Renfrewshire Council Procurement Strategy

Renfrewshire Council

Contents

Foreword

1 Introduction .......................................................................................................... 1

2 The Strategic Context ........................................................................................... 1

3 Strategic Procurement Review ............................................................................. 2

4 Our Tactical Operational Plans for 2014/15 ......................................................... 3

4.1 CPU Staffing .......................................................................................... 3

4.2 Service Focus ........................................................................................ 4

4.3 Collaboration and Shared Services ....................................................... 4

4.4 Procurement strategies and Policies ..................................................... 4

4.5 Processes and Systems ........................................................................ 6

5 Procurement Action Plan ...................................................................................... 7

6. Procurement Strategy by function ................................................................... 14

6.1 Community Resources ......................................................................... 14

6.2 Development & Housing Services ........................................................ 19

6.3 Education & Leisure ............................................................................. 23

6.4 Social Work .......................................................................................... 27

6.5 Finance and Corporate Services .......................................................... 32

6.6 Chief Executives ................................................................................... 36


Foreword

“I am proud that Renfrewshire Council has been a leader in the development and implementation of modernised local government procurement practices. Our Corporate Procurement Unit (CPU) has supported the Council to improve its procurement processes and deliver substantial financial and community benefits across all areas of contractual spend.

This success has been recognised through the independent Procurement Capability Assessment carried out by Scotland Excel with the CPU being the highest scoring Council in Scotland for the last 3 year and being the first Council to reach the “Superior Performance” category in 2012.

Looking forward, Renfrewshire Council and its Community Partners have a vision of communities, public services and business organisations working together to make Renfrewshire a fairer, more inclusive place where all of our people, communities and business thrive. The Council has developed its ambitious “Better Future, Better Council” strategy to deliver on this positive vision, but this is being taken forward during a period of unprecedented financial constraints. I believe that Procurement has a vital role to play in supporting the Council successfully deliver this strategy and achieve the positive vision for Renfrewshire’s communities. This will require the CPU and their customer Council Departments to build on the strong collaborative working foundations that have been established over the previous period and identify how the procurement processes and capabilities we now have within the Council can add further value going forward. I have no doubt that our Corporate Procurement Unit will meet this challenge and help the Council maintain a position of procurement leadership within the local government sector.” David Martin Chief Executive Renfrewshire Council

1

1 Introduction

Renfrewshire Council’s initial Procurement Strategy was produced in 2010 to cover the period 2010- 2013. The Council invested heavily in developing the staff and capabilities of the Corporate Procurement Unit (CPU) to support the delivery of this strategy. During this period the CPU has successfully supported the Council to modernise its approach to procurement and achieve substantial benefits in the cost and quality of the goods and service purchased. Increasingly it has also been able to achieve a range of Community Benefits through its contracting activities. The Council has now embarked on a further ambitious programme of change to deliver the objectives set out in its “Better Future, Better Council” strategic plan and Renfrewshire’s Community Plan. The CPU recognises that these changes create an opportunity to review the Council’s approach to procurement and determine how an innovative and forward thinking procurement function can best support the Council and its Service Departments deliver these objectives going forward.

2 The Strategic Context

A positive vision for Renfrewshire

Renfrewshire Council and its Community Partners have a vision of communities, public services and business organisations working together to make Renfrewshire a fairer, more inclusive place where all of our people, communities and business thrive. The Council has developed an ambitious “Better Future, Better Council” strategy to deliver on this positive vision. The Corporate Procurement Unit is determined to play its part in supporting the Council to achieve this vision.

The challenging financial environment

The “Better Future, Better Council” strategy has been developed in the context of an unprecedented period of financial constraint on council budgets and therefore includes plans to achieve savings of between £20 and £30m over the 2014/17 period. An initial round of tactical savings are currently being delivered through a programme of voluntary redundancies/early retirements and associated re-structuring, but plans for more fundamental service transformation and new ways of working are in the process of being developed to deliver the required medium and longer term savings. The CPU, like all corporate support functions, will play its part in delivering efficiencies within its own operations during 2014/15 and beyond. More importantly however, the CPU must look at what it can do to ensure it is providing the professional procurement advice that our customers need to support the transformational changes they plan to make within front line services. Diminishing returns from contract re-tendering A consequence of the success of the Council’s focus on imbedding best procurement practice over the last five years is that an increasing proportion of the Council’s addressable spend has been subject to one or more rounds of rigorous competitive tendering. This is starting to reduce the opportunities for procurement to deliver substantial annual savings from contract retendering activity. The CPU will continue to seek savings opportunities in areas of non-compliant spend and through better contract management, but opportunities may also exist for the expertise and capability within the CPU to add value in other areas of strategic importance for the Council.


The importance of Community Benefits

The Council’s Administration has a strong focus on delivering community benefits through procurement and further building on the success achieved by the CPU to date in this area. The UK Government’s welfare reform programme and continuing impact of the recession in the Renfrewshire area create a special impetus to develop procurement innovations that can help promote the adoption of the living wage by suppliers, create job opportunities for young people and encourage more local businesses to participate in the Council’s supply chain. The need to maximise benefit from the City Deal and other major development opportunities

While much of the strategic context outline above is challenging, there are also a number of significant new developments emerging within the Renfrewshire area which offer significant opportunities for procurement to be creatively engaged to support their successful implementation and the delivery of wider community benefits. These include:

The ground breaking £1.3bn City Deal programme of infrastructure investment across the Clyde Valley, with Renfrewshire delivering two of the most significant projects with a value of £270m.

The Council’s Paisley town centre regeneration and Heritage strategy

The £220m infrastructure investment at Glasgow Airport

The £250m Braehead area development plan The need to engage positively with the national procurement reform agenda

The Scottish Government continues to promote a national strategy of procurement reform to drive continual improvement in procurement practice across the public sector in Scotland. This is supported by a mix of policy initiatives and legislative changes including the planned introduction of a new national procurement assessment framework, The Procurement Reform (Scotland) Bill and The Social Care (Self-directed Support) (Scotland) Act 2013. In addition to these Scottish legislative changes, public sector procurement also has to take account of the changes contained within the 2014 EU Directive. Renfrewshire Council has developed a strong reputation as a leader of procurement reform within the Local Government sector. The continued drive for reform at a national level with create further opportunities for the Council to continue to innovate and lead in its approach to procurement.

3 Strategic Procurement Review

Given the significant strategic challenges and opportunities outlined above, the CPU has determined that it will be important to conduct a review of its role and operations and identify how it can best support the council deliver on its ambitious change agenda. This review will take place during 2014/15 and be timed to dovetail with the work being undertaken within services to consider new target operating models and ways of working. The CPU will engage with its customer departments, the Council Management Team, Council Administration and other key stakeholders to:


review the current approach to procurement within the Council and lessons learned from the implementation of the previous procurement strategy;

assess the impact of planned service changes on the future contracting needs of the council;

identify how best to provide strategic professional procurement input to discussions on front line service innovation and new approaches to service delivery; and

think creatively as to how best to embed Community Benefits the Council Administrations’ objectives in relation to promoting the living wage, creating job opportunities for young people and local businesses within the procurement strategy

We will draw heavily from the knowledge and expertise of our own staff and ensure that all CPU staff are involved and have the opportunity to contribute their views and ideas through the review process. We will also seek to identify innovative approaches and best practice being adopted by other Councils in Scotland and elsewhere and draw from the learning of others where this would benefit Renfrewshire.

4 Our Tactical Operational Plans for 2014/15

4.1 CPU Staffing

The Council restructured its CPU to centralise all procurement activity. There are now three category areas:

Social Work, Education & Leisure and Renfrewshire Leisure

Development and Housing Services

Finance and Corporate Services, Chief Executives and Community Resources

There is a further team dedicated to Purchase to Pay (P2P), Compliance and Community Benefits. The CPU is made up of mainly permanent staff, with 20% employed on a fixed term basis, which recognises that resource requirement can fluctuate based on demands within each service area and the Council’s focus on benefits to be achieved. The team will concentrate on achieving best value in contract renewals, capital investments and new requirements. Ongoing negotiations and improved contract management with suppliers ensure that our contracts remain best value, we achieve Community Benefits through appropriate contracts and, that we achieve the Council’s objectives with regards to Corporate and Social Responsibility (CSR). The CPU has secured a training budget for the last three years which has allowed investment in training staff and development on an ongoing basis. All permanent staff have been encouraged to obtain the Chartered Institute of Purchasing & Supply (CIPS) Qualifications and approximately 82% now have or are working towards the qualification. Ongoing training is provided in areas such as updates to EU Legislation and Procurement Directives. A Procurement specific competency framework has been created and is used to set Individual Training and Development Plans and contributes to setting Goals and Objects for the team.


