Procurement Training

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Procurement Training
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Introduction

• Working with the districts has identified a need
  for various levels of training
• This session is designed to give an overview
• More in-depth training will be developed based on
  district needs
• This session will cover
• Introduction to Procurement Lincolnshire
• Introduction to Procurement
• Introduction to EU Procurement Directives
• We want feedback from you on who else would
  benefit from attending this session and what
  other training you want / need
• Questions

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A Guide to Procurement Lincolnshire
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Agenda

• Introduction to the session
• Introduction to Procurement Lincolnshire
  including a brief background
• Key Deliverables and Drivers of Procurement
  Lincolnshire
• How we work
• What we do
• How we can support you
• What do we need from you
• Procurement Lincolnshire Website and Sustainable
  Procurement Strategy

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Introduction to Procurement Lincolnshire

• All eight authorities signed up
• One team, with mix of existing and new staff with
  wide skills base
• One employer LCC
• Dedicated officer working with each partner
  authority, dedicated category managers
• Shared procurement strategy and agreed work
  programme
• Governance arrangements in place

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Introduction to Procurement Lincolnshire

• Specialist knowledge and expertise eight main
  categories
• Business Services
• Construction Consultancy
• Environmental Services Facilities
  Management
• ICT/Telecoms Utilities Vehicles and
  Transport

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Brief Background Procurement Lincolnshire

• Formed as part of wider county shared service
  programme established in response to elected
  members desire for authorities to work
  collaboratively to generate benefits
• Aim to provide a centralised resource on behalf
  of each partner offering procurement service,
  advice and support to both members and officers

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Key deliverables

• Savings
• Increased capacity
• Economies of scale

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Two Key Drivers

• Efficient and Effective procurement
• Socially responsible procurement

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How we work - Our Vision

• Procuring goods, services, and works by the
  most economic, efficient, effective and
  sustainable means to ensure that the needs of the
  community are met, within a clear framework of
  accountability and responsibility. In doing so,
  Procurement Lincolnshire will become best in
  class by adopting excellent procurement practices
  and techniques.

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How we work - Core Values

• Looking after Lincolnshire
• Putting Customers First
• Demonstrate Leadership in Sustainable Procurement
• Effective Working Partnerships
• Provide Value for Money
• Valuing Colleagues

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How we work - Bringing it all together

• Promoting effective procurement across all
  Partner Authorities
• Key step towards achieving value for money
• Adopts a strategic approach to sustainable
  procurement

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The practicalities how it all works

• Who will be working with you?
• What do we do?
• What support will you get?
• What do we need from you?
• Where can you go for help?

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Who will be working with you?

• 3 Procurement Liaison Officers
• 5 Procurement Officers responsible for Category
  Management
• 2 Procurement Officers responsible for strategic
  procurement and training
• 3 Procurement Managers
• Procurement Analyst, Assistant Procurement
  Officers
• Procurement Assistants, Finance and Comms
  Officers
• Head of Service

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What do we do?

• Ensure a co-ordinated approach to the tender
  process
• Introduce corporate contracts and monitor
  compliance and spend
• Introduce existing framework agreements where
  they represent value for money
• Develop a standard set of procurement documents,
  templates and policies
• Develop a contract data base and register
• Seek to maximise procurement efficiencies

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What do we do? (continued)

• Develop a web presence for internal use
  www.procurementlincolnshire.co.uk
• Develop an external web presence
• Carry out a spend and supplier review
• Promote implement the Lincolnshire Procurement
  card
• Training for Officers and Members

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What do we do?

• PROCUREMENT TRAINING MODULES
• Specification Writing
• Introduction to How to do a Perfect Tender
  including Tender and Supplier Evaluation
• Introduction to Best Practice Procurement
  including Contract Procedure Rules and EU
  Procurement Rules
• Request For Quotations, Mini Competitions,
  Frameworks and Gateway Reviews
• Contract and Supplier Relationship Management
• Obtaining Value for Money including developing a
  Business Case and Return on Investment as a
  Method of Investment Appraisal
• E - Procurement Training
• Overview of TUPE Rules
• Negotiation/Post Tender Negotiation Skills
• EU Remedies Programme
• Sustainability and Responsible Procurement How
  to address Social Issues in Public Procurement,
  Equality Diversity in the Supply Chain,
  Business Continuity and Risk
• Third Sector Commissioning including an overview
  of the Voluntary and Community Sector/Networks
• Strategic Sourcing and Market Development

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What support will you get?

