Procurement Strategy 2016 2020 - Waltham Forest · Our 2010-2015 Procurement Strategy was developed following the outcome of an Independent Panel review. The vision at that time was

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Procurement Strategy 2016-2020

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Foreword In a time of reduced funding from central government, and increasing expectations of our residents,

business and tax payers, it is more important than ever that our Procurement Strategy supports our

four key priorities:

Keep your neighbourhood clean and safe.

Help build a strong local economy and thriving town centres.

Support affordable housing for everyone’s needs.

Help all of our residents enjoy a good quality of life.

We cannot afford to continue delivering the services needed in the way we deliver them today.

There are ever growing demands for our existing services and there are new responsibilities that we

have to meet. At the same time our resources in real terms will continue to reduce. The focus on our

commercial arrangements, procurement, supplier and contract management is therefore key.

Procurement and Commissioning play a crucial role in our drive to continue to involve service users

in designing and delivering innovative and effective services, working with our suppliers and

providers, and developing effective partnerships to reduce costs and improve services.

It is with pleasure I put forward this revised Procurement Strategy, and look forward to be able to

continue to celebrate the success of our procurement service through to 2020.

Cllr Clare Coghill

Cabinet Member for Economic Growth and High Streets

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Contents Foreword ................................................................................................................................................. 2

Purpose ................................................................................................................................................... 4

Role of procurement ............................................................................................................................... 5

What We Have Achieved ........................................................................................................................ 6

Context for this strategy ......................................................................................................................... 7

Themes .................................................................................................................................................... 9

Theme 1: A commercial approach to deliver savings and generate income ........................................ 11

Theme 2: High quality & efficient sourcing ........................................................................................... 13

Theme 3: Partnership and collaboration .............................................................................................. 15

Theme 4: Social Value ........................................................................................................................... 16

Theme 5: The Right Resources .............................................................................................................. 17

Appendix 1 – Action Plan ...................................................................................................................... 18

Appendix 2 - Waltham Forest Progress Towards National Procurement Strategy Recommendations21

Appendix 3 Case Studies ....................................................................................................................... 34

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Purpose This strategy sets out the Council’s ambitions for procurement and supplier management and the

actions necessary to achieve those. It has been structured into a series of overarching themes

clearly setting out:

The ambition

The actions necessary

The difference it will make to customers and staff

The performance measures It is supported by an action plan at appendix 1 with detail on what is required to deliver each theme. The themes have been identified following consideration of the current state of procurement, the context in which we currently operate and known future pressures. They also recognise the 4 key principles of RWF 2020, namely to be:

Resident focused

Insight Led

Digitally Driven

Commercially Minded

The Themes are: • A commercial approach to supply chain management • High quality & effective sourcing • Partnerships, collaboration and integration • Social Value • The Right Resources

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Role of procurement Procurement at Waltham Forest has developed over the years from being a transactional buying function to a strategic function which has contributed to delivering significant savings for the borough. Procurement is not an activity carried out in isolation by one team but a process which draws upon expertise from all areas of the Council to ensure that we obtain value for money for our residents.

The Council has implemented Category Management, an approach where spend is analysed and monitored across the organisation to identify opportunities for savings and efficiencies. This requires a cross cutting approach led by commercially minded category managers who understand relevant markets and can develop ideas in conjunction with commissioners and subject matter experts in services to drive out value from the Council’s supply chain.

The ‘activity wheel’ illustrates the range of activities that take place from the initial identification of need, through to the analysis of options, sourcing suppliers and managing contracts. Crucially, at a time when the Council will be under further financial pressure, a key role for the procurement function will be to develop and shape markets as we seek new models of delivery and commercial approaches to contracts such as payment by results and outcome based commissioning.

In 2014 the procurement function was incorporated within the Service Design Hub alongside Resident Insight, Commissioning and Contract Management to ensure that there was an independent and integrated approach to commissioning Council services. The Service Design Hub and each of its component parts will be a centre for excellence and this strategy is aimed at enhancing what has already been recognised externally as an excellent procurement function. However, continuous improvement is essential to maintaining that standard and this strategy also identifies how this will be achieved through the use of benchmarking and

comparisons against leading procurement models.

Waltham Forest has sought to collaborate wherever possible for the benefit of residents and working as part of a Shared Procurement Service with the London Borough of Enfield. This was established in 2011 as London’s first truly shared procurement function with a single team serving two authorities managed by one Assistant Director. The Shared Procurement Service was awarded Team of the Year in the 2013/14 Government Opportunities Excellence in Public Procurement Awards. Waltham Forest was again recognised winning Team of the Year in 2016/17. Moving forward Waltham Forest will continue to work

with other partners to improve value for money outcomes.

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What We Have Achieved Our 2010-2015 Procurement Strategy was developed following the outcome of an Independent Panel review. The vision at that time was “To procure goods, services and works by the most efficient and sustainable means, ensuring accountability, achieving value for money and deriving maximum benefit to meet the needs and aspirations of the community“. This required a step change in delivery and our achievements include:

Introduction and development of a professional procurement team

Introduction of category management

Streamlining processes and procedures for staff and suppliers

Improving compliance with Contract Procedure Rules

Ensuring that sustainability is at the heart of our procurement activity, examples of which include:

o Ensuring local suppliers are invited to quote for business

o Running workshops for local suppliers on how to win council contracts

o Ensuring that contract specifications minimise the impact on the environment

o Building apprenticeships into council contracts

Introducing electronic tendering and more effective analysis of council contract spend

Ensuring that market engagement is seen as the ‘norm’, helping to develop competitive markets who can respond effectively to the Council’s needs

Contributing to the delivery of significant savings in partnership with service commissioners across all spend categories including waste, street cleansing, ICT, social care

Actively participated in collaborations with other contracting authorities and lead collaborative procurements to drive out greater savings – examples being a 10 Council framework for independent foster agencies, and a 4 borough framework for temporary accommodation.