4.2 Service Focus

The CPU works closely with the Council’s Service Departments and seeks to tailor operations to suit each Department’s procurement needs. We do this by employing Service focussed Category Managers with specialist sector expertise and embedding procurement staff within services. Category Managers develop service specific procurement strategies and these are provided in Section 6 of this document. We will continue to look for ways of strengthening our engagement with Services throughout the year to support the delivery of their priority outcomes.

4.3 Collaboration and Shared Services

The Council participates in contracts put in place nationally by the Commercial Crown Service, in Scotland by Scotland Excel and Scottish Procurement and locally by actively participating and leading on collaborative contracts. Planned development in this area is mainly ensuring contract management is carried out at a local level to ensure best value.

Local collaboration with neighbouring councils is always considered when a contract strategy is put in place and often implemented. The Council is currently working closely with East Renfrewshire Council with a view to collaborate on ICT services, applications and maintenance and has led on the initial procurement stages and continues to participate in the procurement of the Clyde Valley residual waste solution for five Councils. The Council has worked closely with its Clyde Valley partners in securing the City Deal and will be supporting the procurement of several of the key infrastructure projects within this ground breaking initiative. The Council participates in the roads and transport collaborative working group led by Inverclyde and is in discussion with Glasgow City Council to collaborate, share and participate in more collaborative contracts. The Council is committed to collaborative procurement and actively takes part in many National and Sectoral contracts. We will continue to look for collaborative procurement opportunities where these will support the delivery of benefits for the Council and its communities.

4.4 Procurement strategies and Policies

The Council has standardised its procurement documentation and has a dedicated Procurement Subcommittee to approve all contracts above the EU threshold. In partnership with the Legal Department the Contract Standing Orders (CSO’s) were reviewed during 2013 to reflect the CPU restructure, changes to the law and best practice. The CSO’s will be subject to ongoing review as the procurement landscape changes and in particular when the new EU legislation and directives have been issued during 2014. The Council has implemented a consistent approach to contract and supplier management. A review of the current suppliers managed will be undertaken during 2014 with a view to relevance and appropriateness based on high value, high complexity and/ or high risk contracts. The process will be embedded to drive best value within existing contracts.


In 2013 the new Procurement Sub-committee was formed and sits every four weeks in order to approve contract awards and other procurement activity reports. The Sub-committee was established due to the high volume of contract authorisations required across the Council and to centralise this activity through a consistent and more specialised committee. Over the next year we intend to build closer relationships with Renfrewshire’s Third Sector and Small to Medium Enterprises (SME’s). The CPU are working closely with the Council’s Economic Development Department to identify areas where procurement support is required. We regularly take part in supplier development events to encourage local suppliers, and advertise all contract opportunities above £50K on our website and the Public Contracts Scotland Portal. Contracts between £10k and £50k will be issued to a minimum of six suppliers (where possible) selected from the Public Contracts Scotland portal and administered through this secure etendering system. CPU have committed (where possible) to include 50% of the companies selected with a Renfrewshire post code in this process to support the local agenda. The Council’s Corporate Social Responsibility (CSR) and Sustainable Procurement Policy define our approach to these important areas. Whilst sustainability and CSR are considered in all major procurement activity, there is recognition that further community benefits could be delivered using the Council’s buying power. This is a key priority moving forward. In June 2013 the Procurement Sub-committee approved the CPU’s recommendations to implement a total of 10% evaluation weighting for community benefits (where appropriate) within construction and infrastructure procurements over £250k. The Subcommittee also approved the employment of a Community Benefits and Compliance Manager to manage and monitor the delivery of community benefits. This role will also consider the wider corporate and social responsibility factors including community benefits, the living wage, and sustainability. The Community Benefits and Compliance Manager has been in place since September 2013 and reports directly to the Procurement Manager. The CPU committed to review further areas and spend levels and report back to the Sub-committee with proposals in the form of a Community Benefits Strategy. The Community Benefits Strategy was approved at the Procurement Sub-Committee in June 2014. The CPU has introduced a benefits tracker database showing all contracts to be delivered on a yearly basis. The database records all contracts worked on and is used as a workload planning and allocation tool where reports can be run to identify contracts due to expire allowing advance planning of work load. It also captures any savings achieved with the recurring revenue savings are removed from departmental budgets in the following year. As a result of working with the service departments, in excess of £750k recurring revenue savings were delivered in 2013/14. A target of £500k per annum has been set for 2014/15 and 2015/16. The Council recognises that as an increasing proportion of its addressable procurement spend has been through a rigorous tendering procedure, the opportunities for future revenue savings from re-tendering alone will diminish in the long term. An increasing focus therefore will be given to better contract and supplier management as a route to further ongoing savings. A Savings Working Group was set up to initiate the review of current contracts with 3 team members focused on working with current suppliers to obtain best value from a


number of our existing high value contracts. It is recognised that contracts can be poorly utilised and that there is the potential to achieve cost reductions through a structured process of review and discussion with suppliers. This team will divide their time between negotiating within current contracts and tendering contracts that are identified as good candidates to deliver savings.

4.5 Processes and Systems

The Council has a P2P Strategy and Enablement Plan which aims to ensure all purchasing is carried out using approved systems and processes. Spend matched to an electronic purchase order (PO) has increased to over 90% in the last three years. The Council has implemented its “No PO, No Payment” plan, which has involved agreeing a compliant purchasing approach with all service departments, and communicating to all the Council’s suppliers about the need for purchase orders to ensure prompt payment. The Council uses e-tendering which offers clients and their consultants a simple, secure, standard, efficient and cost effective way to managing tenders online. This is complemented with purchase to pay systems which allow the Council to requisition, order, and pay for goods, services and works. Further improvements implemented in relation to P2P include:

Further rollout of a purchasing card which has improved rebates and management information.

An ICT systems review is being conducted with results and recommendations to be deployed into a revised Systems Strategy.

A review and improvement plan of the Council’s supplier management processes is underway in liaison with the Business Support Service.

PECOS authorisation levels have been reviewed and embedded in the system across the Council.

The Scottish Government is working towards implementation of a Contract Management module to compliment the current Public Contracts Scotland – Tender system. This is intended to improve contract and supplier management and business. Training and input to the functionality of the new system will be undertaken by CPU staff when it is available for implementation.


5 Procurement Action Plan

A range of activities have been identified which will allow us to achieve the objectives and outcomes set out in the previous section. These are divided into the following three areas, more detail on which can be found in the following tables: a) Strategy, Policy and Advice b) People and Organisation c) Processes & Systems

a) Strategy, Policy and Advice In light of the significant changes being taken forward by the “Better Future, Better Council” strategic change programme, the CPU will be work with Council Departments during the year to undertake a strategic review of procurement within the Council and identify how it can add most value to support delivery of the Council’s strategic priorities. We will continue to CPU act as the procurement centre of excellence for the Council and develops clear procurement policies, providing guidelines to employees on how to purchase goods, services and works. We will also continue to ensure compliance with relevant legislation and integration with Council policies and processes.

Current Situation Future Priorities Target Date

Procurement Strategy 2015/17 A tactical strategy 2014/15 exists with sections for each Council Service area.

The CPU will work with the Council and Service Departments to build a deep understanding of the strategic challenges and opportunities and to identify how procurement can best support the delivery of Council and Service Department strategic priorities. The conclusions and agreed changes in the Council’s approach to procurement resulting from this review process will form the basis of a new Procurement Strategy for 2015/17.

New Strategy approved by Mar 2015

Individual contract strategies being prepared for spend above £50k.

All spend above £50k has a contract strategy agreed prior to advertising. A quotation request form is completed and authorised for all spends between £10k - £50k.

Ongoing

Community Benefits With a view to increasing community benefits achieved through contracts tendered by the CPU the Procurement Subcommittee approved the CPU’s recommendations to where possible implement a total of 10% evaluation weighting for community benefits within construction and infrastructure procurements over £250k.

CPU committed to review further other areas and spend levels and report back to the subcommittee with proposals. The subcommittee also approved the employment of resources to monitor and manage the delivery of community benefits. This role also considers the wider corporate and social responsibility factors including community benefits, the living wage, and sustainability. A community benefits and compliance manager took up post in Sept 2013. Included in the objectives of their remit was to set up a forum, to incorporate members from service departments and representatives from the supply base. This is underway and a Community Benefits strategy has

Ongoing

June 2014


Local employment The Living wage

been approved and communicated in June 2014. The CPU has employed six Interns during 2013 and early 2014 living in the Renfrewshire area. Two of which now have permanent positions within Renfrewshire’s CPU. The Council are committed to encouraging payment of the Living Wage to all employees working for or servicing the Council. This is promoted through all tender exercises conducted by the CPU.

