Procurement Services diversity policy update

Report: 11
Date: 1 December 2005
By: Commissioner

Summary

This report gives an update of the actions taken by Procurement Services (PS) to address and promote diversity and equal opportunities within the supply chain and inclusion of all suppliers in our policies and procedures for tendering.

A. Recommendations

That

1. Members are asked to note the current status of Procurement Services diversity policy as ongoing;
2. Members are asked to endorse the future actions outlined to ensure that the MPA’s commitment to diversity is adequately reflected in the procurement process; and
3. Members note the Diversity Questionnaire Form as shown at Appendix 1.

B. Supporting information

1. Procurement Services strives to address equal opportunities and inclusion of all suppliers in our policies and procedures for tendering, as well as complying with the Race Relations (Amendment) Act 2000.

2. The Metropolitan Police Procurement Strategy states that Procurement Services will aim to ensure its contract strategies, regulations, policy statements and processes:

• Promote open and fair competition;
• Ensure service delivery is accessible and responsive to the diversity of people living and working in or visiting London;
• Encourage the provision of work, service and goods by businesses that promote equality; and
• Enable London to become the safest world city, through taking account of the social, economic and environmental impacts of tenders.

3. Procurement Services published the Diversity Policy in January 2005; this update outlines achievements made by Procurement Services (PS) in promoting equality and diversity within the supply chain. The policy was published to ensure that our staff and internal customers understood what the diversity policy was as well ensuring compliance with its responsibilities (on behalf of the MPS) under the Race Relations (Amendment) Act 2000.

4. The objective of the Procurement Services Diversity policy was to ensure that PS had a strategy in place that would ensure compliance with its responsibilities (on behalf of the MPA) under the Race Relations (Amendment) Act 2000. This Act requires us to ensure that we are making concerted efforts to:

• Eliminate discrimination
• Promote equality of opportunity
• Promote good race relations

5. In order to achieve the objective we had to undertake various activities including:

• Reviewing tender process
• Compiling and issuing equal opportunities questionnaire
• Data analysis from Systems Applications and Productions (SAP) to identify Small Medium Enterprises (SMEs)
• Supplier consultation
• Staff awareness training on diversity.

6. The purpose of this report is to update members of the steps taken to promote diversity and equality within Procurement Services as requested by the MPA, and as outlined in the PS Diversity Policy (published January 2005), presented herein is a review and evaluation of all activities highlighted in Phase 1 of the above document.

7. Our commitment to diversity is continuous and we recognise that as well as being an organisational issue, we as individuals are responsible for ensuring that diversity becomes part of our procedures and is integrated in all our policies and strategies.

8. PS has a duty to promote race equality through our procurement function via individual contracts; an objective for procurement has to be best value and quality of service provision.

9. Diversity is increasingly valued and its social, cultural and economic benefits are recognised. Local communities expect public funds to be used appropriately in order to benefit the community and the funds should be spent in a way that promotes equality of opportunity.

10. The MPS strives to give under represented businesses the same opportunity to compete for the supply of goods and services as other suppliers.

Brief summary of activities undertaken

Procurement Services - diversity programme plan

Activity 2005 - Phase 1

• Improve e-Processes - Quarter 1 and 2
• Review Invitation to Tender (ITT) process - Quarter 1
• Compile/issue ITT questionnaires - Quarter 1 and 2
• Questionnaire data entry - Quarter 2
• SAP Data Analysis/Banding - Quarter 1
• Staff Awareness/training - Quarter 1 and 2

11. An Equal Opportunities Monitoring Form (EOMF) was devised and emailed to 992 suppliers, who annually supply goods and services to the MPS with a value between £154,000 and £1m. The number of suppliers selected was determined via data analysis of the MPS SAP system. The form requested information on gender, ethnicity, disability and diversity of their organisation. As with all questionnaires, a limited response can be expected, to date we have received 236 responses (23.8%). Through the data collected, identification will be made of small medium enterprises (SMEs), which is stored on a draft database.

12. A draft database of diverse suppliers has been compiled which will assist with monitoring how much business the MPS is performing with SMEs and our aim is to use this database as a source of information to advise these suppliers of any upcoming contracts and give them contact details for further information. All the information received will be updated on SAP.

