Introduction%20to%20Procurement%20Scotland

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Introduction to Procurement Scotland and the
Public Procurement Reform Programme
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AGENDA

• Procurement Reform Programme Update 
• National Programme Workstreams
• Procurement Scotland Overview
• Accessibility of Contracts
• Collaborative Procurement Process Overview

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Public Sector Procurement Vision
Where a single interface with the public sector
facilitates efficiency and competitiveness of
suppliers. E.g. IT HW, Telecoms, Office Equipment
Supplies
Commodities Services categorised as A, B or C
National Strategies ContractsGoods or
services of a similar standard or nature
Category A
Where interface coordinated via a sector CoE.
E.g. Wheelie bins, Medical Equipment, Care
Services
Sector Specific Strategies Contracts
commodities and Services that tend to be unique
to a specific sector, yet common within that
sector
Category B
Where interface coordinated via regional hub or
local organisation
Category C1
Local/Regional Strategies Contracts where it
is appropriate to consolidate requirements on
local/ regional basis
Category C
General Strategies Contracts Commodities
not categorised as A or B.Establishment of
contracts will be conducted as the remit of a
single organisation. e.g. niche IT applications.
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Public Procurement Reform Programme
Central
Boards
Government
Health
CGCoPE
NHS National Procurement
Procurement
Scotland
Policy Guidance
Best Practice
Local
Colleges
Reform Programme
APUC
Scotland Excel
Manage- ment Information
Competitive Supply Base
Authorities
Universities
People Skills
Cat A National Contracts
e-Tools
Police
Fire
Cat B Sectoral Contracts
Services
Police
Rescue
Services
Cat C Local Contracts
Fire
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Overview of Governance Model
Programme
Public Procurement Reform Board
Public Procurement Advisory Group (PPAG)
Proc. Ref Del. Group
End User Organisation
National Procurement CoE
Sector Specific CoE
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Overview of Collaboration Model
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Recognition of Challenges / Major Change
Programme

• Evolving governance
• Organisations at different stages of development
• New terminologies / ways of working
• Resource constraints, changing roles
  expectations
• Increasing scrutiny
• Need to parallel process set up/development
  with delivery
• Ensuring appropriate engagement and
  communications in complex stakeholder environment

gt Managing full change spectrum

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Key Enablers Critical Success Factors

• Ministerial endorsement direct support
• High level sponsorship
• Increased visibility/expectations of procurement
  its contribution
• Common vision approach
• Key enabling platforms! (MI, toolkit,
  collaborative tools/systems)
• Agreed ways of working/protocols stakeholders
  willingness to engage interact constructively.

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• We have developed several key tools to steer a
  course through this challenging landscape
• Standardised advice on best practice including
  latest policy/guides/support regarding
  corporate social responsibilities
• Visibility of current spending behaviours with
  detailed analysis of spend by supplier,
• commodity, invoice value, public sector
  organisation, sector, etc
• A standard system to measure improvements in
  performance over time
• Access to a National contracts register
  advertising portal (One stop shop for suppliers.
  Facilitates adequate publicity of tender
  opportunities)
• Advice, guidance and templates to help reduce
  the burden on suppliers (How to we reduce
  barriers to competition and ensure a level
  playing field, fairness, transparency?)
• Access to tools, latest thinking events to
  support people and skills developments (Where
  and how can we increase our procurement skills?) .

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CoE Role

• To deliver collaborative national/sector
  procurement strategies contracts that deliver
  best value for Scotland/sector
• cost and efficiency savings balanced with CSR
  responsibilities
• To enable and drive procurement capability
  expertise
• To facilitate and drive best practice
• Adherence to Legal, EU Policy
• Benchmarked Consistent Strategic Procurement
  Processes (Toolkit)
• Responsible Procurement
• Process Efficiency eEnablement
• Performance Management
• Supplier Engagement / SRM / Supply Chain
  Management

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Procurement Scotland

• Officially launched March 2008
• Our Vision
• To contribute benefits to the people of
  Scotland through the development of efficient and
  effective national procurement strategies.
• Our Aim
• We will deliver Value for Money Savings
  through the implementation of innovative,
  fit-for-purpose Category A procurement strategies
  and contracts focused on optimising and balancing
  total cost of ownership and sustainability
  drivers.

