Procurement Strategy 2022 – 2025
c/o Wealden District Council
1.1. The importance of effective procurement has never been greater for local government. The demand for public services is increasing, while resources are drastically reducing the pressure to find greater efficiencies and improve productivity is driving councils to look for different ways to deliver better outcomes for local people.
1.2. This Procurement Strategy sets out the vision, objectives and actions which will direct and govern procurement activities for Wealden District Council for 2022 to 2025.
1.3. These reflect both national and local policies and priorities, and includes our approach to the economic recovery plan in response to the COVID-19 Pandemic, Suppliers’ Fair Working Practices and Ethicality, Sustainability, Climate Change, Corporate Social Responsibility, Small and Medium-sized Enterprises (SMEs), Supported Businesses, and Third Sector organisations.
1.4. This strategy explains how we will continue to develop and benefit from the professional expertise of the East Sussex Procurement Hub over the next three years and the systems we use to make sure that Wealden District Council delivers on its value of “spending money wisely”.
1.5. Procurement plays a pivotal role in supporting the Council’s strategic plan and will continue as a key enabling strand within the ongoing reform and continuous improvement of the Council.
1.6. In 2020/21 we spent £22.6 million on goods, works and services, we clearly have a responsibility to make sure this spending represents best value for money.
1.7. As well as the expertise and experience of our successful team, we have used the National Procurement Strategy for Local Government in England 2018 toolkit to put together a strong 4-year plan. This combined expertise and good practice has allowed us to identify five areas of focus. Putting our energy into these areas will have the biggest impact on supporting the city’s aims and ambition.
2.1. Procurement is the process of acquiring, goods, works and services, 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 contract or the end of 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.
3.1. The impact of procurement is far greater than just the definition of a ‘process’ and our vision, aims and objectives set out in this strategy detail the contribution that effective procurement arrangements can make to a range of socio-economic agendas. These include a successful local economy, a thriving voluntary sector, community empowerment, environmental issues and value for money.
3.2. Good procurement is essential to ensure good public services, from buying works, goods and services that work as they are supposed to, to achieving savings that can be ploughed back into front-line services.
3.3. Local Government spends over £60billion a year procuring a wide range of works, goods and services, from everyday items such as pens and paper, to major construction projects such as schools and hospitals. All those who, as taxpayers, use and fund public services have the right to expect government to meet the highest professional standards when it procures on their behalf.
4.1. Our vision for procurement over the term of this strategy is to demonstrate value for money through the effective procurement of goods, services and works on a whole life basis in terms of generating benefits to the community and the organisation, whilst minimising impacts to the environment.
5.1. Our strategic procurement aims, based on the Local Government Association, National Procurement Strategy are shown below, Appendix 1 provides more details:
- Showing Leadership
With local government third party expenditure totalling around £60 billion a year in revenue alone, procurement clearly has a major contribution to make. A more strategic approach to procurement should be at the heart of thinking for our councillors and decisions makers because procurement is not merely about ensuring compliance. There is an ever-growing need to engage with service heads and procurement teams on high value, high risk procurements to drive innovation, generate savings and identify opportunities for income generation.
- Behaving Commercially
We need to improve public sector commissioning and procurement to increase the effectiveness and efficiency of government. This means improving the skills of our leaders, both members and officers so their teams can design service provision, influence external parties, and shape and manage markets to get the best outcomes. This can be done by creating commercial opportunities, managing contracts and supplier relationships and risk management.
- Achieving Community Benefits
We can use procurement to achieve wider financial and non-financial outcomes, including improving wellbeing of individuals and communities, social value and improved environment.
5.2. Success of this strategy will depend on the implementation and effectiveness of the following key principles and actions:
6.1. Effective procurement forms a continuous cycle of action and improvement, from identification of needs through to review of delivery and achievement of outcomes and includes procurement and contract management activity. The stages are interdependent – each stage builds on the previous ones. The outcome for the procurement exercise may not be known at the outset and this may result in a grant being awarded, provision remaining in-house or a fully tendered procurement.
6.2. This strategy is aimed at promoting effective procurement across all services and should be read in conjunction with our Contract Procedure Rules and Financial Procedure Rule.
6.3. There are several types of procurement procedures we can legitimately use, these are described below:
- Open Procedure – any supplier may submit a bid for an advertised opportunity.