13. Working in collaboration with the Race and Diversity Unit at the MPA, an advertisement was placed in the African Caribbean Business Directory 2005 promoting MPS Procurement Service's intention to work with underrepresented business communities and encouraging these businesses to make contact with Procurement Services to gain more information on how to work with the MPS. The response from this advertisement was very poor (we only received two direct responses); our next step is to advertise in the Voice Newspaper, which is Britain’s best selling ethnic newspaper.

14. We have also been networking with other public sector bodies i.e. Brent Council, London Borough of Haringey, London Borough of Barnet and Westminster Council in promoting best practice on diversity, looking at ways of encouraging SMEs to work with us and attending meetings (i.e. Westminster Minority Business council breakfast meeting; the objective being to encourage to spend a certain amount of their annual overhead expenditure in minority owned businesses) which address issues that procurement services face in promoting diversity in the supply chain.

15. Networking with other public sector organisations has given us an insight into how much progress the MPS has made compared to the mentioned organisations in promoting and addressing diversity with procurement. Apart from the London Borough of Haringey, which is well advanced in procedures and policy in attracting SMEs, the other organisations are only beginning to address the issues involved and are in fact using consultants to research primary data required i.e. number of diverse suppliers, spend data and drawing up a diversity policy. Procurement Services is being asked for help and guidance by some of the above organisations when it comes to diversity and equality issues within procurement.

16. An Equal Opportunities monitoring form is now part of our Invitation to Tender documentation to reflect our support and determination to include SMEs in our bidding process. We have also recently commenced introductory meetings with SMEs who have expressed an interest in working with the MPS whereby we provided them with information on our tendering processes and how to get onto our supplier list.

17. We have commenced introductory meetings with SMEs who have expressed an interest in working with the MPS and have participated in ‘Meet the Buyer’ events. These are seminars arranged by Business-to-Business Exhibitions and sponsored by Business Link for London (BLL).

18. PS published the diversity report on the website for all staff to gain a better understanding of diversity issues within the supply chain.

19. A review of all Standard Operating Procedures (SOPs) is currently taking place to ensure that PS adheres to and complies with the Race Relations (Amendment) Act 2000. As part of this review, PS will look at devising a more user friendly and condensed ITT process document for SMEs. This will make it easier to understand and to fulfil MPS requirements. The Equal Opportunities monitoring form (Appendix 1) is now part of our ITT SOP’s, which have been updated to reflect our support of the diversity policy.

20. PS is working with the London Development Agency (LDA) Procurement Development Programme and the Greater London Authority (GLA) Strategic Performance team on the Diversity Works for London programme.

21. An outline-training plan has been compiled and we will shortly be meeting with Shaun Kennedy from the Diversity Directorate to arrange commencement of the training in October and November 2005.

Evaluation of progress to date

22. In summary, Procurement Services has achieved the activities as set out in January 2005 to the EODB. PS now submits the EOMF electronically to suppliers on a quarterly basis. This process has greatly assisted with the identification of diverse suppliers. Going forward, the implementation of the SAP diverse supplier database will enable PS to collate and present data that will allow us to inform diverse suppliers of any upcoming contracts or any other information that might be appropriate to them. Additionally, the database will enable detailed analysis of the MPS suppliers’ database to provide information relating to supplier ethnicity, gender, size of company etc.

23. The Procurement ITT process now includes the EOMF as a standard template. PS are reviewing ways in which we can decrease the amount of information required within the ITT documentation coupled with simplifying the tender process to encourage competition and inclusion for SMEs.

24. In terms of networking and collaboration, PS have also been involved in a number of Meet the Buyer events and have held extensive and informative discussions with several local councils whereby exchange of information relating to policy and process has proved beneficial to all parties.

25. For staff training, PS is undertaking a Performance Needs Analysis to identify structure and depth of the training that will be required by staff in delivering diversity within the supply chain. This is a joint activity with the MPS diversity directorate. In order to progress staff training, we are currently discussing with the Buying a Better London organisation (via the Office of Government Commerce (OGC).). The aim is two-fold: firstly, to deliver training and advice about working with SMEs and Black and minority ethnic communities/people (BMEs) and secondly, for OGC to review and assist with setting up of monitoring arrangements as well as sharing best practice.