Providing procurement services to partners across Waltham Forest and Enfield including schools and housing management organisations

Winning Team of the Year at the 2013/14 GO Awards for Excellence in Public Procurement and a finalist again in 2014/15 and 2015/16.

Case studies of projects are appended to this strategy.

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Context for this strategy By 2020 Waltham Forest will have saved nearly £100m since the funding reductions started in 2010. The Spending Review announced in November 2015, will see further reductions in public spending over the coming years (at the time of writing the Department for Communities and Local Government had already agreed a reduction of 30% over the 4 years to 2020). At the same time the Council will have an increasing role to pay in delivering care services and jointly commissioning with colleagues in Health. It is imperative therefore that our procurement activity is rigorous in reducing unnecessary spend to help reduce the impact on frontline services whilst at the same time recognising that the Council still has significant spending power through which it can deliver key policy objectives.

The illustration below shows some of the many factors which impact upon the way the Council procures goods and services. There are common factors in many of these – for example, the Growth Commission, the Public Services (Social Value) Act, Small Business and Enterprise Act, the Public Contracts Regulations and the Care Act all have

a) Have a focus on small to medium sized enterprises (SMEs) either directly or indirectly and

b) allow us to take measures through our procurement and contracting activity to enhance the wellbeing of the local area

The need for better value services and greater sustainability through the creation of local jobs and increased spend within the borough are not mutually exclusive and all form part of the same value for money equation. The outcomes possible through the award of a contract include the potential for local jobs, which results in more money being spent in borough, reduced demand for Council services, people being lifted out of poverty and improved public health outcomes. This does not need to come at additional cost, rather through more creative and intelligent procurement.

Procurement Strategy

Small Business and Enterprise

Act

National Procurement Strategy for Local Govt

Procurement Regulations

2015

Redefining Waltham

Forest Care Act

LBWF Economic Growth Strategy

Public Services (Social

Value Act)

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It should be noted that the LGA produced a National Procurement Strategy for Local Government in 2014, details of which are included at appendix 2 along with analysis of how Waltham Forest compares to the recommendations in that report. This strategy provides a borough-centric approach to procurement aligned to the best practice approach recommended by the LGA. Where there are areas for improvement identified then these will be addressed via the action plan at Appendix 1.

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Themes Theme 1: A commercial approach to supply chain management

Delivering savings through a category approach continues to be fundamental to our overall strategy. To drive the greatest benefits from category management we need to continue to review our tools, processes and skills, and look across the profession to ensure our approach reflects the very best practice. We will continue to underpin our category strategies with high quality insight based on market intelligence and spend analysis, married with Resident Insight to forecast future demand. It is also about recognising opportunities for further savings and driving forward innovation through the Service Design Hub.

Alternative models of delivery such as joint ventures, social impact bonds etc will be explored to achieve outcomes. We must use our strong market awareness, understanding of cost, price and commercial structures to provide a commercial view to help shape and develop this thinking. One of the key principles of Redefining Waltham Forest 2020 is for the organisation to be commercially minded and the procurement function will provide a broader commercial consultancy role to the organisation beyond the ’traditional’ procurement function. From renegotiation of contracts, to driving continuous improvement and innovation from suppliers the procurement function, as the centre of excellence, will take a lead in improving outcomes from the Council’s supply chain.

To achieve this requires a corporate approach to supplier management with guidance, tools and training for staff to manage contracts, supplier performance and, for the key suppliers, develop supplier relationships. The procurement function will develop this approach.

Theme 2: High quality & effective sourcing

Our customers, stakeholders and suppliers expect and demand a high quality & effective sourcing process for our contracts. Simple and streamlined processes, delivered by experts with a strong focus on the customer experience will be a core part of our offer. We will continuously review our approach to ensure we respond to feedback, and continue to develop the systems we use. We are responsible for optimising the statutory and legal boundaries of EU and UK Procurement Legislation to deliver the best outcomes for residents.

The success of our procurement function is measured on how we help our customers and stakeholders achieve the best possible outcome and the savings we help deliver. This is not just about the structure and governance of procurement, it is about bringing our skills, knowledge and commercial challenge to ensure intelligence-led decision making. We will continue to develop and deliver a focus on supplier analysis, intelligence, market knowledge and research and use this to directly influence the outcomes achieved, inform how we can meet changing demands, and how we can support new ways of working.

As the Public Contracts Regulations 2015 become established we will take advantage of the latest thinking and innovation in procurement techniques and ensure that all council spend with third parties is procured effectively and efficiently. Contracts will be flexible enough to cope with the changing nature and funding of local government.

Theme 3: Partnership, collaboration and integration

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The public sector has to respond to increased financial and demand challenge, and Waltham Forest has recognised the importance of greater partnership and collaboration. We must work with others in local and central government, health and emergency services, the Voluntary Community and Faith Sector, the education sector and other private and public organisations to deliver the best possible outcomes for our residents. We will continue to seek benefits from collaboration with like-minded partners.

This new strategy commits to integration with Health, particularly to develop, support and manage the care market in the borough. Building on WF’s experience of shared service and the expertise that has been developed further opportunities will also be explored to generate revenue through trading services under a commercial brand.

Theme 4: Social Value

With the Social Value Act and the development of our Sustainable Procurement Policy, we need to have a consistent and best practice approach to using our commissioning and procurement to deliver broader value to our residents and the Waltham Forest economy and our environment. As highlighted in the Context section the wider benefits of effective procurement can be considerable. The challenge previously has been to provide staff with simple tools to ensure that social value is extracted.

