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Procurement Strategy
2005 – 2008
27th May 2005
CONTENTS
Page No
Foreword by Leader of the Council
Preface by Portfolio Holder, Partnerships, Business and Companies
SECTION 1. INTRODUCTION
2
1.1
Purpose of this Strategy
2
1.2.
Context
2
Present origin and structure of procurement
Scale of procurement within Council
1.3
Importance of having a Strategy
3
1.4
Strategic Objectives for Procurement
4
1.5
Alignment to Corporate Plan
5
1.6
The Contribution of Procurement to delivering the Council’s Objectives
6
SECTION 2 - KEY PROCUREMENT THEMES AND PRINCIPLES
9
SECTION 3 - IMPLEMENTING THE PROCUREMENT STRATEGY
19
3.1
Key Targets and Performance Indicators
20
3.2
Monitoring/reporting
25
3.3
Critical success factors / risk analysis
25
APPENDICES
Appendix 1
Summary of Policy linked to Procurement
27
Foreword
The Council is committed to ensuring that the services it delivers to the community are the best
that can be achieved within available resources, irrespective of the service provider used. Using
resources effectively and the achievement of value for money for the citizens of Blackpool are key
objectives of the Council and every opportunity to reach these will be actively pursued.
The Council recognises that good procurement skills and effective procurement decision-making
are key to attaining its objectives of securing improvements to service cost and quality.
This Procurement Strategy sets out the Council’s vision. It states how the Council will ensure that
Best Value is delivered to the community within the principles contained in the Governments
National Strategy for Procurement and the context of the Council's own aims and objectives.
Elected-members and Council officers are committed to implementing effective strategic
procurement arrangements to secure value for money. Implementing this Strategy will drive the
adoption of procurement best practice and help ensure that the services the Council provides are
efficient and cost effective.
Councillor Roy Fisher
Leader of the Council
Preface
This Strategy states the intention to take a corporate view of the Council’s procurement activity
and trading relationships with all sectors. It focuses attention on how better procurement, brought
about by collaboration and partnership working, will secure maximum benefit from the Council’s
limited resources and obtain value for money for the Council Tax payers.
Since the decision in 2003 to develop the corporate procurement function, progress has already
been made in establishing a framework which supports the implementation of best practice. This
strategy sets the management and policy framework for procurement and emphasises how
procurement will be developed and used strategically to assist the Council in meeting its
efficiency targets and delivering its wider, longer-term plans and objectives.
The Strategy sets a challenging agenda for change and improvement. As Portfolio Holder and
Procurement Champion, I would encourage all those involved in implementing the strategy or
anyone engaged in procurement activity, to play an active part in helping deliver the changes
needed to ensure that the Council succeeds in realising the tangible benefits which effective
procurement can bring.
Councillor Robert Wynne
Portfolio Holder, Partnerships, Business and Companies.
1
SECTION 1 - INTRODUCTION
1.1
PURPOSE
The purpose of this Strategy is to communicate clearly to all staff, partners, suppliers and
stakeholders, the Council’s vision for the way forward in its procurement of work, services and
supplies.
This Strategy clearly sets out the framework within which all procurement is to be carried out to
enable the council to obtain value for money and helpmeet its targets and objectives. It addresses
the procurement requirements of Best Value and service review, the national agenda for
procurement excellence, the Governments modernisation agenda and the ‘Gershon’ efficiency
programme.
The Strategy is to be viewed as the top layer of the Council's procurement framework. It
integrates existing procurement related policy into the Strategy and is to be read in conjunction
with the Council’s Contract Procedure Rules and Financial Regulations. When taken together,
these provide the policy and procedural framework within which all procurement is to take place.
Adherence to this Procurement Strategy will provide a high level of control of the Council’s entire
procurement process.
1.2.
CONTEXT
Current approach to procurement within the Council
The Council deals with a diverse range of services and goods being bought-in from outside
providers to complement the services being provided by the Councils own workforce.
In the past, the approach to procurement, contracting and supply chain management has largely
been fragmented with responsibility for Procurement mainly devolved to Heads of Service.
Weaknesses in the Council’s procurement arrangements were identified in the 2003 CPA
inspection and the Corporate Performance Plan 2004/07 reflects the agenda for change and
improvement to remedy this.
Strategic Procurement
The Council has focussed on improving the approach to procurement across the authority based
upon increasing recognition of the contribution that “smarter” procurement can make to the
achievement of value for money and delivering the Council’s objectives. Significant progress has
been made:

A Head of Procurement has been appointed within the Business Services Directorate
(December 2003) with responsibility for procurement matters and ensuring that the
Council discharges its responsibilities under the Local Government Act 1972 for securing
competition and regulating the award and management of contracts for Work, Goods and
Services.

Sustainable corporate procurement arrangements are being developed. A small,
corporate procurement team has been established (December 2004) to implement the
Council’s Improvement Plan for Procurement, approved in April 2004. This will be updated
to reflect the requirements in this Procurement Strategy.
2

1.3.
The Council’s Contract Procedure Rules and Financial Regulations have been amended
and are supplemented by Codes of Practice to strengthen and modernise the Councils
procedural framework for procurement activity.
IMPORTANCE OF HAVING A STRATEGY
Procurement has a significant impact on all aspects of service delivery and Council performance.
It is vital that the Council has a clear strategy for how these externally provided resources are
selected, acquired and managed:
When carried out well, procurement can play a major role in helping the Council to manage its
financial resources efficiently and to deliver cost effective services in line with the Council’s
objectives. If carried out badly, the Council will miss the opportunity to achieve optimum value for
money and make best use of its limited resources.
Having a Strategy will provide the Council with a clear ‘road map’ to achieving procurement
excellence and managing its procurement strategically.
Scale of procurement within Council
Each year, the Council spends approximately £100M buying-in goods, services and work
(revenue and capital). In addition, the Council’s agenda for regeneration, change and
improvement includes a challenging vision for developing a ‘New Blackpool’ involving
considerable investment to deliver its ‘Master-Plan’.
The Council’s dependency on external contractors and service providers for both whole services
or to support in-house service provision, is significant and continues to increase.