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Procurement ScotlandInscope Category As
include

• IT Hardware
• IT Software
• Telecoms
• Professional Services (Including IT Consultancy)
• Office Equipment MFDs
• Corporate Services - Office Supplies, Postal
  Services
• Utilities - national contracts from 2009/10

Public Sector spend (Goods Services)
8bn Category A 1bn
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Progress at 15th October 08 - Procurement
Scotland

• Recruiting and inducting team to become fully
  operational
• Establishing/championing governance, ways of
  working, systems processes to enable
  collaborative procurement across Scotland
• Leading innovation on best practice specific to
  balancing sustainability agenda in support of
  Scottish Governments wider agenda
• E.g. economic, social, environmental, total cost
  and risk factors
• Leading national people and skills work stream to
  nurture the talent which already exists within
  Procurement across the Scottish Public Sector
• Delivering commodity strategies against agreed
  milestones
• securing and generating cashable and non cashable
  savings ahead of targeted savings,
• Optimising service levels, innovation, quality
  and process efficiencies.

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Progress at 15th October 08 - Procurement
Scotland

• IT Hardware e-auction secured 5.45m savings (and
  growing)
• Office Supplies framework secured potential
  annual savings of 7.6m
• Out to market for Scottish public sector demand
  on Electricity and Multifunctional Devices
• Category plans, sourcing strategies and
  stakeholder engagement well underway for
  Telecoms, IT Software, Gas, Interim Management.
• Market analysis and opportunities assessments
  underway for postal services, couriers, fuel,
  travel services.
• Going to market for Professional Services
  imminently.

For status/updates refer to http//www.procuremen
t.scotland.gov.uk
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Accessibility to Contracts

• All Procurement Scotland contracts advertised to
  ensure that the Scottish Public Sector has
  access. The Scottish Public Sector will be fully
  defined in the tender advert but does include
• Police
• Fire
• NHS
• Local Authorities
• Central Government (Core departments, Agencies
  and NDPBs)
• Higher and Further Education

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Governance Ways of Working Collaborative
Procurement Process Graeme Cook
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National Category Forums (NCFs)
Who?

• Cross-sectoral advisory groups
• Bring particular expertise in the goods or
  services in scope for Cat A procurement
• Comprise sectoral procurement staff and
  representatives from technical and end-user
  communities
• Nominated by sectoral COEs or appropriate
  protocol
• Ensure pragmatic procurement strategies are
  developed and deployed that deliver best
  value
• Represent support/lead/facilitate wider
  stakeholder communications and engagement
  within their sector.

Role?
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National Category Forums (NCFs)

• Main tasks?
• Engaging proactively with their respective
  sector
• Representing sectoral views at the Forum
• Updating on progress of Category A procurement
  activity
• Leading User Intelligence Groups (UIGs) within
  their sectors as appropriate
• Participating in opportunity analysis exercises
  
• Contributing to, and endorsing, category
  strategy development proposals to ensure
  ongoing best value procurement
• Contributing to, and endorsing, proposals on
  specifications and standards
• Supporting and championing wider stakeholder
  engagement via UIGs or workshops
• Participating in tender evaluation/supplier
  selection ongoing supplier management
  development.

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The Process - Generic
Engagement Collaboration
The toolkit
Procurement Scotland NCF UIG Stakeholder
Workshops Stakeholder Visits Sectoral
Forums CoE Leads Suppliers (all sizes)
Business Organisations Wider SPD

• Commodity profiling opportunities analysis
• Market Demand
• Product
• Supply Chain
• Total cost, Economic, Environmental Social
• Innovation
• Strategy development endorsement
• EU/Legally Compliant Procurement
• Robust PQQ ITT Evaluations
• Risk management mitigation
• Communication Implementation
• Supplier/Supply Chain management development

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Professional Services Approach

• Maximised leverage, learnings and engagement
  opportunities including
• 1994 Government Use of External Consultants
• Rip-off publication
• Audit Scotland reports
• Other UK wide reports, tenders, guidance and
  experiences
• Market engagement
• IBC engagement
• User engagement
• achieved through workshops intended to prompt
  and stimulate discussion around the requirements
  of the end users organisations and to ensure that
  these needs are taken into account in subsequent
  sourcing and contracting activity.

