Government Policy & Joint Procurement
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  • Lets compare all public sector spend by commodity area across sectors; We can compare : Public Sector Wide Level Sectoral Level organisational level , referencing our own organisation We can (as we’ll see later) Trend the data Analyse a variety of operational and supply chain indicators; Number of invoices processed average send / invoice / creditor % of spend with top 20% companies At the same time always being able to get back to our own data.... We find; Clear Leading Commodities & also incredible diversity of Supply Base – over 51 K Suppliers, ( 200 thomson trade classifications
  • We can focus more clearly upon the medtech sector in health NHS NP is one of the longest established COE’s The Medtech category is one of the most complex (like construction & social care) – clinical specifiers wielding the power and companies constantly innovating We can find that despite the complexities and despite market fragmentation at the low end ie total number of companies, The public sector is now 5% more consolidated than previously. There are more obvious examples – Stationary & IT Hardware trends show a more pronounced effect. But I show you this one as the next phase of procurement challenge Cat B Show : Supplier Data (LIVE) We can identify spend with common suppliers by entity and company and where collaboration should be possible. In addition to this inter-sector comparison we can also look at Intra sector collaborative opportunities; In LG – Spend on Medical Equipment – oriented towards Home care aids – The NHS spend roughly 10x more with the same companies. In ED – Spend on Labs – Again the NHS spend significantly more with the same companies PFE – Defibs & Some


  • 1. Scottish Library and Information Council “Government Policy & Joint Procurement” Gary Robinson Branch Mgr - Procurement Development Scottish Procurement Directorate
  • 2. Agenda
    • Procurement reform : McClelland Report & Conclusions
      • Vision
      • Major challenges, key enablers & critical success factors
      • Structure SPD & Programme Governance Structure
      • Major challenges
    • Enabling the strategy
      • Centres of Expertise
      • Policy & Guidelines
      • Professional People & Training
      • Tools
        • Best Practice
        • Technical Enablement & Management Information
      • Competitive Supply Base
    • Questions
            • 20 minutes
  • 3. Public Procurement Reform in Scotland Report & Recommendations, John McClelland CBE,
    • Observations:
    • Significant room for VFM improvement;
    • Opportunity to redirect savings to front line services;
    • Better procurement would drive better quality goods / services & reduce risks;
    • Potential to increase collaborative procurement.
    • Summary Conclusions
    • Ministerial support a prerequisite;
    • Programme board to support implementation of change programme;
    • Some progress made but not consistent across public sector;
    • Governance issues require urgent action:
      • All procurement activity by staff in procurement team or with specific delegated authority to procure;
    • Procurement needs a higher priority;
    • Need for greater collaboration; (not just in joint contracting).
    • Investment required on resources and skills;
    • Central leadership needed with procurement policy being mandatory;
    • eProcurement Scotl@nd is a fundamental platform – accelerate implementation.
    McClelland Report:
  • 4. Context: Public Sector Procurement Vision
    • Public Sector spend on goods and services ~ £8bn
    • Procurement Scotland focus on national (Category A) commodities ~ £1bn
    Category A Category B Category C1 National Procurement Single interface with public sector facilitates efficiency/competitiveness of suppliers. e.g. IT HW, SW, Telecoms, Utlities, Professional Services, Corporate Services. Sector Specific CGCoPE APUC; Scotland Excel; NHS National Procurement Regional Collaboration at local level e.g. Tayside Consortium Interface via sector Centres of Expertise. e.g. Social Care, Medical Equipment. Category C Interface coordinated via regional hub e.g. Printing (collaboration across organisations) Procurement Scotland Local 185 Major procuring organisations; In excess of 900 in total; Many, many local purchasers/requisitioners….! Many contracts will exist at a local level.