This new strategy will deliver a practical toolkit for staff to increase benefits for residents and the community through our contracts. It will also ensure that our current and future supply chain are aware of our aims and align their service delivery to contribute to those aspirations. This cannot be achieved in isolation and there are interdependences between this strategy and the new LBWF Economic Growth Strategy.

Theme 5: The Right Resources

We will only be a success if we have the right people, with the skills, development opportunities and support in place. We have invested in developing our staff and many within the procurement team are CIPS (Chartered Institute of Procurement and Supply) qualified or working towards their professional qualification. This ensures that we can be confident our staff can bring best practice and professional insight to bear. We also have a wider role to play in the development of procurement, supplier management and commercial skills across the organisation to become intelligent clients.

Similarly we need to ensure that our systems continue to develop and provide the infrastructure necessary for effective spend analysis, procurement and contract management.

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Theme 1: A commercial approach to deliver savings and generate income What is our ambition?

To be the commercial centre of excellence for the Council by delivering the best possible

outcomes through adopting a consistent and high quality category management approach to

all services commissioned internally and externally. Use supplier and market insight coupled

with commercial thinking to maximise the opportunities and potential savings. This

approach needs to include the consideration of alternative delivery models such as joint

ventures, social impact bonds etc

To enhance the organisation’s performance and customer satisfaction as a result of

embedding an effective supplier management regime.

Key actions in 2015 – 2019 to achieve our ambition

a) Identify and drive new commercial opportunities arising from category

management.

b) Deliver refreshed category strategies across all of our major areas of spend.

c) Maximise the use of insight around supplier, market, service design and demand to

pro-actively identify savings and shape future cost effective services.

d) Ensure that savings are tracked and realised

e) Develop and implement a new corporate approach to supplier management

How will our customers notice a difference?

Category strategies will support and complement the commissioning strategies and service plans of our customers and help shape and inform future planning.

Customers will recognise the value which procurement add through their knowledge and understanding of a category of spend; including market expertise, cost and price factors, supply chain pressures and models of delivery

Procurement will be recognised as delivering quality, service and cost improvements.

More effective supplier engagement and performance management which in turn improves Council performance and customer satisfaction

How will staff notice a difference?

Staff will have access to the tools, development and support needed to deliver high quality category strategies and manage suppliers appropriately

Staff will have strengthened support from stakeholders as a result of having an agreed strategy with recognised inter-dependencies with service plans and other council strategies.

Measuring our success

£ savings delivered from procurement, contract and supplier management activities

% contribution to the savings within the medium term financial strategy (MTFS)

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Improvements in service and outcomes achieved through procurement and supplier

management

Benchmark assessment of procurement maturity against independent model

Evidence of consideration/application of alternative delivery models

Feedback from customers

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Theme 2: High quality & efficient sourcing What is our ambition?

That our sourcing process should be simple, clear and efficient. We are leaders across the

region in delivering a sourcing process that achieves successful outcomes and is a positive

and effective experience for our suppliers. We maximise the use of a range of electronic

sourcing tools; including eTendering, Dynamic Purchasing Systems, eCatalogues and

eAuctions.

Processes should be compliant, yet appropriate and proportionate dependent on contract

value and risk, and contracts must be flexible enough to take into account the changing

shape and scope of local government services. Similarly standard terms and conditions of

contract must protect the Council’s interests whilst being appropriate for the nature and size

of procurement.


a) Ensure that the Council’s e-tendering portal is used for all procurements and that

the system is simple to use for both staff and suppliers.

b) Implement a consistent feedback process to capture the experience of both internal

stakeholders and suppliers to improve and evolve the sourcing process

c) Provide further, regular, training workshops for SME and voluntary sector suppliers

to help them with tendering for public sector tenders

d) Maximise the use of new tools such as Dynamic Purchasing Systems and the

Competitive Procedure with Negotiation to deliver more effective procurement

which deliver value for money outcomes.

e) Understand pipeline of future projects to develop ‘nimble’ solutions eg frameworks

for repeat purchases.

f) Terms and conditions of contract refreshed and reviewed by working with Legal

services


Internal customers will see shorter timescales for the sourcing process

Suppliers will be engaged in challenging and reviewing our sourcing processes and will receive regular and constructive feedback

We will engage with suppliers to offer full training on our sourcing processes

Sourcing will be delivered to produce best value for all participants

We will use the most appropriate route to market to deliver best value; frameworks, e-auctions etc


The sourcing process will be simple and efficient and delivered by experts

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The route to market for low value purchases will be simple and clear, making best use of catalogues, SAP SRM, PCards etc

Options will be appropriately explored around use of flexible contract structures and lots which best allow the market to respond with quality, cost effective solutions that support access for local and SME organisations

There will be access to compliant, value for money frameworks.


Reduction in the time it takes to deliver a sourcing process

All procurements will be run through our etendering system

Increase in SMEs bidding for, and securing, new contracts

% spend against compliant contracts

% spend influenced by Corporate procurement

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Theme 3: Partnership and collaboration What is our ambition?

The procurement function will maximise the opportunities for partnerships and

collaboration with others to deliver better value for residents. We will also lead regional and

national procurement activities where appropriate, and provide commercial leadership to

partnerships with others in the public, private and the voluntary community and faith sector.

Closer working with colleagues in health is essential, both in terms of developing, supporting

and managing the care market in the borough and also recognising the government’s’ aim to

integrate health and social care by 2020 but also noting that plans have to be in place by

2017.


a) Promote and Support collaborative working across our key categories to maximise

savings

b) Continue to develop strong relationships with Health to promote collaboration and

where appropriate provide an integrated procurement service.

c) Establish closer relationships with other London Boroughs and public sector partners

d) Continue to deliver a procurement service to existing customers and to sell the

service to new customers under a new commercial approach.