26. During the reviewing of the PS SOPs, comments and guidance on additional information have been included in the documents to make sure that we have addressed the RRA 2000 and the impact on the procurement process. External organisations such as the Commission for Racial Equality (CRE), the Home Office and London Borough of Haringey have been involved in giving feedback on the documents.

Safer Neighbourhoods

27. Contact with several safer neighbourhood schemes has taken place. The aim was to request support and advice from the safer neighbourhood teams with regard to making contact with diverse suppliers in their neighbourhoods. The feedback was positive from the safer neighbourhood teams, however, the consensus was that it was too early in the scheme programme for the safer neighbourhood team to be of assistance although they would advise if information became available that they felt would assist the diversity programme. Going forward, PS will continue to hold discussions with the safer neighbourhoods team to ensure communications are maintained.

Resource

28. PS has in place a dedicated member of staff whose responsibility is to analyse data received from the EOMF and build further relationships with the respondees who employ 250 or less staff in their organisation.

29. There are also three senior managers in the department who are networking with similar public sector organisations, liaising with the OGC on best practice and working closely with the GLA family on ensuring that the diversity agenda is high priority within procurement. On average, there is approximately 5% of PS staff employed fulltime on diversity related aspects of procurement. This represents a significant resource contribution and clearly demonstrates the commitment of the PS team to ensure effective supplier diversity within the MPS.

Next steps

30. In Phase 2 Procurement Services will be looking at the areas listed in the table below as well as:

• Encouraging large suppliers to offer diverse suppliers opportunities to subcontract;
• Develop a strategy for the MPS SMEs to participate in “clustering” opportunities where minority target groups are encouraged to come together to bid for a piece of work. This may prove difficult to achieve in practice;
• Compile a database of diverse suppliers and the goods and services they supply;
• Consider whether a specified number (%) of ITT’s are sent to minority suppliers (using above database as reference);
• Review whether specific annual targets for procurement of goods and services from minority groups can be implemented;
• Continue to challenge existing internal policy/procedures and culture that will make engagement with SMEs and BMEs easier;
• Consider allowing SMEs to bid for some part contracts;
• Identify community stakeholders, customers internal and external – through group meetings, intranet and Internet, staff notice boards, appropriate media i.e. The Job and ethnic newspapers to aid communication of MPS Diversity approach.

Brief summary of next steps

Procurement Services

Activity 2005 - Phase 2

• Supplier Consultation - Quarter 3 and 4
• Develop Publication Policy - Quarter 3
• Review supplier “Off-Setting” - Quarter 3 and 4

Activity 2005 - BOCU / OCU awareness

• Compile SOP - Quarter 3
• Education/Training - Quarter 3 and 4

C. Race and equality impact

1. The report outlines and ensures that under represented suppliers in our community are not treated unfairly when requesting and accessing MPS information and appropriate information is communicated to them in a bespoke manner where necessary.

2. The Commission for Racial Equality has produced a guide for Public Authorities on how they should promote equality of opportunity for their own staff and local businesses regardless of the ethnicity of ownership and ensure services are designed and delivered in a way that meets the needs of all users.

3. Before any recommendation for a contract to be awarded is made to the Authority, the equal opportunity and diversity policies of the prospective contractors are rigorously examined to ensure transparency and that the promotion of equality of opportunity is evident.

4. Detailed diversity and fairness related questions are included in our commercial questionnaire so our RR(A)A responsibilities are made clear to all our potential and actual contractors. Though external providers are not responsible for meeting the general duty, the MPS can influence through the setting of measurable contract conditions. In this way, the MPS can drive forward race equality within other organisations by ensuring they are aware of the requirements and the benefits it will bring them and their employees.

D. Financial implications

There are no immediate financial implications arising from the report but any increased cost of promoting diverse suppliers and staff training costs would need to be flagged and considered accordingly.

E. Background papers

• Procurement Services Diversity Policy

F. Contact details

Report author: Anthony Doyle, Director of Procurement Services

For more information contact:

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

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