Ongoing

Standing Orders – Contract Standing Orders are revised to give all procurement authorisation to the Head of Procurement and Business Support (HoPBS)

The Council’s Contract Standing Orders were updated for the 3rd time during 2013 and a register of required revisions has been set up to ensure that any required amendments to the next revision of the Contract Standing Orders are recorded. Revisions may be required in line with new EU legislation and Directives when fully implemented.

CSOs and Register to be in place

August 2014.

Document Standardisation

Regular meetings are held with the legal team and documentation is kept up to date according to legislation and lessons learned.

Ongoing

Terms & Conditions Terms can vary by department

CPU staff meet regularly with Legal Services to agree and make changes to terms and conditions of formal contractual documents.

Dec 2014

Supplier Management Supplier management is carried out for the top high value and/or high risk suppliers in each service department. CPU is working on an electronic contract register in line with the benefits tracking database.

Continuation of use of Supplier Scorecards to monitor the supplier performance along with the service department. A review of the supply base is underway early 2014 to consider the contracts currently being managed from a high value, high complexity and/or high risk perspective. The aim is to establish if CPU is managing the correct contracts now or should focus change or more be added for review. The CPU has a Supplier Management strategy which will be reviewed in line with new practices. Electronic contract register to be implemented.

Dec 2014 Dec 2014 Sept 2014

Service Delivery

The Service Departments have an ongoing objective to review delivery models to save money across the Council. Procurement will support this process through attendance and input to project groups, tendering and supporting alternative delivery models.

Ongoing


Sustainability Sustainability is given consideration on all relevant contracts. There is a Sustainability policy and action plan in place.

Sustainability policy and action plan to be embedded. Sustainability is built into the procurement process. Implementation of the Sustainability Policy will ensure consideration at contract strategy stage. Category Managers have been tasked to identify a minimum of 3 contracts per annum where they believe they can incorporate considerable sustainability measures.

Complete

CSR Policy The Council has a Corporate Sustainability Policy (CSR), with recommendations to incorporate CSR in all strategies; where relevant.

CSR and Sustainability rolled out and included as a consideration at a contract strategy stage; where relevant. Emphasis on energy and carbon management Small Medium Enterprises (SME’s), equality, ethics etc, in line with the CSR policy. Introduction and implementation of the Renfrewshire 10 point plan which includes initiatives such as:

Ongoing Supplier events for SME’s to cover areas of concern and help educate on how to become a supplier to the Council.

50% of suppliers selected in the quick quote process will be local (where possible).

Encourage main contractors to engage with local suppliers and SME’s.

Ongoing

Fairly traded products This includes the inclusion of use of fairly traded products where applicable

All new contracts consider the use of fairly traded products.

Ongoing


b) People and Organisation

Effective implementation of the strategy is dependent on having staff with the right skills and experience in place with close working relationships with CPUs customer service departments

Current Situation Priorities Target Date

Training The CPU have secured a training budget year over the last 3 years to ensure staff are professionally trained and all permanent staff are encouraged to achieve certification with the Chartered Institute of Purchasing and Supply (CIPS).

All permanent CPU personnel are CIPS qualified or working towards qualification. During the period 2014/15 it is intended to continue providing professional training for CPU staff. CPU focuses on training staff within their respective service departments and providing training and information to suppliers and third sector partners. An ilearn EU fundamentals course is offered to service department staff and to date since this was launched 820 people have passed the online course. All CPU staff have undertaken training in the latest updates to the Procurement reform bill and EU legislation.

Ongoing

Engagement with Services The CPU has developed effective working relationships with service departments through the introduction of service focussed Category Managers and embedded procurement teams.

The Strategic Procurement Review will provide a significant opportunity to strengthen our engagement with our customers and understand their long term objectives, but we will also further strengthen the ongoing operational engagement between the CPU and Service Department management teams to ensure CPU fully understands service priorities and challenges and is best able to highlight areas where procurement innovation can help support the delivery of Service Department objectives in the short to medium term .

Ongoing

Compliance New EU Procurement Directive came into force in April 2014 The New Regulations are expected to be in place by the end of 2015.

Ensure all updates are implemented where not already in place by the completion date e.g.

Agree revisions required to the procurement strategy on an annual basis.

Continue to promote e-tendering for all tenders.

Continue to consider lot structure within tenders to ensure quality and opportunity for SMEs.

Implement new rules for Part B services.

Increase market research at strategy stage.

Consider how to incorporate new rules within tendering and evaluation.

Dec 2015


Procurement Reform Bill 2014

Consider all actions and implement when in force and guidance is issued.

TBC

CPU carries out all procurement activity above £10k, thus ensuring compliance. The CPU team work with service departments and support contract management to ensure full compliance to the contract after award.

Standardise the end to end procurement processes using guidance and training. Education of all service staff and implementation of user guides to ensure there is an awareness of how to use contracts effectively, efficiently and compliantly in the following areas:

Compliance to contract specification and terms,

Compliance to Purchase to Pay (P2P),

Embed contract management processes.

Ongoing

Collaboration The Council makes use of many of the contracts put in place by the centres of expertise. These are mainly Scotland Excel, Scottish Government and the Crown Commercial Service (CCS). This is considered as part of the contract strategy process. The Council participates in the Scottish Future Trust (SFT) Hub initiative.

There is a requirement to ensure the best possible pricing is being obtained from frameworks, and that rationalisation and mini-competition exercises are carried out where appropriate. Communication, collaboration and sharing of best practice with other Local Authorities is also an ongoing priority. In particular regular meetings are held with Glasgow, East Renfrewshire and Inverclyde Councils. Various opportunities are being considered including ICT applications and maintenance and roads and transport contracts. The CPU will work to identify and maximise the collaborative procurement opportunities that arise from the Renfrewshire and East Renfrewshire ICT collaboration programme.

Bette

Ongoing


c) Process & Systems, P2P, Benefits Tracking, E-Procurement This element of the strategy is essential if the Council is to achieve the efficiencies identified. If we do not have detailed processes and systems, which are adhered to, savings achieved through the tender process will not materialise.

Current Situation Priorities Target Date

Purchase to Pay (P2P) 90% plus of the Council’s invoices match to a purchase order. The CPU are working with Service Departments and Suppliers to increase this percentage as orders place with no purchase order allows for suppliers to be paid without spend being properly authorised.

To ensure all purchasing is transparent and in line with the Council Financial Codes, the Purchase to Pay team has introduced a No Purchase Order No Payment Process. It is anticipated that matched invoice payments should remain at 90% plus whilst the process is further embedded. Aiming for a 98% to 100% match rate by March 2015.

Ongoing

March 2015

Purchase Cards (PCard) The Council uses a PCard (mastercard); this process was fully functional in Apr 2012 and there are 400+ cardholders covering all service departments.

The PCard system implemented provides:

more visibility of spend,

greater reporting procedures,

faster payment for suppliers 3-4 days.

a rebate on all spend going through the card which increases the rebate,

more use of Pcards instead of non-matched payments

Ongoing

Vendor Management There are numerous systems, and numerous ways to add a supplier to the system.

Currently within Renfrewshire Council, there are six unique ordering systems. A review of these systems is underway to identify areas where the purchase to pay process can be improved and management information obtained from these systems. Further investigations are underway by committed resources from ICT to finding a single route to collate management information regarding orders and payments to suppliers.

June 2014

E-Procurement eTendering – over £50k spend The Council has electronic tendering technology which is used for all procurement requirements. The Scottish Government supply an etender system, which the council is utilising. All procurement requirements are carried out in accordance with the Councils CSOs

For over £50,000 all contract notices are published through Public Contracts Scotland portal, with all tenders processed through the Public Contract Scotland etender system. This includes mini-competitions and e-auctions.

ongoing


Under £50k spend All Council spend above the value of £10,000 is to be processed through the Scottish Government electronic tendering portals. For spend between £10,000 and £49,999.99, all spend is placed through the public contract Scotland Quick Quote facility. CPU have published an “under £50k guide to procurement”, for use by the service departments.

Continual compliance to Council CSOs, which includes the under £50k guidance. Explore the use of Public Contracts Scotland – Tender for quick quotes when available.

Ongoing

e-Auctions are a simple, transparent procurement method where suppliers compete online. E-auctions are considered at contract strategy stage for some contracts, and employed where there are tangible benefits in doing so. There is recognition that e-tendering is not appropriate for all commodities.

E-auctions should be considered at contract strategy stage. Currently e-auctions are frequently used for ICT contracts, however consideration should be given to appropriateness and benefits that may be achieved if used to tender other contracts.

Ongoing

2014

Benefits Tracking (BT) Database Benefits tracking records all contracts with planned to confirmed savings achieved after award. The BT displays the category team’s workplan for the year’s procurement activity, which is agreed with the service department.

