Joint Procurement Workshop

1
Joint Procurement Workshop

• 8th December 2005
• Kelly Forrester, SWCoE
• Ken Cole, Director, London CoE
• Julian Morley, Director, SWCoE

2
Objectives of todays meeting
Julian

• To ensure agreement on the difference between
  coding and classification
• To understand the reasoning and process behind
  London RCE classification approach
• And also PAE (Procurement Agency for Essex)
• Agree an implementation approach for the SW
• Taking into account the mix of existing
  approaches and the SW spend analysis
• Agree contract definitions

3
Common classification will support a number of
areas
Julian

• Aggregation of demand information at sub-regional
  level
• Increasingly common procurement cluster
• Aggregation of demand at regional level
• Telecoms, IT h/w and s/w, insurance, civil
  engineers, utilities, mail services etc
• Across a variety of tools
• Procurement card
• Procure to pay
• eMarketplace
• Adhoc spend analysis
• eSourcing systems
• Contract registers

4
The proposed classification standard has been
assessed against several attributes
Ken

• Granularity
• Appropriate Hierarchy
• Tiered or single level to suit the complexity or
  value of the purchase
• Balance how many levels
• No more than three
• Extendable and quickly maintainable by the public
  sector
• Cross- referenceable to other coding structures
• Including GL Chart of Accounts
• User Friendly
• See immediately what it means and can be used by
  non procurement specialists
• Descriptions not numbers
• No more than 200 categories from which to pick
• Look up ability/ search
• Easily understood by niche suppliers in any
  region
• e.g. window cleaners

5
Classification standard has also considered
supply positioning (risk/value)
Ken

• Classification standard should reflect Supply
  Positioning (Risk / Value) outcomes
• Low value commodity items being classified at one
  level (e.g. Stationery)
• High value items such as Construction /
  consultancy being sub-divided into hierarchies
• Chelmsford made the point that only about 120 of
  their categories had been used.

6
The proposed hierarchy has been validated against
a number of standards
Kelly / Ken

• PAE NSV Hierarchy
• Chelmsford UNSPSC Hierarchy
• L B of Camden Classification Types
• OGC Commodity Goods and Services work stream
  Categorisation

7
Overview of the proposed classification standard
Kelly / Ken

• 30 classifications at level one
• 132 classifications at level two
• 14 of the level two classifications are taken to
  a third level
• 61 at level three
• See excel Classification Hierarchyv2 FINAL.xls

Spend some time on the excel at this point
8
Status of financial systems and eProcurement
systems across the SW
Julian

• CedAr and Radius are the most common providers
• 6 councils have in-house finance systems
• 8 District councils did not identify their
  financial system
• Councils have extended existing finance systems
  for integrated P2P
• Source SWCoE Phase 1 eProcurement support
  programme

9
There is no current consistent approach to
classification in the SW
Julian
10
Workshops
Julian / Kelly

• Implementation approach
• Support required

11
Contracts Definitions
Ken

• One Off Contracts
• Renewable or "period" Contracts
• Framework Arrangements single authority
• Framework Arrangements multiple authority
• Call-Off Contracts
• Partnership Arrangements - including PFI and PPP

12
One Off Contracts
Ken

• These are contracts to meet a specific need and
  will generally be short-term contracts to supply
  goods and services to meet an individual
  requirement
• e.g. the supply of specialist scientific
  equipment for the Trading Standards Service or
  the supply of consultancy services for a
  particular project
• These contracts are sometimes referred to as
  Spot contracts

13
Renewable or "period" Contracts
Ken

• These are contracts for services required on a
  regular basis and are generally let over a longer
  period of time (1-5 years) and will be monitored
  on a regular basis
• e.g. building cleaning, grounds maintenance.

14
Framework Arrangements single authority
Ken

• This is an arrangement where the terms and
  conditions (including pricing methodology where
  possible) are agreed with the supplier(s) of
  goods and/or services, and which allows prices to
  be obtained and goods to be acquired without the
  need to go through another formal tendering
  process.
• The suppliers are pre-vetted.
• The length of such arrangements will usually be 3
  years with a disclosed option to extend for a
  further specified period.
• Examples include stationery and furniture.
• This type of Framework Arrangement is used for a
  single authority.

15
Framework Arrangements multiple authority
Ken

• This is an arrangement where the terms and
  conditions (including pricing methodology where
  possible) are agreed with the supplier(s) of
  goods and/or services, and which allows prices to
  be obtained and goods to be acquired without the
  need to go through another formal tendering
  process.
• The suppliers are pre-vetted.
• The length of such arrangements will usually be 3
  years with a disclosed option to extend for a
  further specified period.
• Examples include stationery and furniture.
• This type of Framework Arrangement can be used
  for multiple authorities.

16
Partnership Arrangements - including PFI and PPP
Ken

• This is where the Authority seeks to develop a
  relationship with a supplier based on partnership
  principles (as distinct from a formal
  partnership) with a supplier thereby sharing the
  costs and risks involved
• For example, civil engineering works and
  individual building schemes.

17
Call-Off Contracts
Ken

• A call-off contract is used for the supply of a
  specific/known quantity (a minimum and maximum
  range can be specified) of goods or services over
  a given time period, subject to the prices,
  specifications and terms and conditions agreed. 
• Delivery will be made either to a delivery
  schedule built into the call-off contract, or
  more usually by separate call-off orders placed
  against the contract.
• In essence, a call-off contract is the same as a
  framework agreement except that the call-off
  contract is a legally binding contract with the
  supplier.
• An example would be a Block contract in the
  social care environment.