This places procurement high on the Council’s agenda.
Table 1 provides an overview of the Council’s expenditure.
Category
2004/05 Budget
£33,405,000
Social Care
Percentage of budget
placed with outside
contractors
52%
£253,000
25%
Social Services
£3,065,300
52%
IT/Telecoms
£5,891,600
71%
Environment
£307,000
9%
Waste Collection / Disposal
£6,110,000
90%
Education
£4,480,000
22.5%
Highways
£1,340,000
22%
All Other Services
£8,671,000
75%
£839,800
Unknown
£53,500,000
95%
Housing
Other – HRA
Capital
3
The National Agenda
Procurement is also high on the national agenda:
 The Governments Efficiency Review sets challenging efficiency savings targets for the
Council.
 The National Strategy for Procurement focuses attention on the need for the Council to
raise the strategic profile of procurement and implement change and improvement, which
will be measured within the CPA inspection process which assesses the Council’s
arrangements for resource management.
 The Local Government Act 1999 (Part 1, Section 3), places a duty on the Council to
consider all relevant options for the future delivery of services and to choose the option
that produces value for money and deliver the required service outcomes by the most
economic, efficient and effective means available. Procurement is a key component of
this.
A Strategy is needed to put Procurement at the heart of the Council’s approach to Best Value and
the drive for efficiency, effectiveness and continuous improvement of services.
Meeting Council Objectives
Implementing the Strategy will ensure that, in addition to meeting service specific objectives, a
strategic approach to procurement is adopted across all services. It will ensure that procurement
activity is driven by the Council’s overriding community priorities, is clearly aligned with the
Community Plan, Corporate Performance Plan and Strategic Objectives and, provide the catalyst
for ensuring the implementation of new policy affecting procurement decisions.
1.4.
OBJECTIVES FOR PROCUREMENT
The primary Council objectives for procurement are:
 To establish a properly resourced, procurement framework to;



Achieve continuous improvement in all aspects of the councils procurement activity
Drive the adoption of best practice and promote procurement excellence across the
whole of the organisation in order to minimise the likelihood of time and cost overruns,
poor quality and contract failure.
Ensure the highest standards of ethics, probity and accountability
 Increase corporate capacity and professionalism of procurement, in order to;




Maximise the potential for innovative procurement to achieve value for money, make
cost savings and release funds for priority service delivery.
Secure optimum use of the Council’s limited financial resources and improve service
delivery
Minimise exposure to legal challenge and unnecessary costs through professional
procurement, contracting and risk management and compliance with regulations and
legislation.
Facilitate competition and minimise procurement cost
4
 Adopt a strategic approach to procurement, to;




Align procurement planning and delivery with the Council’s wider strategic objectives,
corporate priorities and policy.
Consolidate procurement/purchasing power by aggregation and improved
management information
Use procurement to achieve efficiencies and continuous improvement in line with the
council’s obligations under Best Value and the national agenda.
Minimise the cost of procurement and purchasing transactions by coordinating
procurement activity and embracing the E-Government agenda.
 Develop procurement from a foundation of strong leadership (political and
executive) to;
 Provide unambiguous, clear strategic direction on how externally provided resources
are to be acquired and managed; and
 Ensure that elected-members are involved in making and scrutinising key procurement
decisions and processes and are trained and conversant with the principles of good
procurement.
 Effectively manage supply chains in order to;
 Develop better contractor relationships through the adoption of partnerships and
innovative procurement;
 Develop a mixed economy of suppliers, including small firms and the voluntary sector,
to maximise the potential for efficiencies and community benefit from a diverse and
sustainable marketplace;
 Use the council’s buying power creatively to drive supply innovation; and
 Realise community benefits through procurement activity.
 Collaborate across all sectors and develop procurement partnerships, to:
 Deliver better quality services by developing sustainable service delivery partnerships
and joint procurement arrangements; and
 Contribute to service improvement and obtain greater value for money.
1.5.
ALIGNMENT TO THE CORPORATE PLAN
The Council’s vision and its core values act as the focus for all activities of the Council.
Procurement is a cross cutting activity within the Council, which must also be viewed in the
context of the Community Plan and the Council’s overall vision, priorities and objectives.
The Community Plan
The Council's vision for the community of Blackpool is contained within Blackpool’s Community
Plan. In broad terms this sets out the vision for “Blackpool to have inclusive, healthy and safe
communities, living in a regenerated, attractive and prosperous resort”.
5
The Plan sets out the targets and actions until 2020 to deliver the vision based on six themes:
1.
2.
3.
4.
5.
6.
Quality Education and Training
Healthy Lives
Safer Communities
Quality Homes in Clean and Green Residential Areas
Strong and Vibrant Communities
A Prosperous Town
The Corporate Performance Plan
The community benefits that the council is seeking to achieve in support of the Community Plan
are set out in the Corporate Performance Plan, which identifies three Corporate Goals that
establish a clear direction for the Council:
1.
2.
3.
The New Blackpool - deliver a step change in the Blackpool product and ensure the
provision of a quality, attractive, multi-purpose and all-year resort destination.
Quality Services - improving service provision and make all services more accessible.
Community Involvement - consult, engage and inform all sections of the community and
increase the capacity of the local community to influence policies.
Strategic Objectives and Core Values
The Council has six strategic medium-term objectives that will contribute towards achieving our
corporate goals underpinned by well defined ‘core values’.
1.
2.
3.
4.
5.
6.
Improve educational provision and attainment at all levels.
Promote a strong, sustainable economy with a regenerated tourism industry.
Increase quality of life for all through an improved urban environment.
Become a more inclusive community, with reduced levels of poverty and social exclusion.
Reduce the levels of crime and disorder in the town.
Help to improve the health and well being of all our residents.