Improved contracts either through sharing of best practice or better value for money

from collaboration

Reduced cost to procure through joined up approach

Common processes which will benefit local providers


Staff will be encouraged to develop partnerships that benefit their own expertise and

the delivery of their roles, and supported to invest time in building positive relationships.

Staff will be working on challenging & complex projects with stakeholders across

organisations to deliver projects


Savings from joint projects/collaboration

Evidence of best practice shared

Awards short-listed/won

Revenue generated

Evidence of broader market analysis and benchmarking to benefit wider public sector

approach in the area.

Alternative delivery options implemented

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Theme 4: Social Value What is our ambition?

Buying sustainably is about getting real value for money, not just lowest cost. It’s about

adding social value through jobs and training opportunities with our suppliers, economic

value through getting local businesses into our supply chains so that more money is re-

invested locally, and environmental value through asking our contractors to minimise their

carbon emissions and waste. Many of these also have a positive impact on public health.


a) Raise awareness of new Sustainable Procurement Policy

b) Ensure staff are trained how to implement Community Benefits in procurements

c) Deliver workshops for SMEs to help improve chances of winning council contracts

d) Work with larger organisations to maximise community benefits from their

relationships with the local supply chain

e) Increase apprenticeships through procurement

f) Increase volunteering opportunities through contracts as a means of getting

residents back into work.


More diverse and competitive market responsive to our requirements

Greater opportunities for local businesses

More residents employed locally and improving life outcomes (eg better health

outcomes, less dependency on council services)


Sustainability becoming part of the normal evaluation criteria in tenders

Contract management with suppliers will also encompass the need to ensure that

suppliers are fulfilling community benefit obligations

Awareness of impact of spending power on local economy.


Spend with SMEs and local organisations

Number of apprentices delivered through contracts

Staff trained on community benefit toolkit

Measurement of Social return on Investment

Larger suppliers using local companies as part of their supply chain

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Theme 5: The Right Resources

What is our ambition?

Procurement has already been recognised nationally as a centre of excellence by being

named as Team of the Year in the Government Opportunities Excellence in Public

Procurement Awards in 2013/14 and again in 2016/17. The procurement function will be

the primary and leading source of commercial expertise across the organisation. Delivery

will be by a professional core of skilled staff supplemented by appropriate expertise as

required to provide an agile workforce. We will also ensure we have the appropriate tools

to support the team.


a) Ensure that the Procurement Function is trained in accordance with the CIPS Global

Standard

b) We will continue to blend our recruitment, encouraging internal promotion at all

levels as well as bringing in the best of external expertise where appropriate.

c) Implement the update to the Council’s e-tendering system and in particular evaluate

and implement contract management functionality.

d) Continue to develop our spend analysis capability by ensuring all procurement staff

proficient in using the system and used as a matter of routines

e) Develop the team, and the wider Council, to be more commercial in their outlook.


We will be the primary source of commercial expertise and intelligence on markets and

suppliers across the organisation

We will bring expertise around alternative/innovative procurement approaches

commercial models when developing procurement options.


Staff will benefit from being supported in their development and empowered to think

creatively

Staff will be actively encouraged to look to the private and broader public sector for

leading edge ideas


Involvement and leadership in distinct commercial activities

% Staff professionally qualified

Absence and retention rates for Procurement staff

Customer feedback

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Appendix 1 – Action Plan Theme Action Timescales Success Measures

Theme 1: A

commercial approach

to supply chain

management

a) Identify and drive new commercial opportunities arising

from category management.

b) Deliver refreshed category strategies across all of our

major areas of spend.

c) Maximise the use of insight around supplier, market,

service design and demand to pro-actively identify savings

and shape future cost effective services.

d) Ensure that savings are tracked and realised

e) Develop and implement a new corporate approach to

supplier management

Ongoing

TBD

Ongoing

Monthly

September 2016

Savings delivered/Income generated

Approved category strategies

Commercial insight evidenced via Strategic

Procurement Board business cases and input

into wider market shaping strategies eg Market

Position Statement

New corporate approach to supplier and

contract management approved and published.

Customer feedback following each project and

case studies produced evidencing commercial

approach and benefits

Theme 2: High quality

& efficient sourcing

a) Ensure that the Council’s e-tendering portal is used for

all procurements and that the system is simple to use

for both staff and suppliers. Also reduce off contract

spend

b) Implement a consistent feedback process to capture the

experience of both internal stakeholders and suppliers to

improve and evolve the sourcing process

c) Provide further, regular, training workshops for SME and

Monthly checks

Feedback sought after

completion of each

project

4 workshops per year

Reduction in the time it takes to deliver a

sourcing process

All procurements will be run through our

etendering system

Increase in SMEs bidding for, and securing,

new contracts

% spend against compliant contracts

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voluntary sector suppliers to help them with tendering for

public sector tenders

d) Maximise the use of new tools such as Dynamic

Purchasing Systems and the Competitive Procedure with

Negotiation to deliver more effective procurement which

deliver value for money outcomes.

e) Understand pipeline of future projects to develop

‘nimble’ solutions eg frameworks for repeat purchases.

f) Terms and conditions of contract refreshed and reviewed

by working with Legal services

Ongoing

Annual forward plan

published each April

and rolling 5 year

programme

May 16

% spend influenced by Corporate procurement

New standard terms and conditions available

via portal

Theme 3: Partnership

and collaboration

a) Promote and Support collaborative working across our

key categories to maximise savings

b) Continue to develop strong relationships with Health to

promote collaboration and where appropriate provide an

integrated procurement service.

c) Establish closer relationships with other London

Boroughs and public sector partners

d) Continue to deliver a procurement service to existing

customers and to sell the service to new customers under

a new commercial approach.

