The answer to the question Using the market for better Results

Mr. A.P.M. Veltman, Major Municipality Someren and Chairman of BIZOB

THE SITUATION IN THE NETHERLANDS

• The Netherlands: 16 million inhabitants, 467 municipalities• The Province of Noord-Brabant: about 75 municipalities• Region procurement cooperation's:

- West-Brabant: about 17 municipalities- East-Brabant: about 14 municipalities

WHICH IS BIZOB?

An organisation who performs:

- (joint) procurement and tender projects for the municipalities also for infra-structure works, goods and services;

- advice municipalities by Public, Private Cooperation cases with suppliers and potential partners;- advice municipalities on cases about out-or in sourcing of activities;- analyse the product development on the market for the

municipalities.

ORGANISATION SCHEDULE BIZOB

General Council28 members, two members of each municipality

Chairman: Mr. A.P.M. Veltman

Council 5 members of the General Council

BoardM.A.J. Stuijts

ORGANISATION SCHEDULE BIZOB

M.A.J. Stuijts

Executive managerExecutive manager

Concern Purchaser Concern Purchaser Concern Purchaser Concern Purchaser Concern Purchaser Concern Purchaser

Management Support Secretary

PROCUREMENT PROCESS IN ORGANISATIONAL VIEW

InformationOrganisation

and employees

Methods & Procedures

Performance-parameters

Contract Order Follow up Evaluation Selection Specifi-

cations

Organization policy

Procurement policy

Suppliers(market)

Municipality

WHY (JOINT) PROCUREMENT COOPERATION?

• Procurement is badly organised (permanent) process in most municipalities;• Procurement is too limited in most (small) municipalities;• Professionals at work;• Economics of scale;• Quality of knowledge (databank);• Introducing possibilities for benchmarking;• Better financial results;• To get the optimal relation between commercial companies and the (local

government)• Stronger contract partner position.

PROFITS OF PROCUREMENT COOPERATION

• Financialprocurement costs and profits

• Qualitativecontracts, multifunctional teamwork, European tenders

• Organisationaltransparent process, integrity, professional procurement

CRITICAL FACTORS OF SUCCES

• Commitment of the local authorities;• Commitment of the management;• Teamwork cooperation instead of competition;• A drive to make the cooperation a success;• Simple but effective organisational form “mean and lean”.

HOW TO START

• Make a group of municipalities and persons with ambitions;• Business plan with step by step targets;• Cooperation organisation close to the individual municipalities;• Down to earth organisation with minimalised overhead and bureaucracy;• Quick wins and public relations;• Turn around opposition into acceptation.

POLICITAL ANGLE

• Political “do-it-yourself” procurement and tenders;• Local suppliers;• Professional European acting;• Guarantee of integrity and transparency of procedures;• Positive effects on town budgets.

STRUCTURAL ANGLE

• The authority of making decisions belongs to each individual municipality;• The procurement organisation is strongly related to each individual

municipality;• Employees of the procurement organisation are physically working in the

individual municipality;• Every municipality has a facts and figures analysis;• Joint procurement projects are based on budget analyses of the individual

participants;• Dynamic organisation structure; from and for the municipalities.

ORGANISATIONAL ANGLE

• Organisation of procurement process in the office;• Clear responsibilities and proper authorities;• One political and one management CEO (Chief Executive Officer) in each

municipality;• Straight agreements on the procurement results;• Working together as municipalities is based on individual and collective

profits.

DO’S BY CREATING SHARED SERVICES

• Shared vision on targets of procurement cooperation;• Shared vision on strategic procurement activities;• Shared vision on the approach (opposition, commitment);• Shared vision on how to manage the entire process (positioning of the

shared service);• Shared vision on the decision making in the project;• Shared vision on the architecture and content of the shared service

organisation.

DONT’S BY CREATING SHARED SERVICES

• Many meetings, no decisions;• Dealing with the whole world instead of only the real participants;• Incompetent program management;• Lack of procurement expertise;• Inadequate change management by the introduction.

Different procurement solutions for different procurement objectives

The Procurement portfolio:

Impact on financial results  

High Leverage products Strategic products

 

Competitive bidding Performance based partnership

 

Routine products Bottleneck products

Low

Systems contracting + E-commerce solutions

Secure suppliers + search for alternatives

  Low High

  Supply risk  

• Infrastructure projects : bridges, railway projects, hospitals a.o.• Outsource the operational and finance exploitation of sport centre;• Develop an ICT software programme for your (local) government;

Develop, realise, maintain and exploitation.

By a Strategic Product the Performance is based on Partnership

A partner is defined as a company with whom your (local) government has a ongoing “buyer-seller” relationship, involving a commitment over an extended time-period, a mutual sharing of information and a sharing of risk and rewards from the relationship

Consortium

Agreement

Concession

Tender

Municipality Contractor

Design

Municipality - PPSand

Contractor - PPS

workers/companies/

realise/maintain

Financer

Organisation of the Tender

Market analysis

Make a functional

specification (headlines)

Decide on procurement

strategy

Make specification on detail level (technical and

functional)

Market consultation

Divide risks and incentives

Criteria for qualitative selection

and awarding selection

Evaluate and analyse the

bids

* bonus yes or no

* interests parallel

Make the concept contract

Awarding of the contract; inform the tenderers

* aim / target* time schedule and functions people involved* project and steering committee* milestones

Make a request for information. A Proces how to

analyse the bids

Implementation of the Tender

* pro-active approach of companies* check contents of specification* feasibility in the market

* devide into parts* single of multi sourcing* what kind of contract and tendering procedure

PROFESSIONAL TENDERING

By using the market

we go Together to a golden result!