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London Borough of Sutton Procurement Strategy 2012-15 The Executive 26 March 2012

DRAFT

London

Borough of Sutton

Procurement Strategy

2012-2015 How to Contact the Corporate Procurement Unit (CPU) The following details are given to enable you to contact us if you have any questions or comments about the strategy or if you wish to obtain further copies. E-mail: [email protected] Phone: 020 8770 5303 Write to: Corporate Procurement Unit, 3rd Floor, Civic Offices, St Nicholas Way, Sutton, SM1 1EA Website: www.sutton.gov.uk Useful websites Communities and Local Government www.communities.gov.uk Improvement and Development Agency www.idea.gov.uk Local Government Association www.lga.gov.uk London Borough of Sutton Procurement internet pages www.sutton.gov.uk/business/tendersandpurchasing/ London Tenders Portal www.londontenders.org

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Contents

Sutton Council’s vision and values 1. Introduction 2. Sustainable Procurement 3. The Smarter Service Sutton Review of Procurement 2010.

3.1 Overall aim for procurement 2012 – 2015 3.2 The Procurement Board 3.3 The Role of the Procurement Board 3.4 The Corporate Procurement Unit 3.5 Responsibility for Procurement Projects 3.6 Council Procurement Spend 3.7 The Council as Commissioner

4. Objectives 2012 - 15

4.1 Develop Category Management through Service Group Managers 4.2 Improve Management Information to enable forward planning and decision making 4.3 Supplier Diversity 4.4 Improve Contract Performance Monitoring and Management 4.5 Improving Electronic Invoice Processing. 4.6 Collaboration with partners 4.7 Better use of frameworks 4.8 Skills Development 4.9 Become a better organisation to do business with 4.10 Business Continuity in Procurement

5. How the Council will procure 6. Equalities in Procurement 7. Procurement Policies

Appendices

Appendix A - Competition Policy Appendix B - Collaboration Policy

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Appendix C - Policy for Promoting contract opportunities for SMEs, Voluntary Organisations and Social Enterprises Appendix D - Role of the Corporate Procurement Unit Appendix E – Equalities Impact Assessment Appendix F - London of Sutton Procurement Spend by Headline Category Appendix G -Procurement Pledge on Employment Appendix H – Action Plan

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Sutton Council’s vision and values

Our vision for the Borough is to build a community in which all can take part and all can take pride.

This vision encapsulates our community-based approach and commitment to addressing quality of life issues and inclusiveness. Our five core values reinforce the vision and provide the underlying context to the way in which we carry out our work.

The values form the acronym PRIDE and show how we are committed to:

Working in Partnership with the people who live and work in the Borough;

Making our services open and accessible so that everyone is listened to and treated with Respect;

Seeking Innovative approaches in order to provide better, more cost-effective services;

Promoting Diversity and ensuring that we recognise and celebrate difference within the context of fairness and equality;

Empowering everyone so that we can all 'take part and take pride' as active citizens.



1. Introduction This procurement strategy sets out the London Borough of Sutton’s overall aims and objectives in relation to procurement for the next three years. It is intended that by setting out the Council’s overall approach to procurement that we create a clear, transparent strategy for procurement which is clear for Members and officers and to inform suppliers - both current and potential. The strategy details the principles that Sutton will adopt for the future procurement and provision of services and sets out a number of key areas of work that will support achievement of the Council’s overall aims. The procurement strategy is aligned to the Council’s new approach to commissioning and is consistent with it. To that end, we have agreed a common definition of commissioning and of procurement. We define commissioning as `the ways in which the Council assesses the needs of people in an area, determines priorities, designs and sources appropriate services and monitors and evaluates their performance’ Procurement is defined as the process of acquiring goods, works and services, covering both acquisitions from third parties and from in-house providers. The process is part of the Council’s commissioning framework which spans the whole life cycle from identification of needs, through to the end of a services contract or the end of the useful life of an asset. It involves options appraisal and the critical ‘make or buy’ decision The Council’s new approach to commissioning creates a systematic, whole-Council approach within which this new procurement strategy sits. This recognises that in the future our internal and external services will be shaped around new commissioning procedures that are likely to lead to a more mixed economy of in-house, outsourced, social enterprises and services provided by the voluntary and community sectors. The Council spends some £215 million each year with outside suppliers and therefore it is essential that this money is spent effectively in a way that maximises the Council’s spending power and is consistent with the achievement of the Council’s overall objectives in terms of creating a community in which all can take part and take pride. To this end our procurement strategy must also recognise the wider social objectives the Council wishes to pursue, in relation to equalities and diversity, support for social enterprise and the voluntary and community sectors and encourage innovation. This procurement strategy is an important document to clarify and inform commissioners of the Council’s ongoing aims to obtain the best outcomes through compliant, cost effective and commercially based procurement. 1.1 Who is this Strategy written for? There are a number of key audiences for this strategy. It has been written to ensure there is a consistent approach within the Council but it has also been written to inform current and potential suppliers about the Council’s aims and objectives and also for the wide range of partners with whom the council works. 1.2 Underlying Financial Situation

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Although in recent years the public sector has almost continuously faced the need to reduce expenditure and obtain more for less, the budget published by the Chancellor of the Exchequer in June 2010 reduced funding for many parts of the public sector and significantly for local authorities.

The Chancellor stated the most urgent task facing the country was to implement an accelerated plan to reduce the deficit as a necessary precondition for sustained economic growth. The 2010 Budget set out how the Government would carry out a five-year deficit reduction plan to rebuild the British economy. A key part of this plan included spending reductions of £32 billion per year up to 2014/15. This, itself, translated into a 25% reduction in funding over four years for many Government departments with a reduction of 28% for local government as a whole. Despite the Council’s ongoing prudent financial management over many years this meant that Sutton would need to make savings of £30M, or 25%, by 2014/15. 1.3 Smarter Service Sutton Reviews The Council has conducted a wide ranging review of all of its services to find savings, efficiencies and better ways to achieve required outcomes. In 2010 a final report was delivered under this programme covering procurement Council wide. This procurement strategy builds on the findings of the Smarter Services Review of Procurement and how the agreed recommendations are to be taken forward with the aim of ensuring all procurement is fully challenged, commercial in its outlook, compliant with legal and governance requirements and cost effective. 2. Sustainable Procurement

Sustainability is key priority for the Council and therefore our procurement practice supports this as important contributor to achieving local sustainability.

