Involving Local Suppliers: Harrow Council activity

4th February 2013

Drivers

● Savings● Quality of service delivery● Best Value● Public Services (Social Value) Act 2012● Equality Act 2010 ● Stakeholder pressure; local politicians and public

Policy Response

Harrow Council Sustainable Procurement Policy

1. Encouraging a diverse base of suppliers

2. Fair employment practices

3. Workforce welfare 4. Targeted recruitment

and training 5. Community benefits 6. Ethical sourcing 7. Promoting greater

environmental sustainability

Value for MoneyOptimum combinationOf whole life costs, Assessed according to outputs (e.g. quality) & resources requiredto produce them (e.g. risk, price)

Best ValueContinuous improvement with regard to;•Economy•Efficiency •EffectivenessConsidering social, economic and environmental value

= Social,Economic

AndEnvironmentalimprovements

to Harrow

Capitalises on learning of GLA, TfL

London 2012, Crossrail

etc

InvolvesCabinet,

Councillors, Directors, Legal,

Democratic ServicesEconomic Dev’t,Corp Procure’t,

Procurers, Commissioners

Contract Managers

What Harrow does: Demand Side

Benefits for Procurers

Benefits for Local suppliers

“Love Harrow, Buy Local” initiative; local suppliers must be given opportunity to quote / tender

Requirements integrated into Contract Procedure Rules, all procurement paperwork and governance

Local suppliers must be given opportunity to quote/ tender for every opportunity

Procurement guidance & “Sustainable Procurement Toolkit”

Effective procurement processes deliver social and Best value

The better the quality of the process and paperwork, the easier to respond to

What Harrow does: Supply Side

Benefits for Procurers Benefits for Local suppliers

Harrow Business Directory

Procurers utilise Directory to search for local suppliers

Suppliers have a single place to register to put themselves in front of buyers

Briefings on how to take part in tender process

Continuing Professional Development (CPD)

Enables preparation for future processes

What we do: Procurement Process

Benefits for Procurers Benefits for Local suppliers

Pre-market supplier events

Enables market testing and collection of market intelligence and scrutiny of social value

Opportunity to ask questions, make suggestions and network

Streamlining process and paperwork

Improves quality of process and requirements – and makes evaluation easier

Minimises bureaucratic burden

Supply chain management / “Community benefit” requirements / ITT question(s)

Enables scrutiny of how supply chain would be managed and social value generated

Stimulates 2nd tier supply and sub-contracting opportunities

BS 8903 - Sustainable Procurement

• Market research• Market testing• Market warming• Capacity building of

potential suppliers• Consortia building

• Via supplier engagement events, meetings, on-line forums

• Face-to-face, electronically or snail mail

To stimulate 1st tier participation;● Communicate the opportunity to

local / SME businesses to that they can compete, if appropriate

● Use procurement process and paperwork appropriate to risk of contract

● Sense-check paperwork to minimise unnecessary bureaucratic burden on bidders

● Provide constructive feedback

To stimulate 2nd or 3rd tier opportunities● Include questions around supply

chain management/ supplier diversity in higher value tenders;– How will they manage their supply chains to

ensure that opportunities are made accessible to local/ SME businesses?

– Engagement with local networks– “Meet the Buyer” events– Push requirements through their supply

chains

● Include relevant Performance Indicators (PIs) – with no associated targets

● Monitor● Report● Share good news● Encourage honesty

about difficulties● Tackle issues openly

and transparently

● Learn● Share● Look out for change● .... And adapt to it● Accept working with [some]

uncertainty● Innovate● Enjoy!!!

Internal Challenges and Responses

Challenge Response

Ensuring Compliance

Requirements written into Contract Procedure Rules/ Constitution

Council approval of Sustainable Procurement Policy means “no going back”

Leveraging on-going political support

Poor procurement process and poor / no supply chain management

Internal capacity building

Moving to Category Management

“Policing” via SAP SRM upgrade

Highways Maintenance, Housing Repairs & Maintenance, Gas repairs & Maintenance, Print Services, Special Needs Transport, Dry Recyclables

“Policing” the Procurers

● SAP SRM Upgrade

– Requires use of contracts or catalogues– If new contract award is requested, evidence must be provided

of how local suppliers have been given opportunity to quote / tender

– All requests have to be approved by Corporate Procurement; no PO number or invoice payment otherwise

– Corporate Procurement reject requests where local suppliers haven’t been given opportunity to compete

External Challenges and Responses

Challenge Response

Poor quality tender submissions

Use plain English in procurement paperwork, explain all jargon and be absolutely clear about what bidders are required to submit

Make requirements/ ask questions that are appropriate to risk and value of contract – and not unnecessarily bureaucratic

Provide training/ briefings e.g. at pre-market events

Suppliers not interested in bidding

Stimulate interest at pre-market events

Don’t waste suppliers’ time with unnecessary bureaucracy, abandoned processes, frameworks that don’t result in contracts etc

Low supplier capacity/ capability

Facilitate partnerships at pre-market events

Stimulate 2nd tier supply and sub-contract opportunity through supply chain management requirements/ questions

Monitoring: 1st Tier supply chain

● How many suppliers are competing for contracts?● How many local suppliers are competing for

contracts?● …. And how many are winning contracts?

● In what elements of the procurement process do local and smaller suppliers struggle/ fail in the process

● … and are these unnecessarily high barriers that we can reduce without compromising quality / price in future processes?

Monitoring: 2nd tier supply chain

● Are large suppliers;– engaging with local suppliers or sub-contractors?– Delivering on supply chain management activity that they

committed to in their tenders?

● What is the £ value of spend with local suppliers/ sub-contractors

● Are fair payment terms being used?● Where is the value in the supply chain?

Challenges of Definitions / Targets

● “SME” – = 99%+ of UK business community!– Micro firms are very different to medium firms and all firms differ

from each other

● “Local”?– What is local? Postcode of head office and/or an operational base

and/or registered company address? Or employs local people? – Franchises? Local offices of national firms?– Different sector ‘clusters’ in different areas– Market stimulation v protectionism

● Third Sector– Why “not for profit”? Need to create a surplus in order to have a

future– Big / national v smaller/ local

Thank-you

& Questions

Liz Holford, Sustainable Procurement Lead

Liz.holford@harrow.gov.uk