- Restricted Procedure – any supplier may express an interest to participate in this procedure, but only those suppliers who pass a pre-selection process may submit bids.
- Competitive negotiated procedure – any supplier may express an interest to participate but only those who pass a pre-selection process may submit an initial bid and then to negotiate.
- Competitive dialogue – any supplier may express an interest to participate but only those who pass a pre selection process may enter into a dialogue over possible solutions to our requirements. Following the conclusion of the dialogue we must invite a minimum of 3 bids.
- Innovation partnership – allows us to develop innovative products, works or services where no suitable solution exists in the market and then to purchase the resulting products, services or works.
- Framework agreements – a framework agreement is a particular type of contract where a council or buying organisation establishes an arrangement where a number of suppliers are accepted as competent to deliver the service and the framework specifies the terms for awarding specific contracts as required.
- Contracts obtained from a framework are called call-offs and the framework specifies the terms of call-offs, such as awarding directly to a single supplier or through a mini-competition with all suppliers.
- The restrictions on framework agreements are that they cannot exceed four years and the terms of a contract cannot be varied substantially from what is set out in the framework. Only authorities clearly identified as part of the framework can award contracts, though the contracts awarded can last longer than the framework itself.
- Dynamic Purchasing System – a Dynamic Purchasing System is like a framework agreement, but it allows new suppliers to be added as potential suppliers over the duration of the arrangement and there is no time limit on its application.
- Light Touch Regime Regulations – contracts valued above the threshold for services specified as part of the Light Touch Regime have to follow the procedure for publishing an opportunity through a contract notice or prior information notice or contract award notice in Find A Tender, the replacement process for OJEU. However, we are not bound to follow any of the procedures specified under the full regulations.
7.1. Public procurement operates in a highly regulated environment that is governed by legislation and policies set by nationally through statute (Public Contract Regulations 2015) and case law and locally by the Council’s Constitution. Please see Appendix 2 for details of the relevant legislation and procedure rules. It is anticipated that significant changes to procurement processes will be made through the forthcoming Transforming Public Procurement legislation early 2023.
- 8.1. The National Procurement Strategy recommends that local authorities demonstrate political and senior officer leadership of procurement.
8.2. Members role in procurement
Members are responsible for:
- Cabinet are responsible for authorising this Procurement Strategy and reviewing progress on the strategic aims and for ensuring compliance with the Financial Procedure Rules.
- Procurement activity requiring more detailed member involvement includes:
> Making key decisions in the procurement process for major projects.
> Where a new service or a substantially varied service is being considered.
> High public interest.
> Significant reputational or financial risk.
> Significant risk of failing to meet legislative requirements.
8.3. Corporate Management Team (CMT)
CMT are responsible for:
- Management of the strategy and to review progress against the implementation of the actions.
- Strategic leadership and governance of procurement.
- Ensuring the Procurement Strategy aligns with corporate objectives.
- Overseeing the arrangements for procurement and to ensure they are operating effectively.
- Ensuring value for money and risk management are considered as part of any procurement activity.
- Ensuring equality and sustainability are considered at each stage of the procurement process.
8.4. Operational Managers and Relevant Staff
- Each relevant operational manager is responsible for ensuring that the staff in their areas have the right level of skills to deliver effective procurement and will also monitor all procurement activity in their services.
- For specific, high value (current Public Contracts Regulations 2015 limits for services.) or high risk contracts, project teams are formed to ensure that technical, legal and commercial issues are considered, using the project management framework.
- Staff involved directly with the purchase of goods, services and works must ensure they comply with this strategy, and the Contract Procedure Rules, with reference to the guidance from ESPH; and conduct relationships with suppliers and the Council in an ethical and appropriate manner to ensure they promote their employer in a positive way.
8.5. East Sussex Procurement Hub
The East Sussex Procurement Hub as a shared service for Hastings, Wealden and Rother offers procurement guidance in line with best practice, and monitors procurement activity across the Council, including:
- Coordinating this procurement strategy on behalf of the Council, and leading on the implementation of the procurement aims.
- Providing assistance to contract owners in the control and management of contracts.
- Development and maintenance of procurement documentation and ESPH web pages to publicise procurement plans, information and advice to potential suppliers and staff; to comply with transparency requirements.
- Continue the development of e-procurement to deliver savings in transactional processes.