Ongoing

Monthly meetings, JCB

and specific projects to

develop integration

Quarterly HoP meetings

Ongoing

Savings from joint projects/collaboration

Evidence of best practice shared

Awards short-listed/won

Revenue generated

Evidence of broader market analysis and

benchmarking to benefit wider public sector

approach in the area.

Alternative delivery options implemented

Theme 4: Social Value a) Raise awareness of new Sustainable Procurement

Policy

b) Ensure staff are trained how to implement Community

Benefits in procurements

Briefings on intranet by

May 2016

New training offer

published and courses

Spend with SMEs and local organisations

Number of apprentices delivered through

contracts

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c) Deliver workshops for SMEs to help improve chances of

winning council contracts

d) Work with larger organisations to maximise community

benefits from their relationships with the local supply chain

e) Increase apprenticeships through procurement

f) Increase volunteering opportunities through contracts as

a means of getting residents back into work.

run from may 2016

4 workshops per year

Monthly reporting re

apprentices, local spend

etc

Staff trained on community benefit toolkit

Measurement of Social return on Investment

Larger suppliers using local companies as part

of their supply chain

Theme 5: The Right

Resources

a) Ensure that the Procurement Function is trained in

accordance with the CIPS Global Standard

b) We will continue to blend our recruitment, encouraging

internal promotion at all levels as well as bringing in the

best of external expertise where appropriate.

c) Implement the update to the Council’s e-tendering

system and in particular evaluate and implement contract

management functionality.

d) Continue to develop our spend analysis capability by

ensuring all procurement staff proficient in using the

system and used as a matter of routines

Develop the team, and the wider Council, to be more

commercial in their outlook

Objectives and

development plans in

place for 16/17 reporting

year

April 2016

April 2016

Involvement and leadership in distinct

commercial activities

% Staff professionally qualified

Absence and retention rates for Procurement

staff

Customer feedback

Evidence of staff CPD

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Appendix 2 - Waltham Forest Progress Towards National Procurement Strategy Recommendations

Theme A:Savings

Recommendations for single tier and county councils

Waltham Forest Position Status (at March 2016)

Set out the rationale for a category management approach in the corporate procurement strategy

Category management is a clear part of the Savings theme within the Council’s Procurement Strategy approved at Cabinet in 2010 and continues in this current strategy.

Invest in category managers or, as a minimum, commit to the outputs from the national or regional strategies where appropriate

The structure of the Shared Procurement Service includes 3 Category Managers – People, Place and Corporate. Outputs from national or regional strategies incorporated into category plans.

Identify the main spend categories in their council and have a clear category management strategy in place to ensure value for money (VFM) for these categories of spend

A full category management analysis of the Councils third party spend has been completed which will enable individual category strategies to be developed. Spend data requires cleansing prior to incorporating into category strategies

Review existing framework arrangements at early stages of procurement to reduce duplicated effort.

Framework agreements used wherever possible to reduce time and effort, subject to VFM. Consideration of framework arrangements is supported through the Strategic Procurement Board process which has been introduced to ensure full consideration of options is made pre-procurement.

Recognise the benefits from engaging with a national approach and ensure timely publication of data to ensure a robust analysis can take place

The Council’s contract register has been updated and is now comprehensive to enable WF to take an early view of upcoming procurements to determine which approach (national. Regional or local) may be the most appropriate for any particular requirement. In addition the Annual Procurement Plan has been established and published which provides greater visibility of forthcoming procurement activity.

Contracts register still requires further population

Set out their approach to partnering and collaboration in their corporate procurement strategy

Collaboration is a key consideration for each significant procurement and the existence of the shared procurement service demonstrates our commitment to this. The new strategy also has partnering and collaboration as a theme. A number of joint procurements with partners

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Theme A:Savings



including Supported Living, Temp Accommodation, CCTV etc

Explore opportunities to procure through existing routes to market, in particular harnessing existing shared service of PBO resources.

All significant procurements are assessed pre-procurement to identify the optimum route to market – this includes full consideration of using PBO resources and opportunities where appropriate.

Set targets for savings or income generation from collaborative spend

Collaborative opportunities will be considered for all procurements as appropriate; setting a target for savings from such opportunities may detract from obtaining an optimum saving.

Consider the business case for new models of delivering procurement services

WF is open minded about options for delivering procurement services and will continue to explore these with other organisations. The shared service model has worked to date but continues to evolve based on the requirements and organisational changes of the partner authorities. There may be other opportunities for sharing with like-minded partners.

Maximise the use of all available procurement resources including across council boundaries.

Waltham Forest and Enfield have recognised the benefits of sharing resources in procurement. Both Councils are active at London Heads of Procurement and in sub regional collaborative forums. WF has participated in a number of pan-London procurements and is leading on others and regularly uses framework agreements put in place by PBOs.

Contract management is part of the responsibilities of the councillor champion

Contract management is part of the role of the Portfolio Holder for the Service Design Hub

Integrate contract management within the council’s procurement and commissioning models

Good contract management has not been consistently applied across the Council. In WF this is being addressed by bringing together procurement and contract management under the Service design Hub. Inclusion of Major Contracts within service design now means that approx. 80% of Council spend is under the influence of one function at WF. Further work needs to be done to ensure consistency of good practice across the organisation.

Further work required – see

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Theme A:Savings



action plan

Invest resources in developing and sustaining a capacity for good contract management

A new model has been implemented in the Service Design Hub at WF which includes a contract management team for social care and environmental contracts.

Demonstrate efficiency savings through better contract management

The new contract management function in the Service design Hub will improve contract management and an associated drive to introduce commercial awareness should result in efficiencies from better Contract management.