The Core Values of the Council are:






1.6
Working in partnership with all who can contribute towards developing a safe, caring and
prosperous town
Enhancing local democracy
Promoting equality of opportunity in all we do
Delivering Best Value by pursuing continuous improvement in the quality and efficiency of
all our services
Striving to be a good employer
Ensuring the Council and its staff maintains the highest standards of integrity
THE CONTRIBUTION OF PROCUREMENT TO DELIVERING THE COUNCIL'S
OBJECTIVES
Having a strategic approach to procurement will assist the Council to achieve its corporate goals
and strategic objectives. In addition, efficient procurement will make a significant contribution to
achieving the Council’s core values:
6
Corporate Actions
The Council has set 25 clear priority actions that both reflect the vision in the Community Plan,
political priorities and provide a response to improvement priorities identified in external
inspections eg CPA. Procurement will contribute to the delivery all 25 corporate priority actions
by helping the Council obtain value for money thereby making best use of its limited financial
resources and releasing funds for service delivery.
The table below (Table 1) shows how, by adopting the objectives and key principles contained in
this Procurement Strategy, procurement will contribute to delivering key priority outcomes.
TABLE 1
CONTRIBUTION MADE BY PROCUREMENT TO DELIVERING KEY PRIORITY OUTCOMES.
Corporate Priorities
Procurement Strategy Contribution
1. Masterplanning and delivering a
transformation of the resort area (Local
Priority)
2. Improve education results and children’s
services (Local Priority)
Procurement Best practice v.f.m. – Project
management/minimising procurement risk.
Community benefits through procurement
Children’s services - Developing a mixed
economy of suppliers. Contract management
and adoption of procurement best practice.
Managing the market, Collaboration
3. Improve Adults’ Services (Local Priority)
Developing a mixed economy of suppliers.
Contract management and adoption of
procurement
best
practice.
Quality
management. Managing the market
8. Improve the street scene and road
quality (Local Priority)
Strategic
procurement,
Collaborative arrangements
9. Retain the Blackpool Council Tax Band
D as the lowest In Lancashire (Local
Priority)
11. Comprehensive Performance
Assessment score improvement goal
(Local Priority)
Adopt procurement best practice to obtain value
for money thereby making best use of its limited
financial resources.
Utilise strategic procurement to assist the
council meet its CPA ‘Use of resources’ and
efficiency targets
Implement National Procurement Strategy
Adoption of co-ordinated risk management
arrangements for Health and Safety through
better contract management, procurement
process and training.
12. Improve health and safety (CPA
Priority)
13. Improve performance management
(Local Priority)
14. Support Members to manage
performance (CPA Priority)
Partnering
and
Establish efficiency and value for money culture
– procurement integrated into the Service
Efficiency Review programme and reflected in
the Business Planning process
Elected member awareness and training on
procurement – Overview and Scrutiny for
procurement performance
7
Corporate Priorities
Procurement Strategy Contribution
15. Develop corporate vision (CPA
Priority)
16. Implement an overall HR strategy and
‘can do’ approach (Local Priority)
Procurement Strategy integrated into corporate
vision
Procurement contribution to workforce matters.
Contract Management
17. Improve skills - financial, project
management and planning (CPA
Priority)
Take a corporate approach to procurement.
Implement procurement best practice project
management / minimising procurement risk.
Procurement Planning
Maximise procurement benefits from
collaboration, partnerships and long term
supplier relationships
Implement Corporate Procurement Strategy and
Improvement Plan
Develop Strategic leadership and elected
member ownership
Implement best practice systems and
processes. Develop e-procurement
Implement National Procurement Strategy
Deliver sustainability and environmental
improvement through strategic procurement
18. Increase external funding (CPA
Priority)
19. Increase corporate and service
capacity (CPA Priority)
20. Introduce environmental management
(CPA Priority)
21. Increase community involvement and
consultation (CPA Priority)
23. Develop the Council response to the
Regional Assemblies Act (Local
Priority)
Procurement involvement in Local Strategic
Partnership. Deliver Community benefit
Adopt a supplier strategy
Adopt the national procurement agenda and
engage in Regional Centres of Excellence
The Procurement Strategy is, therefore, aligned with the Council’s strategic objectives to ensure
that procurement decisions are taken in light of broader outcomes that the Council is seeking to
achieve and not entirely focused on price or commercial considerations alone.
8
SECTION 2. KEY THEMES FOR EFFECTIVE PROCUREMENT.
The objectives for procurement identified in this Strategy, are underpinned by a number of
themes and key principles, which, if adopted corporately and by all council services, will
ensure delivery of the Council’s strategic goals for procurement.
KEY THEME 1 - ESTABLISH STRATEGIC LEADERSHIP AND A CLEAR POLICY
FRAMEWORK FOR PROCUREMENT. The council’s procurement
arrangements will be sustainable and developed from sound
foundations.
The Council aims to be judged as ‘excellent’ in terms of its procurement when externally
assessed or compared with others. It will achieve this by adopting a strategic approach to
procurement, which gives the Council effective, overall control and management of council wide
procurement activity.
Also, having a strategic approach to procurement is essential if the Council is to make cost
savings and maximise its potential to secure optimum use of financial resources, obtain value for
money and improve service delivery for the benefit of citizens of Blackpool.
It is essential to provide strategic leadership and a clear policy framework for procurement to
ensure that procurement resources are adequate and are deployed effectively.
To deliver the procurement priorities identified in this strategy, management systems and
procedures need to be in place and there needs to be a clear allocation of responsibility for
monitoring procurement activity and compliance.
The Council will:
 Establish a properly resourced, procurement framework developed from sound
foundations i.e. political commitment, member involvement and Strategic Leadership
Team support for the achievement of procurement excellence.
 Enable the Head of Procurement to drive best practice throughout the Council and
implement and deploy efficient and effective procurement systems and procedures
across all services, to achieve consistency in approach in the acquisition of all work,
goods and services, including strategic services.
 Ensure that all procurement activity reflects core values and supports the
achievement of the Council's corporate objectives i.e. align procurement planning
and delivery with the Council’s wider strategic objectives, corporate priorities and other
strategic policies which affect procurement (e.g. Regeneration, Environmental, Transport,
Waste etc).
 Establish a Corporate Procurement Board to be the main body for driving the adoption
of procurement best practice within the council – i.e. to be responsible for strategic, longterm procurement ‘business planning’ and act as the focal point for ensuring consistency
with council policy and the council’s approach on all major procurement initiatives.