• Assistance on procurement projects
• A dedicated source of advice and guidance
• Contributing to Best Value reviews, Audit
  enquiries and Use of Resources activities (or
  similar)

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What we need from you?

• Provide detailed spend data and budget
  information
• Ensure that you have a detailed specification for
  your requirement
• Be prepared to compromise, especially on
  collaborative projects
• Ensure contracts are forwarded to PL for
  inclusion on the contracts register

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Where can you go for help?

• The first port of call should be your Procurement
  Lincolnshire District Liaison Officer
• They will either give advice and guidance or
  facilitate contact with the relevant category
  manager

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The Procurement Lincolnshire site is split up
into two sections. The front-end of the site is
mainly directed at suppliers who may be looking
at how they can do business with us. The second
part of the site can be viewed by logging in at
the top of the screen and following the
instructions...
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procurement

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Once logged on, an extra tab will appear on the
main menu screen.
This will open up a whole new menu of useful
information and items, such as document templates
and regulations
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If you are organising a new project and need /
want Procurement Lincolnshire's services, please
fill in the New Project Request form and fill
in the details.
Marie...
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Closure of the session

• Any Questions?

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A Guide to Procurement
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Agenda

• Introduction to the session
• What is procurement?
• The Procurement Cycle
• Questions to ask yourself prior to the start of
  the process
• Financial levels
• Contract value and aggregation
• Tender documentation and award
• Use of Procurement Cards
• Top tips

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What is Procurement?

• Procurement is the process of acquiring goods,
  services and works, covering both acquisition
  from third parties and in-house providers.
• The process spans the whole cycle from
  identification of needs, through to the end of a
  services contract or the useful life of an asset.
  It involves options appraisal and the critical
  make or buy decision which may result in the
  provision of services in-house in appropriate
  circumstances.

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The Procurement Cycle

• Good procurement, sustainable procurement
• Sustainable procurement means value for money by
  purchase of goods/services/works used and
  disposed of in a manner minimising social and
  environmental impacts maximising social
  environmental benefits
• When we buy something there are a number of steps
  to follow which the following diagram outlines -

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The Procurement Cycle (contd)
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Questions prior to purchase

• Do I need it?
• Do I have approval to buy it?
• Are there funds available to pay for it?
• Have I complied with CPRs?
• Is there an existing framework agreement in place
  so that I do not have to go out to tender?
• Is there an in-house facility that can do the
  type of work I require?
• Is this a possible collaborative opportunity?
• What procurement route do I use?
• Should I contact Procurement Lincolnshire?

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Contract Values and aggregation

• Contract value is the total cost of
  goods/service/works over the full length of the
  contract, not just the annual value
• Any possible extensions to the contract to be
  taken into account when calculating the value
• i.e. 50,000 p.a. , contract for 2 years plus 1
  year extension. If extension taken contract value
  over EU thresholds so must be advertised through
  OJEU

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Whole Life Costs
Buy
Own
Use
Dispose
Taking an example of a vending machine
that supplies coffee and other hot drinks-
Suggest examples of the total life costs under
each of these categories
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Whole Life Costs (Answers)

• Buy
• Cost of lease / purchase
• Procurement process
• Delivery
• Installation
• Building alterations
• Plumbing
• Electricity supply
• Signage
• Risk management
• Initial stocks
• Own
• Insurance
• Cash collection and handling
• Interest Payments / APR
• Licence fees
• Depreciation

• Use
• Consumables
• Utilities
• Disposal of waste (e.g. plastic cups)
• Cleaning / Maintenance / Servicing / Repairs
• Staff training
• Contract management
• Storage of consumables
• Time to restock machine
• Invoicing costs
• Dispose
• Transport for disposal,
• compliance with W.E.E,
• reverting area to original state,
• Contract Termination

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EU Thresholds

• All tenders above the EU threshold, currently
  139,893 for goods and services, 3,497,313 for
  works subject to full EU process.
• Procurement Lincolnshire have a separate booklet
  for guidance on EU, Pocket Guide to EU
  Procurement Directives, a green booklet.
• Further training session will follow based on
  this booklet.