The Benefits tracker Database includes all tenders within the business area, savings planned through to achieved. ICT have been working with CPU to implement the new database to track and record all benefits. Initial stages of the new tracking system have been implemented. Further development is necessary but CPU has moved to use the new system. CPU intends to develop the database to include awarded supplier thus creating an electronic contracts register. This will be used to highlight contract renewal and be a search engine to identify existing contracts.

Oct 2014


6. Procurement Strategy by function

6.1 Community Resources

6.1.1 Scope / Key Spend Areas An analysis of the existing spend profile within Community Resources has identified a number of priority areas of focus. These have been captured within the FY14/15 benefits tracker but summary details have been provided within the table below:

Key Spends Anticipated Spend Value

FY1/15

Roads

Carriageway and Footway Maintenance, Repairs and Improvements

£3.52M

Roadstone and other quarry materials £3.3M

Drainage and Flooding, including capital scheme for North Renfrew Flood Prevention

£3.5M

Street Lighting Maintenance, Repairs and Improvements, including Festive Lighting

£2.5M

Traffic Signals Maintenance, Repairs and Improvements and Traffic Management Works

£950K

Road Related Structures Maintenance, Repairs and Improvements

£950K

Roadside Advertising TBC (concessions contracts –

income generation)

Environmental

Vehicles, Plant maintenance & Spares £2.5M

Waste £2.5M

Utilities & Fuel £2.3M

CCTV (Renfrewshire Wide) £650K

Cleaning Equipment, Services & Supplies £446K

Uniforms £250K

Fruit and Veg £290K

Traffic Management £120K

Textiles Concessions Contract TBC – income generation

6.1.2 High Level Strategy The embedded CPU team supports Community Resources and have agreed common objectives to maximise the benefits of procurement to improve service delivery and value. CPU will continue to work with the service to develop a forward plan of procurement activity which takes cognisance of the lessons learned and opportunities arising from first generation contracts / framework agreements established. A summary of key priorities is given below.

Undertaking a service wide review of recurring contracts to ensure robust market testing informs decisions to renew these contracts and provide a detailed plan of contracts for renewal each year. The CPU will continue to work with the Service to prioritise their procurement requirements, one-off and recurring, in line with budget and to ensure compliance with EU regulations and best practice. Procurement timescales are often driven by operational requirements rather than the time it takes to carry out an effective end to end procurement process. Relationships between


CPU and the Community Resources Senior Management Team will be utilised to ensure early engagement with procuring officers to ensure sufficient time for the procurement process is included within operational programmes. This approach will ensure the most effective procurement approach is adopted and value for money is achieved.

The service utilises several collaborative contract arrangements for a variety of commodities (e.g. groceries, frozen food, catering sundries, IT equipment, street lighting supplies and road maintenance materials). The CPU will review existing national and collaborative contracts currently utilised to ensure these still represent value for money. Where relevant, the CPU will work with the service to ensure that opportunities through collaborative arrangements are maximised and will investigate additional collaborative opportunities with other neighbouring authorities/ public sector bodies for commodities.

Focus on collaborative and shared service opportunities with other public sector organisations, in particular Glasgow City, Inverclyde and East Renfrewshire Councils.

Contribute to the Scottish Governments sustainability targets by signing to the Halving Waste to Landfill campaign.

Continue to maximise benefits and savings and rationalise the supply base through aggregation of spend.

Ensure community benefits and sustainability is considered within all contract strategies, ensuring compliance with the Council’s Community Benefits Strategy. This approach should increase the number of community benefit targets secured, in particular for Services contracts which did not target Community Benefits previously. A review of existing contracts with key suppliers will be undertaken to identify opportunities to secure additional community benefits where possible.

Continue to progress the recommendations of The Arbuthnott Report in relation to waste for the Clyde Valley area, to collaboratively contract for a treatment and disposal of residual waste solution.

The consideration of whole life costs is conducted at strategy development stage and where possible, the commercial evaluation of bids will focus on whole life costs rather than lowest price.

There are some synergies in the contractual arrangements being put in place within Community Resources and Development & Housing Services such as landscaping works and professional technical services. The CPU will strive to achieve efficiency savings and potential aggregation savings by utilising a common supply chain in these areas.

To enable CPU team and the service department to continue the integrated working style and to ensure that the optimum working relationships are maintained, a roles and responsibilities document has been included as an appendix to this strategy; this document clearly outlines the roles and responsibilities of the CPU team, the service department and all other departments who are involved in the overall procurement process.


6.1.3 Structural and cultural change Procurement activity within Community Resources has been centralised under the Head of Procurement and Business Support since August 2010. As such, the structure of the team and activity within this area is well established. The CPU team members previously supporting the former “Roads” and “Environmental Services” have amalgamated and continue to deliver for the combined Community Resources service. The structure of the embedded CPU team is reviewed on a regular basis to ensure it meets the service demands for Community Resources. A planned programme of training is in place for CPU officers to ensure the team have the necessary skills and knowledge for the role. Training is extended out to Community Resources officers where appropriate. There is senior management support of the embedded procurement function and this is evidenced through CPU representation at the meetings of the Community Resources Senior Management Team and regular meetings with Director of Community Resources, Heads of Services and senior officers. The integration of the CPU and Community Resources and established regular communication enables joint monitoring of progress of planned activities and achievement to date of the agreed programme by senior management. The CPU management team will always aim to ensure that the priority of activities is agreed with Community Resources at scheduled procurement update meetings, which will be held at regular intervals and progress will be discussed, monitored and ultimately agreed against targets set. The CPU will work with the P2P team and the Community Resources to continue to improve the use of the Council’s PECOS system and identify further efficiencies in the payment process in terms of catalogues, CPC’s and statement billing.

6.1.4 Contract and supplier management

Supplier relationship management is a comprehensive approach to managing the Council’s interactions with the organisations that supply the goods, works and services it uses. The goal of supplier relationship management (SRM) is to streamline and make more effective the processes and contracts between the Council and its suppliers. The key actions required are:

progress with the agreed ownership of the contract and supplier management process;

deliver the standardised contract and supplier management processes with key suppliers;

identify and implement efficiencies within existing contracts; and

implement and monitor achievement of community benefits.

A review of the Contract and Supplier Management Strategy is being undertaken taking cognisance of the suppliers currently being managed. Following this review, CPU will apply pareto analysis to ensure the correct suppliers, representative of the majority of spend for Community Resources, are managed. On this basis, the frequency of some suppliers currently managed by CPU will reduce where no issues have previously been identified.


Roads contracts have adopted a standard form of contract (NEC3) which promotes partnership working with contractors rather than traditional adversarial relations. Through this approach, issues are flagged and addressed as they arise; risks are identified, costed and allocated to the parties best equipped to manage that risk, from the outset. Work and training is required for both CPU officers and technical officers to ensure this is implemented fully in contract documentation and contract management. The opportunity to rationalise and deliver savings through the 2nd and 3rd tier supply chains will also be targeted and contractors will be measured on their approach to their 2nd and 3rd tier supply chains, e.g. ability to pay subcontractors quickly. The success of the overall partnering approach will be closely monitored and together with any lessons learned, will be applied to future contracts and framework agreements. Consideration is given during the development of contract strategies to maximise opportunities for SMEs and third sector organisations whilst exploiting opportunities that may arise from aggregation of spend. This approach will include consideration of proportionality in terms of minimum financial criteria, indemnity levels and the requirement for bonds etc. Consideration is also given to lotting contracts and framework agreements based on value band, the encouragement of consortium bids and reserved contracts. As part of the SME engagement process, the views / input of SME’s are sought during the market research phase of strategy development. Further, it is intended that Supplier Awareness events will be held at the point of tendering any new, high value or high risk contracts and framework agreements. When tendering any high value arrangements, tenderers are asked to submit proposals on supply chain development including how they will engage with and create opportunities for SMEs.

6.1.5 Short term strategy

The short term strategy for Community Resources is:

implementation of key strategic framework agreements and ensuring core spend goes through these;

ensure all spend is compliant;

continue to work with service to prioritise work plan to enable effective resource planning;

review, develop and implement the supplier management process for all key contracts and suppliers as outline in section 4.1.4 above;

negotiate additional savings and community benefits from existing contracts with key suppliers;

continue to create opportunities for SME’s whilst exploiting opportunities available through aggregation of spend;

continue to provide training and awareness sessions for those service staff actively involved in the tendering process;

put work plan in place to ensure savings plans are being resourced to deliver savings targets for contract renewals and negotiations for existing contracts;


review and develop an approach which ensures value for money for the renewal and maintenance of vehicles;

develop a collaborative approach for delivery of the roads maintenance programme, with Inverclyde Council recognising lessons learned from the Council’s existing framework agreements and from neighbouring local authorities’ recent experiences

implementation of a priorities tracker work plan tool to ensure best value is achieved and sufficient resource is available to meet operational requirements;

implementation of a contract renewal plan to feed into work plan for future years;

utilisation of Public Contracts Scotland – Tenders e-tender system, where appropriate, in accordance with the Council’s Contract Standing Orders. This will in turn support the development of a contracts register; and

ensure that the Council supports CAT A and B contracts from both a technical and commercial perspective to maximise the benefits.