- Providing assistance to contract owners in the planning and co-ordination of improvement of current contracts, business continuity, exit strategies and post contract appraisals and reviews.
- Ensuring the procurement process eliminates the potential for fraud and favouritism towards any supplier.
- Supplier analysis to identify supplier base, spend per supplier, spend per category.
- Coordinate and monitor the Council Contracts Register to allow improved advanced planning for procurement and contract management activity.
- Organising training for staff, to include specific procurement training, induction and Contract Procedure Rules, and use of the procurement portal.
9.1. Value for money does not mean the lowest cost. There are many aspects to achieving VFM through the procurement process; mainly to select a procurement model that is proportionate to the value and risk of individual contracts.
9.2. It also requires a proportionate approach to the evaluation of cost and quality; where the costs can be broadly predetermined there will be a higher weighting towards quality.
9.3. VFM is not just about price, there are a wide range of other considerations that may be taken into account when assessing VFM, including for example, quality relevant and appropriate to the specifics of the contract; social value in terms of community experience and outcomes and whole life value.
10.1. The Public Services (Social Value) Act 2012 requires us to consider how the services we procure might improve the economic, social and environmental well-being of the area. It is defined as improving economic, social and environmental wellbeing from public sector contracts over and above the delivery of the services directly required at no extra cost. Used properly, additional social value can be beneficial to both suppliers and councils and represent a joint effort to exploit maximum value from procurement.
10.2. Our Social Value Policy is currently in development and will set out our approach to ensure that all resources are used wisely and that we protect and acknowledge the current Climate Change Emergency and enhance the environment whilst ensuring the efficient use of resources and delivery of value for money. It will also acknowledge the current financial pressure facing the Community and Voluntary sector post Covid, especially with the challenges of the Climate Change Emergency.
11.1. As part of the Social Value Policy, sustainability is an important consideration when making procurement decisions. It ensures that we prioritise the environmental impact of procurement decisions.
11.2. We are committed to making our spending decisions in a way that delivers both value for money on a whole life cycle basis, and achieving wider economic, social and environmental benefits.
11.3. We are committed to achieving the aims of the Council’s Climate Change Emergency Policy, and we will:
- Require our suppliers and contractors to reduce the impact of goods, works and services by considering whole life costs; ending our use of single use plastics; and the carbon impacts associated with goods works and services.
- Require information from potential suppliers on how they will help us to progress our environmental objectives as part of the delivery of a contract.
12.1. We recognise that there are significant advantages of engaging with small local businesses, for both the Council and the local economy. We are committed to using procurement processes that encourage such businesses to compete for opportunities.
12.2. We are precluded from any explicit local buying policies by the Public Contracts Regulations 2015, however we will procure in a manner that benefits the local economy. Procurement Aim 3 – achieving community benefits, in Appendix 1 further identifies our aims in relation to supporting the local economy. We will also recommend to suppliers and contractors that local suppliers are used in the supply chain, where appropriate.
13.1. Ethical procurement considers the impact of environmental, economic and social factors along with price and quality. We must be aware and look out for signs of unacceptable practices in the supply chain such as modern slavery, fraud and corruption.
13.2. We are committed to a positive approach to combat Modern Slavery and we will:
- Train all relevant staff using the Chartered Institute of Purchasing and Supply’s online course on Ethical Procurement and Supply (Public Sector).
- Require contractors to comply fully with the Modern Slavery Act 2015, wherever it applies, with contract termination as a potential sanction for noncompliance.
- Challenge any abnormally low-cost tenders to ensure they do not rely upon any potential contractor practising modern slavery.
- Highlight to our suppliers that contracted workers are free to join a trade union and are not to be treated unfairly for belonging to one.
- Publicise our whistle-blowing system for staff to blow the whistle on any suspected examples of modern slavery.
- Require our contractors to adopt a whistle-blowing policy which enables their staff to blow the whistle on any suspected examples of modern slavery.
- Regularly review our contracted spending to identify any potential issues with modern slavery.
- Highlight to our suppliers any risks identified concerning modern slavery and refer them to the relevant agencies to be addressed.
- Refer for investigation via the National Crime Agency’s national referral mechanism any of our contractors identified as a cause for concern regarding modern slavery.
- Annually report on the implementation of this policy.
