What You Need to know about Procurement- Working together to get Best Value

What You Need to know about Procurement-

Working together to get Best Value

Pippa Dooley, Northern Representative for

Crescent Purchasing Consortium

AGENDA Legislation and Rules for Academies

-EU Rules, the basics

-Academies Financial Handbook

Importance of procurement

-Difference between purchasing and procurement

-How to manage the risk of buying the wrong thing/paying too much

AGENDA How to achieve value for money

-Both as an individual institution and through collaboration

Benefits of using Consortia

What help is out there

What CPC can offer

Rules and Legislation

Public procurement rules and EU Procurement Legislation

Academies Financial Handbookhttp://media.education.gov.uk/assets/files/pdf/a/

academies%20financial%20handbook%20sept%202012v11.pdf


Academies must: Ensure regularity, propriety and value for money in their management of public funds Avoid waste and extravaganceEnsure efficient and effective use of all the resources in their chargeEnsure a competitive tendering policy is in place and applied


EU Rules – the basicsTHEY ARE LAW!

Public Contracts Regulations 2006 (SI 2006/05)

Fundamental principlesTransparency, non-discrimination, equal treatment and proportionalityPublic spending is open to competition


EU Rules – the basics

Contracting Authorities MUST tender via OJEU requirements where aggregated spend for is above threshold

Outcome of OJEU exercise must be published

Rules and LegislationThresholds Supplies and Services £173,934 (€200,000)

Works £4,348,350 (€5,000,000)

Aggregated spend over contract period or 4 years (maximum framework period).

Change every 2 years on 1st January next change in 2014


Purchasing vs Procurement

Purchasing is…

The specific activity of committing expenditure

It tends to focus on issues of price rather than of value

It’s placing the orders – doing the buying

Importance of procurementPurchasing vs Procurement

Procurement is…

The entire process of acquiring goods and services

The identification of requirements, specifications, assessment of risk, management of tendering processes, ordering, contract award and the management and monitoring of suppliers‘ performance

Importance of procurementPurchasing vs Procurement

Procurement is…

It takes into account factors such as the cost over the life (whole life costs) of the good or service, and the quality necessary to meet users' requirements

Identify the Need

Identify Potential Suppliers/

Procedures

Evaluate Proposals

Award & implement

Contract

Invite ProposalsAgree Prices & Terms

Specify the Requirement

Manage Performance

Develop Market

Purchasing is the ‘buying’

Importance of procurementThe Procurement Cycle


Organisation’s total expenditure

A – Staff Pay

B – Capital

C – Revenue

Sound procurement practices will improve the School or Academy’s overall value for money activities on both these areas of expenditure


Planning your purchaseBudgets are tight, so you must plan before you purchase

Assess the need

Consider alternatives to purchase


Planning your purchaseCould you collaborate with other schools to increase your buying power?

Check if there is an existing deal available to you

Estimate the total contract value


Possible thresholds less than £10K, low value purchase, write a

statement of requirement, framework or 3 quotes (written ideally)

£10k to £40K, medium value purchase, write a business case and a specification, framework or at least 3 written quotes


Possible thresholds £40K + (but below the EU threshold), high

value purchase, write a business case and a specification, framework or tender

purchases with a value above the EU thresholds, write a business case and a specification, must use the OJEU

tendering process

Business Cases

Regarded as good practice

Adopt for all new projects / initiatives over a specific value

Opportunity to explore alternative sourcing options and truly test out the actual need



Contract Managementkeep copies of all related documents

build a good relationship with your supplier

ensure the goods or service is delivered correctly, meeting your requirements


Contract Management

manage risks effectively

change control procedures

exit strategy

How to achieve value for money

What is value for money?

Achieving financial savings that can then be re-invested in your priorities for driving up standards

Ensuring that the goods or services purchased are fit for purpose



Ensuring suppliers deliver (and continue to deliver) as agreed

Ensuring legal and financial obligations are complied with



Paying less for the same product

Paying the same for a better quality of product

- Where you need the better quality

Getting added value at no extra cost

Reducing the Academy’s exposure to risk

Streamlining your processes

Becoming more sustainable


Practical Steps

Analyse expenditureReview your contracts Identify opportunities for rationalisationDeliver admin savingsCollaborate across key spend areas


Practical Steps

Benchmark and compareUse consortia frameworks to access compliant and competitive arrangements

Benefits of using Consortia Compliance with legislation

Use of frameworks that have followed best practice procurement protocols

Terms available that represent collaborative spend, not just your Institution’s spend


Support from professional procurement team if suppliers are not performing

Reduces time spent on procurement activity and frees up resource for front-line delivery

Freeing up savings to re-invest in

educational priorities


What is a framework?

A purchasing framework is an ‘umbrella agreement’ that sets out the terms (particularly relating to price and quality) under which individual purchases (call-offs) can be made throughout the period of the agreement.


What are the benefits of using a framework?The panel of suppliers has been vetted and approvedEconomies of scale, competitive pricingWhere a panel has more than one supplier, the suppliers are engaged in constant and repeated competition for business throughout the life of the framework, which tends to keep them on their toes!


What are the benefits of using a framework?‘Calling off’ from a framework is typically a quicker and simpler process than setting up a new contract by yourself from scratch.Better service levelsReduced riskOn-going support from the Consortia

Who can help? www.buyways.co.uk Free online training course developed to provide

an introduction to procurement for non-procurement professionals working in schools.

www.education.gov.uk/procurement Contains information about the procurement

process, including useful links to deals, training and further resources.

Who can help?

Crescent Purchasing Consortium 1500+ Academy and School memberships Dedicated website for Academies and Schools www.thecpc.ac.uk

Government Procurement Service http://gps.cabinetoffice.gov.uk

What can CPC offer?

Free membership (no cost, hidden or otherwise, to join)

75 Framework Agreements Successful Academies Insurance Framework Proven value for money on all arrangements Contract management Access to free professional purchasing advice

What can CPC offer? Procurement related resource – template

policies / procedures / guidance Benchmarking Professionally operated consortium web site E-Newsletters No obligation to use CPC deals once a member Low cost Introduction to Procurement training

workshop for CPC members in the North East, Sept ‘13

And to Finish….

And to Finish…. Questions?

Contact information Pippa Dooley, Northern Representative

[email protected] 07788 285941

Customer Helpdesk 0161 295 5354

[email protected] 0161 295 6729

Documents

What You Need to know about Procurement- Working together to get Best Value