Delivering Value for Money and Social Outcomes Through Innovative

Procurement

Tuesday 4th September 2012

Gary Stephens

Procurement Director

Agenda

1. Expenditure and Risk

2. Procurement – what you need to know!

3. Social Value Act

4. Innovative Procurement Options

5. Questions

Our environment…

Economy

Demand

Residents

Welfare Reform

Pressures on LA’s

Older Population

Young People

HCA – VFM Standard

We must seek solutions which…

Offer flexibility

Deliver value for money

Consider added value options

Meet regulatory requirements

Example HA – 2011/12

Headline figures

Headline Figure

2011/12 Spend £34,000,000

Average Invoice Value £607

No of suppliers used in 2011/12 670

Number of new suppliers over 2010 175 (26%)

Total number of invoices 56,000

No of invoices between £1 and £45 31,000 (55%)

Cost to administer assuming £15 per invoice £465,000

Companies issuing 1 invoice 155 (£350,000) Avg value £2,258

% of companies issuing 1 invoice 23%

Category Spend – 2011/12 Analysis of spend over £10K)

Category Spend 2011/12

Category Spend 2011/12

New build £12,000,644 Catering Services £233,782

Planned Maintenance £3,579,323 Glazing Services £203,795

Responsive Repairs £2,032,970 Heating Services £199,136

Solar Energy £1,278,211 Flooring Services £124,719

Gas Servicing £973,469 Surveyors £113,585

Insurance Services £917,436 Telecoms £107,422

Energy £503,960 Fire Safety/Security £106,465

Groundworks £493,844 Hygiene Services £88,095

Legal Services £484,889 Fleet Services £81,842

Recruitment/Agency £420,489 Household Goods/Furnishings £81,025

ICT Services £349,439 Cleaning Services £80,122

Electrical Services £328,778 Roofing Services £62,994

Painters & Decorators £308,750 Electrical Goods £48,980

Example – Solicitors 2011-12

Supplier Spend with each Supplier

Josh Lewsey Tindall £12,997

Woodman Solicitors £82,992

Johnson & Dallaglio £225,390

Back & Hill Legal Services £6,967

Jason Robinson Solicitors £2,180

Kay & Vickery Solicitors £15,078

Cohen & Thompson £73,247

Greenwood & Wilkinson Solicitors £420

Moody Catt Solicitors £65,618

£484,889

Matrix approach to identifying

Procurement Projects

What housing professionals need to know…

1. Procurement Strategy

2. Rules – Standing Orders & Financial

Regulations & Section 20

3. EU Procurement Directives

4. Processes and procedures

5. Professional Support

Explaining procurement – what you need to

know when starting a procurement project

What you want to achieve?

Who?

Scoping exercise

Consider:

Resident Involvement

Social Value

Risk – H&S, TUPE

Contracts and KPI’s

e-tendering and Project Management tools

• Suppliers/Contractors

Contract Management

11 September 2012

11

Current state Process Mapping

The current process was mapped revealing a range of issues and problems experienced across all teams

Social Value Act

Public Services (Social Value) Act 2012

The Public Services (Social Value) Act

2012 became law on the 8th March 2012.

The Act was initiated by Chris White MP as a

Private Members Bill.

It will come into force in January 2013

Social Value - What does this mean for procurement?

It means (in so many words) that before starting a procurement

process we must consider—

(a)how what is proposed to be procured might improve the

economic, social and environmental well-being of the relevant area,

and

(b)how, in conducting the process of procurement, we might act with

a view to securing that improvement.

But we can only consider matters that are relevant to what is

proposed to be procured and, in doing so, must consider the extent

to which it is proportionate to include them. Also we should consider

consulting on them.

It also explicitly indicates that the Public Contracts Regulations take

precedence.

Case Study 1. Kitchen, Bathroom & Rewires Installers Contract

Wales – Three Valleys

New Opportunity Community/ Local

investment Engagement

Staff QDF Tenants Suppliers

Tai Calon solution

Local Contractor engagement Local Advertising - Press Supplier Breakfast Event

Explain Opportunity Explain tendering

• Appropriate Lots and different sizes 9 Lots

PQQ – Simplified Resident Training

Assessment of ITT Contractor Interviews

Contract – KPI’s Kitchen event

•Range of Lots •Resident focussed service •“Right first time” service •Improved Resident satisfaction •Value for money •Contractual requirements •KPI’s

Case Study 2.New Responsive Maintenance & Improvements requirements:

•Commitment to:

• Invest in local community (1%)

• Apprenticeships (8 placements per year)

• Work placements

• DIY Workshops

• Pre-employment training

•Supported by contract KPI’s

Case Study 2.New Responsive Maintenance & Improvements Contract offered:

Procurement Options

An investigation of options Consortia

GPS, PFH, PFA, Fusion 21, NHC, GM Procure, LHC

Tendering One supplier Choice of supplier

(Framework Agreement) Can you Join with

another RP? Reverse Auctions

In House Delivery Social Enterprise (Joint

venture Company)

What is effective procurement?

Savings & Quality

Standing orders

Compliant - European Union procurement directives “Body governed by Public Law”

Goods & services £173,394

Works £4,348,350

Challenges are increasing

Auditable

Residents

Suppliers

Contract Management

Further Information

www.servicematters.uk.org

7 Hot Tips for saving money

Rationalising Supply

www.whq.org.uk/i2i

Google i2i whq

SME friendly procurement

No 2 – Keeping WHQS investment local

Thank you for listening

Questions?

Further Information

Gary Stephens

Procurement Director

Orbit Group

gary.stephens@orbit.org.uk

07879 664578

www.servicematters.uk.com