14.1. Risk management is an integral part of a procurement process and must be considered at the planning stage of any procurement process. We will identify the risks associated with all major procurement activity and the contingencies for service disruption in each project and how these are to be mitigated and managed.
14.2. For any high financial value, high risk or high profile procurement and which also involves significant risk including staff transfer; or significant potential for reputational or financial risks we will utilise the project management methodology throughout a projects life to ensure it delivers the project objectives and outcomes. Risks and issues register(s) relating to the procurement will be set up and regularly monitored by the project team.
15.1. Contract and relationship management refers to the effective management and control of all contracts from their planning inception until their completion by the appointed contractor(s). It covers the supported policies, procedures and systems needed to undertake it, together with broader issues from the identification and minimisation of risk, successful and timely delivery of outcomes and performance, effective control of cost and variations, and the maintenance of clear communications and operational relationships with contractors.
15.2. Buyers and contract managers will be proactive in relation to managing contracts and performance in order to ensure that positive output and outcomes are maximised, cost variations are minimised and any issues in relation to the delivery of the contract are appropriately addressed at the earliest opportunity.
16.1. Business continuity is the process of preparing for and responding to a disaster, pandemic, event or situation that could have a serious impact on the delivery of services. For high risk procurements the suppliers will be required to submit a business continuity plan as part of the tender submission. All key suppliers will be required as part of contract management to provide an annual update of their business continuity plans, which will need to be reviewed in the light of the Covid-19 pandemic.
Vision for procurement
Our vision for procurement over the term of this strategy is to demonstrate value for money through the effective procurement of goods, services and works on a whole life basis in terms of generating benefits to the community and the organisation, whilst minimising impacts to the environment.
Procurement Aim 1 – Showing Leadership
With local government third party expenditure totalling around £60 billion a year in revenue alone, procurement clearly has a major contribution to make. A more strategic approach to procurement should be at the heart of thinking for our councillors and decision makers because procurement is not merely about ensuring compliance. There is an ever-growing need to engage with service heads and procurement teams on high value-high risk procurements to drive innovation, generate savings and identify opportunities for income generation.
What it is: Councillors set the council vision and strategic priorities and must be satisfied that the procurement and commercial arrangements for their delivery are robust. Councillors make key decisions, particularly in major projects, and maintain oversight of the performance of key contracts, agreeing corrective action where necessary. Councillors need to be fully engaged in these roles. Councillor engagement needs to be supported through training, good procurement and commercial advice and reporting arrangements.
Why it is important: When councillors are fully engaged with procurement and commercial matters, the quality of decision-making is better and oversight and accountability are improved. Among other things, councillor engagement leads to better project delivery and better outcomes for the local community.
Engaging Senior Managers
What it is: Key decision-makers value and benefit from procurement and commercial advice, including advice at the early stages of major projects. This is a two-way process requiring action by senior managers on the one hand and by procurement and commercial advisors on the other.
Why it is important: Good procurement and commercial (wherever possible, provided in-house or shared between councils) can have a decisive impact on the outcome of a project, particularly one involving innovation. It is important that senior managers engage with the procurement and commercial issues from the earliest stages of the project.
Working with Partners
What it is: The council works as a single team to design and implement solutions for public services and commissioners / budget holders, and commercial and procurement advisors work together as part of that team.
Why it is important: A team approach is the best use of limited resources and can lead to innovative solutions and better results. The team approach should characterise how council departments work together and how the council works with other councils, health, fire, police, housing, VCSEs and other partners.
Engaging Strategic Suppliers
What it is: The council takes a strategic approach to the management of relationships with the most important suppliers (otherwise known as Strategic Supplier Relationship Management). This activity should be carried out cross-department and is most effective when done cross organisation.
Why it is important: Effective management of strategic supplier relationships can deliver a range of benefits including improved outcomes for the public, added social value, reduced cost, reduced risk and innovation.
Procurement Aim 2 – Behaving Commercially
We need to improve public service commissioning and procurement to increase the effectiveness and efficiency of government. This means improving the skills of public sector leaders so their teams can design service provision, influence external parties, and shape and manage markets to get the best outcomes.
Creating Commercial Opportunities
What it is: There are many ways in which commercial opportunities can be created through the strategic management of the commercial cycle and the services and assets delivered through the contracts it creates. Commercialisation is a broad and important subject to the sector. This key area is confined to how procurement teams should contribute to helping identify and create commercial opportunities.
