TDC - Examples of Best Practice in Procurement
Best Practice in Procurement - Collaboration within the Public
Sector
Several local authorities within the South East, including
Thanet District Council, formed a purchasing consortium
called the South East Network for Telecommunications (SENT) with
the aim of collaboratively holding a “mini competition” and
e-auction for the provision of fixed line telephony, primarily
covering voice telephone lines and calls.
This procurement exercise saw City, County, District and Unitary
Authorities collaborating and in doing so, achieved the “critical
mass” necessary to maximise competition, which ultimately achieved
economy of scale not achievable on an individual Council basis.
As this exercise was a good example of collaboration in
practice, the Office of Government Commerce (OGC) saw fit to fund a
reverse e-auction. With the approximate cost of an e-auction in
excess of £10K, not surprisingly it would not have been financially
viable for authorities to engage on an individual footing.
Therefore, this auction was a “first” for all members of SENT and
maximised the competitiveness within the supply chain achieving
further savings over and above the pricing schedules within
tendered submissions.
Bracknell Forest Borough Council acted as the lead authority on
behalf of SENT and provided all administration and resources
necessary, saving Thanet the cost of this provision and all
associated costs.
The Process
In order to shorten the timescales and realise savings more
quickly, it was decided to utilise the existing OGC Buying
Solutions Telecoms Service Framework Agreements. This would avoid
the need to go through a full EC procurement whilst ensuring that
all suppliers had been fully pre-qualified. Under the new EC
Consolidated Procurement Directive, where framework agreements are
used, there should now be a mini competition between all framework
suppliers. A “broadcast” was therefore sent out through the OGC
Buying Solutions and interested parties were subsequently issued
the ITT in early June 2005. An e-auction between the
tenderers was held in early July 2005.
The tenders were assessed by a cross-departmental Evaluation
Team from various authorities. Thanet participated both from
a procurement and IT premise with the tender evaluation methodology
taking account of a range of service quality issues, including
technical capacity, transition and billing services as well as
price and cost of change. Prior to tender submission, the
cost/quality split had been set at 45%/55%. Based on the
results of the evaluation exercise it was recommended to proceed
with Global Crossing (UK) Telecommunications Limited as the
preferred supplier. Sensitivity analysis revealed no change
to the recommendation.
Assuming all of the current SENT Members place orders for their
maximum periods, on average 3.2 years after taking account of
expiry dates of existing arrangements; this would represent total
savings of around 30%, i.e. up to £1.6m. All figures are
approximate and assume that the current levels of use
continue. Additional Members are expected to join SENT at a
later stage thereby increasing the total savings through volume
discount.
Currently, Thanet District Council is the only participating
Kent authority however, there is growing interest from Kent Buying
Consortium members and this is likely to realise further take up
within 2006.
Thanet have signed a 2-year contract commencing 1st
February 2006.
Best Practice in Procurement - Purchase of Software for a
Risk Register and Claims Handling System (Case Study)
Outline:
In February 2004, the Council received the final report from the
Audit Commission into a review which had taken place on Risk
Management which concluded that:-
"A strategy for the implementation of risk management has
not been drawn up. The Council would find this helpful to
steer the corporate approach and ensure all the building blocks are
put in place for example:
- identifying key players;
- assessing and delivering training for councillors and
staff;
- identification of risks at corporate levels, building on
the Zurich Municipal report;
- embedding and mainstreaming risk management; and
- assessing the success of the approach and reviewing the
arrangements.
The Council has not yet developed strategies and action
plans for assessing, controlling, monitoring and reviewing
identified risks at both corporate / strategic and operational
levels."
It was identified by officers that, to enable the Authority to
monitor and review these risks, Risk Register software is required
so that all Officers with responsibility for strategic and
corporate risks would be able to access the necessary information,
which will be stored within this Register.
A budget was identified for the acquisition of this software,
and an Officer Steering Group was established to oversee the
acquisition, including representatives from Risk Management,
Internal Audit and Information Technology.
The market was researched, drawing on the experience of these
and other officers. Due to the specialist nature of the
software, three companies who are most widely used and recommended
in the Local Authority market were identified.
The identified companies made presentations to the Group on site
in Thanet, and were evaluated according to pre-determined
criteria.
The Risk 2003 and LACHS 2000 software came in at the cheapest
price, and the Group agreed that these packages had room for growth
as Risk Management became more embedded within the Authority and
awareness was raised.
The necessary CPR exemptions were sought (as only 3 quotes,
rather than 4 as required for £10-25k procurements were
obtained) sought and the package was acquired and
implemented.
Lessons Learned:
- Identify interested stakeholders at an early stage
- Be clear about what are essential features, and what are
desirable
- Keep your Cabinet Member informed about the process and
outcomes.
Best Practice in Procurement - Partnering Project with
Mears
Reactive, planned and recurring maintenance services to the
Council's housing stock and reactive maintenance only to commercial
and municipal properties are currently procured using a term
partnering contract.
The award of the service to Mears Ltd. followed evaluation of
tenders received on a quality and financial basis (a marked
departure from lowest price only). Stakeholder and client
department representatives were engaged in the award process and
the project provides for process development, establishment of
performance targets, their measurement, monitoring and the
implementation of predetermined year on year improvements in
service delivery.
Best Practice in Procurement - Joint Procurement of Customer
Relationship Management System (CRM)
Thanet District Council and Canterbury City Council worked
together on the procurement of a Customer Relationship
Management system, which led to a sizeable reduction in costs to
both Authorities.
The Customer Services Managers for each Council worked together
to draw up a tight system specification for the CRM system. Legal
Teams from both Councils shared the checking of submitted tender
documents as did the IT departments. The financial checking of
Companies selected to tender was also shared by the Audit teams
from both Councils.
This joint working didn’t just save money in the final cost of
the system but also the sharing of the workload lead to a
saving in staff resources required by both Councils to complete the
tender specification and selection processes.