resource section on the Intranet to inform and guide officers through the procurement process
• minimising the costs of the procurement process through using electronic order processing and consolidated invoicing procedures

10.0 Strategic procurement and service delivery

10.1 Strategic procurement is the process of entering into contracts or other forms of regulated collaboration for the delivery of high financial value, complicated and innovative services

10.2 The council will use project management teams, practices and gateway style reviews to manage its strategic procurements

10.3 Forthcoming procurements will be programmed and planned in advance. The corporate contracts register will be kept up to date to support this process

10.4 The approach to strategic procurement will consist of the following developmental stages:

1. the service
2. market analysis
3. option appraisal

11.0 The Service

11.1 The contribution the service is intended to make and actually does make to council values and objectives must be analysed. The analysis will determine the most suitable approach to procuring the service through researching the

• cost and quality of the service against a range of service providers across the public, private and voluntary sectors
• the views of the service users and the community towards the quality and value for money of the service
• the impact that any changes to the procurement and the delivery of the service will have on the local community through employment and economic development
• the performance of the service and whether it is achieving its intended purpose and is meeting contractual obligations
• additional resources the service may need to realise its objectives by considering the following:

• whether capital investment is required to achieve an acceptable level of performance
• if management and cultural changes are needed to ensure agreed performance levels
• whether there are any advantages of an extended service period to make changes to the financing and structuring of the service
• if there is a requirement for the service and whether all or part of it should be ceased

12.0 Market analysis

12.1 Research will be undertaken to assess prevailing market conditions and the capacity of the market to deliver the required services

12.2 The research will include:

• consultation with service users and providers
• reviewing how the council's requirements should be packaged to ensure that the service delivery will meet these needs
• considering how the requirement should be structured and advertised to attract suitably qualified and experienced service providers

12.3 Conducting the research:

• service Managers will be responsible for commissioning and managing the market analysis
• the research process will be fully auditable and transparent to both internal and external auditors
• where there is a specialist or unique requirement the appointment of consultancy services may be necessary if the council does not possess the skills in house

12.4 Market analysis will identify:

• the leading service providers who have the capacity, expertise and experience to work with the council in developing service innovation and meeting performance objectives
• the range of costs and quality standards within the market
• identification of market weaknesses which may impinge on its capacity to deliver the required services
• whether the market is capable of expanding and offering alternative service delivery options or if it has reached maximum capacity
• the potential for innovation, by service providers, either independently or through joint working with the council
• the approach taken, techniques used and experiences gained by other councils and sectors when structuring and delivering similar services

13.0 Option appraisal

13.1 Option appraisal is the consideration of the options for procuring the service requirement. It will conclude with a recommendation for the preferred option.

13.2 Option appraisal will be undertaken

• prior to the expiry of an existing contract
• following a review of service performance
• as a matter of urgency if a service or a contract is failing

13.3 Within the early stages of the option appraisal a decision is required as to whether the service will be provided by external providers or through in-house arrangements. This is known as the "make and buy" decision.

13.4 The council will consider the following service delivery options together with any others which may be identified through research and experience.

14.0 In house service provision

14.1 The council believes that in-house services can provide cost effective and high quality services. However, it appreciates that this is only one approach to service delivery which must be considered, on an equal basis, with other options.

14.2 In house services will be exposed to the competitive market unless it can be shown that an external solution would be inappropriate.

14.3 Consideration will be given to selecting the in-house option where

• it can be demonstrated that the service competes with the best service providers in the various sectors. Auditable cost, service and performance evidence will be required to substantiate the competitiveness of the in-house service
• the market is underdeveloped and there are either no suitable alternative providers or a very limited capacity
• market research has shown that there is little or no interest from prospective service providers in delivering the required service
• legal reasons require the service to be provided by the council

15.0 Commissioning and Procurement

15.1 The council will consider commissioning principles when determining its approach to the delivery of services. It will develop a corporate commissioning strategy. Research work is, currently, being undertaken including discussions with other local authorities who are implementing strategic commissioning across their organisations.

15.2 Commissioning is different from procurement. Procurement is a part of the commissioning cycle and is responsible for managing any competitive processes employed. Commissioning may deliver services provided through non-competitive processes such as grant finding and voluntary work.

15.3 The council recognises that commissioning is a central component in the transformation agenda. It has the capacity to facilitate significant changes to the betterment of the wider community. However, there are no specific and pre-determined commissioning models as each process must be developed to meet specific circumstances and given needs, whilst remaining consistent with commissioning principles.