Procuring sustainably means considering the environmental, social and economic impacts of the product or service over its life time, such as: design, use of non-renewable material, methods of manufacture and production, logistics, operation, maintenance, reuse, recycling options and disposal; plus the suppliers’ capability to address these impacts throughout the supply chain. This means building economic, environmental and social considerations into our procurement of goods, services, works and utilities to achieve best value for money and continual improvements in our sustainable performance. That is, by conserving resources, controlling pollution, reducing waste and raising the quality of people’s lives. The Council has adopted One Planet Living, a vision of a sustainable world where people live healthy, happy lives using their fair share of the earth’s resources. There are ten principles of One Planet Living which we are using as the framework for our goals. These are as follows:-

Zero carbon buildings Zero waste Sustainable transport Local and Sustainable materials Local and sustainable food Sustainable water Natural Habitats and wildlife



Culture and heritage Equity and local economy Health and happiness.

Web address: http://www.sutton.gov.uk/CHttpHandler.ashx?id=10954&p=0 Under the Local and Sustainable Materials principle of One Planet Living the Council is committed to meeting the following targets:- All new development should use 5% reclaimed materials, 25% recycled content by value, 50% local materials by weight, 95% timber should be FSC certified by 2012 achieving level 5 of the DEFRA Flexible Framework by 2017. http://www.defra.gov.uk/publications/2011/03/28/pb13423-flexible-framework-guidance/ The Council already has in place processes which support sustainable procurement covering environmental and equality issues and will further take forward sustainable procurement as follows:-

• Develop social benefit opportunities within contracts where appropriate.

• Develop opportunities within contracts to support the local economy both in terms of local suppliers and promoting local employment in accordance with the procurement pledge (see Appendix G).

• Encourage a diversity of suppliers to bid for the Council’s business commissioning services from the public, private, voluntary and community sectors

Sutton has become one of a growing number of Fairtrade Boroughs, joining 400 towns across the UK. We've committed to purchasing Fairtrade products at the council while encouraging business, community groups, schools and colleges to do the same.

3. The Smarter Service Sutton Review of Procurement. Scope The review looked at procurement across the Council and did not solely cover the activities of the Corporate Procurement Unit. The whole process of procurement was looked at from the identification of need, commissioning, through procurement and contract management. The key results of the review were:-

• To define a new vision for Procurement

• To set up a Procurement Board

• To define a new role for the Corporate Procurement Unit and

• To prioritise a number of areas for procurement action.

3.1 Overall aim for procurement 2012 – 2015

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The overall aim is for the council’s approach to procurement to ensure that the council maximises the best use of its resources while at the same time meeting wider social objectives. The Smarter Services Sutton review developed the following overall aim:- “To develop a procurement model across all services that is:

• Compliant,

• Commercial,

• Cost-effective and

• Provides greater internal challenge.” Compliant – Procurement principles should be applied consistently across all procurement with common processes which are understood by both officers of the Council and those expressing interest in and tendering for Council contracts. All procurement and purchasing must be compliant with the Public Contracts Regulations, the Council’s Contract Standing Orders and Financial Regulations, transparent and open to scrutiny. Commercial – Specified requirements should not be over prescriptive and where possible expressed as outcomes. The use of outcome specifications can effectively transfer risk from the Council to contractors who are better placed to manage it effectively. This will enable the market to use their commercial expertise to bring forward innovative and efficient ways to deliver better services at better cost. Supply should be aggregated to achieve economy of scale and services which have synergy incorporated together in single procurements where possible to increase interest in Council contracts from the market. Cost effective – In the current financial climate especially we are looking to reduce costs. Price will be an important criterion in all procurement processes. To achieve cost effectiveness the Council is committed to competitive tendering for the award of all contracts for works, supplies and services. At the same time procurement methods also need to be cost effective and the use of the electronic procurement system will be mandatory. Framework agreements and collaboration with other public bodies will be used, where possible, to reduce the cost of procurement. Greater internal challenge – Rigorous commissioning processes to establish need and determine required outcomes are required in the first place but all proposed procurement projects and decisions to spend with third party organisations will be subject to scrutiny and challenge by the Corporate Procurement Unit and the Procurement Board. The application of this vision will achieve for the Council

• Legitimately procured contracts supported by sound business cases.

• Expert, innovative and sustainably deliverable solutions from the market.

• Delivery of cost effective services, supplies and works.

• Increased demand management. 3.2 The Procurement Board The Procurement Board held its first meeting in January 2011The board is responsible for overseeing delivery of the procurement aims and objectives, in particular developing a procurement forward planning programme and driving procurement processes.



