Agenda item

[Report of the Director for  Environment  and Neighbourhoods. To be introduced by the Cabinet Member for  Local Investment and Economic Growth]

The report is seeking approval to renew the DPS categories for Semi Independent, Supported living and HomeCare for two years to ensure the service have a compliant route to market and also allow the service to review their current processes in place.

The Cabinet Member for Local Investment and Economic Growth introduced the report which outlined the reasons for the renewal of the Dynamic Purchasing System (DPS) procurement sourcing tools for the provision of the Council’s Semi Independent, Supported Living and Home Support requirements for a period of two years, with the provision to extend for a further two years until 2024.

The Cabinet Member outlined that the DPS was a key tool in providing local business and SMEs easy access to Council contracts, and would play a large part in community wealth building and economic recovery. Haringey was recognised as a leader in this field, with the largest portfolio of DPS categories in local government, with over £100m p.a. of spend going through them.

In response to questions from Councillor Connor, it was noted that:

• Further information on the number of care workers and their rate of pay, where they were not covered by DPS contracts, was available in the addendum report for agenda item 9.

• The Head of Procurement would confirm in writing whether the terms and conditions of the new arrangements required full sick pay to be paid.

RESOLVED

1.         That pursuant to CSO 7.04 a) (Where the Council is considering leading on any joint procurement activities with other contracting authorities that is a Key Decision), CSO 9.04.1 (a Dynamic Purchasing System (DPS) may be used to carry out procurements in accordance with Regulation 34 of the Public Contract Regulations) and CSO 9.07.1 e) (The award of any contract valued £500,000 (five hundred thousand pounds) or more is a 'key decision') to renew the DPSs for Home Support, Semi Independent, and Supporting Living with access for other Local Authorities for an initial two (2) year period commencing on 1^st July 2020 with an option to extend for a further two years to 30^th June 2024.

2.         To award a DPS for the following care provision with additional capacity of 75% for LLW and use by other local authorities in the values outlined below:

It was noted: The above values consider the provision for both the Council and other authorities accessing the DPS and does not represent the actual expenditure of the Council in these categories.

Reasons for decision

The Dynamic Purchasing System (DPS) is a supplier e-sourcing tool and a compliant route to market under the Public Contract Regulations, which enables suppliers to enrol, accredit and be approved to bid for Council contracts.

The Council’s overall spend for home support, supported living and semi- independent over the past financial year was in the region of £13m, £16m and £7m, respectively. Renewing these DPSs will not incur any additional license fees, as the Council already holds an enterprise license.

The DPS provides a compliant route to market for care provision, which ensures transparency in the procurement process, equal treatment of suppliers and ensures that the requirements of both the Public Contract Regulations 2015 and the Council’s Contract Standing Orders (CSO) can be met, particularly as much of care provision is purchased on an individual basis and the Regulations do not provide for hitherto ‘spot contracts’.

Purchasing outside of a DPS would require either an extremely resource intensive approach, whereby each requirement would be commissioned separately and would require suppliers to go through the accreditation checks for each opportunity. This would likely prevent suppliers bidding for the services and place the provision of these services at risk; or we would need to establish a framework, which would likely exclude many local SMEs from meeting the criteria to qualify under a framework. In addition, a framework does not allow for suppliers to join at any time and prevents new start-ups and entrants from accessing Council contracts during the term of the framework.

A DPS is beneficial in that; it enables supply chain expansion as suppliers can join at any time during its lifetime, unlike a traditional framework where only suppliers at inception remain within it until expiry. This means that the supply chain can be renewed and replenished throughout its term, which lends itself to more competition and therefore better value for the Council and its users.

The DPS is an efficient route to market for both the Council and the supply chain; importantly it enables access to Council opportunities for SMEs. A fact borne out by the figures; of the circa £36m of expenditure across these 3 categories, whereby, in the last year 92% was spent with SMEs, 40% of which was in borough. Once accredited, suppliers can apply for multiple contract opportunities and do not need to undertake separate tender processes for services accredited for. This is particularly important, as resource intensive tender processes may duplicate effort and are often barriers to entry for small and medium sized enterprises.

A DPS enables the Council, to undertake time efficient tender processes, which facilitates speed of award and service delivery. We currently undertake around 2,200 individual procurements each year in these categories. The DPS streamlines the Councils procurement/commissioning, contract management and finance processes, which can be undertaken under the one system.

Importantly, renewing the DPS will have minimal impact on the existing supply chain as suppliers will only need to confirm there is no change in their qualification status except for their financial standing, which will be reviewed again. This will provide Commissioners an opportunity to devise any additional questions and amend the category structure to further support emergent commissioning strategies over the next two to four years.

Moreover, awarding these DPSs aligns with agreed procurement & commissioning strategies, including payment of LLW, establishing block contracts, locality- based home support in order to facilitate high quality care delivery, as well as contract and market management; market expansion – all care category markets have expanded since inception; Home Support, Semi Independent and Supported Living by 84%, 37% & 60% respectively. Further expansion is required to fine tune supply in more specialised areas.

Renewing for an initial 2 year period, will give Care Commissioning and Strategic Procurement time to review their commissioning and procurement strategies going forward, factoring in any potential categories that could be insourced, impacted by social distancing and updating category documentation to account for current circumstances, emergent need, or identified gaps in provision e.g. to meet specialisms like positive behaviour provision for high need learning, disabled residents or perhaps provision that may be better delivered through alternative procurement routes or longer-term measures like property acquisition or remodelling to meet need.

Strategic Procurement will support the replenishment of the care supply chain by stimulating the market conducting suitable market engagements to identify, enrol and accredit suitable economic operators or indeed deploying management market tools like: price caps for continued efficient and effective delivery of the Council Semi Independent, Supported Living and Homecare requirements through the renewed process time for commencement on 1^st July 2020.

Enabling other authorities to join the DPS in these categories will bring additional benefits:

Suppliers will only need to be accredited once to access all contract opportunities across the authorities, opening up opportunities to local suppliers to provide services outside of Haringey.

This approach will assist in attaining parity of prices across the sectors.

It will potentially provide access to additional suppliers in hard to source sectors.

Market intelligence around costs, capability and capacity in the market will be significantly increased.

May provide an opportunity for the Council to generate some income to offset the operating costs of the DPS.

Alternative options considered

Do Nothing - This option would require the Council to seek alternate procurement arrangements incurring significant additional costs and resource effort to facilitate procuring over 2,200 requirements per year, each needing the supplier to re-present accreditation requirements that will then need to be evaluated.

Establish a framework for semi-independent, supporting living and home care – this option was discounted in preference to the use of a DPS for commissioning these services. This is primarily due to the restrictions applied to the duration of a framework and the limitation of suppliers only being able to be admitted at the point of establishment of the framework. In comparison to a framework, a DPS enables an unlimited number of suppliers to join at any time; provided they meet the accreditation and enrolment criteria. The call off process from a framework is much more administratively intensive than that of a DPS.