15.4 Strategic commissioning means securing the services that most appropriately address the needs and wishes of the individual service user, making use of market intelligence and planning accordingly. Commissioning is about the realisation of high quality and value for money services for the community. It requires continuous monitoring and review leading to actions designed to make improvements. The commissioning process must consider all appropriate options, irrespective of the sector they originate from as well as ensuring legislative compliance and full transparency.

15.5 Essential to successful commissioning is the need to engage all stakeholder groups. The council will ensure that all stakeholders including service users, the wider community, suppliers and contractors and specialist council officers along with their partner organisations are included in the process.

15.6 The council's Corporate Commissioning Strategy will include the seven principles of commissioning.

These principles will be applied when managing a process-

• people are placed at the centre – adopting a "customer centric approach"
• well managed collaborative engagement is a key feature designed to ensure smooth collaboration between client, provider and service user
• decisions are taken against a background of quality research and penetrating analysis to clearly establish what must be delivered
• clarity on how outcomes will integrate into the strategic and corporate policy context
• continuous engagement amongst all interested parties from the outset of the commissioning process will be ensured
• delivering value for money is at the core of the process and is inclusive of sustainable outcomes and the need to deliver increased value with fewer resources.
• ensuring a detailed knowledge and a quantified understanding of existing services and how they perform in relation to value for money and user satisfaction

15.7 The council will ensure that its strategy is communicated to officers and members and is available, via the Internet, to other interested groups.

16.0 Competition

16.1 The council will procure its services by competitive processes which will include the following methods:

16.2 Market testing - will be used where it is not possible to evaluate, due to the quality of the information available, whether or not an in-house service is competitive. Bids are obtained from external service providers and compared with the in-house service's costs, quality standards and performance levels. Market testing is only possible where there is an established and competitive market.

16.3 The outcome of the comparison may result in the service being commissioned from an internal or external provider depending on which represents the best value for money.

16.4 Outsourcing - is the award of contract to an external service provider without there being an in-house bid. Outsourcing is usually applicable to situations where:

• the in-house service does not provide a cost effective and quality service
• there is a viable and well developed external market in which the in-house service will not be able to compete.
• there is no in-house provision

16.5 Where a service is exposed to potential outsourcing the council will always:

• consult staff, Trade Unions and other interested parties at an early stage in the procurement process.
• include employment considerations into the procurement and contracting process.
• ensure compliance with relevant employment legislation and codes of practice.

16.6 Mixed market - is the provision of a service by more than one provider. The mix may be a variety of differing combinations depending on the nature of the required service. It can be a mix between internal and external as well as voluntary service providers. This option is particularly suitable to services of a highly specialist and technical nature or where there are difficulties identifying a suitable single source provider for all aspects of the requirement.

16.7 Particular attention shall be given to the need to balance costs against benefits because this option has the potential for attracting significant costs due to managing a number of distinct service providers.

16.8 Partnering and partnerships - is a contractual arrangement set up between the council and its service providers, inside a non-adversarial and adaptable framework, to provide a service or deliver a project. Partnering is particularly applicable to procurement projects involving high risk and high financial values. Partnerships are arrangements which may involve a number of agencies working towards similar objectives. The council will be involved but not necessarily as the main participant.

16.9 Partnering is concerned with all parties working together to reach agreed and shared objectives. The parties will share the risks and the rewards as well as combining in joint investment strategies and mutual training and development programmes. Partnering does not, necessarily, mean the contracting out in full of a service. The option appraisal process may determine that the council will retain the provision of a part of the service requirement and the remainder shall be provided by a partner organisation.

16.10 Partnering arrangements and contracts offer the potential to draw the best and most progressive elements from a mix of providers into the delivery of services through developing long term sustainable and collaborative relationships.

The council's approach to partnering will ensure:

• compliance with the European Procurement Directive and Council Contracts Procedure Rules
• a detailed examination of partnering models to determine the most suitable option for the required procurement
• all prospective partners are informed about and are committed to the realisation of the council's vision and values as part of their contribution to the partnering arrangements
• partnering best practice is followed through reference to established and evolving practical guidance from specialist partnering bodies such as "The Strategic Partnering Taskforce" and the "Public Private Partnership Programme" (4P's)
• investigation of existing partnering arrangements used by other organisations to learn from their experiences
• contractual incentives are considered when preparing partnering arrangements. Incentives, which are usually financial, have distinct advantages to the parties through serving as a driver to innovation and continuous improvement

16.11 Collaborative working within the public sector - this is a form of public-public partnering which provides opportunities for the council to work with public sector organisations to achieve economies of scale and develop networking opportunities. Most consortium procurement activity is currently focused on the procurement of goods and non-strategic services.