Why it is important: As grants from central government are reduced, organisations are required to look at other means of reducing funding deficits. Commercial opportunities can be created in many different ways, from conventional means such as increasing returns on assets to the way it engages with its development partners and third party contractors.
Managing Contracts and Relationships
What it is: Contract and relationship management is the process by which all contracts and variations are managed effectively to control costs, secure the quality and timeliness of agreed outcomes and performance levels and minimise the occurrence of risks.
Why it is important: Research by the International Association for Contract and Commercial Management (IACCM) shows that contracts exceed their expected costs by 9.4 per cent on average over their lifetime. Poor contractor
Managing Strategic Risk
What it is: A series of actions and policies designed to reduce or even eliminate the probability of a perceived risk occurring and minimising the detrimental effects that may occur should it materialise.
Why it is important: The occurrence of any risk, particularly when it could be foreseen, can have a devastating impact on the organisation’s reputation and the lives of the people it serves, the quality of the services that it provides, and even its financial viability.
Procurement Aim 3 – Achieving Community Benefits
We can use procurement to achieve wider financial and non financial outcomes, including improving wellbeing of individuals and communities, social value and improved environment.
Obtaining Social Value
What it is: Social value is about improving economic, social and environmental wellbeing from public sector contracts over and above the delivery of the services directly required at no extra cost.
Why it is important: Experience from procurements let by Councils that have fully included social value requirements has shown that a minimum +20 per cent social value ‘additionality’ can be obtained on contract value by way of direct community benefits.
Local small medium enterprises (SMEs) and micro-business engagement
What it is: SMEs are non-subsidiary, independent firms.
Why it is important: SMEs play a major role in creating jobs and generating income for those on low incomes; they help foster economic growth, social stability, are a source of innovation and contribute to the development of a dynamic private sector. With the potential localisation of business rates, it will be even more important for local authorities to encourage the establishment and growth of SMEs in their areas. The importance of local sourcing has been highlighted by our support from these business during the Covid 19 pandemic.
Enabling voluntary, community and social enterprise (VCSE) engagement
What it is: The VCSE sector is diverse in size, scope, staffing and funding of organisations. It provides a broad range of services to many different client groups. However, VCSE sector organisations share common characteristics in the social, environmental or cultural objectives they pursue, their independence from government, and the reinvestment of surpluses for those objectives.
Why it is important: VCSE organisations can play a critical and integral role in providing local services; being advocates for specific causes; and representing the voice of service users.
Public procurement operates in a highly regulated environment that is governed by legislation and policies set by the Public Contract Regulations 2015, nationally through statute and case law and locally by our Constitution and Contract and Contract Procedure Rules, and other relevant Council policies. These are listed below:
Public Contract Regulations (PCR) 2015
The Public Contract Regulations have run alongside the EU procurement regime since 2015 and superseded them once the UK left the EU in 2020. The PCRs give detailed instructions on how public procurement over a certain threshold should be carried out. The detail behind the legislation and regulations is complex, and since their inception has been supplemented by a raft of case law. This legislation is currently under review under the governments Transforming Public Procurement agenda. Following a period on consultation it is expected that these regulations will come into force in 2023.
Local Government Transparency Code 2015
The Transparency Code requires the Council to publish details of every invitation to tender for contracts with a value that exceeds £5,000. We must also publish details of any contracts, commissioned activity, purchase order, framework agreement or any other legally enforceable agreement with a value that exceeds £5,000.
The Public Services (Social Value) Act 2012
This act places a duty on local authorities, at the ‘pre procurement’ phase of procuring services to consider how and what is being procured might improve the economic, social and environmental well-being in their community; and how they might secure that improvement in the procurement process itself as long as such action is relevant to what is being procured, and is considered to be proportionate.
Community Right to Challenge (Localism) Act 2012
This act to enables “relevant bodies”, for example voluntary and community groups, employees or Parish Councils, to challenge to take over local services that they think they can run differently or better. The right enables a relevant body to submit an expression of interest (EOI) to a relevant authority to provide or assist in providing a relevant service.
Freedom of Information Act 2000
This act provides people with the right to access to information held by public bodies. This with the government’s transparency agenda has consequences for those contracting with the partners where the financial details of contracts awarded may be made public.
