MPA/MPS Procurement strategy action plan

Report: 9
Date: 12 September 2011
By: Treasurer and Director of Resources on behalf of the Commissioner

Summary

Following Member approval of the Procurement Strategy, an action plan was developed and presented to Resources and Productivity Sub-Committee on 3 September 2009. The latest quarterly update on progress is attached at Exempt Appendices 1 & 2.

A. Recommendations

That members

1. Note the update on progress, as Exempt Appendices 1 & 2.
2. Note that further updates will continue to be provided to the Resources and Productivity Sub-Committee on a quarterly basis.

B. Supporting information

1. The Authority approved the joint MPA/MPS Procurement Strategy and the various procurement models at the Finance & Resources Committee in June 2009.

2. The action plan is designed to monitor progress on the key actions required to implement the strategy. Members should also note that there is a comprehensive performance management framework in place that links objectives of the Procurement Services team and the Business Units to the Procurement Strategy and the MPS Corporate Objectives.

3. The latest update includes the changes that Members requested on the format.

Audit

4. The internal audit of the procurement framework has been finalised and the Director of Audit Risk and Assurance has concluded that:

• The procurement control framework has considerably improved since our previous review of this area. However, this remains an area for further improvement to ensure contracts are managed effectively and value for money is achieved. The introduction of Source to Pay in January 2012 will assist in providing a means of greater control and visibility over the end to end sourcing process.
• The MPA/MPS Procurement Strategy was revised in 2009 and has been aligned to MPS and MPA corporate aims and priorities and meets recommended best practice. An effective implementation plan has also been developed to support the strategy, it has been approved by the MPA and quarterly reports on progress are made to the Resources and Productivity sub-committee (RAP).
• Contract Regulations and approved procurement policies and procedures are in place and available on the intranet. Procurement Services have introduced new procedures and updated the procurement manual as necessary but recognize that there remains a need to promote further awareness and understanding of the MPA Contract and Financial Regulations.
• A clearly defined framework is in place for the proper tender and award of contracts. However, there has been a lack of consistency in applying key controls within the framework which has led to non-compliant contracts. This is being addressed by the work undertaken as part of the DRM and progress is being monitored by the MPA Resources and Productivity Committee. Work continues to embed improved monitoring controls and to ensure that all MPA contacts that have been identified as non compliant move to a compliant position.
• A framework for contract management has been developed but is not fully embedded. The procurement Strategy sets out clearly the aims and objectives of the MPS in developing the key areas of control within contract management. This includes improving supplier relationships and the ability to monitor and manage them professionally and improving compliance, accountability and control through more effective procurement governance. However, this remains an area for further improvement to ensure contracts are managed effectively and value for money is achieved. In particular, the establishment and embedding of the contracts database into the corporate accounting system SAP will increase the level of control and enable Procurement Services to increase the effectiveness of its oversight. Toolkits for managers to cover key areas such as supply chain management and contract management on larger contracts are also being introduced.
• Procurement Services have plans in place to address the areas for further improvement and the Directorate of Audit Risk and Assurance will conduct a follow up review in the third quarter of 2011/12 to give assurance on the progress made.

C. Other organisational and community implications

Equality and Diversity Impact

1. In line with the GLA Group Responsible Procurement four year strategy the Authority and the Service will continue to diversify their supply base through a number of compliant initiatives including simplification of the procurement processes to ensure smaller suppliers are not excluded from winning MPS business, and the mandated use of CompeteFor (from 31 May 2011) which gives greater visibility of MPS opportunities to local small to medium sized enterprises.

Consideration of MET Forward

2. The Procurement Strategy underpins and supports the delivery of the Procurement element of Met Support by improving our infrastructure, driving out waste, improving value for money and concentrating resources on fighting crime.

Financial Implications

3. The costs associated with the activities set out in this report are covered by existing Procurement Department, and MPS wide, budgets as contained within the current Business Plan. It is anticipated that implementation of the Procurement Strategy will result in efficiency savings being delivered and which will be built into business plans as appropriate.

Legal Implications

4. There are no direct legal implications arising from the recommendations, as this is an information report.

5. This report identifies controls that will assist highlighting risks at an early stage and measures to monitor performance. Individual initiatives within the action plan may have legal implications arising, which will need to be explored on a case by case basis.

6. All MPA contracts for goods, works or services are required to be awarded in accordance with the Public Contracts Regulations 2006 (as amended) and advertised through OJEU unless an exemption or exclusion to the Regulations applies. EC Treaty principles and the MPA Contract Regulations must also be adhered to for all contracts, regardless of their value.

Environmental Implications

7. The Responsible Procurement strategy also has a number of positive implications on the environment. Most notably the MPS’s commitment to sourcing environmentally friendly products reflected by the recent achievement of Gold on the Mayor of London’s Green Procurement Code.

Risk Implications

8. There are a number of risks associated with not delivering the Procurement Strategy. These may have Financial/Legal implications which could lead to possible damage to the reputation of the MPS/MPA and financial loss. Such risks include, but are not limited to, the inability to obtain value for money contracts, failure to fully comply with the Public Contract Regulations 2006/MPA regulation and inability to manage all purchasing and procurement action in a responsible manner.

D. Background papers

• Procurement Strategy, Finance & Resources Committee, 18 June 2009.

E. Contact details

Report authors: Lee Tribe - Director of Procurement Services, MPS

For more information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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