6.1.6 Long term Strategy The long term strategy for Community Resources is:

ensure that performance and opportunities across contracted spend is optimised, driving value from existing contractual arrangements;

develop greater engagement with our supply based and partners with the aim of promoting best practice, continuous improvement, delivering innovation, increased collaborative working and consideration of shared service opportunities;

greater engagement with potential partnerships with consideration to more collaborative working; shared services and outsourcing opportunities; and

utilisation of the work plan and service wide review to ensure contract delivery timescales support best value.


6.2 Development & Housing Services

6.2.1 Scope/Key Spend Areas

Key Development and Housing Services (D&HS) areas include:

Scottish Housing Quality Standard (SHQS) – the requirement for social landlords to ensure their property portfolio meets the defined minimum quality standard by 2015.

Major capital works include - School Estate Management Plan (SEMP) Project, new builds, extensions and refurbishments.

Intermediate capital works – demolition, extensions and refurbishments.

Minor capital works – trades, environmental, securities, upgrades and refurbishments.

Professional technical services and agency staff.

Facilities; asset management; statutory compliance; energy and carbon management.

Trades materials stock items and direct purchases.

An analysis of the existing spend profile within D&HS together with a review of confirmed budgets and contracts in place, has identified a number of priority areas of focus. These have been captured within FY13/14 benefits tracking sheets for each service but summary details have been provided in the table below:

Key Spends Approximate Spend Level

Building Services £3,500,000.00

Housing Services £50,000,000.00

Planning; Economic Development; Regeneration & Events £80,000,000.00

Property Services £20,000,000.00

Education (SEMP project) £32,500,000.00

6.2.2 High Level Strategy

The embedded CPU team have integrated well within the D&HS function where common goals and objectives have been agreed and an integrated team approach developed with agreed processes and procedures for identifying the need through to managing the resulting contracts. CPU will continue to work with the service to develop a forward plan of procurement activity which takes cognisance of the lessons learned and opportunities arising from first generation contracts / framework agreements established and to maximise the benefits of better procurement practices to improve both performance and value. Priorities include:

to progress and support the project activity, in line with the councils SEMP, to offer procurement services, support and advice;

to continue to progress the Town Centre Regeneration program which has superseded the Building Better Communities (BBC) programme and to support activity relating to the Renfrewshire Local Plan and Local Development Plan;

http://www.renfrewshire.gov.uk/ilwwcm/publishing.nsf/Content/pt-cl-Renfrewshire-Local-Plan

http://www.renfrewshire.gov.uk/ilwwcm/publishing.nsf/Content/pt-as-NewDevelopmentPlan


to rationalise the number of framework agreements covering minor works; repairs & maintenance in order to create efficiencies in material supply, administration and management of contracts including integration with CAMIS (the services asset management tool). In doing so, CPU will be supporting the Corporate Landlord’s shift in emphasis from a reactive to a planned maintenance regime;

to develop a new approach to the delivery of medium valued works which takes cognisance of the success and lessons learned from the BBC framework agreement which rationalised the supply chain and established a partnership approach to the delivery of major works and in doing so, has delivered a programme on time, budget and to an exacting standard;

to continue to progress the delivery of the SHQS and work with the service to develop a forward plan for delivery of post SHQS activity;

to contribute towards the Council's targets in carbon reduction and energy efficiencies and commitment to reducing fuel poverty through developing procurement strategies that takes advantage of available funding and promote energy efficiency measures;

to develop greater engagement with our supply base and potential partners with the aim of: promoting best practice; continuous improvement; delivering innovation; increased collaborative working and consideration of shared service opportunities; and

to ensure that in all contract activity, consideration is given to opportunities to make Renfrewshire an attractive place to live in, work in; invest in and visit; creating a diverse and competitive supplier base and supporting people to find work and to develop their full potential.

To enable the CPU team and the service department to continue the integrated working

style and to ensure that the optimum working relationships are maintained, a roles and

responsibilities document has been drawn up to clearly set out the roles and

responsibilities of the CPU team, the service department and other stakeholders involved

in the overall procurement process. This document is available through the procurement

toolkit on the Councils intranet.

6.2.3 Structural and cultural change

Procurement activity within D&HS has been centralised under the CPU since August 2010. As such, the structure of the team and activity within this area is well established. Culturally, an integrated team approach has begun to evolve meaning mutual expectations, objectives and constraints are recognised and constructive working relationships have been established. Practices which promote the integrated team approach such as early engagement with the CPU team and regular CPU reporting on activity will be continued.

There is senior management support of the embedded procurement function and this is evidenced through representation at the meetings of the Development and Housing Services Senior Management Team and regular meetings with Heads of Services and senior officers. The structure of the embedded CPU team is reviewed regularly to ensure that it is sufficient to meet the demands of the service. A planned programme of training is in


place to ensure that the embedded CPU team have the necessary skills and knowledge necessary for the role. Training is extended out to the D&HS officers where appropriate. The CPU management team will always aim to ensure that the priority of activity is agreed with the service at scheduled procurement update meetings, these update meetings will be held at regular intervals (at least every six weeks) and progress will be discussed, monitored and ultimately agreed against targets set.


The current SHQS and BBC frameworks agreements have rationalised the supply base and introduced terms and conditions aimed at delivering a partnering approach to contract management. Through this approach, the focus is on the client; issues are flagged and addressed as they arise; risks are identified, costed and allocated to the parties best equipped to manage that risk from the outset; performance is incentivised (e.g. award of future work under the framework agreement will be dependent on performance) and rewards are shared. It is intended that this model or a variation of it, will be taken forward when procuring major schemes, medium values works and where practical and appropriate, minor works, supplies and services.

Under partnering, the opportunity to rationalise and deliver savings through the 2nd and 3rd tier supply chains will also be targeted. In the same vein, contractors will be measured on their approach to their 2nd and 3rd tier supply chains, e.g. ability to pay subcontractors quickly. The success of the overall partnering approach will be closely monitored and together with any lessons learned, will be applied to future contracts and framework agreements. Contracts are managed operationally by D&HS. Strategic contract and supplier management is a joint initiative between CPU and D&HS, with focus currently on high value / high risks contracts. Through developing a rationalised supply chain, it will be feasible to extend Strategic contract and supplier management across a greater proportion of D&HS spend thus ensuring that performance and opportunities across our contracted spend is optimised. With this in mind, CPU have conducted an exercise which will ensure that contract and supplier management will be undertaken on all measured term contracts. In addition contract and supplier management will have a major focus in all high risk and all strategic contracts moving forward. In rationalising the supply chain, consideration will continue to be given to methods to ensure that SMEs are encouraged to compete for Council opportunities. At strategy development stage, consideration will be given to proportionality in terms of minimum financial criteria, indemnity levels and the requirement for bonds etc. Consideration is also given to lotting contracts and framework agreements based on value band and the encouragement of consortium bids.

As part of the SME engagement process, the views / input of SME’s are sought during the market research phase of strategy development. Further, it is intended that Supplier Awareness events will be held at the point of tendering any new, high value, framework agreements. Any contract opportunity in excess of £250K (where proportionality makes it feasible) will seek contractual proposals from bidders on the additional community benefits they will deliver if successful. Emphasis will be given to proposals which seek to deliver employment; training; target use of local (Renfrewshire) sub-contractors and support community based initiatives. These contractual proposals will be monitored and


measured through the contract and supplier management process with the successful contractors / suppliers.

6.2.5 Short term strategy The short term strategy for Development and Housing Services is:

ensure that the SHQS; Town Centre Regeneration and Energy and Asset Management programmes are fully supported and managed to deliver the planned benefits;

develop the strategy for the SEMP project for delivering major works;

rationalise the supply base for minor and intermediate works under a single arrangement which takes cognisance of the success and lessons learned from the BBC framework agreement;

continue to work with service to prioritise work plan to enable effective resource planning; and

ensure compliance with the Councils Standing order relating to contracts, EU regulations and the Procurement Directives.

