Agenda item

[Report of the Director of Environment and Neighbourhoods. To be introduced by the Cabinet Member for Climate Change, Equalities and Leisure.]

Cabinet approval for the Renewal of the existing Parks and Leisure Dynamic Purchasing System.

The Cabinet Member for Climate Change and Sustainability introduced the report which sought approval to renew the Dynamic Purchasing System (DPS) for Parks and Leisure for a period of seven years from 29 January 2021.

The DPS was an approved list of suppliers registered on a categorised computerised system through which suppliers were offered the opportunity to bid against other suppliers for the work on offer. In a normal year, 375 procurements were made, with 98% to SME’s. The renewal of the DPS would help to support the Council’s Community Wealth Building agenda.

Officers responded to questions from Councillor Ogiehor:

-           Of the £2.4m of expenditure across the Park and Leisure category in 2019/20, 98% was spent with SMEs (65% in London (26% North London) and a further 9% of which was in borough).

-           Currently, the Council were drawing up a list of potential suppliers in the borough with the aim of significantly increasing the amount of money that stays in the borough.

-           Businesses were able to join the DPS at any time, so local companies could be encouraged to join to bid for contracts at any point in the seven years. There was a process to complete in order for a supplier to become accredited and they would need to sign up to taking forward certain specifications for works and meet required terms and conditions.

-           It was a requirement of the new DPS that all suppliers pay the London Living Wage.

-           In terms of sustainability there was a need to produce certain processes and procedures and information to sign up to the terms of the sustainability code and further information on this could be supplied to Cllr Ogiehor outside of the meeting.

RESOLVED

1.    To approve, pursuant to 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 DPS for Parks and Leisure for a period of seven years from 29 January 2021.

2.    To award a DPS for the Parks and Leisure provision in the value of £20m over the seven-year term.

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 Parks and Leisure over the past financial year was in the region of £2.4m. 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 Parks and Leisure, 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.

The use of the existing DPS represents good value for money for the commissioning of these services. The DPS has enabled the service to commission works 19.06% below the average market rate for the service.

Purchasing outside of a DPS would require a resource intensive approach, whereby each requirement would be commissioned separately and would require suppliers to go through the accreditation checks for each opportunity. Previously framework agreements were used but these excluded 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. Of the £2.4m of expenditure across the Park and Leisure category in 2019/20, 98% was spent with SMEs (65% in London (26% North London) and a further 9% of which was in borough). In addition, our top three suppliers, by spend, although not based in the borough employ staff who live in the borough and buy materials from suppliers based in Haringey. Once suppliers are accredited, they can apply for multiple contract opportunities and do not need to undertake separate tender processes for the services they are 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. Therefore, the DPS is seen as the best route for the Council to grow the Haringey supplier base within these categorise.

A DPS enables the Council, to undertake time efficient tender processes, which facilitates speed of award and service delivery. We currently undertake around 375 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 Officers an opportunity to devise any additional questions and amend the category structure to further support emergent purchasing strategies over the coming years.

Moreover, awarding this DPS aligns with agreed procurement & commissioning strategies, including payment of LLW and allow more SME’s to join the DPS.

Strategic Procurement will support the replenishment of the Parks and Leisure supply chain by stimulating the market by conducting suitable market engagements to identify, enrol and accredit suitable economic operators through the renewal process in time for commencement on 29th January 2021.

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 375 requirements per year, each needing the supplier to re-present accreditation requirements, that will then need to be evaluated.

Establish a framework for Parks and Leisure

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.