Agenda item

To receive an update on Procurement.

Mr Barry Phelps, Chief Procurement Officer, introduced the report.

The meeting heard that:

·      The Dynamic Purchasing System (DPS), was a procedure under the current procurement regulations. It had features that were particularly suitable for managing certain categories more effectively than other routes to market. The DPS allowed suppliers, provided they met certain accreditation and criteria, to join what was essentially an open framework. This was beneficial for small and medium-sized Enterprises (SMEs) and allowed for the development of markets within the framework of the procurement regulations, enabling more efficient procurement of goods and services. Determining categories for DPS was done through consultation with the team and the services to understand needs and the dynamics of the market.  This also formed part of the category strategies that were developed with the services. The HPCS system was purely a procurement system where quotations were issued and the supply chain was invited to respond. However, there was no accreditation required for this, meaning that anyone could register. In contrast, within the DPS, those that were registered must be accredited for delivering those types of services. This was the primary difference between the two. There had been no sampling done because officers had not been asked to undertake a sample. The Committee requested to at least have some random samples.

·      Within the DPS, approximately 90% of the contracts were given to SMEs. Approximately 35% these were within Haringey. The reason the percentage was not higher was due to some of the services not aligning with the profile of suppliers within the borough.

·      In terms of promoting local supply chains and employment opportunities, the Council would regularly attend events with local businesses and other organisations.

·      The Council was in the process of developing a social value policy. This would incorporate social, economic and environmental elements and how that would interact with procurement activity. This would align with the National TOMS (themes, outcomes, and measures), a group of social value elements that the supply chain could bid on. The Council was mandating the use of this with contracts at a certain threshold and considering them for contracts below that threshold. When the Council went out to market, the Council looked to signpost the supply chain to its priorities and areas where a particular focus was needed. Suppliers could then respond through a tool called the Social Value Portal which outlined any commitments. These commitments were contractually binding and if suppliers did not deliver, then liquidated damages would be applied.

·      Social value was very important and the procurement strategy was not focused on driving lower costs, but rather how the Council could deliver more local social value. This aligned with the National Procurement Strategy and would be embedded in the new Procurement Act.

·      The social value policy would be presented to the Committee when it was available. It was being developed and would be submitted to members for comment.

·      It was difficult to benchmark the Council’s performance against other authorities. This was because many boroughs did not collect the same information in the same way. Information could be provided on the number of contracts within the borough and what the spend was. This information was already being tracked and would be available yearly.

·      Timescales were tight for data migration. This was mitigated by using an ‘off-the-shelf solution’ that was already preconfigured. Over the next six to eight weeks, a base model would be put in place. Officers would be invited into workshops throughout the program which was being led by Digital Services. There was a specific project manager and various subject matter experts. The supplier was providing and doing all the data migration and project management activities. Regular conversations were being held with audit and concerns had been raised about certain areas that needed closer examination.

·      The goal was to end up with a system that was implemented according to needs and expectations.

·      The benefits of the new system would be helpful to the Council regarding the category management, in being more commercial the Council would have the data and information within the system to inform decisions on how and when to go to market. There would also be more information available through the system that currently was not available.

·      In relation to value for money, the exact savings figures for consolidating two systems into one was not currently available. Digital Services was leading on this and some specifics needed to be checked. However, there were Medium Term Financial Strategy (MTFS) savings as part of the broader Digital Services program.

·      In terms of implementation and training, there had been a change resource within the project to support this. A whole communication program was being put into place over the next few weeks. The Council had already started, but the more the system was understood the more this understanding could be communicated. The Procurement team would be the main users and there was a further improvement program running alongside the implementation. The Council was looking to integrate the new Procurement Act and the new regulations and communicating this across the organisation. A training programme would be undertaken in relation to this. The system itself had context-sensitive help. When a user was on a screen, the help that was embedded in the system would relate directly to the activity. A further update would be provided at a future meeting regarding how the system had been implemented.

·      A list of risks and mitigation would be provided to the Committee.

Benchmark data of local spend and number of contracts and information on the Procurement Act would also be provided to the Committee. 

RESOLVED

To note the updates and progress being made in relation to the implementation of the new e-procurement system.