6.2.6 Long term strategy The long term strategy for Development and Housing Services is:

provide procurement support to programmes related to delivery of the Renfrewshire Local Plan and Local Development Plan;

rationalise the supply base for facilities management incorporating statutory compliance which takes cognisance of the success and lessons learned from the BBC framework agreement;

through a rationalised supply chain, ensure that performance and opportunities across contracted spend is optimised;

develop greater engagement with our supply base and potential partners with the aim of promoting best practice; continuous improvement; delivering innovation; increased collaborative working and consideration of shared service opportunities; and

ensure the new Procurement directives and EU legislation is followed and implemented within the department when applicable.



http://www.renfrewshire.gov.uk/ilwwcm/publishing.nsf/Content/pt-as-NewDevelopmentPlan


6.3 Education & Leisure

6.3.1 Scope / Key Spend Areas An analysis of the existing spends profile within Education & Leisure together with a review of confirmed budgets and contracts in place has identified a number of priority areas of focus.

Key Spends Annual Spend Value

(approx)

Education Day Placements £2.2 million

Nursery Provision £1.3 million

Art & Leisure Services £2.1 million

Education and Leisure have a significant amount of non-influenceable expenditure that includes charges to their budget from contracts that are negotiated and managed by other Service Depts e.g. Development & Housing Support, Community Resources. Although the vast proportion of spend is through devolved budgets, there is a requirement for facilities management to be provided via the Council’s Development & Housing Support service. Services are also provided through partnership arrangements with external bodies including NHS. There is a requirement for standard goods and services, including educational equipment to be procured and these are mainly through collaborative contract arrangements arranged by the Scottish Government or Scotland Excel. Other Education & Leisure specific contracts will be developed by CPU either as collaborations with other local authorities to secure the benefits which economies of scale provide or they will be tendered appropriately in order to receive best value for money. Services are also delivered through external bodies

6.3.2 High Level Strategy

The embedded CPU team will work with the Service to:

assist during the period of transition for the integration of Education and Children’s Social Care Services;

undertake a full spend analysis across Education and Leisure Services to ensure all spend is captured under existing contract arrangements;

assess the areas of spend commissioned through national contracts or partnership arrangements to ensure they continue to provide best value;

where relevant promote the use of core products and services through national contracts or partnership arrangements, ensuring implementation plans/strategies exist and are adhered to. Such strategies will identify targets savings to be achieved through the adopted approach;

encourage a strategy to commission services that are needs led in line with current resources ensuring that services are not commissioned on the basis of traditional or historic requirements but on a business need basis;

work closely with Education and Business Support Colleagues to continue to develop the communication process to ensure that updates to information on PECOS, new contracts and performance are communicated to the educational users;


ensure all spend is compliant with Standing Orders Relating to Contracts and financial regulations;

continue to provide support and assistance to monitor contract compliance within the service area, both financially and in terms of service delivery;

continue to explore collaborative opportunities between departments, Councils and other public bodies (eg Health) to increase buying power to achieve best value and develop capacity within the market;

community benefits/CSR – Ensure compliance with the community benefits strategy. Through supplier and contract management, explore opportunities for community benefits within existing contracts and target specific community benefits through new contracts. Promote the work of Economic Development through tendering process and supplier management process;

reassess the supplier management strategy to ensure that efforts and resources are targeting high value, risk and impact areas;

continue to promote and ensure compliance with framework agreements to ensure that all call off services are bound by the general terms and conditions of the agreement;

ensure that staff involved in the procurement of care and support services are in receipt of appropriate training required to develop and maintain their knowledge and skills; and

identify groupings of officers and target procurement awareness training relevant to their function on an annual basis for those individuals who purchase services, goods and equipment on behalf of the Council.

6.3.3 Structural and cultural change The CPU will continue to work with the Service to prioritise their procurement requirements in line with budget and service redesign plans and to ensure compliance with EU Procurement Directives. The Procurement Reform work stream will significantly influence and inform measures that should be adopted in order to reduce risk, deliver best value and maximise potential for procurement savings and efficiencies. A summary of key measures is given below.

The delivery of targeted training for groups of officers from CPU, Business Support, Education and Leisure Series directly involved in procurement. These sessions will be tailored to the requirements of each group. This training will be conducted annually.

Introduction of the Procurement Reform Bill and new European Legislation may result in additional training requirements for all aforementioned officers.

Procurement timescales are often driven by operational requirements rather than the time it takes to carry out an effective end to end procurement process. CPU utilise the relationships formed with Senior Management of Education and Leisure Services to ensure that all future projects are identified at development stage. This will allow procurement requirements to be initiated at the earliest possible point e.g. as budgets are discussed / recommendations made.

It is important that the more predictable procurement requirements are highlighted early to CPU for example when budgets are allocated and recommendations are


made. There is recognition that funding and other restrictions do not always allow proactive procurement.


The CPU has a contract management plan to deliver a robust, consistent and effective supplier relationship management (SRM) approach with key organisations that supply the goods, works and services it uses. The focus of SRM is to develop two-way, mutually beneficial relationships with strategic supply partners to reduce risk and deliver greater levels of innovation and competitive advantage than could be achieved by operating independently or through a traditional, transactional purchasing arrangement. CPU will review the existing plan on an ongoing basis in conjunction with spend analysis to ensure resources are focussed on suppliers who provide high value, risk or impact services. These suppliers will be included within a revised contract and supplier management strategy. In line with this revised strategy, CPU will seek to ensure that best value is continued to be delivered under existing arrangements and that any off contract/maverick spend is captured and remedied.

6.3.5 Short term strategy The short term strategy for Education and Leisure Services is:

undertake a full spend review and identify off contract spend;

ensure all spend is compliant with Standing Orders relating to Contracts;

continue to develop work plan to prioritise workload and ensure savings targets are being delivered;

asses current arrangements to ensure best value is still provided;

implement appropriate supplier management meetings with key suppliers;

continue to improve communication of contracts by developing and promoting implementation plan and user guides;

improve the input into collaborative contracts via full utilisation of the Commodity Strategy document at the earliest point;

deliver procurement training to staff actively involved in procurement activity; and

work with colleagues in Business Support and Education and Leisure services to improve P2P stats and processes.

6.3.6 Long term Strategy The long term strategy for Education and Leisure Services is:

creation of a contract renewal plan to feed into work plan;

develop a supplier and contract management strategy;

analyse contractual arrangements with other public sector bodies;

utilise the work plan to ensure contract delivery timescales support best value;

maximise use of collaborative contracts to deliver efficiencies in revenue and process;


maximise the P2P processes to deliver compliance and high level of matched invoices; and

monitor Pcard activity to ensure compliance with Council policy.


6.4 Social Work 6.4.1 Scope / Key Spend Areas

An analysis of the existing spend profile within Social Work together with a review of confirmed budgets and contracts in place, has identified a number of priority areas of focus. These have been captured within the benefits tracking database but summary details have been provided in the table below:

Key Spends Spend Value

13/14 Community Care (Adults & Elderly Service Users) Care Homes (including respite) £23.8m Adult Supported Living £20.8m

Care at Home £3m

Housing Support Services £542k

Mental Health Services £433k

Children’s Services Residential Accommodation including Residential Schools £3.1m External Fostering £5.4m Respite Services £679k

Housing Support Services £294k

There is a requirement for standard goods and services to be procured through collaborative contract arrangements arranged by the Scottish Government or Scotland Excel. Other Social Work specific contracts will be developed either as collaborations with other local authorities to secure the benefits which economies of scale provide or they will be tendered appropriately in order to receive best value for money.

6.4.2 High Level Strategy The Council supports the guiding principles of the Procurement of care and support services jointly published by the Scottish Government and COSLA. It reflects the complexity of procuring care and support services and the challenges associated with upholding values, delivering high standards and responding to individuals’ needs whilst complying with procurement rules and securing best value. It applies to the procurement of:

social care and support services for children and families, younger people and adults, including older people;

care at home services

social care and support services commissioned by criminal justice organisations.

It does not apply where services are provided in-house, delivered through shared services arrangements between public bodies or secured through grant funding. The following Guiding Principles reflect the complexity of procuring care and support services and the challenges associated with upholding values, delivering high standards and responding to individuals’ needs whilst complying with procurement rules and securing best value. Taken together, the principles should govern all procurement activity.

http://www.jitscotland.org.uk/action-areas/commissioning/procurement/

http://www.jitscotland.org.uk/action-areas/commissioning/procurement/


Outcomes – achieve positive outcomes for service users and carers through the delivery of good quality, flexible and responsive services which meet individuals’ needs and respect their rights.

Strategic commissioning – place the procurement of services within the wider context of strategic commissioning, reflecting strategic and service reviews.

Personalisation – secure personalised services which provide independence, choice and control for service users.

Involvement – involve service users and carers as active partners in defining their needs and the outcomes they require and in the design of services.

