Procurement in Local Government

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Procurement in Local Government
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• Warwickshire County Council
• Paul White - County Procurement Manager
• Coventry City Council
• Mick Burn Procurement Manager

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Outcome from this presentation

• At the end of the presentation people will have
  a clearer understanding of
• The National Context.
• The legislative framework within which we
  operate.
• The E Commerce Agenda
• Where to find business opportunities within each
  Council

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Overview of Local Authority Procurement

• Total expenditure 40bn (UK Public sector)
• 400 plus Councils.
• Step Change in National Agenda
• Byatt Report (2001)
• National Procurement Strategy (Oct. 2003)
• Regional Centres of Excellence (Feb. 2004)
• Gershon Review (July 2004)

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How do we define Procurement?

• The acquisition of Works, Services and Goods
  which meet the customers (and service users)
  needs, whilst ensuring value for money throughout
  the life of the product, including disposal.

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Why is Procurement important?

• We are required by legislation to consider, for
  all Services provided, whether we will make or
  buy that service.
• A mechanism to deliver our key policies such as
  equality and sustainability.
• Its impact on spend and savings.

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What is the estimated make up of the spend?

• Both Councils spend in excess of 250m, split
  across goods, works and services.

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What do we buy?

• Examples
• Goods paperclips/vehicles
• Services - grounds maintenance/social care/
  architectural design services.
• Works - minor repairs/school builds
• Consultants - external advisors/technical experts

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Legislation Rules under which we operate

• European - Procurement Directives
• National Legislation and rules e.g. Local
  Government Act
• Local - Procurement Procedures

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Why have rules?

• Public Accountability
• Non Discriminatory
• Transparency
• Encourage Competition
• Open Markets
• To protect staff from malicious allegations

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Tender Thresholds

• Below EU tendering thresholds (153,476) local
  authorities set their own operating procedures,
  which should all be in the public domain see
  our websites

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Typical Tendering Process

• Consult with the marketplace customers
• Determine specification documentation Advertise
• Questionnaire (pre-selection)
• Tender
• Evaluation
• Award
• Review monitor

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Value for money Not just Price MEAT Most
Economically Advantageous Tender
What Do We Consider?

• Example Criteria
• Price
• Quality
• Technical capability
• Service delivery
• Whole life costs
• Ongoing maintenance

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The National E Procurement Agenda?

• Electronic Orders
• Electronic Payments - Invoices
• - BACS
• - Procurement Cards
• Electronic Tendering
• Reverse Auctions

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E Procurement Drivers

• All Authorities have the same drivers
• Simplified Trading
• Reduced Transaction Costs
• Improved Visibility
• Management Information
• Government Targets

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Example Authority

• Coventry
• Electronic Purchase Order System introduced 2003
• Major use of Purchasing Cards (500)
• Tendering as part of consortium group for
  Electronic tendering package
• First reverse auction carried out May 2005

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Purchase Order

• What is electronic Purchase Order?
• Electronic requisitioning that sends out orders
  electronically
• Preferably by e mails (currently 66 and growing)
  with orders attached
• Catalogues/contracts on system result in quicker
  order placing reduce maverick spend
• Streamlined approval processes reduces
  transaction costs
• Removes paperwork, reliance on post and its
  quicker

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Key statistics to date

• Rollout of electronic purchase order since
  September 2003
• Currently over 1500 users on the system
• 6 Catalogues
• Orders worth 90m (40m in last 6 months)
• Over 35,000 orders (18,000 in last 6 months)

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The Future

• e Marketplaces and more catalogues
• Complete rollout to by March 2006
• Majority of council spend through electronic
  purchase order
• Electronic data exchange/invoicing

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Purchasing Cards

• What are Purchasing Cards?
• Credit card transactions where the invoice is
  replaced by a bank statement
• A compliment to e Purchase Orders
• High Volume / low value purchases / Emergency
• e.g.Travel, petty cash, food, accommodation
• Over 500 Purchasing Cards in Coventry, 4 of
  volume of transactions but less than 0.4 of
  value!!!

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THE ADVANTAGES

• Payment within 4 days by the bank
• Fewer invoices/statements
• Fewer points of contact for queries
• WHAT DO YOU NEED
• Credit Card facilities arranged through your bank

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 Who to ContactRules and RegulationsContract
ListTender Opportunities/Awards
www.coventry.gov.uk/procurementwww.warwickshir
e.gov.uk/procurement
 Selling to the Council Guide
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Don't leave things until the last minuteAnswer
the questions posed, not the ones you would have
preferredBe sure your goods or service match
the requirementAddress the selection
criteriaMake sure references and referees are
relevant to your bidTender only if you can do
the job
Tenders dos and donts
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Distinguish yourself from the competitionBe
customer focusedProvide value-added
servicesBe innovative and leading
edgeDemonstrate that you will be around for the
long term
A Winning Edge
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Leigh Hunt

• Warwickshire County Council
• Economic Development

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What do you need?

• Fax machine (short-term)
• Email
• Computer
• Internet Connection
• Email Account

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What do you need?

• Credit Card terminal / merchant account
• Ask your bank or a major Credit Card Co.
• Ability to receive .xml files
• Longer-term for fully integrated systems
• Website
• To provide catalogue facility

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Business Benefits

• Shorter lead times
• Quicker payments
• More business
• Ability to deal with a wider range of non-public
  sector organisations
• Website will give 24/7 availability and
  sales/marketing capability

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Consider

• Who will check email?
• How often will you check?
• Should you consider broadband?
• What about your supplier lead times?
• What impact might this have on your business
  processes?

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You are not alone !

• Assistance is available from
• WCC Economic Development
• Business Link
• RuralNet
• Other providers

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WCC Economic Developmentwww.warwickshire.gov.uk/b
usiness

• Working in partnership with other organisations
  to provide
• ICT-Specific Training and Advice
• Investor Development
• Employment Support
• Support for Rural Businesses
• Business Resource Centres
• Work life balance
• Tourism
• Access to Finance
• Managed Workspace
• Environmental Support for Business
• Quality Systems Support

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ICT Development Programmewww.cw-chamber.co.uk/eve
nts

• Series of FREE seminars to help you develop your
  business through the use of ICT, including
• Use technology to market your business
• Generate website traffic
• Understand legal issues around websites, email
  and e-commerce
• Get more from your CRM
• Take control of your web designer

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Business Linkwww.cw-businesslink.co.uk

• 11 Advice and Support
• Support for businesses for both strategic and
  tactical development and growth
• Management and Workforce Development Training

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RuralNetwww.ruralnet.org.uk

• Advice and support for rural businesses
• Broadband in rural areas
• Online Experts
• Online Forums
• Training

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Any questions?