 Develop increased elected-member involvement in procurement and develop the
scrutiny role in accordance with the national agenda
 Establish clear Procedure Rules and appropriate codes of practice for procurement.
9
KEY THEME 2 - EFFICIENCY GAINS AND COST SAVINGS WILL BE OBTAINED THROUGH
EFFECTIVE PROCUREMENT. Procurement will be viewed as a strategic
function and will be corporately managed.
The Council recognises that if it is to maximise its potential to make efficiency gains and achieve
cost savings, it is essential that a common approach be taken on all procurement matters. This
will avoid dual standards and ensure that the procurement experience and expertise that exists
within the Council, is fully developed and harnessed to deliver value for money and accommodate
the challenges of the National Procurement Agenda and comply with the duty of Best Value.
The Council’s procurement expenditure will be co-ordinated and managed. Corporate
procurement arrangements will be firmly established to provide a ‘centre-led’ approach to councilwide procurement activity. The procurement team will be developed to be the centre of
procurement, professional expertise and a shared resource for service departments.
The Council will:
 Develop Corporate Procurement arrangements which are integrated into the overall
procurement, purchasing or supply related activity carried out across the council-wide
spectrum of services
 Implement Procurement systems, procedures, processes and control mechanisms
enabling the Council to adopt procurement best practice to effectively manage its
resources and achieve efficiency and cost savings.
 Establish a Procurement Plan that identifies all council expenditure and sets priorities
for contracting (where the authority may be at risk from existing arrangements or is failing
to achieve value for money). In particular this should include ‘major / strategic’ projects
(PFI, PPP schemes) to ensure that the contracting arrangements are established with
close involvement of the Corporate Procurement unit.
 Develop a procurement communications network to facilitate dissemination of best
practice guidance/procurement information, co-ordionate procurement activity and
ensure a uniform approach to tendering and contracting across all Council services.
 Establish procedure to ensure that procurement interfaces with other key council
functions which can help drive effective procurement across the organisation e.g:
Audit – develop routines to police compliance with policy/procedures
Accountancy – explore possibilities for improved management information
Risk & Insurance – ensure risk management process addresses procurement risk
Legal Services – to establish a co-ordinated contract award process.
 Develop Codes of practice and guidance for service managers - to include guidance
on procurement generally, procurement processes supporting the Council’s Service
Review programme and, procuring Council services from alternative providers following a
decision by Council to do so.
10
KEY THEME 3: - COMPETITION, TENDERING AND CONTRACTING WILL BE FULLY
UTILISED TO ACHIEVE EFFICIENT, BEST VALUE PROCUREMENT
A key objective is for procurement to be carried out in a manner, which facilitates competition,
minimises procurement cost and risk and is compliant with legislation and the Council’s Contract
Procedure Rules.
Work, goods or services obtained from external sources must to be acquired by competition or,
where competition is not employed, the results must be proven to be competitive commensurate
with quality and represent value for money.
The Council will:
 Develop procedural guidance documents, which address the process of seeking
competition, and tendering, to provide clear instructions for those officers involved in
commercial dealings and the award of business. Corporate Procurement will take the
lead role when tenders are to be invited
 Develop a sound, uniform approach to contracting which ensures that all
procurements are subject to enforceable contractual terms. Model legal contracts and
agreements are to be developed and used. The Head of Procurement will be integral to
the tendering and contract award process and, signatory to all contracts and agreements
for bought-in goods and services
 Ensure that procurement complies with legislation and statutory guidance relating to
tendering and contracting, including European Directives.
 Ensure that all major procurement projects are based on a sound business case
which assesses risk and are project managed and, procurement led
 Adopt an overall approach to procurement, which represents best practice and
which builds on the operational knowledge and expertise that exists within service
departments.
KEY THEME 4 : - VALUE FOR MONEY WILL BE OBTAINED FOR THE CITIZENS OF
BLACKPOOL. The benefits from procurement will be maximised and
Council business will be awarded to the provider offering the most
appropriate balance of quality, sustainability, deliverability, fitness for
purpose and cost which represents ‘value for money’.
In the context of a procurement process, obtaining value for money means choosing the
products, services and providers that offer “the optimum combination of whole life costs and
benefits to meet the customer’s requirement” (National Strategy).
As far as possible procurement decisions are to be made with the objective of satisfying identified
outcomes, customer needs and achieving value for money with minimal risk.
It is an objective that procurement is carried out in a way, which facilitates consideration of ‘whole
life cost’ factors such as product efficiency, replacement cycles and social issues (e.g. benefits to
local people, good workforce management, community safety and diversity).
11
In addition, the Council wishes to see its significant buying power being used to optimum effect to
obtain value for money and to encourage commitment and investment from its key contractors.
For higher value, higher risk procurements or construction projects, the potential to move to
longer-term agreements or partnerships with providers, which deliver clear benefit to the
Council, will be considered.
The Council will:
 Co-ordinate procurement to obtain economies of scale and establish corporate
contracts for common goods/services across service areas.
 Review all expenditure and procurement arrangements routinely and systematically,
to test competitiveness and value for money. The Head of Procurement will agree
procurement plans for all services and spending departments.
 Consider all options for service delivery and supply. The major consideration in all
procurement exercises will be to obtain an outcome which provides the correct balance
of quality and cost i.e. offers the best value for money.
 Base procurement decisions on ‘whole-life’ principles. Price alone will rarely be the
sole consideration in any decision to award business. All aspects will be considered i.e.
the benefits of cost and quality improvements will be considered against the risks or
adverse effect on the council of pursuing any particular option
 Consider partnerships and other innovative models of service delivery alongside
traditional methods. Construction schemes are to be carried out in accordance with the
Governments ‘Constructing Excellence’ principles. Where appropriate, the council will
develop an approach to service delivery based on shared objectives, shared risk, mutual
learning, joint investment and sharing of rewards. Client-contractor, adversarial
contractual relationships will be avoided.