Data Protection Legislation
The General Data Protection Regulation 2016 and the Data Protection Act 2018 sets out the basis on which we process the personal data we collect. Any contract must clearly set out the roles and responsibilities of the council and the contractor, and require the contractor to comply with Data Protection legislation and indemnify the council against any claim.
Contract Procedure Rules, Financial Regulations and Scheme of Delegation
As part of its corporate governance arrangements the Council must ensure that there are adequate controls, procedures and standard documentation in place to satisfy the need to meet probity, propriety and transparency tests. Contract Procedure Rules, Financial Regulations and Scheme of Delegation fulfil this requirement and they are part of the approved Constitution. They must be observed by both Members and Officers within the procurement process.
The KPI’s below will be used to measure our progress toward the level of ambition set out in this strategy. These will be assessed in 2023 and 2024 as follows:
- Where the KPI includes a value, by comparison of actual results against target; and
- Where the KPI does not include a value, by utilising the National Procurement Strategy toolkit to assess (with input from procurement and commissioning officers across the Council) the Council’s maturity level.
Value for Money and Efficiency
Key Area 1: Delivery of budget savings through procurement.
Baseline: Target of 1.5% of external expenditure based on 2021/22 levels (£330,000 at 2020/21 levels).
Target 2022 – 2023: Figures for future years to be agreed with Finance on an annual basis.
Key Area 2: Procurements are undertaken legally (including in accordance with changes in legislation/case law e.g. Brexit), consistently and within the CPRs/financial procedure rules. All Freedom of Information requests are responded to in a timely manner.
Baseline: Procurement Policy Notices issued by Government on a regular basis identifying impacts of legislative changes on the procurement process. CPRs are reviewed annually; training and guidance is provided. Exemptions of CPRs are routinely monitored and reported to Cabinet Committee annually in conjunction with the Performance Report.
Target 2022-2023: Procurement refresher training for all relevant officers to take place in Spring of 2022. Transforming Public Procurement comes into force early 2023 and training programme will need to be established for staff and Members in the Autumn of 2022. The impacts of new legislation is reviewed and procurement processes updated accordingly. The number of service area exemptions reduced year on year from the baseline figure from 21/22. On-contract spend to increase year on year from the baseline figure in 21/22.
Key Area 3: Review of tender documentation and procurement toolkits.
Baseline: Standard tender/toolkit documents in place and being used across the council.
Target 2022 – 2023: All tender documents and procurement toolkits reviewed to ensure they reflect up-to date procurement practices.
Key Area 4: External and unforeseen events (e.g. Brexit, Covid-19)
Baseline: Keeping abreast with central government briefings and taking appropriate action, as and when required.
Target 2022 – 2023: Thorough understanding of the possible impact on all high value/risk contracts. Contingency plans in place in the event of contract failure.
Key Area 5: Fraud and financial loss
Baseline: Basic systems, controls and reporting is in place to ensure compliance and minimise potential for financial loss from both internal and external sources.
Target 2022 – 2023: Assessment of systems to take place following the guidelines of the Local Government Procurement Fraud review of 2020. Audit teams working closely with all departments to make this a priority.
Obtaining Social Value
Key Area 6: Policy and scope.
Baseline: A process and policy is in place to identify which contracts should include social value.
Target 2022 – 2023: Review approach to embed Social Value culture into procurement processes and create Social Value officer sub-group to enable this change. Key tasks of group will be to develop Social Value Policy in 2022 outlining an approach to maximise environmental and social wellbeing. We will establish the baseline figure as to the number of procurement exercises which have included social value criteria at end 21/22 and then increase this sum year on year. We will look into developing a mechanism for a monetary sum to be offered for Social Value.
Key Area 7: Councillor or cabinet board/authority member given responsibility for reporting leading on social value.
Baseline: We have a Lead Member who has responsibility for leading on social value.
Target 2022 – 2023: Individual named officer(s) within ESPH given responsibility for reporting to Lead Member and Officer group, and managing and delivering social value across procurement and commissioning. Relevant officers are provided with social value training.
Key Area 8: Market engagement and Contract Management
Baseline: We currently work closely with the business community on various projects and meet regularly with representatives from third sector organisations. Where relevant, specific, targeted social value action plans are agreed at the commissioning / procurement stage, are bound into the contract and performance against those targets are monitored.