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Financial Levels

• Procurement Below 5,000 ensure value for money
  achieved, be aware of market prices. Direct
  approach to a single supplier and oral quotation
  are acceptable.
• Procurement from 5,001 - 10,000 minimum of 2
  written quotes based on written specification.
  Keep quotes process of selection of supplier
  for audit purposes.
• Procurement from 10,001 - 25,000 3 quotes
  based on written spec. Keep quotes process of
  selection of supplier for audit purposes.
• Procurement from 25,001 - 75,000 at least 3
  written quotes based on Request for Quotation
  (RFQ)
• High value procurement 75,001 to EU thresholds
  all tenders with cumulative value of 75,000 and
  above to follow formal tender process. Procedure
  to follow is either Open or Restricted
• High value procurement above EU thresholds
  subject to the full EU Directives process
  consult with your procurement resource.

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Tender documentation and tender award

• Advertise the requirement, PIN notice, OJEU,
  Supply2.gov, Source Lincolnshire and specialist
  publications
• 5 Procedures Open, Restricted, Negotiated,
  Competitive Dialogue and Accelerated
• Pre Qualification process. Used in the
  restricted procedure to short list suppliers to a
  manageable number. Access capability, capacity
  etc
• Procurement Lincolnshire standard tender
  documentation should be used

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Tender documentation and tender award (contd)

• Tender specification must be provided by you!
• Evaluation process most economic advantageous
  tender (MEAT). Emphasis on price quality.
• Team approach to evaluating bids
• Tender award process
• Offer debrief to unsuccessful bidders
• Keep documentation for audit trail
• Inform your District Liaison officer so contract
  can be put on the Procurement Lincolnshire and
  District Contract Registers

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Use of Procurement Cards

• Procurement Lincolnshire Procurement Card
• Used for low value, high volume, low risk
  purchases
• Save officer time, no orders to raise, no
  invoices to process and approve
• Give supplier improved cashflow
• Similar to a visa card
• District Liaison Officers will work within the
  authority to implement this project

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Top Tips

• Take a step back and look at options available
• Use framework agreements and corporate contracts
  where possible
• Calculate all costs associated with the
  requirement
• Consider collaboration
• Stick to rules and timelines
• Record your reasons for why you used a particular
  procurement route
• Liaise with your District Liaison Officer. They
  may save you a lot of time
• If in doubt just ask!!

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Closure of the session

• Any Questions?

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A Guide to EU Procurement Directives
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Agenda

• Introduction to the session
• What are the EU Directives?
• Why are they important?
• When do the full EU Procurement Directives apply?
• Contracts, Notices and Procedures
• Part A and Part B Services
• Developing the Specification
• Contract Award
• Useful Websites
• Jargon, what does it mean?

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Introduction

• Pocket Guide to EU Procurement Directives gives
  overview of the regulations
• For further details, including Contract Procedure
  Rules and other procurement Guides go to the
  Procurement Lincolnshire Website
  www.procurementlincolnshire.gov.uk

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What are the EU Procurement Directives?

• They set out the legal framework for public
  procurement
• They apply when public bodies acquire supplies,
  services or works
• They set out procedures that must be followed
  before awarding a contract if the value exceeds
  set thresholds

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Why are they important?

• The purpose of the directive is to open up the
  public procurement market to ensure free movement
  of supplies, services and works within the EU
• These rules reflect and reinforce the value of
  money ethos set out in the Procurement
  Lincolnshire Sustainable Procurement Strategy

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When do the Full EU Procurement Directives apply?

• When the contract value is above
• 139,893 for Supplies and Services
• 3,497,313 for Works
• Where a contract covers a mixture of supplies,
  services and works is should be classified the
  aspect with the highest value
• These are local government thresholds and
  different thresholds may apply of other public
  bodies
• These thresholds change every 2 years and will be
  revised in January 2010. More information on
  Thresholds can be found at -www.bipsolutions.com/h
  tml/ecdirectives/htm

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When do the Full EU Procurement Directives apply
(contd.)?