 Develop specifications (and contract terms) based on ‘outcome’ criteria, which
allow service providers flexibility in determining the most effective way of providing a
service to meet the Council’s performance requirements. Specifications, which are
prescriptive, based on inputs or dictate the method or process to be followed, will be
used only when appropriate.
 Develop clear, relevant, contract terms and conditions so that responsibilities are
understood, risks are identified and managed and, disputes with suppliers are minimised.
 Monitor contractors performance against the terms or performance indicators
specified in the contract to ensure that value for money, continuous improvement and the
anticipated outcomes are achieved.
 Project Manage and risk assess all strategic or large-scale procurements to ensure
best use of the relevant expertise that exists in the Council and address all aspects of the
procurement exercise.
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KEY THEME 5: PROCUREMENT WILL BE CARRIED OUT IN A PROFESSIONAL MANNER,
EMPLOYING THE HIGHEST STANDARDS OF ETHICS.
Probity and accountability is a key objective for procurement.
Clear audit trails should exist for all procurement activity. Also, it is essential that proper controls
and segregation of duties exist at every stage of the procurement process.
The Council will:
 Adopt clear selection procedures for supplier appointment to ensure that risk is
appropriately managed and that all procurement remains legal, ethical and transparent.
 Ensure that any procurement initiative is carried out in the most efficient and
effective manner, properly recorded to provide transparency of procurement decision
and to ensure compliance with internal audit requirements.
 Establish systems and processes which provide a clear audit trail and ensure that
no single individual is empowered to authorise all stages of a procurement process. In
particular, financial authority shall be separated from the authority to authorise the
procurement.
 Ensure that all competing bids are evaluated objectively with no favouritism or bias
shown towards one provider over another or, any activity carried out which may be
considered anti-competitive
KEY THEME 6 – THE COUNCIL WILL ADOPT A CLEAR SUPPLIER STRATEGY.
Good relationships with contractors and providers are key to obtaining
efficient service delivery and continuous improvement. Fairness and
openness are the cornerstones to developing good trading relationships
built on mutual trust and respect.
The Council wishes to be viewed as an organisation that values its relationships with key
suppliers and contractors and requires that, in all commercial dealings with suppliers and
contractors, we act fairly and display openness and clarity.
Also, it wishes to work with strategic contractors and suppliers to establish mechanisms for
involving them in developing and improving the service they provide for ‘community benefit’ and
efficiency gains and to explore opportunities for joint (continuous) improvement.
13
The Council expects disputes with suppliers and service users to be minimal.
The Council will:
 Request only such information of a potential provider that is relevant and
necessary to establish the suitability and capability to meet service requirements or to
establish compliance with Council policy,
 Pay suppliers promptly, in accordance with agreed terms.
 Seek to resolve all procurement disputes quickly.
 Identify strategic suppliers, establish processes to manage (reduce) the existing
supplier base and, develop improved value relationships with suppliers and contractors.
 Introduce a ‘customer first’ approach to commercial trading partners i.e. establish a
one-stop contact point, utilising Procurement as the prime conduit for contact with the
private sector and trade organisations. This will include establishing a Business Trading
information portal on the Council web site and publishing guides on how to trade with the
council.
KEY THEME 7: - PROCUREMENT WILL BE INTEGRAL TO THE COUNCIL’S SERVICE
EFFICIENCY REVIEW AND BEST VALUE PROCESS.
The acquisition and management of external resources is fundamental
to delivering services that are efficient and effective. Good procurement
can play a major part in ensuring the continued viability of Council
services.
The Council has adopted the Service Efficiency Review process to satisfy the requirement, under
the duty of Best Value, to test Council services critically for need, effectiveness and
competitiveness and to ensure that services are provided by the most efficient and cost effective
means.
The Council wishes to see that Service Efficiency Reviews are carried out in accordance with the
approved methodology which will take into account the requirements of all stakeholders, the
social, economic and environmental needs of local people and businesses and, the Council’s
duty of well-being.
Reviews will challenge the need for services currently delivered and the way in which they are
delivered, compare the performance of services against other organisations, consult with
stakeholders to define performance targets and assess the competitiveness of existing services
by considering alternative approaches for future service delivery.
As a consequence of carrying out Service Efficiency Reviews, it is possible that services
previously delivered entirely from in-house provision are re-structured to include commercial
relationships with other organisations i.e. obtaining part, or all, of the service from external
providers or partners.
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All Procurement activity that arises following Service Review is to be carried out in line with this
Procurement Strategy, Contract Rules and comply with approved procurement codes of practice.
In particular, the Council requires that all reasonable steps be taken to protect employee interests
by ensuring that workforce issues are properly reflected in any agreements with external sources;
e.g. TUPE, fair employment, protection of pension rights and health and safety issues and the
workforce is consulted as part of the procurement exercise.
The Council will:
 Ensure that any decision to undertake formal competition or pursue some form of
external or alternative service provision is taken by the Executive. This may be
following a Service Strategic or Efficiency Review or external, regulatory or other
performance related review, or simply in pursuance of continuous improvement. Such
procurement decisions will be subject to scrutiny by the relevant Service Development
Committee.
 Apply the key principles in this strategy to any formal initiative resulting from Service
Review to ensure that the procurement is successfully managed and carried out.
 Ensure that Corporate Procurement supports the Service Review process by
helping service managers and elected-members compare quality and competitiveness of
current service provision against the full range of options for future service delivery.
 Apply competition and challenge existing services in a manner that respects the
rights of Council employees and their position as valuable assets to the Council.
 Engage with the market concerning funding, capacity, method and innovation and
conduct the procurement process in a manner that encourages providers to compete and
be innovative and creative.
 Incorporate performance standards and continuous improvement targets into
contracts for strategic services.
KEY THEME 8: - THE COUNCIL WILL STRIVE TO CONDUCT ITS BUSINESS AND TRADE
ELECTRONICALLY.
The Council will embrace the use of Information Technology to deliver
service and cost efficiencies and to comply with Government targets for
the implementation of electronic ‘e-procurement’ solutions.
The council is committed to implementing e-procurement systems, which maximise the potential
for process and price savings, reduce transactional costs and meet the best practice guidelines
stated in the Modernisation Agenda and National Strategy for Procurement.
