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The answer to the question Using the market for better Results
Mr. A.P.M. Veltman, Major Municipality Someren and Chairman of BIZOB
THE SITUATION IN THE NETHERLANDS
• The Netherlands: 16 million inhabitants, 467 municipalities• The Province of Noord-Brabant: about 75 municipalities• Region procurement cooperation's:
- West-Brabant: about 17 municipalities- East-Brabant: about 14 municipalities
WHICH IS BIZOB?
An organisation who performs:
- (joint) procurement and tender projects for the municipalities also for infra-structure works, goods and services;
- advice municipalities by Public, Private Cooperation cases with suppliers and potential partners;- advice municipalities on cases about out-or in sourcing of activities;- analyse the product development on the market for the
municipalities.
ORGANISATION SCHEDULE BIZOB
General Council28 members, two members of each municipality
Chairman: Mr. A.P.M. Veltman
Council 5 members of the General Council
BoardM.A.J. Stuijts
ORGANISATION SCHEDULE BIZOB
M.A.J. Stuijts
Executive managerExecutive manager
Concern Purchaser Concern Purchaser Concern Purchaser Concern Purchaser Concern Purchaser Concern Purchaser
Management Support Secretary
PROCUREMENT PROCESS IN ORGANISATIONAL VIEW
InformationOrganisation
and employees
Methods & Procedures
Performance-parameters
Contract Order Follow up Evaluation Selection Specifi-
cations
Organization policy
Procurement policy
Suppliers(market)
Municipality
WHY (JOINT) PROCUREMENT COOPERATION?
• Procurement is badly organised (permanent) process in most municipalities;• Procurement is too limited in most (small) municipalities;• Professionals at work;• Economics of scale;• Quality of knowledge (databank);• Introducing possibilities for benchmarking;• Better financial results;• To get the optimal relation between commercial companies and the (local
government)• Stronger contract partner position.
PROFITS OF PROCUREMENT COOPERATION
• Financialprocurement costs and profits
• Qualitativecontracts, multifunctional teamwork, European tenders
• Organisationaltransparent process, integrity, professional procurement
CRITICAL FACTORS OF SUCCES
• Commitment of the local authorities;• Commitment of the management;• Teamwork cooperation instead of competition;• A drive to make the cooperation a success;• Simple but effective organisational form “mean and lean”.
HOW TO START
• Make a group of municipalities and persons with ambitions;• Business plan with step by step targets;• Cooperation organisation close to the individual municipalities;• Down to earth organisation with minimalised overhead and bureaucracy;• Quick wins and public relations;• Turn around opposition into acceptation.
POLICITAL ANGLE
• Political “do-it-yourself” procurement and tenders;• Local suppliers;• Professional European acting;• Guarantee of integrity and transparency of procedures;• Positive effects on town budgets.
STRUCTURAL ANGLE
• The authority of making decisions belongs to each individual municipality;• The procurement organisation is strongly related to each individual
municipality;• Employees of the procurement organisation are physically working in the
individual municipality;• Every municipality has a facts and figures analysis;• Joint procurement projects are based on budget analyses of the individual
participants;• Dynamic organisation structure; from and for the municipalities.
ORGANISATIONAL ANGLE
• Organisation of procurement process in the office;• Clear responsibilities and proper authorities;• One political and one management CEO (Chief Executive Officer) in each
municipality;• Straight agreements on the procurement results;• Working together as municipalities is based on individual and collective
profits.
DO’S BY CREATING SHARED SERVICES
• Shared vision on targets of procurement cooperation;• Shared vision on strategic procurement activities;• Shared vision on the approach (opposition, commitment);• Shared vision on how to manage the entire process (positioning of the
shared service);• Shared vision on the decision making in the project;• Shared vision on the architecture and content of the shared service
organisation.
DONT’S BY CREATING SHARED SERVICES
• Many meetings, no decisions;• Dealing with the whole world instead of only the real participants;• Incompetent program management;• Lack of procurement expertise;• Inadequate change management by the introduction.
Different procurement solutions for different procurement objectives
The Procurement portfolio:
Impact on financial results
High Leverage products Strategic products
Competitive bidding Performance based partnership
Routine products Bottleneck products
Low
Systems contracting + E-commerce solutions
Secure suppliers + search for alternatives
Low High
Supply risk
• Infrastructure projects : bridges, railway projects, hospitals a.o.• Outsource the operational and finance exploitation of sport centre;• Develop an ICT software programme for your (local) government;
Develop, realise, maintain and exploitation.
By a Strategic Product the Performance is based on Partnership
A partner is defined as a company with whom your (local) government has a ongoing “buyer-seller” relationship, involving a commitment over an extended time-period, a mutual sharing of information and a sharing of risk and rewards from the relationship
Consortium
Agreement
Concession
Tender
Municipality Contractor
Design
Municipality - PPSand
Contractor - PPS
workers/companies/
realise/maintain
Financer
Organisation of the Tender
Market analysis
Make a functional
specification (headlines)
Decide on procurement
strategy
Make specification on detail level (technical and
functional)
Market consultation
Divide risks and incentives
Criteria for qualitative selection
and awarding selection
Evaluate and analyse the
bids
* bonus yes or no
* interests parallel
Make the concept contract
Awarding of the contract; inform the tenderers
* aim / target* time schedule and functions people involved* project and steering committee* milestones
Make a request for information. A Proces how to
analyse the bids
Implementation of the Tender
* pro-active approach of companies* check contents of specification* feasibility in the market
* devide into parts* single of multi sourcing* what kind of contract and tendering procedure
PROFESSIONAL TENDERING
By using the market
we go Together to a golden result!