The Procurement Board is made up of 8 senior officers, and provides a one Council managerial forum for overseeing delivery of the procurement aims and objectives. Relevant Category Leads will be designated to review spend categories with guidance and support from the Corporate Procurement Unit and to deliver procurement improvement in terms of savings, compliance and reductions in off contract spend. Category Leads will be invited to attend the Board as spend categories are reviewed. The Procurement Board is chaired by the Strategic Director of Resources and membership includes senior officers representing each Council Group, Legal Services and Corporate Procurement. Whilst the Board will provide overall strategy and highlight areas for investigation, the responsibility to action procurement processes will be that of the relevant individual groups through the designated category leads. The CPU will provide guidance on procurement strategy, procurement procedures, documentation and methodology. 3.3 The Role of the Procurement Board

The Procurement board is tasked with achieving a one council approach to procurement through the following:-

• Ensuring pro-activity and consistency in all total procurement practice across the Council, i.e. linking in with commissioning through to contract management;

• Improving forward planning and scrutiny of larger contracts;

• Driving down current costs and making better use of the Council’s spending power;

• Increasing visibility of procurement processes;

• Improving ability to identify opportunities for high-level collaboration;

• Increasing ability to ensure compliance;

• Providing a forum for authorisation of exceptions to Standing Orders/innovation/risk;

• Providing a forum for services to suggest procurement initiatives, savings projects and making decisions;

• The setting of the strategic direction of the CPU to deliver identified savings and procurement activities in conjunction with spend category leads;

• Monitoring procurement performance and existing contracts and frameworks;

• Identifying options for outsourcing;

• Deliver and maintain the Council’s contracts register which feeds a programme of re-procurement

3.4 The Corporate Procurement Unit As a result of the Smarter Services Sutton review of procurement the Corporate Procurement Unit (CPU) will have a new role. The Procurement Board will set strategic direction for the procurement across the Council which will be key to the working of the board providing necessary professional expertise, management information and solution focused advice.

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The role of the CPU will in future relate to developing strategy, governance, guidance, compliance, consistency, commercial focus and cost effectiveness across the whole procurement of the Council. The CPU is expected to be a key member of the project team on major procurement projects. The CPU, with the support of the board, will challenge Business units regarding procurement actions (or lack of) including business cases for procurement projects, failure to consider collaboration, off contract spend, non compliances, and report to the Board as appropriate. (See Appendix D) 3.5 Responsibility for Commissioning and Procurement Projects As set out in the introduction to this framework, the Council has adopted a new approach to commissioning that gives individual managers the responsibility to commission services within the new policy framework. As part of that process of commissioning managers are responsible for conducting procurement projects under the supervision of the relevant Category lead and with the guidance of the CPU. Category leads will be called to board meetings to report on the progress of procurement projects as and when necessary. Business Units will be required to undertake the procurement of contracts in accordance with the governance requirements set out in Contract Standing Orders in a timely and compliant manner and to robustly manage those contracts to achieve the delivery of the specified outcomes and best value. 3.6 Council Procurement Spend The Council spent £215M with third party suppliers in 2010/11, which is a significant proportion of the Council’s budget. The top ten categories of spend (spend analysis 2010/11) were:-

Social Community Care Supplies & Services £72M

Works - Construction, Repair & Maintenance £46M

Housing Management £20M

Education £12.6M

Human Resources £11.2M

Transport £7.4M

Environmental Services £7.1M

Information Communication Technology £6.9M

Facilities and Management Services £5.7M

Consultancy £5.3M A full statement of the procured spend by headline category can be found at Appendix F. 3.7 The Council as Commissioner The Council has recently agreed a new council-wide approach to commissioning (at the Executive meeting on 4 October 2011). The new approach to commissioning will be applied across all services whether they are provided from internal or external providers. Importantly, this approach to commissioning does not mean that services will be automatically outsourced nor does it mean that services will necessarily be directly provided by the Council. Rather the approach will lead to more mixed methods of service delivery including in house, mutualisation, social enterprise and management buy-out proposals, for example, as well as more traditional out sourcing solutions.



In some instances, and particularly in respect of adult social services, the Council will be funding vulnerable adults who are eligible for council support people through personal budgets- either direct payments to purchase services to cover their own needs or council arranged personal care.. All Council commissioning will be guided by the Council’s new approach to commissioning.

4. The key objectives for 2012-15 The following are the areas for action developed from the review of procurement:- 4.1 Develop Category Management Category management is a methodology to manage buying activity by grouping together related supplies and services across the Council and mapping them onto a supplier market. Through category management, decisions about what products and services are procured, how contracts are packaged and which suppliers are used are made on a category-by-category basis across the Council as a whole. This facilitates the optimisation of savings by aggregation of supply, rationalisation of supplier numbers with the associated reduction in contract management costs and recognition of synergies between procured works, supplies and services to make contract packaging relevant and commercial for the relevant market. The Procurement Board will identify Category Leads relevant for each spend category who will take responsibility for investigating and improving procurement performance for the category. The CPU will provide analysis and management information and will advise Category Leads and procuring business units on procurement, commercial issues and procurement methodology. Under the guidance of the Category Lead and the CPU, procurement project teams from the relevant groups will undertake the necessary procurement work to:-

• Aggregate spend and realise savings

• Rationalise the supplier base

• Ensure optimum contract packaging to transfer risk to suppliers and increase commercial interest.

Category management will interface with partner authorities on a sub regional basis to further take advantage of opportunities to:-

• Aggregate spend across authorities and achieve economies of scale.

• Manage and develop markets

• Rationalise specifications

• Rationalise the supplier base.

• Reduce/share procurement costs.

4.2 Improve Management Information to enable forward planning and decision making The Council has adopted the Pro Contract electronic tendering system and all tenders are to be conducted through this. Pro-contract provides a complete audit trail of tender processes which facilitates scrutiny. The system also has a contract register to record Council contracts and work is in handled by the Board and the CPU to obtain details of

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all extant contracts from service groups to fully populate the register. All newly procured contracts will be added as they are awarded. Increased visibility of procurement spend will be achieved through the Pro Spend module which will enable the ready analysis of spend by category, supplier base, transaction numbers etc. down to individual invoice lines. This information will be of great value to identify where to prioritise procurement activity. At the same time visibility of contracts, performance and spend will facilitate contract managers to renegotiate the cost, performance and methods of delivery of major contracts. 4.3 Supplier Diversity The Council recognises that supplier diversity is important both in terms of competitive sustainable markets and supporting the local economy. The Council will actively encourage competition from a wide range of providers including:-