Implementing electronic solutions will also enhance the Council’s ability to obtain management
information on procurement activity, spend analysis and compliance which is needed to help drive
the implementation of the objectives in this Strategy.
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The Council will:
 Implement e-Procurement ordering and payment systems that will facilitate the
direct ordering of goods or services by the individual service departments, building upon
existing e-procurement activities such as the Roses Marketplace.
 Adopt electronic tendering or other e-procurement initiatives, which modernise,
improve and simplify the procurement process as the technology and best practice,
evolves.
 Develop a ‘Procurement’ Intranet site to host procedural guidance and contract
information.
 Develop an Internet / Web site for advertising trading opportunities and encouraging
local businesses.
KEY THEME 9: - MAXIMISE THE POTENTIAL TO ACHIEVE VALUE FOR MONEY AND
IMPROVE SERVICES FROM NETWORKING AND COLLABORATION.
Exploring opportunities for collaboration, networking and joint service
provision across all sectors is likely to offer considerable scope for
improved service delivery and efficiency gains.
The Council is committed to developing those services that already perform well in comparison
with others and will explore the market and partnership opportunities which may arise as part of
the Service or Efficiency Review or other improvement process. Decisions to enter into
partnerships or enter into collaborative arrangements will require the approval of the Executive.
Where there is a clear benefit from doing so, the Council will establish and develop strategic
alliances and will actively seek to enter into joint procurement or collaborative arrangements with
other organisations or authorities which result in improved services, reduced costs or efficiency
gains and which represent best value for money.
The Council will:
 Establish communications links with various organisations e.g. ODPM and Buying
Consortia etc. and be actively involved in wider procurement activities and initiatives (e.g.
Regional Centre of Excellence)
 Develop strategic alliances to mutual benefit e.g. Health and other Government
Departments (Local Strategic Partnership).
 Actively explore opportunities for collaboration, networking and joint provision across
all sectors and seek active involvement in wider procurement/external community
activities and initiatives.
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KEY THEME 10 -
THE COUNCIL WILL MAXIMISE THE POTENTIAL FOR OBTAINING
COMMUNITY BENEFIT FROM PROCUREMENT.
The Council recognises that ‘supply chain’s are an important feature of
the economic activity within the community. The buying power of the
Council (and its community partners) offers significant potential for
procurement to provide both social and economic benefit.
It is an objective of the council to work with its strategic partners and key contractors to establish
the contribution that small firms, ethnic minority businesses, social enterprises and voluntary and
community sector suppliers can play in the supply chain.
Also, the Council is keen to develop a "mixed economy" of service provision utilising the services
from all sectors since, by doing so, it is likely to succeed in obtaining sustainable and diverse,
value for money service outcomes.
It wishes to work across traditional market boundaries and give careful consideration to
alternative service delivery options in any competitive tendering exercise.
The Council will:
 Explore the opportunities for community benefit from collaboration with its strategic
partners and key contractors on procurement matters.
 Adopt a mixed economy approach to service provision, which ensures that a broad
view is taken of the potential market in any procurement process. The Council will
consider the potential within all sectors i.e. collaboration and partnership arrangements
with other public authorities, the private sector and the voluntary sector.
 Encourage a diverse and competitive supply market to trade with the Council,
including small firms, social enterprises, ethnic minority businesses, voluntary and
community sector suppliers and, identify steps needed to improve SME capability and
competitiveness.
 Work with prime contractors, both at tender stage and during the life of a contract, to
establish the contribution that small firms, ethnic minority businesses, social enterprises
and voluntary and community sector suppliers can play in the supply chain
 Keep the bidding process as simple as possible in order to help minimise the costs to
suppliers. Rules and policies will be applied fairly.
 Ensure that all tenderers have equal access to relevant information at pre-tender
stage and during the tender process.

Work with regional and national partners to ensure a consistent approach to prequalification and assess potential suppliers against published pre-qualification and tender
evaluation criteria. These criteria will be proportionate to the risks of the individual
contract process. In particular the criteria relating to financial standing will not be set to
unreasonably exclude newer businesses.
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KEY THEME 11 - IMPLEMENT THE NATIONAL (MODERNISATION) AGENDA TO DRIVE
PROCUREMENT BEST PRACTICE.
The Council’s strategy mirrors the national agenda to achieve the highest
standards of service delivery through efficient, resourceful and prudent
procurement.
The requirement for the Council to manage its resources effectively is reflected in the
Modernisation Agenda for Local Government and is integral to the duty of Best Value. The ability
to demonstrate success in this is key to the Council improving its CPA rating.
The Council is committed to meeting and, where possible, exceeding the Government’s
requirements for achieving procurement excellence and meeting the targets for efficiency gains in
the ‘Gershon’ Efficiency Programme.
Success in delivering the Council’s priorities and objectives included in this Strategy and
achieving continuous improvement in its procurement arrangements to meet the challenges in the
national procurement agenda, is dependent on the right levels of procurement skills and
competencies being available.
There is a clear need to increase procurement capacity within the Council to deliver the step
change needed for procurement to make a real, positive and sustainable difference which will
benefit the citizens of the borough without compromising quality.
The Council will:
 Adopt the recommendations in the National Procurement Strategy, published by the
Office of the Deputy Prime Minister (ODPM - October 2003), which identifies key aspects
of procurement which should be improved in line with national targets.
 Develop a sustainable response to the Gershon (Efficiency Review) and improve the
effectiveness of current procurement arrangements in preparation for next CPA value for
money assessment.
 Actively participate in Regional Centres of Excellence initiatives and collaborative
arrangements.
 Build Procurement Capacity and awareness within the Council - The procurement
Team will act as the catalyst and will seek to identify and develop the skills and
competencies required to fulfil the procurement role effectively.
 Develop appropriate staff training programmes to build procurement capacity and
release the knowledge and full potential of people, at an authority-wide level, who are
involved in procurement:
 Develop performance measures to benchmark the council’s procurement performance
with best practice and the performance of others - to identify opportunities for continuous
improvement.