The following illustrates some of the principle benefits associated with consortium working:

• joint contracting initiatives
• maximisation of buying power
• reduced procurement administration costs
• networking opportunities through the exchange of information, especially in relation to market intelligence
• access to contracts arranged by other local authorities and purchasing consortiums

16.12 The council participates in collaborative working through membership of the KBC and the LASER energy purchasing consortium. It will continue to participate in similar forums where suitable opportunities exist including the Improvement and Efficiency Partnerships.

16.13 Working with the voluntary sector – the council recognises the role that their sector has in delivering services to the community. The council will work with and support the voluntary sector through local compact arrangements. The support may range from giving grant funding for projects to providing procurement and other technical support.

16:14 Social Enterprises – social enterprises are key partners in the delivery of excellence in the public sector and are positioned alongside private and public sector service providers. The council will encourage their engagement into the competitive procurement process.

16.15 Strategy implementation - is the driver in changing the corporate procurement culture.

The strategy will be delivered by:

1. Enablement and commitment

(a) Procurement is "championed", at Member level, by the Lead Member Transformation Portfolio. The Director (Transformation and Finance) has management responsibility for strategic procurement.  The Procurement Manager will develop and manage the implementation of the Procurement Strategy.

(b) The Procurement Manager's role is strategic and is concerned with delivering the procurement culture change. Whilst the role encompasses giving service managers' advice and providing operational procurement support the main focus of the post will be focused on strategic initiatives. Service managers will be responsible for conducting procurement within their service.

2. Building capacity through training

(a) Implementation of the Strategy will require Officers to be trained in the skills needed to conduct and review major procurement projects.

(b) Members will need to be conversant with the processes for conducting option appraisals and the monitoring and scrutinising of strategic procurements to ensure that the procurements are supporting the Corporate Plan and council policies.

(c) Training will include project management skills, procurement related legislation, specification writing, contract and performance management and service delivery option appraisal.

The council will:

• carry out a skills audit to establish what procurement expertise and experience exists across the council. The skills can then be considered for use as a corporate resource rather than remaining localised within departments
• review the results and use them to assist in the preparation of a procurement training and development programme
• provide the financial and administrative resources to support training.
• investigate using established training programmes such as those provided by the Improvement and Development Agency (IDeA) and the Public Private Partnerships Programme (4p's) as well as programmes developed through the KBC and SIEP.

3. Procurement group

Establishing a corporate Procurement Group to assist the co-ordination and implementation of the Strategy. The group will:

• operate on a corporate basis focusing upon strategic procurement issues
• be chaired by the Director (Transformation & Finance)
• have Assistant Directors and Senior Managers as its members
• include representation from

1. Financial services
2. Legal Services
3. Audit & Performance Management

• report to Management Team
• identify, plan, co-ordinate and prioritise forthcoming procurement activity which will be developed into an annual Procurement Plan
• give status updates relating to the ongoing implementation of strategic procurement initiatives
• provide information for collation into an electronically managed corporate contracts register as well as the register being developed by the SIEP
• assist in the development and planning of procurement training
• network on internal and external procurement issues

4. Supplier and contractor development

• The effective management of the council's supplier and contractor database is key to ensuring the selection of quality assured service providers
• The council will continue to use external supplier accreditation services, who are approved by Government and appropriate professional organisations, to ensure the quality and capacity of its supplier base
• The council will be proactive in developing its supplier base and will encourage suppliers to apply for business through:

1. regular consultation to ascertain suppliers' perspectives on applying for work with the council
2. using the consultation results to consider improved ways of attracting interest from a diverse supplier base
3. regularly updating the "How to Sell to the Council" guide which informs suppliers of the procedures to follow when applying for work and the processes the council must follow when making appointments
4. producing a dedicated Internet page for suppliers and prospective suppliers which will include the guide, contracts register and procurement plan
5. supporting the small and local business communities by helping them to develop their ability to compete for council work. This will include supporting training initiatives and local business engagement events
6. the council has signed the National Procurement Concordat for Small Medium Enterprises and is working towards its implementation
7. monitor the value and type of work being awarded to local businesses
8. encouraging suppliers to develop the capability to trade electronically and to share in the potential for reduced transaction costs
9. engagement with local Chambers of Commerce and the Federation of small Businesses. The council will continue to be proactive in developing working relationships with these bodies

5. Profiling the council's expenditure and the management of risk

The FMS is being interrogated to establish a profile of council expenditure which will include:

• the type of goods and services being procured
• which suppliers and contractors are being used
• what goods and services are procured by individual council departments
• an analysis of the volume of invoices received

The council will continue to work with the South East Improvement and Efficiency Partnership and the Kent Buying Consortium to analyse procurement related data. The outputs will be used to identify opportunities for joint and consolidated procurement activity.