• commercial sector organisations both big and small,

• the voluntary and community sector and

• social enterprises. The Localism Act 2011 will offer further opportunities for the diversity of supply as this act enables residents to ‘bid’ to take over services currently commissioned by the Council to provide a ‘community owned’ service which will deliver added value because local people will have a more personal investment in it. In order to encourage the development of such community owned services, the procurement process will need to be open and accessible to residents and will need to actively support resident participation. It will also need to acknowledge success criteria that local people recognise and involve them in the evaluation thereof. The Council will develop methodology to evaluate output from social capital and how this will be incorporated into tender evaluation of appropriate services. 4.4 Improve Contract Performance Monitoring and Management The CPU will develop a contract management framework and produce guidance within the procurement manual regarding the management of contracts. Contract management activity will be recorded on the Pro Monitor module of Pro Contract which will also issue reminders to contract managers at key times in the life of the contract. The Council has high expectations of its contractors and suppliers to deliver quality goods and services effectively, efficiently, economically, on time and to the satisfaction of Sutton’s citizens. To ensure these expectations are met strong contract management skills and procedures are necessary together with appropriate sanctions for contractors and suppliers if they fail to deliver as required. At the same time consistent, regular and productive communication between contract managers and contractors needs to occur in order to achieve better outcomes and cost savings through innovation. All contract managers are expected manage the delivery of service proactively to ensure services are delivered to the required quality and develop a sustainable relationships



with suppliers to promote innovation and mutual respect and thereby achieve the best outcomes for citizens. 4.5 Improving Electronic Invoice Processing. The Council already processes its orders and invoices electronically internally however further improvements can be made through the Council’s finance and purchase to pay system to enable secure direct electronic transmission of orders to and receipt of invoices from suppliers. The implementation of electronic invoice processing will be undertaken following completion of the Agresso upgrade in 2012. 4.6 Collaboration with partners Public bodies procure many supplies and services which are common. Economies of scale by aggregation of spend, sharing of procurement costs and expertise can all result in better value for the Council. The Councils collaboration policy is set out in the Procurement Policies section. 4.7 Better use of framework agreements Analysis indicates that we currently make good use of external frameworks (Government Procurement Service (GPS) etc.) but work is needed on increased use of internal frameworks. Category management will identify areas of spend where the procurement of framework agreements will provide an appropriate solution to allow diversity of supply and reduce procurement timescales and cost. 4.8 Skills Development The change in emphasis to category management and the requirement for Category Leads and services to take responsibility for procurement exercises will require a large number of managers in the Council to develop procurement skills and knowledge. Contract managers will also need training in contract management in accordance with the Council’s contract management guidance in the procurement manual and to obtain better value from contracts. 4.9 Become a better organisation to do business with The Council will look at its processes and procedures to reduce barriers to doing business with the market especially in relation to Small and Medium Size Enterprises (SMEs), local businesses, voluntary sector organisations and social enterprises. It will look across the board to package and otherwise make contracts commercially interesting to the market and accessible to all sectors. The Council will adopt consistent practices and processes to ensure transparency and a level playing field for suppliers and prospective suppliers. 4.10 Business Continuity in Procurement Since 2005 all Local Authorities in the UK have been statutorily required to have business continuity plans for their services and to make sure any contracted service also has them. It follows that one of the Council’s objectives is to ensure that its suppliers have effective business continuity plans in place. Service groups within the Council are tasked with ensuring that those suppliers delivering services or capabilities which underpin services can deliver to the extent required. Guidance on a proportionate (risk-cost) approach to assessing business continuity requirements and suppliers’ capabilities is available to service groups on the Council’s Intranet.



At the same time, the Council wishes to support suppliers to comply with business continuity good practice guidelines by signposting them to London Resilience - so that no supplier is excluded from competing for a contract. London Resilience is a government agency that provides free action focused information that is tailored to small organisations, medium-sized organisations and large organisations. Risk assessment and planning templates are included to enable effective business continuity plans to be developed in a relatively short period of time. Information is also available from Business Link.

4.11 Procurement Pledge The Council has adopted a ‘Procurement Pledge’ which is a formal and public commitment to work within our supply chain to create employment and training opportunities. As part of the pledge the Council has adopted a corporate policy to promote apprenticeships; will look at existing contracts and seek voluntary commitment from contractors to create apprenticeships and other opportunities; will set internal targets to increase training and job opportunities through procurement; will promote the commitment to the pledge to contractors and to the wider public through meetings, events and media; and will endorse London Councils’ procurement toolkit. Targets will include the number of apprentices recruited, and the percentage of workforce recruited locally. These targets will be set and monitored by the Head of Business Development and Economic Regeneration. All Heads of Services will be made aware of the Councils commitment’s to the procurement pledge.

5. How the Council will procure There are clear stages in the process from assessing need through to procurement these are:-

Commissioning Assessment of Need Current Services and Best Practice Assessing resources available Market consultation Market research and analysis Opportunities to collaborate and innovate Option Appraisal Risk Analysis Scoping the Requirements Preparation of the Business Case Procurement Board - Review Business Case for decision to proceed.

Procurement Deciding the procurement route

• Is there a corporate contract?

• Is there an extant framework agreement available from another authority or public sector buying organisation?

• Would collaboration with others be viable?



Advertising contract and conducting the tender process. Procurement Board review of proposed award. Approval of award by the relevant committee. Contract Management Performance review

The Council is committed to procurement through open and transparent competition as set out in the Competition Policy. (Appendix A)

6. Equalities in Procurement Equality and Diversity is well-embedded into Council practices and always forms part of

our thinking in our decision-making processes. The Equality Act, which came into place

on 1st April 2010, replaces all previous equality legislation and introduces a Single

Equality Duty for the Council and other public authorities. The Equality Duty requires

public bodies to consider all individuals when carrying out their day to day work – in

shaping policy, in delivering services and in relation to their own employees. It therefore

has important implications when procuring services.