National Care Standards – ensure services meet the National Care Standards and adhere to the principles underpinning the Standards (dignity, privacy, choice, safety, realising potential and equality and diversity).

Codes of Practice (Scottish Social Services Council) – ensure staff involved in procuring services promote the interests and independence of service users and carers, protect their rights and safety and gain their trust and confidence; ensure employers provide training and development opportunities which enable staff involved in procuring services to strengthen and develop their skills and knowledge.

Best value – secure best value by balancing quality and cost and having regard to efficiency, effectiveness, economy, equal opportunities and sustainable development.

Benefit and risk – base strategic decisions concerning the procurement of services on benefit and risk analysis of the potential effects on: the safety and well-being of service users and carers; the quality and cost of services; and partnership working with service providers and workforce issues.

Procurement rules – ensure procurement exercises comply with the principles deriving from the Treaty on the Functioning of the European Union (equal treatment, non-discrimination and transparency), the requirements of the Public Contracts (Scotland) Regulations 2006, statutory guidance issued under section 52 of the Local Government in Scotland Act 2003 and Scottish public procurement policy.

Leadership – ensure senior managers give a high priority to the procurement of care and support services, setting clear strategic goals and managing performance.

Workforce – ensure the procurement of services takes account of the importance of a skilled and competent workforce in delivering positive outcomes for service users.

Partnership – promote collaboration between public bodies and partnership working across the public, private and voluntary sectors to make the best use of the mixed economy of care and bring about cultural change in all sectors.

Despite the large sums of money involved in procuring social care services, purchasing decisions are quite often reactive in nature, frequently necessitating ‘on the spot’ decisions, with little opportunity for negotiations, mainly due to the urgency of the service or the complex needs of the individual. Contracts are invariably more complex and sensitive when dealing with people as opposed to commodities, as services cannot generally be dispensed with or re-arranged without deliberation, consultation and participation of the individual and / or carer. This can result in disaggregation of spend and the loss of savings opportunities, as well as failure to reap the benefits of longer term partnerships with providers who deliver the services. However, in recent years there has been a concerted effort to rectify this, with several good examples of best practice being demonstrated in delivering contracts.


The CPU will work with the Service to:

assist during the period of transition for the integration of Health and Social Care Services;

undertake a full spend analysis across Social Work to ensure, where possible, all spend is captured under existing contract arrangements;

assess areas of spend commissioned through national contracts or partnership arrangements to ensure they continue to provide best value;

support the implementation of Self Directed Support to allow Service Users in Scotland greater choice and control over individual services and the Provider undertaking these services;

support the development of the 10 year Joint Commissioning Plan for Older Adults including the development of a market positioning statement;

encourage a strategy to commission services that are needs led in line with current resources ensuring that services are not commissioned on the basis of traditional or historic requirements but on a business/individual need basis;

continue to develop the communication process to ensure that updates to information on PECO and SWIFT, new contracts and performance are communicated to social work users;

ensure all spend is compliant with Standing Orders Relating to Contracts and financial regulations;

continue to provide support and assistance to monitor contract compliance within the service area, both financially and in terms of service delivery;

continue to explore collaborative opportunities between departments, Councils and other public bodies (e.g. Health) to increase buying power to achieve best value and developing capacity within the market;

support delivery of community benefits - where application of community benefits is a condition of contract, delivery will be linked to Key Performance Indicators (KPI’s) where possible;

continue to use and promote framework agreements to ensure that all call off services are bound by the general terms and conditions of the agreement;

ensure that staff involved in the procurement of care and support services is in receipt of appropriate training required to develop and maintain their knowledge and skills;

promote partnership working across the public, private and voluntary sectors to make the best use of the mixed economy of care and bring about cultural change in all sectors;

analyse spend on an annual basis and agree savings targets; and

deliver procurement awareness training for those individuals who purchase services, goods and equipment on behalf of the Council.


6.4.3 Structural and cultural change The CPU will continue to work with the Service to prioritise their procurement requirements in line with budget and service re-design plans and to ensure compliance with EU Procurement Directives. The Procurement Reform work stream will significantly influence and inform processes to be adopted in order to reduce risk, deliver best value and maximise potential for procurement savings and efficiencies. A summary of the key measures is given below.

The delivery of targeted training for all officers directly involved in procurement – due to the number of changes in procurement in terms of legislation, case law, political interest, etc. thoughts on best practice procurement delivery have changed radically.

Develop training specific to Social work staff following the implementation of the Procurement Reform Bill and the new EU Legislation.

Procurement timescales are often driven by operational requirements rather than the time it takes to carry out an effective end to end procurement process. Central to the social work function is the need to be able to respond at short notice to unforeseeable changes in care needs of often very vulnerable people. CPU will utilise the relationships formed with Senior Management to ensure that when such circumstances arise, Social Work will continue to be able to respond in a way that also reflects effective procurement practice.

The aforementioned relationships will also be used to ensure that the more predictable procurement requirements are highlighted early to CPU and that, wherever practical, opportunities for more flexible timescales in terms of operational requirements are considered to ensure that effective end to end procurement processes can be instructed. There is recognition that funding and other restrictions do not always allow proactive procurement within Social Work.

6.4.4 Contract and supplier management The CPU has developed a contract management plan to deliver a robust, consistent and effective supplier relationship management (SRM) approach with key organisations that supply the goods, works and services it uses. The focus of SRM is to develop two-way, mutually beneficial relationships with strategic supply partners to reduce risk and deliver greater levels of innovation and competitive advantage than could be achieved by operating independently or through a traditional, transactional purchasing arrangement. CPU will review the current plan in conjunction with spend analysis to ensure that resources in relation to supplier management are focussed on Providers who deliver high value, risk or impact services. CPU recognises the role of the Care Inspectorate and the Social Work Review and Performance Team in overseeing Providers and monitoring Social Care Contracts. With this in mind, CPU has worked with Social Work to develop a “roles and responsibilities” procedure to reduce duplication between contract management and contract monitoring. CPU will continue to provide appropriate support and undertake contract management for the high value high risk social care contracts, to ensure providers continue to deliver the service in accordance with the terms of the contracts.


6.4.5 Short term strategy The short term strategy for Social Work is:

undertake a full spend review to identify any spend not currently covered by a contractual arrangement;

assess current arrangements to ensure that they continue to provide best value;

ensure all spend is compliant with Standing Orders relating to Contracts;

continue to develop work plan to prioritise workload and ensure savings targets are being delivered;

implement appropriate supplier management meetings with key suppliers;

continue to improve communication of contracts by developing and promoting contract implementation and user guides;

improve the input into collaborative contracts via full utilisation of the Commodity Strategy document at the earliest point;

deliver procurement training to staff actively involved in procurement activity; and

comply fully with Guidance for Procurement of care and support services issued under Scottish Procurement Policy Note SPPN 8/2010.

6.4.6 Long term Strategy The long term strategy for Social Work is:

creation of a contract renewal plan to feed into work plan;

expand, as appropriate, the contract and supplier management process;

utilise the work plan to ensure contract delivery timescales support best value;

maximise the use of collaborative contracts to deliver efficiencies in revenue and process;

monitor Pcard activity to ensure compliance with Council policy; and

comply with updated legislation and EU directives as required.


6.5 Finance and Corporate Services

6.5.1 Scope / Key Spend Areas Analyses of the existing spend profile within Finance and Corporate Services has identified a number of priority areas of focus. These have been captured within the FY14/15 benefits tracker but summary details have been provided within the table below:

Key Spends Anticipated Spend

Value FY 14/15

Finance

Purchasing Cards £3.9M

Insurance Services £700K

IT

IT Maintenance Renewals £1.6M

PC Replacement Programme £450K

Mobiles and Tablet Devices £300K

Corporate

Water £1.2M

Advice Services £1M

Catering £60K

6.5.2 High Level Strategy The embedded CPU team supports Finance and Corporate Services and have agreed common objectives to maximise the benefits of best practice procurement to improve service delivery and value. The CPU will continue to work with the service to pull together and manage the Councils collaborative opportunities, introduce community benefits, put in place framework agreements to reduce timescales and risk, carry out spend analysis, thus driving savings targets. This will also include forward planning review of the Departments’ budget and identification of high risk, high spend contract requirements. This will allow the CPU to allocate time and prioritise workload based o n dictated timescales from EU legislation and the Councils Contract Standing Orders. ICT are undertaking a full review of all ICT systems within the Council. The aim of this review is to rationalise the number of systems used, reduce costs and identify areas for collaboration with East Renfrewshire Council. CPU will fully support this review and work with ICT to implement recommendations following the review. Collaboration opportunities will be considered within all contract strategies. The Council has its own Document Solution Centre (DSC), which is its first choice supplier of printing services. Where printing requirements cannot be met by the DSC, the Council procures printing services on an ad hoc basis from a range of external suppliers. Some of these requirements can be anticipated well in advance, but others arise at comparatively short notice. A framework contract for externally provided design and printing services is intended to be put in place during FY 14/15. The service utilises several collaborative contract arrangements for a variety of commodities (e.g. insurance services and postal services). The CPU will work with the service to ensure that these collaborative arrangements continue to deliver value for money to the Council. Where appropriate, collaborative arrangements will be maximised


and CPU will continue to investigate collaborative opportunities with other neighbouring authorities/ public sector bodies.