Scrutinises strategic contracts post award and ensures benefits are achieved

As above. .

Councils monitor and enforce internal compliance to ‘on contract spend’

The category management work undertaken by procurement has identified a number of instances of ‘off-contract’ spend. Work is on-going to review the reasons for this to improve ‘on-contract’ spend levels.

Understand key suppliers and develop and implement performance indicators that are aligned with business outcomes

Key suppliers are known – need to gain understanding of contracts now that the Service Design Hub is in place and whether PIs are appropriate and reflect outcomes

Identify second tier spend and activity for high value/high risk contracts

Whilst the Council is aware of who key sub-contractors are in its high value/high risk contracts the Council does not currently routinely collect second tier spend and activity information. This needs to be introduced over time.

Develop and agree exit strategies within all major contracts

Exit strategies, transition plans and mobilisation strategies are routinely considered as part of the procurement planning process and contracting procedures.

Expect main contractors to act fairly with supply chains and mandate timely payment to subcontractors through contract clauses

The inclusion of social value clauses within contracts and effective contract management will address these areas. Public Contracts Regs 2015 require 30 day payment from contractors to subcontractors. Currently being built into terms and conditions of contract.

Put systems in place to map contracts, measure spend, collect feedback and measure the benefits

WF has mapped all contracts and measures spend on a category management basis and tracks savings, benefits etc. There is a need to explore contract management systems.

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Theme A:Savings



achieved

Engage with regional or national information and data sharing

Via London Councils’ boroughs (including Waltham Forest and Enfield ) are using the Bravo spend analysis tool to analyse spend across the Capital. The Council’s contracts register is published on the London Tenders Portal Waltham Forest and Enfield also share information with other boroughs to assist with collaborative procurements.

Insist on transparency throughout the supply chain This issue needs to be addressed through contract management and also via ensuring appropriate provisions are incorporated in contracts. Will be key in terms of understanding cost drivers and ensuring that key initiatives are being applied eg fair payment terms, LLW etc

Set savings targets that are performance managed. WF has clear savings targets as part of its Redefining Waltham Forest programme and procurement is responsible for delivering some of those through defined projects which are regularly reported on. These are regularly tracked and reported to Management Board.

Publish data in relation to contracted-out services in accordance with the Transparency Code

Data is published in accordance with the Transparency Code.

Ensure the rights to the data created as a result of a service being contracted out remains with the council.

This is covered within individual contract terms and conditions. Information governance has been reviewed recently to ensure that appropriate clauses are contained within contracts to protect sensitive data

Extend the requirement to publish information on performance and costs to contractors

Needs to be addressed

Risk management should be integrated into Procurement processes. It is considered early, discussed with suppliers and regularly monitored

Risk is considered for major contracts at the business case stage and is incorporated in the Council’s procurement manual. The procurement risk register details strategic risks.

Identify strategically important (high value and/or high risk) contracts on the risk register and regularly monitor both by officers and members

High value contracts have been identified – need to ensure that key contracts are on risk registers (local and corporate)

Proactively audit contracts to check for fraud Check with Audit

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Theme A:Savings



Include whistleblowing policies as part of contract conditions

Included as part of tender documentation

Require main contractors to mirror these policies in their subcontracting arrangements

This issue will be picked up as appropriate as part of a review of Contractual Terms and Conditions currently on-going.

Councils build in a demand management approach before procurement begins

As part of the pre-procurement process demand management is considered to ensure that the procurement properly reflects genuine and actual need. In WF the lead commissioners and service design managers will ensure services are designed to meet required outcomes, procurement will provide commercial challenge and that will include demand management.

Ensure procurement and commissioning strategies and processes take account of demand management techniques

See above

Involve procurement teams at an early stage in developing alternative ways to meet demand

In WF the Commissioning Framework and the Activity Wheel require procurement to be involved in projects when developing the business cases. This enables alternatives to be considered early enough to influence the outcome. In addition the use of spend analysis and contracts register enables us to look at alternatives on a category basis early enough to shape the future solution. Increased use of open book accounting will also enable future discussions with suppliers on cost and flexibility in contracts.

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Theme B: Supporting Local Economies

Recommendations

For single tier and county councils

Waltham Forest Position RAG Status as at March 2016

1 Economic, Environmental and Social Value

Councils gain maximum value from procurement through inclusion of economic, environmental and social value criteria in contracts for good/services and works

Councils reduce waste by making sustainable choices when procuring products and services - helping them to cut costs, and meet their social, economic and environmental objectives.

An officer social value champion is appointed and provides leadership on issues relating to social value.

AD Procurement has taken lead – Member champions in place.

Social value opportunities in all tenders, including those below the EU thresholds and for goods where appropriate.

WF has a community benefits toolkit to help officers and a sustainable procurement policy which requires sustainability (including social value) to be considered in all tenders.

Bidders are requested to demonstrate community benefits through the whole supply chain

Social value requirements are being embedded into the Councils procurement processes at the first tier supplier level. Further work needs to be undertaken to extend this further down supply chains. Pilots also being carried out using CCEG.

Consider and describe how the economic, social and environmental well-being of communities can be improved

Waltham Forest has approved a Sustainable Procurement Policy which sets out mechanisms by which the economic, social and environmental well-being of communities can be improved

Ensure that social value requirements do not cause unintended consequences (eg apprentices being unable to complete their apprenticeships as contracts always require ‘new’ apprentice places to be created).

The approach taken is to request contractors to explain how they can best meet Waltham Forest’s social value requirements. In this way unintended consequences are avoided by ensuring that contractors respond with proposals rather than the Council taking an input based approach.

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Take account of the powers in the EU regulations that encourage use of mutuals, Social Enterprises and supported factories

Where appropriate Waltham Forest will make use of the powers provided in the revised EU Regulations once enacted.