The Single Equality Duty has three aims. It requires the Council to have due regard to

the need to:

• eliminate unlawful discrimination, harassment, victimisation and any other conduct prohibited by the Act;

• advance equality of opportunity between people who share a protected characteristic and people who do not share it. A protected characteristic can be age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, gender, sexual orientation

• foster good relations between people who share a protected characteristic and people who do not share it.

This means that we must consciously think about the three aims of the Equality Duty in

the decisions we reach. This includes thinking about how we design, deliver and

evaluate services and how we commission and procure from others. Third parties who

deliver services on our behalf must comply with the Equality Act and it is the Council’s

responsibility to ensure this. It is a duty that cannot be delegated.



7. Procurement Policies To support the procurement strategy a number of procurement policies have been developed to guide managers. The following policies can be found in the Appendices.

Appendix A - Competition Policy Appendix B - Collaboration Policy Appendix C - Policy for Promoting contract opportunities for SMEs, Voluntary Organisations and Social Enterprises



Appendix A

London Borough of Sutton – Competition Policy Introduction The Council has some 4000 suppliers with whom the Council spends over £200m p.a. The expenditure with individual suppliers ranges between as little as £10 up to £13M. The Council needs to ensure that it gets best value from all its procurement and ensure that what it buys is both fit for purpose and obtained at an economic price. Sutton Competition Policy Sutton Council is fully committed to securing all supplies, works and services through a challenging process of competitive tendering in order to obtain best value. The Council will, subject to the exceptions set out below or reasons of extreme urgency require all contracts to be publicly advertised and tendered. The exceptions to this policy are:-

• Where the Council already has an extant compliantly procured contract or framework agreement.

• Where supply can be obtained through an EU compliant framework agreement established for use by public bodies by another council or public sector buying organisation.

• Contracts below £10,000. (However it is expected that officers will subject many of these small contracts to quotation in order to prove the duty of value for money and open more of the Council business to SME’s.)

• The exemptions set out in Contract Standing Orders relating to:

• where effective competition is prevented either by government control or by the supplies or services being proprietary and/or are sold only at a fixed price; or

• solely in connection with repairs to or parts for existing vehicles, machinery, plant or systems.

Reasoning behind the Competition Policy The Council has adopted this policy for the following reasons:-

• As a public body the Council is bound by the legislative requirements of the Treaty of Rome and the Public Contracts Regulations 2006.

• The increasing financial restraints on the Council mean that it needs to obtain more for every pound spent.

• Competition is recognised as a method which is successful in achieving reductions in price and cost.

• Competition facilitates the market to put forward commercial and innovative solutions to achieve the specified outcomes



• The open tendering of, in particular, smaller contracts is a major contributor to providing opportunity for local small organisations to participate and strengthen the local economy.

The details of the Council’s Competition requirements are set out in Contract Standing Order 62. Implementation The Council has adopted an electronic procurement system and all tenders and referral for quotations will be administered through Pro Contract. The use of electronic tendering has the following advantages:-

• Tender timescales are reduced

• Easy electronic access for tendering for suppliers large and small.

• Automatic advertising through the London tenders Portal and the Pan London Portal.

And for small tenders and Referrals for Quotation (RFQs) :-

• Pre registered suppliers for most requirements

• “Quick Quotes” for small purchases to obtain best price. The table below indicates when tendering, RFQs or Quick Quotes should be used. For each procurement the method to be used needs to be decided on the complexity and the market for the specific requirement.

Contract Total Value

Quick Quote

RFQ Tender Authorisation to award*

Up to £10,000 ü Executive Head

£10,000 - £30,000

ü(If simple) ü Executive Head

£30,000 - £100,000

ü (If simple) ü Executive Head

£100,000 - £150,000

ü Strategic Director

£150,000# - £500,000

ü Strategic Director with the agreement

of the Strategic Director Resources

Over £500,000 ü The Relevant Committee

# Note Contracts for Supplies and Part A Services with a value over £150,000 and Works over £3.5M are required to be advertised under an OJEU notice. * Note this requirement will be incorporated in the amendments to Contract Standing Orders. Oversight



The Procurement Board will monitor the use of tendering, RFQs and QuickQuotes against expenditure to ensure that all appropriate contracts and purchases are procured in accordance with this competition policy.



Appendix B

London Borough of Sutton – Collaboration Policy Introduction It is recognised that collaboration between public bodies in procurement can on many occasions achieve better value for public bodies as against individual procurement. Whilst it is currently a theme across London and great efforts are being made to identify areas where collaboration may be useful this policy sets out the Council’s approach to collaboration and the matters to be considered when considering collaborative procurement. Principles for Collaboration The Council will actively look to take advantage of opportunities to collaborate on procurement with other public bodies wherever it meets the requirements of the Council in terms of:-

Being commercial – There must be tangible advantage in cost through aggregation of spend, economy of scale and market leverage. Synergy of objectives – A satisfactory result will only occur if the parties to the collaboration can agree common objectives. Appropriateness to the market – The market needs to be considered as to whether collaboration will be an advantage. It is necessary to look at the typical size and types of supplier in the market and how collaboration may affect market capacity and diversity. Collaboration can result in very large contracts the size of which may limit competition to big prospective suppliers only. Collaboration may not be appropriate in markets where local responsiveness is paramount or suppliers tend to be smaller organisations. Aggregating supply can reduce prices in the short term but in the medium term may reduce competitiveness in the market. Timeliness – The collaboration needs to progress expeditiously and not result in the Council having a gap in supply, being open to unnecessary risk of procurement challenge or losing opportunity to make early savings. Coming to agreement on how and what to procure and agreeing protocols between bodies can be resource intensive and time consuming. Supporting sustainability objectives – The Council will take its local sustainability objectives into account. The collaboration would need to support:-

• local supply,

• increasing opportunity for SMEs, Voluntary organisations or Social enterprises

• supporting local employment opportunity and

• environmental requirements. How will Sutton collaborate with others? Sutton will collaborate on procurement as relevant for any contract-



Nationally – i.e. with ESPO or members of the Pro 5 consortia, OGC Buying Solutions national collaborative initiatives for local government. Regionally - i.e. within Greater London or the South East region. Sub regionally – i.e. with the five boroughs of the South West London Procurement Partnership (Kingston, Richmond, Merton, Croydon and Wandsworth). Other partners – There may be times when it is appropriate to collaborate with other public bodies such as health, or the police and other groupings of local authorities which may come together from time to time. Scrutiny The Procurement Board will monitor opportunities for collaborative procurement and require business units to justify why they are not procuring with other public bodies in appropriate cases.