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KEY THEME 12: PROCUREMENT PLANNING AND CONTRACTS MANAGEMENT
It is an objective to strategically manage and prioritise council wide
procurement activity.
It is vital that the council has a clear view of its expenditure and procurement resource
requirements. Developing good management information will provide the Council with the
opportunity to manage the supply base effectively and achieve the benefits which derive from
economies of scale.
Accurate procurement management information is essential if the Council is to have strategic
control of procurement activity.
The Council will:
 Carry out a detailed analysis of procurement related expenditure
 Assess the procurement management information available to support the Council’s
procurement function. to establish if this can be adapted or improved as part of the
councils e-procurement plans.
 Develop a contracts register and contracts management system
 Establish a 3/5 year Procurement Plan which will include all major procurement
projects
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SECTION 3. IMPLEMENTING THE PROCUREMENT STRATEGY
3.1
KEY TARGETS AND PERFORMANCE INDICATORS
Procurement Improvement Plan
A Procurement Improvement Plan, which identifies the key tasks which will ensure the
implementation of efficient and effective procurement across all council services, was
ratified by the Strategic Leadership Team and the Council’s Executive in April 2004
The attached table (Table 2) identifies the key tasks which, when implemented, will
ensure that the benefits from implementing the Procurement Strategy are realised at the
earliest opportunity. These concentrate on the key priorities identified in the Strategy and
build on existing progress towards implementing the initial Improvement plan:
TABLE 2 - KEY TASKS
THEME:
ESTABLISH STRATEGIC LEADERSHIP AND A POLICY FRAMEWORK.
KEY TASKS
CRITICAL SUCCESS INDICATOR
Update Procurement
Improvement Plan including
a resource strategy
New plan includes the key principles in
this strategy. Plan adopted by
Corporate Procurement Board.
Procurement adequately resourced
Reporting lines in place.
Service Development Committee,
scrutiny role developed.
Board established and focussed on
long-term procurement planning
consistent with Strategy
KPI’s in place to measure:
- progress to achieving the council’s
objectives.
- effectiveness of procurement
arrangements
Policy which impacts on procurement is
introduced and linked to this strategy
Existing policy is reviewed and
integrated into improvement plan
Establish elected member
ownership – and awareness.
Corporate Procurement
Board re-launched for
strategic focus.
Develop Key Performance
Indicators (KPI’s) in line
with National Strategy for
Procurement and Regional
guidance
Review Policy and
Corporate plans - establish
the procurement links
Update procurement
procedural rules (and
controls)
Procurement procedural documents
reviewed and updated.
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TARGET
September 2005
June 2005
June 2005
July 2005
November 2005
December 2005 (2year programme to
2007)
THEME:
EFFICIENCY AND COST SAVINGS
KEY TASKS
CRITICAL SUCCESS INDICATOR
Implement Corporate
Procurement arrangements,
integrated across all service
areas and supported by
appropriate systems and
process.
Develop procedural
guidance and Codes of
Practice for service
managers
Create a Council wide
Procurement Plan
Corporate contracts systematically
introduced.
Procurement improvement plans in
place with all service departments,
integrated with Corporate
arrangements.
Codes of practice in place supported by
best practice guidance
THEME:
Control and management of all
procurement spend
All bought-in expenditure identified.
Contracts Register established and
major projects prioritised
TARGET
December 2005 (3year programme to
2007)
December 2005 (2year programme to
2006)
January 2006
COMPETITION, TENDERING AND CONTRACTING
KEY TASKS
Create procedures to
establish a uniform, best
practice approach to
competition and award of
business
Establish systems to ensure
that business is awarded
following a legally
compliant, competitive
process which addresses all
options
Establish procedures
(training and guidance) to
ensure all business is
supported by legally
enforceable contract terms
and is risk managed.
CRITICAL SUCCESS INDICATOR
TARGET
Procedures
established
and
a
framework for Contracting in place.
Model tender documents and Contracts
developed. Head of Procurement January 2006
integral to process.
Clear selection procedures in place
Contracts compliant with legislation
including E.U.
Competition fully utilised involving a
January 2006
diverse range of providers.
EU procurement process co-ordinated
and managed by Corporate
procurement
Council risk minimised.
Project and risk management applied to
all major procurements.
July 2005
All bought-in expenditure subject to
appropriate, enforceable terms.
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THEME:
SUPPLIER STRATEGY, ETHICS AND STANDARDS
KEY TASKS
Develop procedures and
Codes of Practice which
ensure accountability and
transparency in the
procurement process
Develop a clear strategy for
supplier management based
on fairness, openness and
requirement for continuous
improvement through key
supplier relationships
THEME:
CRITICAL SUCCESS INDICATOR
Procurement Guides published
Corporate Procurement lead on
tendering.
Scrutiny role developed
Clear Audit trails
Supplier base rationalised
Disputes with suppliers are minimal
Benefits from partnerships and long
term supplier relationships
TARGET
December 2005
January 2006
VALUE FOR MONEY
KEY TASKS
Establish Corporate
Contracts to maximise the
councils buying power and
obtain economies of scale
Adopt ‘whole life - outcome
based’ principles into the
award of business decision
making process.
Consider ‘Partnership’
approach to contracting and
establish properly
monitored, long-term
relationships
CRITICAL SUCCESS INDICATOR
TARGET
Contracts for common goods and 2005 (ongoing)
services established.
Procurement plans in place for each
service (competition timetable)
Whole-life selection criteria established
2005 (ongoing)
in all tenders
All cost and benefit elements
considered in the award process
(underlying risk and cost v quality and
community gains)
Major construction and service
2005 (ongoing)
contracts are partnered.
Performance indicators included in
contracts.
Longer term contracts established and
contract review process established
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THEME:
SERVICE EFFICIENCY REVIEWS AND BEST VALUE
KEY TASKS
CRITICAL SUCCESS INDICATOR
TARGET
Establish the role of
Corporate Procurement in
the Service Review process
in respect of option
appraisal and seeking
competition
Procurement integral to the Review June 2005
process.
Procurement input to option appraisal
Competitive process procurement led.
Establish a methodology for
Service Efficiency Reviews
which involves members in
any decision to pursue an
option for alternative
service delivery
Methodology established.