Target 2022 – 2023: Baseline set against pre-pandemic practices and we will continue to work proactively to support third sector suppliers and their understanding of social value. Performance reviews will be undertaken and regular feedback obtained. Action will be taken to ensure continuous improvements to social value implementation and delivery.
Key Area 9: Governance and accountability
Baseline: Social value is recognised as a core principle of the council’s procurement strategy. All relevant procurement documentation is available on Council Website.
Target 2022 – 2023: We will continue to ensure Lead Member for social value has direct oversight of social value performance. We will embed social value into commissioning and procurement practice, tools, resources and processes with a ratified policy that is published.
Local SMEs, micro-business and VCSE engagement
Key Area 10: Policy and scope
Baseline: To effectively communicate local needs and the desired market outcomes.
Target 2022 – 2023: Pipeline of opportunities to be published on website to inform relevant parties of local needs and the desired market outcomes. The value of spend with local suppliers and SMEs to increase year on year from the baseline figures set for 21/22. Undertake analysis of external spend with companies outside of area to identify future opportunities to develop a local supply chain.
Key Area 11: Facilitating good relationships with SMEs, micro-businesses and VCSE organisations
Baseline: Relationships between SMEs, micro-businesses, VCSE organisations and other providers not at commissioner level.
Target 2022 – 2023: Identify and implement appropriate communication process between procurement / commissioners and SMEs / VCSE organisations. Explore potential for Understand The Buyer event to update local businesses on changes to Procurement regulations in 2022/23.
Key Area 12: Annual Procurement Programme
Baseline: Forward planning is undertaken in all areas following consultation with commissioners. Opportunities to create new revenue streams is sometimes investigated in some service areas and for some expenditure categories.
Target 2022-2023: Forward planning needs to be undertaken across the organisation to consider commercial opportunities for arrangement commencing in the next 3 years. Procurement is engaged in the inception of strategic projects to effectively contribute ideas for revenue generation in the forward planning process.
Key Area 13: Tendering
Baseline: Tendering is seen as a commercial process by the organisation. Standard tender documentation is drafted to encourage bidder participation and is focused on innovation and opportunities. Procurement is seen as an integral contributor to the planning phase.
Target 2022 – 2023: Subject to early engagement we will ensure that tendering opportunities are focused on innovation and opportunities, and carried out in conjunction with partners to maximise market attractiveness.
Key Area 14: Performance reporting
Baseline: Performance reporting is undertaken on an annual basis to Cabinet and includes commercial and social benefits achieved, as well as savings across the whole organisation.
Target 2022 – 2023: We will report more effectively on performance on commercial and social benefits achieved.
Key Area 15: Post contract review
Baseline: Post contract reviews are undertaken by most service areas. Such reviews are seen as being an integral part of improving outcomes and identifying commercial opportunities.
Target 2022 – 2023: Post contract reviews will be undertaken on all cyclical arrangements. We will develop effective criteria for undertaking post contract reviews including the identification of potential commercial opportunities.
Supplier relationships and contract management
Key Area 16: Data collection and analysis
Baseline: We have partial data and intelligence on our strategic suppliers. We have a contract register with access possible at officer level, mainly viewing and searching capability.
Target 2022 – 2023: We will routinely collect and analyse data and intelligence on supplier performance, cost, financial status, added social value and risk. We will have complete data sets for all major third party spend, including those of low value.
Key Area 17: Early engagement with future strategic suppliers
Baseline: Our future needs are signalled to the market using a variety of channels including publication of pipeline information and engagement events. Publication of pipeline information and engagement events. We engage early with bidders on significant projects through market consultation/testing and seek to encourage innovative solutions.
Target 2022 – 2023: We will work with the combined authority/ group of councils and take a lead role for market engagement. We will take the lead in early engagement for any joint projects we undertake.
Key Area 18: Supplier financial distress
Baseline: We have a structured approach to early engagement of suppliers in financial difficulties.
Target 2022 – 2023: We will include supplier financial distress clauses in all contracts for goods, works and services. We will provide guidance to commissioners and contract managers on managing suppliers in financial distress.
Key Area 19: Savings and benefits delivery
Baseline: A process is in place for capturing savings and accruing benefits from contracts but this is not uniformly implemented.