• Where the contract falls outside the scope of the
  Directives the following principles should still
  apply
• non discrimination
• equal treatment
• Transparency
• Advertising appropriate to the size of the
  contract is necessary to demonstrate
  transparency. Must also be fair and impartial
  allowing for sufficient competition

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Types of contracts

• Supplies relates to purchase of supplies or
  commodities e.g. furniture, computer equipment
  etc
• Services contracts that do not fall under works
  or supplies but involves the provision of a
  service e.g. cleaning, grounds maintenance etc
• Works usually relates to a construction based
  project but could also be major refurbishment or
  rebuilding works e.g. site preparation,
  construction, repairs etc

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Part A Part B Services

• Service contracts divided into 2 categories, Part
  A and Part B
• Part A subject to full requirement of
  Directives. Part A Services include telecoms,
  financial, publishing etc
• Part B limited rules apply relating to
  technical specifications and post award
  information. There is no requirement to publish a
  Contract Notice in OJEU but you are required to
  publish a Contract Award Notice. Even though the
  full Directives do not apply still deal with in
  an open, transparent and fair manner. Part B
  Services include hotel, education, recreation
  services etc
• A full list of Part A and Part B Services can be
  found at www.opsi.gov.uk/si/si2006/uksi_20060005_e
  n.pdf

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Contract Notices (adverts)

• There are 3 main types of Contract Notices that
  should be placed during the tender process
• PIN (Prior Information Notices) published to
  alert the market of a likely contract
• Contract Notice sets out details of contract
  being advertised and is posted at the start of
  the tender exercise
• Contract Award Notice gives details of who the
  contract has been awarded to, including the
  tender value

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Procurement Procedures

• 5 award procedures provided in the Directive
• Open allows all interested suppliers to tender.
  Should only be used in a limited market. Takes
  less time to complete than the other procedures
• Restricted a 2 stage process initially
  allowing all interested suppliers to express an
  interest in the tender opportunity. PQQ is then
  issued and once evaluated allows officers the
  opportunity to restrict which companies receive
  an Invitation to tender (ITT). Takes longer then
  the open procedure and used where the interest in
  the tender opportunity is likely to be high

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Procurement Procedures (contd.)

• Competitive Dialogue allows authorities to go
  through the selection process followed by a
  dialogue phase with potential tenderers to
  develop one or more suitable solutions for its
  requirements. Bidders invited to tender on one of
  the solutions. Used in complex contracts where
  the end result may not be clear at the outset.

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Procurement Procedures (contd.)

• Negotiated Procedure may only be used in
  prescribed circumstances. Please consult
  Procurement Lincolnshire for advice before you
  consider using this procedure
• Accelerated Procedure may only be used in cases
  of extreme urgency outside the control of the
  contracting authority. It may not be used in
  cases of poor planning or organisation

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Developing the Specification

• Directives designed to ensure all tenderers
  receive equal treatment and geographical
  discrimination does not happen
• Contract specification should avoid using brand
  names that would eliminate particular providers
  or products/services
• If UK/BS included the wording or equivalent
  must be included within the specification

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Contract Award

• Once the tender has been evaluated and award
  decision made a formal award must not be made for
  at least 10 working days after the unsuccessful
  bidders have been notified. Known as the Alcatel
  standstill period
• This gives unsuccessful tenderers the opportunity
  to challenge the decision if they feel any of the
  regulations have been breached and also to
  receive constructive feedback as to why they have
  been unsuccessful
• If the tender was awarded and the decision
  successfully challenged substantial damages may
  be awarded against the Authority concerned
• In addition individual officers may also be
  liable

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Remedies Directives

• Remedy of ineffectiveness allows courts to tear
  up contracts entered into illegally.
• Damages may be claimed by contractor originally
  awarded contract
• Court may impose fines on contracting authority
• Effective from 20 December 2009

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Useful Websites for tender information

• Procurement Lincolnshire www.procurementlincolns
  hire.co.uk
• Source Lincolnshire www.sourcelincolnshire.co.uk
  
• Tenders Electronic Daily
• http//ted.publications.eu.int
• Bip Solutions www.bipsolutions.com
• Supply2Gov www.supply2.gov.uk
• Office of Government Commerce www.ogc.gov.uk
• ESPO www.espo.org

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Jargon what does it mean?

• PIN Prior Information Notice
• OJEU Official Journal of the European Union
• PQQ Pre Qualification Questionnaire
• ITT Invitation To Tender
• FOI Freedom of Information
• MEAT Most Economically Advantageous Tender

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Closure of the session

• Any Questions?

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And Finally!!

• Dont forget about managing the contract
• Two way relationship with the supplier
• Set up a regular schedule of meetings appropriate
  to the risk level / value of the contract
• Take action
• Completes the Procurement cycle

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Feedback

• Please let us know
• Who else you think would benefit from attending
  this training
• What other training you need
• THANK YOU