  • 5. Vision : Public Procurement Reform Programme
  • 6. Scottish Procurement Directorate Scottish Procurement Directorate Procurement Policy & Development Construction Advice & Policy CGCOPE eProcurement Scotland Procurement Scotland
  • 7. Public Procurement Reform Governance Structure Chair John Swinney MSP , Cabinet Secretary for Finance and Sustainable Growth Chair Jim Mather MSP , Minister for Enterprise, Energy and Tourism Procurement Scotland ePS CGCope Scottish Procurement Directorate Fire Police Scotland Excel APUC NHS Nat. Proc. Delivery Group Advisory Group Reform Board
  • 8. Major Challenges
    • Major change programme;
    • Evolving governance;
    • Organisations at different stages of development;
    • Conflicting priorities;
    • New terminologies / ways of working;
    • Resource constraints, changing roles & expectations;
    • Political & media focus;
    • Differing perceptions/expectations on vision, progress and timeline;
    • Need to parallel process ‘set up/development’ with ‘delivery’;
    • Ensuring appropriate engagement and communications in complex stakeholder environment.
  • 9. Key Enablers & Critical Success Factors
    • Ministerial endorsement and direct support;
    • High level sponsorship and champions at the top and locally;
    • Increased visibility/expectations of procurement and its contribution;
    • Investment in procurement skills development;
    • Common vision & approach;
    • Key enabling platforms! (MI, toolkits, collaborative tools/systems);
    • Agreed ways of working/protocols & stakeholders willingness to engage & interact constructively; and
    • Passion and enthusiasm for driving the programme, upskilling and sharing learnings openly.
  • 10. Enabling the Strategy - Centres of Expertise
    • To enable and drive procurement capability and expertise;
    • To facilitate and drive best practice :
      • Adherence to legal, EU and policy requirements;
      • Benchmarked and consistent strategic procurement processes (toolkits);
      • Responsible procurement;
      • Process efficiency & eEnablement;
      • Performance management;
      • Supplier engagement / SRM / supply chain management; and
    • To deliver collaborative national/sector procurement strategies and contracts that deliver best value for Scotland/sector for assigned commodities.
  • 11. Enabling the Strategy - Procurement Policy & Guidance
    • Procurement governance, basic standards and legal/EU obligations at the heart of effective procurement;
    • Importance of central procurement body to support policy development and future direction of procurement;
    • Understanding and commitment across the business:
      • Documented basic or acceptable standards
      • Audit/Review Function – Capability Assessment Tool Deployed
      • Improvement/Development Plans
    • Procurement
      • Procurement Regulations (EU, Legal, Treaty, Case Law)
      • Procurement Policy & Practice (Policy Hand Book, Policy Guidance Notes, CSR/Ethical considerations, Best Practice Toolkits, Sustainable Procurement Action Plan)
      • Procurement/Spend Controls & Supporting Governance, DPA.
    • Suppliers
      • Commitment to suppliers (Suppliers’ Charter, 6 Step Plan)
      • Right of supplier re-dress on policy/practice (i.e. Single Point of Enquiry, Courts, Legal, Press, Ministers....)
  • 12. Enabling the Strategy (The Tools) - Best Practice & Ways of Working
    • The Toolkit:
    • is online facility with key steps, supporting tools & templates to support effective procurement;
    • does not replace need for investment in skills development;
    • Supports procurement process and how to build an understanding of:
    • Market, supply and political drivers;
    • Product and supply chain characteristics;
    • Opportunities for innovation;
    • Total cost analysis
    • Opportunities to add value & support economic, environmental or social considerations.
    • Risk management and mitigation
    • Better enables:
    • EU/legally compliant procurement with adherence to policy
    • Robust tender evaluations
    • Effective communication & implementation
    Toolkit is key but success determined by: => Understanding of procurement, effective communication, information sharing…
  • 13. Enabling the Strategy - Professional People & Skills
    • - Scarcity of good procurement skills
    • Job descriptions and adverts call out requirement for CIPS, or equivalent, qualifications;
    • Competency based framework
    • Pay course fees and allow study time for people to obtain qualifications;
    • A key performance indicator;
    • Developed a close working relationship with CIPS, viewed as a key partner
    • Increased training for people involved in procurement across Scotland
  • 14. Enabling the Strategy (eTools) - Technical Enablement & Management Information
    • Scotland rolling out common eProcurement platform
      • And supporting eEnabling tools (e.g. eTendering, eAuction);
    • Developed national information Hub:
      • Extract spend information from every organisations’ accounts systems on annual (or quarterly) basis;
      • Hub cleanses, manipulates & classifies information enabling national, sectoral and local reporting;
      • View of spend across the whole public sector and with whom;
      • Most successful spend analysis project in the public sector in Europe;
    • Developed and agreed national performance indicators
      • uploaded and tracked on the Information Hub; and
    • Ongoing developments to further improve and simplify reporting.