Target 2022 – 2023: Savings captured from contracts and benefits-realisation will be applied uniformly across the council and reported to heads of service on a regular basis. We will streamline approach to savings capture / benefits realisation which will be applied uniformly across the council and reported to Cabinet on an annual basis.
Key Area 20: Recognition and cultural acceptance
Baseline: There is recognition by the organisation of contract and relationship management in service areas. Job roles are designated as contract manager and/or contain specific contract and management activity in their content description in some service areas.
Target 2022 – 2023: Contract and relationship management will be recognised as being essential to overall contract performance. Need to review approach to contract management with more effective training and resources Performance will be reviewed with job holders in their annual appraisals.
Key Area 21: Skills and knowledge
Baseline: Staff have access to general contract management guidance / resources as a one-off exercise rather than an ongoing skills enhancement programme.
Target 2022 – 2023: Contract and relationship management will be acknowledged as a core competency across the council. Briefings on contract and relationship management will form a part of all induction and management programmes.
Key Area 22: Developing Talent
Baseline: The ESPH service plan includes support for staff to obtain professional qualifications and for apprenticeships.
Target 2022 – 2023: We have a planned approach to developing talent in relation to future procurement and contract management workload including:
- Resource planning.
- Competency framework.
- Comprehensive training and development plan including provision for development of staff not currently in procurement.
Key Area 23: Exploiting Digital Technology
Baseline: We currently have basic purchase ordering functionality for all products and/or services using finance systems. There is limited procurement and contract management information via existing databases. We use an electronic tendering and quotations system for most tenders/ quotes.
Target 2022 – 2023: Most procurement and contract management Information will be available online to all stakeholders with appropriate search and filtering functions available. Digital evaluation and e-signature approaches to be reviewed and implemented.
Buying – placing orders under relevant contracts, use of purchasing cards and purchase-to-pay systems, receipting, making payments and associated transactions. This is also sometimes called Purchasing.
Category Management – best practice approach to managing and organising Procurement spend and resources; a structured framework of activities designed to deliver better Procurement outcomes through a holistic approach which focuses on the interrelated needs of buyers and suppliers; managing buying activity by grouping together related Goods, Works and Services across the council and mapping them onto the Provider market, to improve quality, savings and efficiency across the council as a whole.
Commissioning – the entire cycle of assessing the needs of people in a local area, designing and putting into place Goods, Works and Services to meet those needs, and monitoring and evaluating the outcomes. In a commissioning approach, the council seeks to secure the best outcomes for local communities by making use of all available resources, whether the resources are provided in house, externally or through various forms of partnership. This activity continues throughout the Whole Lifecycle.
Contract Management – the tasks and activities which seek to ensure we receive what we have contracted to receive, at the price we contracted to receive it, taking account of agreed change and continuous improvement. Activity is focused from prior to the contract starting though to contract expiry and de-commissioning. It includes supplier relationship management and also ensures that we meet our obligations under the contract.
Goods – things that we buy, such as pens and paper, or plants and seeds, or fruit and vegetables.
Procurement – the tasks and decisions which secure an external Provider to provide what we want, at a price that we can afford. Activity is focused on the period from prior to advertising a tender to signing the contract. It includes both competitive tenders and circumstances where we negotiate with a single supplier.
Provider – any organisation that provides Goods, Works or Services to the council or on behalf of the council.
Purchasing – placing orders under relevant contracts, use of purchase-to-pay cards and systems, receipting, making payment, and associated transactions.
Services – services that we buy include specialist support for vulnerable children and adults, and also repairs and maintenance services, financial advice, designs and surveys for new building works.
SME or Small and Medium Enterprises – firms that employ 9 or fewer staff (micro), and firms that employ 50 or fewer staff (small), and firms that employ 250 or fewer staff (medium), and with a turnover of less than £50 million.
Social Value – the additional economic, social and environmental benefits that a contract achieves.
Value for Money or VfM – buying the right thing at the right price, taking account of price, quality, outcomes and whole life costs; the combination of whole-life costs and benefits to meet the customer’s requirement; the relationship between economy, efficiency and effectiveness.
Whole lifecycle – the whole cycle of assessing needs, analysing options, preparation, Procurement, mobilisation, Contract Management and exit.
Works – construction works that we buy, including construction of new buildings, or extensions, and also creation and improvements to roads and bridges and open spaces.