Appendix C

Policy for Promoting contract opportunities for SMEs, the Voluntary and Community Sector and Social Enterprises

Introduction The Council recognises that SMEs, the voluntary and community sector and Social Enterprises are valued and responsive suppliers to the Council and have a major part to play in sustaining the local economy, creating employment and delivering cost effective services. This policy sets out how the Council will facilitate, opportunity for SMEs, Voluntary Organisations and Social Enterprises, to bid for Council contracts without discrimination without invalidating or precluding fair competition. The Department for Communities and Local Government (DCLG) has recently issued Best Value Statutory Guidance which requires that “Authorities should be responsive to the benefits and needs of voluntary and community sector organisations of all sizes (honouring the commitments set out in Local Compacts) and small businesses”.

Public Procurement Legislation Context The Council, as a public body, must comply with the Public Contracts Regulations and be open fair and transparent in its procurement practice. The Council cannot discriminate within procurement. The Council must openly advertise contracts to all those who may be interested in expressing interest and may not use nationality, location, or an organisations type as a criteria for inclusion in (or exclusion from) a tender process. The Council is also fully committed to securing all supplies, works and services through a challenging process of competitive tendering in order to obtain best value using the whole market.

Sutton Policy The Council encourage the participation of SMEs, Voluntary Organisations and Social Enterprises in expressions of interest for Council contracts. The Council will ensure that, where appropriate, opportunity is facilitated for such organisations to compete for Council contracts. The Council will support and facilitate such opportunity but it cannot assist organisations, during or immediately before any tender process nor can it give any support which would distort open competition or which could be construed as discrimination. At all times the Council will require best value. Where internal Council business units express interest in delivering services in competition with the external market they will be expected to compete on the basis of equal and even competition.

Implementation The Council will take the following measures to implement this policy:-



Make more opportunities available for tender Tender Packaging The Council is constrained by the principle of aggregation which prevents Public Bodies from unreasonably breaking up their supply requirements to avoid proper competition and especially the requirement to publish OJEU notices (Advertising within the whole EU) above the relevant thresholds. However officers commissioning services will be required to look for where there may be opportunities for SMEs, Voluntary Organisations and Social Enterprises either to supply direct to the Council or to become part of a main contractors supply chain. Ensuring Opportunities are advertised - Small Tenders There are a significant number of suppliers with turnover of less than £100,000 with the Council. There is therefore considerable scope for smaller contracts to be taken to the market. The Council has adopted Pro Contract an electronic tendering system which facilitates easier issuing and receipt of Requests for Quotation (RFQs). With Member and Director support we will:-

o Get the processes more widely known by service groups. o Provide the Quickquote and RFQ facility to a wider range of officers. o Encourage the use of QuickQuotes and RFQs to open more small

contracts to the market. o Challenge new suppliers set up for evidence of tendering or other

procurement compliant process. Tender Documentation

Pre Qualification Questionnaire – A simplified PQQ for small contracts to encourage smaller organisations to express interest. Clearer Specifications – We will organise /develop training so that commissioners can express the requirements more clearly and succinctly. There will be more focus on specifying outcomes.

Ensuring a level Playing Field The CPU with the backing of the Procurement Board will challenge commissioners when they do not procure transparently and on a level playing field. We need to establish that all Council contracts will be awarded only as a result of competitive tendering by the Council or a public body working on the Council’s behalf. Challenge Contract Extensions Provide greater challenge of proposed contract extensions unless there is a sound business case for doing so. This could get more opportunities put out to the market. Assessment of Risk and Financial Standing Requirements



Client engagement form – This is being developed for completion by service officers and will include risk assessment to ensure proportionate PQQ requirements. Required Level of Financial Standing – We will develop a tool so that using risk assessment we can ensure the financial standing requirements for each tender are assessed as proportionate to the contract requirement. This will involve input from service officers to assess risks, likelihood, impact and mitigation.

Publicity / Internet We will regularly review the content of the procurement website and update and improve including:-

London Portal - Ensure the web address is clearly prominently displayed. Supplying Sutton – This guide will be updated and republished. NNDR – Make use of the list of NNDR payers and contact the organisations by e-mail ensuring they are aware of the London Portal and encourage them to register.

Voluntary Sector Training The CPU has been delivering courses twice a year in conjunction with Sutton CVS for voluntary sector organisations. This will continue. Engagement with Local Businesses Develop further links through the Sutton Chamber of Commerce and other local business networks such as the Hackbridge Green Business Network :-

• Create a dialogue to establish what they consider prevents them from competing for Council contracts.

• Offer similar training to that already provided to the voluntary sector on how public procurement works.

• Increase awareness of the London Portal within the chamber. Hackbridge Green Business Network – The CPU is engaging with the Network and has been involved in presentations on doing business with Sutton. Market Consultation Make greater use of market consultation events to encourage and provide opportunity to smaller suppliers to compete for contracts, inclusion on framework agreements and meet with main contractors to enter their supply chains as part of the pre tender process. We will also use market consultation events as an opportunity for local SMEs to introduce themselves to prospective main contractors. We will use our links with the Sutton Chamber and the Voluntary Sector to encourage participation.



Appendix D The Role of the Corporate Procurement Unit

As a result of the Smarter Services Sutton review of procurement the Corporate Procurement Unit (CPU) will have a new role. The Procurement Board will set strategic direction for the CPU which will be key to the working of the board providing necessary professional expertise, management information and solution focused advice. The role of the CPU will be:-

Strategy

• Procurement strategy.