  • 15. Public Sector Spend Segmentation
  • 16. Spend with SMEs 49% spend by value with SMEs
  • 17. Enabling the Strategy – Competitive Supply Base
    • Impartial point of contact for advice/concerns on public procurement practices in Scotland:
      • Provide businesses with advice on procurement legislation & practices;
      • Seek resolution of disputes regarding procurement practice;
      • Help improve the consistency of public procurement processes;
    • Will operate with impartiality, fairness and objectivity and promote culture of openness and transparency in relation to procurement practice.
    • Ensuring fairness and transparency for all suppliers;
    • Identifying and reducing barriers to business; and
    • Specifically Commits to:
      • Adequate publicity (facilitated by the national portal);
      • Use of core questionnaire (ensure proportionality, minimise burden);
      • Debriefing on request (transparency and supplier development).
    http:// /Topics/Government/Procurement/Selling Suppliers Charter Single Point of Enquiry
  • 18. Enabling the Strategy – Competitive Supply Base
    • Supporting Government’s wider economic agenda through procurement whilst adhering to legal & EU requirements:
      • Understand market dynamics;
      • Drive innovation;
    • Ensuring a more equal playing field for suppliers of all sizes in all locations:
      • Innovative strategies to enable competition on ‘ value add ’ products and services;
      • Developing supplier/market capability;
      • EU prohibits protective policies;
      • Want sustainable & competitive local businesses;
    • Increasing transparency & ease of doing business with Scottish public sector:
      • Supplier events & roadshows;
      • Supplier engagement throughout procurement process;
      • Info on web.
  • 19. Enabling the Strategy - Competitive Supply Base
      • A one stop shop for advertising public sector tender opportunities;
      • Increases transparency and opens up access to businesses;
      • Officially launched by the Cabinet Secretary for Finance and Sustainable Growth in October 2009;
      • Over 40,000 suppliers registered on the portal since its launch;
      • Automatically sends e-mail alerts to registered suppliers when opportunities they may be interested in are advertised;
      • Over 1 million alerts have been issued to date;
      • 160 public sector entities actively using the portal to advertise contracts.
  • 20.
    • What does it do ?
      • It provides –
      • information on contract
      • opportunities,
      • e-mail alerts to suppliers,
      • helpful information to
      • buyers and suppliers,
      • online Q &A facility,
      • online submission of tenders,
      • quick and easy online
      • quotation service,
    “ Connecting public and private sector business”
  • 21.  
  • 22. Does procurement reform actually work ?
  • 23. Does Procurement Reform Work ? - SMEs gaining access to contract opportunities
  • 24. Does Procurement Reform Work ? - Case Study (Procurement Scotland)
    • Office Supplies (£43m Spend)
      • Secured cumulative savings of £24m by 2011, £7.6m p.a .;
      • Significant additional cost avoidance due to fixed price deals;
      • 3 Lots: General Stationery, Paper & IT Consumables;
      • 3 Year deal with optional 1 year extension;
      • Over 80% orgs already migrated to new arrangements & many more committed;
      • Major focus on supporting government’s economic agenda. Examples include:
        • Development of market/suppliers capacity/capability , ensuring equity and fairness;
        • Championing effective partnerships with Scottish providers/distribution partners that ‘add value ’;
        • Suppliers commitment to Scottish job creation and new warehouse facility ;
        • High % environmentally friendly products on core lists;
        • Social clauses to support Corporate Social Responsibilities through supply chain;
  • 25. Procurement Reform Impact? 5% Increase in the amount of common spend over the three year period despite 5-10% fragmentation in the overall supply base. NHS Performance – Medical equipment
  • 26. Continuous Progress in Procurement Reform 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Efficient Government Plan Mcclelland Report NHS National Procurement (Cat B) Procurement Scotland (Cat A) Central Government CGCOPE Education APUC Scotland Excel £300m saved, major improvements made
    • Public sector deficit
    • Public sector debt
    • Demographics, Lifestyle
    • & Expectations
    • Reduced revenues from taxation
    Requirement to accelerate benefits in even more challenging circumstances.
  • 27.
    • Questions