Build in sustainability into the whole procurement cycle

Sustainability is built into the life of contracts as part of the overall VFM equation.

Social, Economic, Environmental assessments are undertaken for each procurement project

This is carried out for all above EU procurements and for those that require Cabinet approval (as part of the sign-off process) but needs to be extended to lower value contracts. Adoption of CBA for construction will help and also potential for Apprenticeship Training Agency.

Consider ethical issues, including fair pay, zero hours contracts, child labour and animal testing throughout the supply chain

These issues are considered on a case by case basis London Living Wage issues will be considered as appropriate on a contract by contract basis. Broader ethical issues subject to Member policies

2. Improving Access for SMEs and VCSEs

A wide range of suppliers are encouraged to do business with councils through use of Portals to advertise tender opportunities

Barriers to doing business with the council are removed without compromising due process

SME’s and VCSE’s are able to identify potential ‘partners’ with whom to form consortia to bid for council contracts

Councils identify forward spend wherever possible and use this data to inform pre-market engagement and supplier planning

Identify all procurement opportunities through local or regional portals and national portals where appropriate

Waltham Forest opportunities are advertised on the London Tenders Portal.

Ensure websites make it clear which portals are being used to advertise tender opportunities and how suppliers can register

The Waltham Forest web site sets out for companies how to search for opportunities via the London Tenders Portal. The London Tenders Portal has clear registration instructions.

Engage with local umbrella bodies such and FSB to ensure that procurement and engagement strategies will not inadvertently discourage suppliers

Waltham Forest regularly holds meet the buyer events and pre market engagement to ensure that our procurements encourage suppliers. We also work closely with the North London Chamber of Commerce and Constructionline to provide help to local SMEs

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Ensure procurement processes are not overly-rigid, cut off from day to day service provision or contain disproportionate requirements (eg insurance levels)

Through meet the buyer and pre market engagement events, as well as through monitoring of responses procurement processes are reviewed to ensure they do not contain disproportionate requirements. In addition Contract procedure Rules are regularly reviewed to ensure that processes are streamlined and encourage SMEs.

Require prime contractors to report any failure to comply with payment terms and mandate payment by suppliers to their subcontractors be no greater than those in the primary contract, through contract clauses.

New Regs 2015 mandate this and are implied even if not explicit in ts and cs. Need to review contract management arrangements though.

Engage with single simplified PQQs such as PAS91 for construction

Already implemented. New procedures for supplies and services mean that tenders will not be required sub OJEU and over OJEU will be a simplified PQQ

Learn from and engage with the supply base and other councils on a regional basis through market days for future projects

Waltham Forest regularly uses market days or market sounding to help shape future procurements. Learning and exchange of information across London takes place at the London heads of Procurement network.

Ensure that lotting strategies do not create unwanted barriers for smaller businesses.

Lotting is considered as part of the development of the individual procurement strategies (pre-procurement).

Engage in proactive pre-market engagement with the supplier base and through the commissioning process with users and advocates

Waltham Forest holds pre-market engagement with suppliers and through the commissioning process.

Allow sufficient time in the procurement process for suppliers to form consortia

Where considered appropriate this is built in to procurement processes.

Make suppliers aware of trading opportunities and secure their input and expertise

Waltham Forest opportunities are advertised on the London Tenders Portal and meet the buyer events and pre market engagement is undertaken to ensure that our procurements obtain suppliers input and expertise. .

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Theme C: Leadership

Recommendations


Waltham Forest Position RAG Status

1 Single Cohesive Voice

Central Government policy takes into account the needs and differences of local government because local government procurement speak clearly with one cohesive voice

Engage with networks to encourage discussion and input into NAG as a national voice

The AD Procurement is an active participant of the LHOPN, whose chair is on NAG, and also is on the SOPO NEC which also has the LGA NAG rep on it.

Join with PBO’s showcase and share good practice to influence Government and the wider public sector

More work to be done here.

2 Commitment from the top

Procurement is recognised as strategically important by chief executives, members and senior officers within local authorities

Procurement is supported in each authority through the appointment of a councillor champion

Best overall value has been considered in all council’s addressable third party spend

Procurement is a driver to implement council policy

Overall responsibility for Procurement rests at Director level and councils are committed to a strategic approach to procurement and delivering outcomes from this NPS

Responsibility for procurement in Waltham Forest is with the AD Procurement who until recently reported to a Board member. Restructuring has led to an additional layer between the AD and the Director. The Councils’ current and proposed Procurement Strategy which reflects the issues set out in the NPS.

Ensure there is a strategic alignment of procurement with Finance Director/s151 Officer or Director of Business Transformation

Procurement is strategically aligned with the work of the s151 officer and works alongside Transformation colleagues.

Provide periodic updates to senior managers and elected members on implementation of good practice (set out in this NPS) and relevance to organisation

Regular updates are provided to Portfolio Holders and board members on procurement matters. In addition regular reports are provided to Committees as appropriate.

An elected member champion from the executive has procurement, commissioning and contract management as a substantial part of their portfolio

There is a Cabinet Member who has responsibility for procurement. Commissioning and contract management

Procurement professionals influence all third party Procurement is not centralised at WF and therefore an element of spend is devolved.

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spend Much of the spend is influenced by the team but it is not possible to state that all spend is.

Procurement professionals work closely with their commissioning colleagues to ensure best possible outcomes are achieved

Procurement work closely with commissioning colleagues to deliver optimum outcomes.

The procurement strategy underpins the corporate strategy and a commitment to achieving the wider corporate objectives of the council is demonstrated

The Procurement Strategy fully supports the wider corporate objectives of the Council.