This investigative work is important because it will

• allow decisions to be taken about how best to use procurement resources and deliver value for money solutions
• assist in the identification of opportunities for aggregating procurement requirements and maximising buying power
• identify any issues concerning compliance to procurement rules
• assist the classification of procurements by:

1. high value and high risk. Those that are likely to involve partnering arrangements and particular skills to manage
2. high value and low risk such as energy supplies
3. low value and high risk such as security systems for premises
4. low value and low risk items, such as stationery, which may be procured through consortium and framework arrangements

6. Contracts Procedure Rules

The council will regularly review its Contracts Procedure Rules to ensure that they are consistent with best practice procurement and procurement legislation.

The council updated its Contract Procedure Rules in December 2005.

The council will engage in any initiatives to consider common and shared Contract Procedure Rules which support improved opportunities for collaborative working.

17.0 Legislation and rules

All procurement activity will maintain the highest standards of probity and be transparent and fully accountable.

The council will ensure:

• full compliance with the European Procurement Directive, domestic legislation and the council's Contract and Financial Procedure Rules
• officer and Member Codes of conduct are followed
• all business with suppliers and contractors is conducted to the highest standards of honesty, impartiality and objectivity
• equal opportunities exist for all suppliers and contractors who meet the required criteria to bid for work
• procurement processes are subject to regular review by Internal Audit to ensure compliance with legislation and council rules

18.0 Managing and monitoring procurements

Procurement is an integral part of the performance management framework of the council. Corporate procurement and the implementation of the Strategy will be subject to monitoring to ensure that it is continuing to provide an effective mechanism through which the council can achieve its objectives.

The council has established an electronic contracts register which is regularly updated. It is being developed into a primary source for preparing the annual Procurement Plan. It serves as a planning and reference resource for Service Managers and other interested parties.

The council will:

• develop supporting guidance for officers in the management and monitoring of contracts. This will be published on the staff Intranet
• involve contractors in the monitoring of contracts. This will be a requirement for all partnering contracts
• agree a clear communications strategy with contractors prior to the commencement of a contract to reduce the potential for future confusion
• work with contractors in establishing the performance indicators and monitoring requirements for the management of contracts
• hold regular review meetings with contractors to discuss contract performance and options for service improvements
• develop systems for exceptions reporting against agreed levels of contract performance
• record and monitor financial savings achieved from procurement initiatives through the Business Transformation Group
• consult service users to determine their satisfaction with contract performance and incorporate the results into review processes
• use benchmarking techniques to compare levels of service provision and customer satisfaction with other public and private sector customers receiving similar services
• review strategic service delivery initiatives and analyse the successes and shortcomings of the application of various procurement techniques

19.0 Electronic procurement

19.1 E-procurement describes the use of electronic systems for data exchange which supports the acquisition of goods, works and services from third parties. E-procurement processes include electronic ordering and invoicing, web-based supplier catalogues, purchasing cards for the ordering and payment of goods and the management of competitive tendering processes by electronic means.

19.2 An E-Procurement Implementation Team has been formed. It operates at a corporate level and is responsible for the evaluation and implementation of appropriate electronic solutions designed to streamline the procure to pay process.

20.0 Electronic Procurement and the Financial Management System

20.1 The development and implementation of the FMS electronic purchasing module is being managed by Financial Services on an incremental basis. Benefits to be realised from the module are:

• deliver financial and efficiency savings through reducing the processing costs
• support the work to identify, aggregate and co-ordinate council procurement activity
• provide improved and faster communications with suppliers
• improve the management of the supplier base
• produce bespoke management reports to analyse purchasing activity

20.2 The successful implementation of the module requires a comprehensive review of the structure and management of the supplier database. The council will develop a policy to rationalise its supplier database and establish a managed supplier set up process.

21.0 Review of the strategy

The Strategy will be reviewed at least once a year on a formal basis to ensure that it is consistent and relevant to the National Procurement Strategy, best practice procurement and the council's corporate policies and objectives. The review of the strategy will be undertaken by the Procurement Manager.

D R Hollands
Procurement Manager
February 2005

This Procurement Strategy was revised and updated: 

16 June 2006
10 January 2007
05 June 2007
19 June 2008
17 February 2009