• Development of procurement policy.

• Development of category strategies with category leads

• Integral membership of project teams to advise major or key procurement projects.

• Identifying opportunities for outsourcing.

• Market development.

• Contract Management strategy Governance

• Interpretation of EU Governance

• Council governance (Contract Standing Orders etc.)

• Procurement manual.

• Gate keeper for OJEU notices etc.

• Procurement compliance in use of frameworks and collaborative procurement.

Management Information and Analysis

• Contracts Register

• Spend analysis

• Market research and knowledge

• Procurement Management Information.

Procurement Expertise

• Procurement legislation advice.

• Procurement Best practice.

• Advice and guidance. i. Procurement procedure and process advice. ii. Commercial aspects iii. Procurement options (e.g. Collaboration Frameworks etc.)

• Market research and knowledge

• Electronic tendering including support, development and training.

• Contract management techniques.

Challenge

• Challenging procurement proposals and activity.

• Maverick spend.



• Procurement governance and process non compliance.

• Collaboration.

• Supplier management. The role of the CPU will be in future relate to developing Strategy, governance, guidance, compliance, consistency and cost effectiveness across the whole procurement of the Council. The CPU is expected to be a key member of the project team of major procurement projects. The CPU with the support of the board will challenge Business units regarding procurement actions (or lack of) including off contract spend and non compliances and report the Board as appropriate.



Appendix E

EQUALITIES IMPACT ASSESSMENT Procurement Strategy 2012-2015

AIMS

1 Is this a new policy/service or a review of an existing policy/service? This strategy replaces the Commissioning and Procurement Strategy 2008-2011.

2 What are the aims/purpose of the policy/service? The aim of the strategy is to set out how procurement will be undertaken by all Council Service Groups, the specific procurement policies and guidance to be observed and the process for oversight, ensuring compliance with the Public Contracts Regulations and Council governance, consistency and challenging the rationale of commissioning and procurement projects.

3 Whose needs is the policy/service designed to meet? (include detail of positive impacts on any specific groups e.g. older people, disabled people etc).

The strategy covers all procurement within the Council so the document is to inform, in particular, Officers and Members.

EVIDENCE

4 What equality-related information, for example through consultation with stakeholders, has been gathered on this policy/service? (indicate the type of

information gathered and ensure you address ethnicity, disability, gender, age, religion and sexual orientation. Attach a summary or refer to where the evidence is held.

The Strategy has been consulted upon widely within the authority to Executive Management team level, which encompasses CMT, SMT through to third tier officers, Group Management Teams and the commissioning network. This is largely an internal document.

IDENTIFIED IMPACTS

5 In what ways might the policy/service impact negatively on some groups of people? (please ensure you address ethnicity, disability, gender, age, religion and sexual orientation. If appropriate, you may also need to address social class and with people caring responsibilities).

The whole basis of the Public Contracts Regulations is that procurement must be non – discriminatory. There are therefore no identified negative impacts identified.

ACTIONS AND PUBLICATION

6 What action needs to be taken as a result of this EIA to address any negative



impacts or meet previously unidentified needs? None.

7 How will you evaluate the impact of the actions being taken? [include date when this EIA will be reviewed]

No actions are indicated.

8 Please confirm how this impact assessment is being published. This assessment will form an appendix to the Procurement Strategy.

9 Sign- off [please ensure that this EIA has been approved by the Executive Head, where it does not form part of a Corporate Management Team or Executive report]



Appendix F

London of Sutton Procurement Spend by Headline Category (2010/11) Note: The totals set out below are derived from an early report from Pro Spend, the Council’s recently implemented spend analysis tool. These figures should be taken as illustrative at this time.

Category

Total

Social Community Care Supplies & Services

ASSH £ 50,500,000

CYPLS £ 19,300,000

Chief Executives £ 2,400,000

£ 72,200,000

Works - Construction, Repair & Maintenance

£ 45,700,000

Housing Management

£ 20,200,000

Education

£ 12,600,000

Human Resources

£ 11,200,000

Public Transport

£ 7,400,000

Environmental Services

£ 7,100,000

Information Communication Technology

£ 6,900,000

Facilities & Management Services

£ 5,700,000

Consultancy

£ 5,300,000

Utilities

£ 3,700,000

Financial Services

£ 3,600,000

Healthcare

£ 1,900,000

Cleaning & Janitorial

£ 1,900,000

Building Construction Materials

£ 1,500,000

Unmapped

£ 1,500,000

Vehicle Management

£ 1,400,000

Catering

£ 1,300,000

Arts & Leisure Services

£ 1,000,000

Legal Services

£ 900,000

Horticultural

£ 620,000

Mail Services

£ 390,000

Stationery

£ 340,000

Furniture & Soft Furnishings

£ 260,000

Street & Traffic Management

£ 125,000

Other

£ 181,600

Grand Total

£ 214,916,600



Appendix G Procurement Pledge on Employment

Historically Sutton has enjoyed one of the lowest unemployment rates in London. However, more recently as the recession continues to bite, unemployment has begun to rise. Unemployed 18-24 year olds in Sutton stands at 938 (September 2011) and represents the largest single group of Job Seekers Allowance (JSA) claimants in the borough. The Council shares concern over the rising numbers of young people out of employment and we would want to carefully consider any proposals that potentially could influence and increase local employment opportunities for young people.