June 2005
Clear business case considered.
No alternative service option pursued
without elected member approval
THEME:
DOING BUSINESS ELECTRONICALLY
KEY TASKS
Develop and implement an
E-Procurement Strategy in
line with national targets for
E-Government for electronic
ordering and payment.
Adopt the use of technology
to improve the tendering
and contract management
process.
CRITICAL SUCCESS INDICATOR
TARGET
Strategy adopted by Strategic
Leadership Team and an
implementation plan established
June 2005
E-Tendering implemented.
Management Information available
January 2006
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THEME:
COMMUNITY BENEFIT FROM PROCUREMENT
KEY TASKS
CRITICAL SUCCESS INDICATOR
TARGET
Establish and develop
strategic alliances to obtain
community benefit from
procurement activity e.g.
Local Strategic Partnership,
Regional Centres of
Excellence.
Links established with LSP members.
Plans in place for exploring
opportunities through collaborative
procurement for community benefit
Adopt procurement
procedures which allow
equal access to tendering
and business opportunities
to all sectors, including
SME’s
A one-stop procurement contact point, October 2005
with the private sector and trade
organisations is established. A Business
Trading information portal on the
Council web site is created to include
guides on how to trade with the council.
Engage with Key
contractors to develop
community benefit from
strategic contracts and
partnerships
All major tenders and contracts include 2005 (ongoing)
community gains as an award criteria
June 2005
THEME: IMPLEMENT THE NATIONAL (MODERNISATION) PROCUREMENT AGENDA
KEY TASKS
CRITICAL SUCCESS INDICATOR
TARGET
Implement
the
National Council meets the Government targets
Procurement Strategy
for improvement
Implement the ‘Gershon’
Efficiency Review process
and timetable
Develop an active role in the
Regional Centres of
Excellence
Develop appropriate staff
and member training to
build procurement capacity
December 2005 (3year programme to
2008)
Sustainable systems in place linked to 2005 ODPM timeBusiness Planning process.
table
Targets reported
Active membership on all work-streams 2005 ongoing
Skills assessment
Training carried out
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completed
and January 2006
THEME:
PROCUREMENT PLANNING AND CONTRACTS MANAGEMENT
KEY TASKS
Establish a 3/5 year
procurement ‘Forward Plan’
of all major procurement
projects
Implement contract
management systems and
create a corporate ‘Register
of Contracts’.
Establish procurement
improvement plans for all
services and spending
departments
3.2
CRITICAL SUCCESS INDICATOR
Plan established
Scrutiny.
and
reported
Systems for managing contracts
(renewals/ terminations) in place
Expenditure analysed to identify
opportunities for corporate contracts
and to develop a ‘forward plan’.
Plans in place. Management lines
established with Corporate
procurement and departmental
procurement teams
TARGET
to
January 2006
January 2006
February 2006
Monitoring / reporting
The Council will need to implement monitoring and reporting arrangements in order to monitor
progress towards meeting its procurement objectives
To assist the corporate management of the procurement function and facilitate the reporting of
performance and progress, the Improvement Plan will be incorporated into the Business Planning
arrangements for Business Services and integrated into the Council’s ‘Performance Management
Framework’.
Implementation of the Improvement Plan and progress is delivering the objectives in the Strategy
will be monitored by the Development Services (Scrutiny) Committee (Partnerships, Business
and Companies) and progress reports will be submitted at least an annual basis.
3.3 Critical success factors / risk analysis
Leadership.
The Council acknowledges that high level ownership and support of procurement processes will
be vital to ensuring the success of this Strategy. Procurement is ‘cross-cutting’ and a number of
people will be directly affected as the procurement improvement plan is implemented. Executive
support may be needed to overcome barriers, which may arise from any resistance to change.
The Strategy addresses this by including provision for reporting progress to elected-members
through the Services Development Committee and Scrutiny process and via the procurement
champion, Councillor Robert Wynne. In addition, the Strategic Leadership Team (Corporate
Procurement Board) will provide Executive ownership and direction to drive the adoption of best
practice.
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Resources.
The achievement of the objectives and performance of tasks is directly linked to the availability of
resources. Whilst a number of priority actions can be achieved within existing resource,
achievement of the longer-term targets for procurement and the overall success of the Strategy
and Improvement Plan will depend on the availability of resources.
The Council wishes its procurement arrangements to be sustainable. To address this, the
resource strategy, which is included in the Council’s initial improvement plan for procurement, will
be monitored for appropriateness.
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Appendix 1
SUMMARY OF POLICY LINKED TO PROCUREMENT
The Council recognises that other policy will impact on this procurement strategy therefore the
strategy reflects the requirement that procurement will link with other corporate strategies and
policy which may be developed and adopted in the future.
This Appendix :
(a)
sets out ‘existing’ policies to be followed in the procurement of goods, works or services
on behalf of Blackpool Council.
(b)
Identifies policy which will need to be developed as part of the implementation of the
Improvement Plan
EXISTING POLICIES
Contract Procedure Rules
Financial Regulations
Community Plan
Performance Plan
Master Plan and Economic regeneration
E-government Strategy
Voluntary Sector Compact
Partnering in Construction
HR Policy
Service Efficiency Reviews
Crime, disorder and drugs strategy
Children and young people strategy
Local Strategic Partnership
NEW POLICIES
Sustainability and the Environment Environment
To define how procurement will support the Council’s aims of protecting the environment,
effecting waste reduction and re-cycling.
Diversity and Equality
To define how procurement will be used to promote equality of opportunity and how this will be
incorporated into our evaluation and decision-making processes.
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Small and local businesses
Small businesses can make an important contribution to the delivery of public services and play a
vital role in the national and local economy. Policy will state how the Council will make the most of
the benefits offered by SME’s and address the Governments “Small and Medium Sized
Enterprise (SME) Friendly Procurement Concordat” designed to encourage a mixed range of
suppliers in order to help develop and stimulate a varied and competitive marketplace and local
economy.
Local Authority Trading Powers
Explore opportunities for provision of services to private sector and Partnering in strategic service
delivery.
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