Meeting documents

WDC Info Sheets - Economic Improvement & Scrutiny
Monday, 20th September, 2004

Info Sheets - Economic Improvement & Scrutiny 2004, 10-2004 Procurement Strategy - Progress Report

 

 

 

     INFORMATION SHEET

 

Economic Improvement & Scrutiny Committee

Issue No: 10/2004

Date Issued: 20 September 2004

PROCUREMENT STRATEGY – PROGRESS REPORT

Officer contact: Mrs Angela Sives     Ext: 3315  DDI: HW 421315   Email: angela_sives@wycombe.gov.uk

 

The Committee was last updated on progress in procurement in November 2003.  Significant progress has continued in procurement over the last 12 months, including progress in respect of the National Procurement Strategy (Issued October 2003), additional cost savings and electronic purchasing processes.

IDeA Procurement Fitness check

Further to a recommendation by the CPA Challenge Group in October 2003, the Procurement Unit has arranged for a Procurement Fitness check to be carried out in September by the IDeA.  The aim of the ‘audit’ is to identify the authority’s existing strengths and benchmark our progress in attaining best practice national standards.    

The Fitness check comprises a two day on-site visit, which is supplemented by desk based research, and during their site visit the consultants will be meeting with a number of Members and holding a Members Procurement workshop on the evening of Wednesday 29 September.  

National Procurement Strategy

In October 2003 the ODPM issued its response to the Byatt Report; The National Procurement Strategy.  The Strategy sets out key objectives (“milestones”) for local authorities over the next 3 years in order to achieve best practise in procurement.  The Council continues to be at the forefront of procurement at a District level and has achieved a number of the milestone ahead of target.

One of the key objectives in the NPS is for increased collaboration on contracts and sharing best practise.  In response to this the Bucks Procurement Group has been set up, comprising the County and the four non-unitary districts, with a view to progressing more joint-contract opportunities and sharing best practice in procurement.

Procurement Centres of Excellence

The launch of the South East Procurement Centres of Excellence took place in May this year in response to one of the National Strategy objectives.  The aims of the 9 regional Centres of Excellence are ‘to co-ordinate and disseminate best practise in procurement and drive collaborative procurement between authorities’.  The South East Centre comprises 72 local authorities and Richard Cummins has been appointed as one of participants in the South East Centres 10 person Management Board.

 

Local issues:

Contract Standing Orders (CSOs)

Whilst a new version of Contract Standing Orders was issued in June 2003 a later external audit report identified the further need to make CSOs more “enabling” and less complex.  An updated version of CSOs has therefore been produced with the aim of making them easier to read, more structured and focussed primarily on the letting of contracts.  A number of new SOs have also been added (eg. use of purchasing consortia, extensions to contracts and the use of select lists).  

In revising CSOs it should be noted that the overall internal and external processes and regulations for contracts have not been changed; it is the format and the contents of CSOs which has been amended.

The new CSOs are supplemented with a separate guide which now contains ‘supporting information’ which was previously included in CSOs.  Copies of the new CSOs will be made available to Members later this month.  

Contracts and Tenders

A number of major contracts have been co-ordinated by the procurement unit over the last 12 months including the Recruitment Advertising contract (c. £300,000 pa) and a new contract for the Provision of Temporary Staff (c.£200,000 pa).  It is estimated that together these contracts will produce savings in excess of £40,000 per annum.  Our first e-auction (or Reverse Auction) was also successfully carried out over the internet for the Council’s Gas contract (£100,000 pa) and part of the Electricity contract (£80,000).

Invoicing

Progress continues to be made on reducing the number of invoices processed and it is expected that the target reduction of 3,500 invoices in 2004 will be achieved.  The Chartered Institute of Procurement estimates that the cost of processing one invoice is in the region of £29.  Whilst our own processing procedures are significantly more efficient than this, a reduction in the number of invoices will lead to increased efficiency and potential process cost savings.  

The reduction in invoices is being achieved in a number of ways:

a)

Consolidation of multiple invoices from single suppliers (manually and electronically)

b)

The use of purchasing cards

c)

Reduction in the number of suppliers

Performance Measurement

The Council’s internal procurement performance is regularly reviewed and measured against national Key Performance Indicators (KPI’s) and internal KPI’s.  A summary of results are attached at Appendix 1.  It is expected that a national database of procurement performance across local authorities will be compiled over the next 12 months by the Centres of Excellence, against which we will be able to benchmark our own progress.

e-Procurement

A number of projects are being progressed which will contribute to e-government targets:

New payment processing procedures are to be introduced in November to facilitate a more streamlined and efficient ordering and payment processes.  This will include electronic order authorisations and goods receipting.  In addition, all invoices will be scanned and stored electronically.  The project will enable the Council to achieve some of its electronic government targets in addition to providing process cost savings.

(a)

Purchasing cards – Purchasing cards have proved to be a successful means of eliminating low-value invoices and improving ordering and payments processes.  Whilst the overall spend on the cards is likely to be less than £50,000 per annum this equates to a significant reduction in invoices under £100.

(b)

e-sourcing – A successful e-auction was carried out for the renewal of the Council’s gas contract.  This facility allows invited bidders to carry out an on-line reverse bidding process for the gas within a set, limited timescale.  Our first e-tender will be carried out in October with the procurement of the Wycombe Direct CRM system.

(c)

On-line Procurement web-site – A new ‘How to do Business with the Council’ web-site has been set up for current and prospective suppliers who wish to understand how the Council lets its contracts and what contracts are currently being tendered.

Summary of Savings

The progress which continues to be made in procurement is supported by on-going cost savings that have been accrued to date.  An actual cost saving of £60,000 has been identified between the period January-July 2004, facilitated by negotiating new contracts for recruitment advertising, provision of temporary staff and photocopiers, and these are summarised in the table attached at Appendix 2.