Agenda item

To extend the Dynamic Purchasing System (DPS) procurement sourcing tools for the provision of the Council’s Semi Independent, Supporting Living and Home Support requirements.

The current DPSs for these categories were renewed in 2020 for a period of two years with the provision to extend for two years at a total estimated combined value of £110,000,000

The Semi-independent and Supported Living categories expired on 1st July 2022 therefore an interim extension was agreed for 4 weeks in the short term to provide sufficient time to enable the completion of a Cabinet report to consider longer term DPS extensions period. The Home Support category would expire on the 28th July 2022.

The proposal was to extend the DPSs, for Home Support, Supposed Living and Semi-Independent categories for a period of 17 months to 29th December 2024 with the provision to extend for up to a further 6 months subject to utilisation value.

The Council would open the DPSs for other contracting authorities to access, to support the wider strategic approach to collaboration and obtaining parity in prices across these sectors. This would enhance the sustainability and resilience in these sectors.

The Council currently spent around £21m (net) per year (£42,000,00 over two years) on these services, the intention will be to allow scope London Living Wage increases and for other authorities to access the DPS and increase the annual spend provision by 75% through the DPSs to £63, 000.000 p.a.

The DPSs provided significant access to Council contracts for SMEs both locally and regionally, with around 33% of the spend going to Haringey located business and a further 51% p.a. going to other London based SMEs.

The extension of these DPSs would support the policy position of the Council to implement measures to pay LLW across all suppliers, including social care.

The Cabinet Member RESOLVED 

An extension to the DPSs for Home Support, Semi Independent, and Supporting Living to include access for other Local Authorities for an initial 17 month period commencing on 29th July 2022 with an option to extend for a further 6 months.

An extension to the DPS for the following care provision with additional capacity of 75% for LLW and use by other local authorities in the values outlined below:

Note: 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) was a supplier e-sourcing tool and a compliant route to market under the Public Contract Regulations, which enabled 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 2021/2022 was in the region of £11,000.000, £4,300,000 and £4,200,000, respectively. Renewing these DPSs will not incur any additional licence fees.

The DPS provided a compliant route to market for care provision, which ensured transparency in the procurement process, equal treatment of suppliers and ensured that the requirements of both the Public Contract Regulations 2015 (the Regulations) 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 tendering requirements in the Regulations do not apply to ‘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 the Council 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 did not allow for suppliers to join at any time and prevented new start-ups and entrants from accessing Council contracts during the term of the framework.

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

The DPS was an efficient route to market for both the Council and the supply chain; importantly it enabled access to Council opportunities for SMEs. A fact borne out by the figures; of the circa £45m of expenditure across these 3 categories, whereby, in the last year 88% was spent with SMEs, 33% of which was in borough. Once accredited, suppliers could apply for multiple contract opportunities and did not need to undertake separate tender processes for services accredited for. This was particularly important, as resource intensive tender processes may duplicate effort and were often barriers to entry for small and medium sized enterprises.

A DPS enabled the Council, to undertake time efficient tender processes, which facilitated speed of award and service delivery. The Council currently undertook around 2,200 individual procurements each year in these categories. The DPS streamlined the Council’s procurement/commissioning, contract management and finance processes, which could be undertaken under the one system.

Importantly, extending the DPS would have minimal impact on the existing supply chain as suppliers would only need to confirm there is no change in their qualification status except for their financial standing, which would be reviewed again. This would 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, extending these DPSs alignd with agreed procurement and commissioning strategies, including payment of LLW, establishing block contracts, as well as contract and market management.

Extending for an initial 17 month period, would 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 or 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 would 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.

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

Suppliers would 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 would assist in attaining parity of prices across the sectors.

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

Market intelligence around costs, capability and capacity in the market would 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 would 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 enabled an unlimited number of suppliers to join at any time; provided they met the accreditation and enrolment criteria. The call off process from a framework was much more administratively intensive than that of a DPS.