3. Commissioning

Councils identify strategic outcomes in relation to assessed user needs, and design and secure appropriate services to deliver these outcomes

Councils better understand and manage demand through the commissioning process to better target services efficiently and effectively

Use a strategic commissioning approach to appraise new service delivery models

Procurement works closely with strategic commissioners to ensure that service delivery models are fully researched and appraised prior to procurements. This process is supported through the introduction of a Commissioning Framework.

Procurement and Commissioning staff work together to ensure best outcomes for service users

See above

Demonstrate a willingness to move to multi-functional delivery

The new service design Hub at WF is clear demonstration of the willingness to move to new delivery models and ways of working as part of the service delivery appraisal process to ensure best outcomes for recipients of services.

Set out a corporate approach to decommissioning services which includes

• Clear objectives • Co-produced products and strategy • Communications strategy • Transparency • Timescales and timetable • Risk management • Defined roles for those involved

To be developed in accordance with the Commissioning Framework

4. Procurement Training

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Councils build better procurement competencies across the organisation by ensuring staff are equipped with the knowledge, training, and practical skills needed to derive maximum benefit from procurement practices.

Councils are more influential with suppliers through taking a more commercial approach to procurement

Council officers understand and implement the flexibilities afforded by the new EU Procurement Directives

Invest in their officers having the professional, leadership and interpersonal skills required to deliver council objectives through better procurement.

The majority of staff in procurement are either full members of CIPS or working towards that. The team also attend conferences and seminars on a limited basis where appropriate to keep up with current professional practice. Other skills are important too and training has also been provided on negotiation,, project management and presentation skills.

Implement a development programme which takes into account the new context and models for good procurement

As above. In addition a procurement training plan has been developed to roll out to the wider organisation.

Encourage councillors to engage with procurement and commissioning training being offered through the LGA Leadership Academy

Not pursued – to be discussed with Directors

Invest in developing commercial skills including costs and profit, the market and service quality, relationship building and renegotiation skills

A number of staff in procurement have undertaken formal procurement training which includes commercial skills development as part of the course. Further work needs to be undertaken to ensure all appropriate staff have these skills. This will be developed in conjunction with Organisational Development

Engage with training on new EU Procurement Directives

Staff have attended courses run by Crown Commercial Service on the new EU Directives and cascaded that training to other organisations.

Cascade training where appropriate across the council and to districts

Training in the new Regulations has been delivered. This has been supplemented by holding ‘procurement surgeries’ to assist with issues staff in Services may be experiencing difficulties with.

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Theme D: Modernisation

Recommendations


Waltham Forest Position RAG Status

1 Commercialisation and income generation

Councils procurement staff are more commercially minded, and understand and realise benefits from all funding streams including how contracts can be developed to generate income

Councils invest in training and developing commercial acumen for new and existing staff

See previous response. More focussed training in this area will be delivered as required.

Councils develop forward savings and income generation plans The Council as a savings plan as part of the MTFS and the Redefining Waltham Forest programme. Income generation initiatives are being explored.

2 Supplier innovation

Suppliers are able demonstrate innovation through all stages of the procurement cycle.

Use early market engagement, and set out well-structured procurement processes, to allow for innovative approaches to be put forward

Waltham Forest uses market days and market sounding where appropriate to seek innovation from suppliers. The use of dialogue during procurements also facilitates innovative models of service delivery eg Substance Misuse services

Harness and proactively encourage supplier innovation

This is achieved through the process outlined above together with discussions with incumbent suppliers on improved ways of delivering services throughout the contract life.

Develop and run innovation workshops with supply base Provider forums operate in some areas to stimulate ideas. Consideration will be given to running innovation workshops in other areas where appropriate

Ensure terms and conditions are flexible enough to allow for changes in technology during the life of the procurement

Flexibility is currently provided in terms and conditions through variation clauses, however this will be reviewed further.

Use outcome-based specifications that include the minimum technical and performance requirements and focus on a statement of the problem that needs to be solved

Outcomes based tenders are used on a consistent basis and payment by results as appropriate. Recent examples include substance misuse, sexual health and Information, advice and advocacy

3. Using technology

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Councils increase efficiency and productivity and realise full benefits through the use of appropriate e-procurement solutions in procurement processes

Use of e-invoicing helps councils and suppliers streamline administrative processes and improves supplier liquidity

Use electronic means for tendering processes in line with EU Directives

Waltham Forest uses the London Tender Portal for e-tendering.

Work with their suppliers to encourage a move to more e-business

All procurement is conducted via e-tendering, POs are raised electronically and invoices are either electronic or scanned in.

Outline the benefits of e-invoicing to suppliers helping them to do business electronically

Waltham Forest implemented e-invoicing several years ago. The upgrade of the SAP system should improve the match rate.

Implement e-invoicing and move quickly to realise benefits of 100% take-up

See above

Set a performance target and report on value and time to pay via e-invoicing

Need to check

Consider making e-invoicing a contractual requirement Incorporated in contract terms

4. EU Directives

Council procurement process are quicker, simpler and less costly to run through use of the new EU Procurement directives

Councils and PBO’s take full advantage of the free face to face and e-learning available through CCS

Staff have attended CCS training days.

Cascade training to council officers and elected members outside of the ‘procurement team’

A training programme and procurement ‘surgeries’ are planned to cascade training outside of the procurement team. This will commence once Contract Procedure Rules have been revised and approved. Member training needs to be arranged.

Councils maximise the flexibilities afforded to them in the new EU Directives

Once the new EU Directives have been enacted officers will seek to maximise the flexibilities contained within them, particularly around timescales and new procedures

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Appendix 3 Case Studies

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Documents

Procurement Strategy 2016 2020 - Waltham Forest · Our 2010-2015 Procurement Strategy was developed following the outcome of an Independent Panel review. The vision at that time was