6.5.3 Structural and cultural change

Full centralisation of procurement is complete within all departments since August 2010. This has made a positive impact on the speed of information gathering, enabling procurement improvements, whether with placement of new contracts or enhancing the purchase to pay processes. A planned programme of training is in place for CPU officers to ensure the team have the necessary skills and knowledge for the role. Training is extended out to Finance and Corporate Services officers where appropriate. There is senior management support of the embedded procurement function and this is evidenced through regular meetings with Senior Management Team, Heads of Services and senior officers.

Procurement timescales are often driven by operational requirements rather than the time it takes to carry out an effective end to end procurement process. Consideration therefore needs to be given on how a procurement requirement can be flagged earlier to procuring officers – e.g. as budgets are discussed / recommendations made. A review of service requirements to create a longer term workplan will be undertaken and priorities agreed between the CPU and the service. Regular monitoring by the senior management of progress against the agreed plan will be undertaken. The CPU will work with the P2P team and the service to continue to improve and maintain the existing use of the Council’s PECOS system and identify further efficiencies in the payment process in terms of catalogues, CPC’s and statement billing.


At present a contract management plan has been compiled by the procurement team to deliver a robust contract management timetable addressing all high risk high spends. A review of the Contract and Supplier Management Strategy will be undertaken, taking cognisance of the suppliers currently being managed. Following this review, CPU will apply pareto analysis to ensure the correct suppliers, representative of the majority of spend for Finance and Corporate Services, are managed. On this basis, the frequency of some suppliers currently managed by CPU will reduce where no issues have previously been identified. The key actions required are:

identify key suppliers to be managed;

standardise contract and supplier management processes and introduce to key suppliers;

create a plan in conjunction with technical staff;

identify and implement efficiencies within existing contracts; and

implement and monitor achievement of community benefits.

Consideration will be given during the development of contract strategies to maximise opportunities for SMEs and third sector organisations whilst exploiting opportunities that


may arise from aggregation of spend. This approach will include consideration of proportionality in terms of minimum financial criteria, indemnity levels and the requirement for bonds etc. Consideration is also given to lotting contracts and framework agreements based on value band, the encouragement of consortium bids and reserved contracts. Consideration will also be given to Supported Businesses during the development of contract strategies, with the aim to award where possible to a Supported Business. A Supported Business is currently defined in regulation 7 of the Public Contracts (Scotland) Regulations 2012 (Article 19 of Directive 2004/18/EC) as “an establishment where more than 50 per cent of the workers are disabled persons who by reason of the nature or severity of their disability are unable to take up work in the open labour market”.

6.5.5 Short term strategy

The short term strategy for Finance and Corporate Services is:

put work plan in place to ensure contract delivery and savings plans are being resourced to deliver against target;

ensure all spend is compliant with the Council’s Contract Standing Orders;

review, develop and implement the supplier management process for all key contracts and suppliers as outline in section 4.1.4 above;

negotiate additional savings and community benefits from existing contracts with key suppliers;

utilisation of Public Contracts Scotland – Tenders e-tender system, where appropriate, in accordance with the Council’s Contract Standing Orders. This will in turn support the development of a contracts register;

create opportunities for SME’s whilst exploiting opportunities available through aggregation of spend;

provide training and awareness sessions for those service staff actively involved in the tendering process;


utilisation of the priorities tracker work plan to ensure savings plans are being resourced to deliver savings targets for contract renewals and negotiations of existing contracts;

ensure that the Council supports CAT A and B contracts from both a technical and commercial perspective to maximise the benefits; and

support the ICT collaboration with east Renfrewshire Council.

6.5.6 Long term Strategy

The long term strategy for Finance and Corporate Services is:

expand the contract and supplier management process;

greater engagement with potential partnerships with consideration to more collaborative working; shared services and outsourcing opportunities; and


utilisation of the work plan and service wide review to ensure contract delivery timescales support best value.


6.6 Chief Executives

6.6.1 Scope / Key Spend Areas

Analysis of the existing spend profile within Chief Executives has identified priority areas of focus. These have been captured within the FY14/15 benefits tracker but summary details have been provided within the table below:

Key Spends Anticipated Spend

Value FY 14/15

Chief Executives

Design and Print Services £250K

Advertising £200K (tbc)

Magazine Print and Distribution £80k (tbc)

There is a requirement for a framework of contractors to deal with specialist or over capacity requirements for print and design. This will be a contributor to the influenceable spend for 13/14. This workstream overlaps with the details in Finance and Corporate Services on the overall design and print strategy.

6.6.2 High Level Strategy Chief Executives do not have an extensive budget and therefore there is not a high level of procurement activity at present. The departments’ requirements in relation to advertising have are met by utilising a collaborative agreement awarded by Scotland Excel to date. However, demand for these services continues to decline from both the Department and other users of this Scotland Excel arrangement therefore when the arrangement recently expired, Scotland Excel did not establish a new arrangement. A review of the service requirements will be undertaken and a strategy will be developed for future advertising spend at a local level. Savings will be monitored and reported. The Category Manager will work with the service to identify, implement and manage collaborative opportunities, introduce community benefits, put in place framework agreements to reduce timescales and risk where appropriate, carry out spend analysis, thus driving savings targets. This will also include forward planning review of the Department’s budget and identification of high risk, high spend contract requirement. This will allow the CPU to allocate time and prioritise workload based on dictated timescales from EU legislation and the Councils Contract Standing Orders.

6.6.3 Structural and cultural change Historically the requirement for procurement from this Department has been minimal. Full centralisation of procurement is complete within all departments since August 2010. This has made a positive impact on the speed of information gathering, enabling procurement improvements, whether with placement of new contracts or enhancing the purchase to pay processes. A planned programme of training is in place for CPU officers to ensure the team have the necessary skills and knowledge for the role. Training is extended out to Community Resources officers where appropriate.


Procurement timescales are often driven by operational requirements rather than the time it takes to carry out an effective end to end procurement process. Consideration therefore needs to be given on how a procurement requirement can be flagged earlier to procuring officers – e.g. as budgets are discussed / recommendations made. A review of service requirements to create a longer term workplan will be undertaken and priorities agreed between the CPU and the service. Regular monitoring by senior management of progress against the agreed plan will be undertaken. The CPU will work with the P2P team and the service to continue to improve and maintain the existing use of the Council’s PECOS system and identify further efficiencies in the payment process in terms of catalogues, CPC’s and statement billing.

6.6.4 Contract and supplier management At present a contract management plan has been compiled by the procurement team to deliver a robust contract management timetable addressing all high risk high spends, an element of contract management continues to be implemented for some lower value problematic contracts, thus addressing quality, payment terms and conditions, invoice volumes and buyer/supplier relationships.

6.6.5 Short term strategy The short term strategy for the Chief Executive’s Department is:

put work plan in place to ensure contract delivery and savings plans are being resourced to deliver against target;

ensure all spend is compliant with the Council’s Contract Standing Orders;

review, develop and implement the supplier management process for all key contracts and suppliers, maximising benefits for the Council;

negotiate additional savings and community benefits from existing contracts with key suppliers, where appropriate;

utilisation of Public Contracts Scotland – Tenders e-tender system, where appropriate, in accordance with the Council’s Contract Standing Orders. This will in turn support the development of a contracts register;

create opportunities for SME’s whilst exploiting opportunities available through aggregation of spend;

provide training and awareness sessions for those service staff actively involved in the tendering process;


utilisation of the priorities tracker work plan to ensure savings plans are being resourced to deliver savings targets for contract renewals and negotiations of existing contracts; and

ensure that the Council supports CAT A and B contracts from both a technical and commercial perspective to maximise the benefits.


6.6.6 Long term Strategy

The long term strategy for the Chief Executive’s Department is:

expand the contract and supplier management process;

consideration of ownership of contracts within each service to define who manages; and

utilisation of the work plan to ensure contract delivery timescales support best value.

Renfrewshire Council Procurement Strategy · Renfrewshire Council’s initial Procurement Strategy...

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Transcript of Renfrewshire Council Procurement Strategy · Renfrewshire Council’s initial Procurement Strategy...