The Pledge

Sutton has made a formal and public commitment to work within our supply chain to create employment and training opportunities. This sends a clear message to potential contractors about boroughs’ commitment to creating jobs and improving skills. Sutton has signed up to a ‘Pledge’ to use their spending power to create more jobs and training opportunities. As part of the Pledge Sutton has/will:

• adopted a formal corporate policy

• set internal targets to increase training and job opportunities through

procurement

• seek voluntary commitment from existing contractors to create

apprenticeships and other opportunities

• promote the Pledge to new contractors and to the wider public

• endorse London Councils’ procurement toolkit

Requirements include:

• Number of apprentices recruited to work on the contract or

apprenticeships started by existing employees

• Percentage of the workforce recruited locally

• Number of work placements offered to young people, graduates, or

workless people

• Percentage of existing workforce offered additional training and

qualifications

• Contractors working with their supply chains to create additional

opportunities. 1

1 London Council’s Procurement Pledge on Employment and Skills. 13 Dec 2011.



Benefits

The benefits from the pledge include:

• Sutton can ensure that local opportunities are still created in a time

when there is little budget for employment and skills and economic

development.

• Apprenticeships remain available to local young people

• Increased efficiency through setting up corporate apprenticeship policy

and procedure.

In addition to the above pledge Sutton recognises that we have a responsibility toward the looked after children in our Borough and as such will promote the above pledge with this in mind.



Appendix H.

Procurement Strategy 2012-15 Action Plan This action plan will cover the period Spring 2012 to Spring 2013. Annual action plans will be agreed by the Procurement Board in relation to amendments to the Procurement Strategy and priorities arising. The Strategy as a whole will be subject to review in June 2013 to assess the achievement of procurement objectives and to set the future action.

Objective When Responsibility

Develop Category Management

Analyse spend using new Pro Spend Tool and identify relevant procurement categories and or sub-categories.

April /May 2012

CPU

Define the scope of the procurement activity to be covered by the individual categories.

June/July 2012

CPU

Meet relevant stakeholders to challenge the proposed categories and agree a common understanding of how procurement activity will be managed.

April 2012 – June 2012

Procurement Board / CPU

Confirm consistent roles and responsibilities of category leads and manager(s) and identify.

June 2012 Procurement Board / CPU

Formalise the category management role within the Council’s contract procedure rules

July 2012 Procurement Board / CPU

Ensure consistency/common standards between the category managers and establish key tasks and performance measures for each category. (E.g. efficiency savings, supplier rationalisation, demand management ),


Recording procurement savings on a corporate savings tracker.

April/May 2012

Business Advice and Support Team (Finance Unit)

Develop category challenge process to identify how further efficiency gains could be made.


Improve Management Information to enable forward planning and decision making

Contracts register – All contracts over £115,000 recorded. (Top 80% of spend)

• ASSH Group March 2012 ASSH Procurement Board member.

• CYPLS Group March 2012 CYPLS Procurement Board member

• Chief Executives February 2012

Chief Executive’s Procurement Board member

• Environment and Leisure February Environment and



2012 Leisure Procurement Board member

• Resources February 2012

Resources Procurement Board member

Extend contracts register – All contracts over £30,000

• ASSH Group June 2012 ASSH Procurement Board member

• CYPLS Group June 2012 CYPLS Procurement Board member

• Chief Executives June 2012 Chief Executive’s Procurement Board member

• Environment and Leisure June 2012 Environment and Leisure Procurement Board member

• Resources June 2012 Resources Procurement Board member

Develop data analysis reports from Pro Spend April/May 2012

CPU

Develop ongoing 3 year forward procurement plan.


Improve Contract Performance Monitoring and Management

Develop Corporate Contract Management framework to ensure consistency in practice across the Council.

June 2012 CPU

Develop and publish contract management guidance.

June 2012 CPU

Install process for regular contract performance reporting to the Procurement Board.


Improving Electronic Invoice Processing.

Implement relevant module following Agresso update to enable electronic despatch of official orders and receipt of electronic invoices.

August 2012

Finance Unit

Supplier engagement with electronic receipt of orders and despatch of invoicing. Suppliers with annual turnover of over £125,000

October - December 2012

Payments Team / CPU

Supplier engagement with electronic receipt of orders and despatch of invoicing. Suppliers with annual turnover below £125,000

December – March 2013

Payments Team / CPU



Collaboration with partners

Maintain active communication through London Heads of Procurement, SLT and SWLP to ensure awareness of collaborative opportunities.

Ongoing CPU

Continue to participate in London contract Register.

Ongoing CPU

Through category management and market research identify where there are collaborative opportunities.

Ongoing CPU

Better use of frameworks

Provide access through LBS procurement website to directory of framework agreement s as available locally, regionally and nationally.

May 2012 CPU

As part of category management develop LBS framework agreements where it is indicated as procurement efficient.

Ongoing Procurement Board / CPU

Where appropriate procure LBS framework agreements to be available to other Local Authorities.

Ongoing as appropriate

Procurement Board

Skills Development

Publish LBS Procurement Manual June 2012 CPU

Continue with ongoing Pro Contract training Ongoing CPU

Develop Pro contract functionality and provide training as required to develop skills.

Ongoing CPU

Develop/Provide training for category managers and officers in service groups undertaking procurement.

As required CPU

Support corporate commissioning training especially in relation to procurement.

As Required CPU

Become a better organisation to do business with

Review and simplify tender documentation May 2012 CPU

Ensure more opportunities are advertised which are of interest to local the SME and voluntary sector organisations by tightening governance.


Simplify tender and RFQ requirements and documentation for small contracts.

Ongoing CPU

Continue to deliver procurement awareness training to Voluntary sector.

Ongoing CPU

Offer procurement awareness training for local SMEs through Sutton Chamber

As required CPU

Develop new selling to Sutton guide in conjunction with the Chamber of Commerce and SCVS

May 2012 CPU

Produce information on category management



together with contact details of category managements for inclusion on the procurement web page.

Develop a procurement prospectus of future tender subjects. Major contracts.


Further develop procurement prospectus of future tender subjects including all contracts over £50,000.

September 2012

Procurement Board / CPU

Develop guidance for improving SME and voluntary sector participation in LBS tenders

May 2012 CPU

Increase use of market consultation as a tool to inform procurement projects.

Ongoing CPU


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