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Professional Services Approach

• Holistic portfolio approach across broad
  spectrum of external resource categories
  including
• Temp Interim
• Interim Specialist
• Interim Management
• Consultancy
• encompassing employment agencies, interim
  management agencies and consultancy firms
• Focus not just on frameworks but under pinned by
  governance, guidance and toolkits to support
  demand management and best practice
• Championed at highest level.

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External Resource Categories
Construction-Related Consultancy
Financial Consultancy
General Business Management Consultancy
IT Consultancy
Other Consultancy
Other External Resource
Technical or Specialist Service (Incl
Construction Infrastructure)
Construction and Infrastructure Post-Occupancy
and Benefits Review
Construction and Infrastructure Feasibility and
Scoping Exercises
Organisational IT Strategy Design
Advice (Cross-Business Re-engineering, ICT
Integration)
Functional IT Strategy Design
Advice (Function-specific IT solution e.g. eHR
systems, eTendering)
Outsourcing
Interim Management
Permanent Recruitment Services and Advice
Accountancy Advice Services

Audit/Forensic Accounting
Advice and Services
Financial Economic Advice Services
Environmental Consultancy
Research Evaluation
Policy Development (including feasibility
Scoping exercises)
Business Strategy
Organisational Development (Including Training)
Functional Development
Programme Management
Marketing Consultancy
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In-scope Commodities

• The in-scope commodities for the impending OJEUs
  include
• Business Strategy Consultancy
• To support areas such as the identification and
  development of new services/programmes/initiatives
  , development of short, medium and long term
  planning, review and development of
  organisational strategy, re-organisation of
  corporate structure, rationalisation of services
  and products, and general business appraisal of
  the organisation.
• Organisational Development Consultancy
• To support areas such as change management,
  business process re-engineering, due diligence,
  risk management and contingency planning.
• Functional Consultancy (HR)
• To support areas such as restructuring and/or
  re-design of processes including skills analysis,
  performance management, reward packages, staff
  development, employment law, TUPE, health
  promotion, counselling, redundancy and
  outplacement. For the current exercise, HR does
  NOT include recruitment consultancy.
• Programme Management Consultancy
• To support the roll out of major programmes in
  terms of appropriate tools and techniques
  (including PRINCE2, MSP), risk management,
  quality assurance, communication and change
  management strategies.
• Procurement Support Services
• To support organisational roll out of local or
  wider public sector programmes covering areas
  such as procurement strategy development,
  re-engineered procurement processes and systems.

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Contract Overview Scope

• Areas Covered by these agreements
• For these agreements we define Business
  Management (BM) Consultancy to include the
  specialist areas as detailed in the diagram to
  the right.
• Areas Not Covered by this Contract
• Marketing Consultancy
• Financial Consultancy and Audit Consultancy
• Training

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Lotting Strategy

• Small scoping exercises or feasibility studies
• Lower Risk/ Lower indemnity
• High-risk or critical projects
• May be appropriate to pay for increased
  assurance.
• Mini-competitions will be directed to the
  appropriate lot by use of a decision matrix.

National Framework for HR Consultancy
Lot 1 Low Risk Projects
Lot 2 Medium Risk Projects
Lot 3 High Risk Projects
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OGC Consultancy Grades
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ASSUMPTIONS WITHIN EVALUATION MATRIX(PROPOSED
AVERAGE UTILISATION RATES)Endorsed by the
Institute of Business Consultants
Grade of Staff Business Consultancy Feasibility Study orBusiness Case
Junior Consultant/ Researcher 10
Consultant 25
Senior Consultant 25
Principle Consultant 20
Managing Consultant 10
Partner/Director 10
Total 100
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PROPOSED EVALUATION MATRIX APPROACHDeveloped
with the Institute of Business Consultants
Grade of Staff Business Consultancy Utilisation by Grade Supplier 1 Cost Supplier 1 Score Supplier 2 Cost Supplier 2 Score Supplier 3 Cost Supplier 3 Score
Junior Consultant/ Researcher 10 200 10/10
Consultant 25 300 25/25 350 21/25 300 25/25
Senior Consultant 25 500 25/25 600 20/25 500 25/25
Principle Consultant 20 1000 20/20 1100 18/20 1000 20/20
Managing Consultant 10 1400 10/10
Partner/ Director 10 2500 10/10
Total 100 100/100 59/70 70/70
100
84
100
Over-all score
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Calculating Risk to Determine Lot
Stage One
Likelihood of Negative Impact Likelihood of Negative Impact Likelihood of Negative Impact
Points Descriptor Given the nature of the service being provided how likely is it that an error or omission on the part of the consultant will have a negative impact (financial or otherwise) on the purchasing authority, it's associates or strategic programmes?
1 Very Unlikely  
2 Unlikely  
3 Possible  
4 Likely  
5 Almost certainly  
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Calculating Risk to Determine Lot
Stage Two
Severity of Negative Impact Severity of Negative Impact Severity of Negative Impact
Points Descriptor If the project fails to deliver its objectives, how severe would the impact be on the organization?
1 Minor Example projects might include scoping studies, issue diagnostics, field/feasibility studies or information gathering where the commission outputs will assist or guide other projects or decisions along with other sources of information or data.
2 Moderate Example projects might include scoping studies, issue diagnostics, field/feasibility studies or information gathering where the commission outputs will form the main information source for other projects or decisions.
3 Major Commissions for direct policy setting or business process change that will directly impact the purchasing authority, it's associates or strategic programmes.
4 Severe Significant projects with a high profile and significant impact on individuals or parts of the purchasing authority.
5 Catastrophic Major and complex projects likely to impact across the purchasing authority, its associates and/or delivery of public services.
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Calculating Risk to Determine Lot
Stage Three
Project Budget Project Budget Project Budget Project Budget Project Budget Project Budget
Points Value Value Value Value Value
1 Up to 50,000 Up to 50,000 Up to 50,000 Up to 50,000 Up to 50,000
2 50,000 to 100,000 50,000 to 100,000 50,000 to 100,000 50,000 to 100,000 50,000 to 100,000
3 100,000 to 500,000 100,000 to 500,000 100,000 to 500,000 100,000 to 500,000 100,000 to 500,000
4 500,000 to 1M 500,000 to 1M 500,000 to 1M 500,000 to 1M 500,000 to 1M
5 Above 1M Above 1M Above 1M Above 1M Above 1M

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Calculating Risk to Determine Lot
Stage Four Users sum the points attributed to
the project at the three previous stages and
refer to the table below.
Project Significance Risk
3 to 4 Low Risk
5 to 9 Medium Risk
10 to 15 High Risk
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Expectations in PQQ and ITT(Dont forget the
basics!)

• Make every effort to answer the question in the
  space given.
• Do not refer to marketing materials or
  attachments.
• No prior knowledge
• Evaluation teams for subsets of questions dont
  refer to the answer above (its OK to repeat
  yourself)
• Read and re-read the question
• Only use the comments fields if absolutely
  necessary to add clarity to an answer
• Consortia bids are welcome (identify the lead
  contractor clearly)
• Alternatives to audited accounts are welcome and
  will be evaluated
• Bid with your best bid FIRST TIME. Do not expect
  to enter into post-tender negotiations.
• Understand the Reform and Political environment
  and drivers.

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Timelines
Sept - Oct
ltltAugust
Apr 2009 gtgt
March 2009
Nov - Dec
Jan - Feb
Status Strategy Development
(May) ContractGo-Live
(Jan) Issue Tender
(End Feb)Receipt of Tender
(July) ApproveCommodity Plan
(Sept)PublishOJEU
(End Oct)Publish OJEU Release PQQ
(End Mar)Pre-awardDecision
(End Aug) ApproveStrategy
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Break
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Q A