Procurement strategy update

Report: 4
Date: 16 January 2009
By: Treasurer and Director of Resources

Summary

The Authority approved the joint MPA/MPS procurement strategy in December 2003, which was subsequently revised and updated in 2007. Following on from the review of Standing Orders, including the Contract Regulations, which took place last year it was agreed that the current strategy should be reviewed. This paper intends to update members on the review and seek their views on key elements of the strategy.

A. Recommendations

That members

1. Note the process and timetable for reviewing the current procurement strategy.
2. Comment on the proposed structure of the strategy and key aspects of the strategy.

B. Supporting information

1. In recognition of the importance of having a procurement strategy in place , the Authority approved the MPA/MPS procurement strategy in December 2003, this was subsequently revised and updated in 2007. However during last year’s review of Contract Regulations it was agreed that the existing strategy should be reviewed to ensure the linkages between the Contract Regulations and procurement strategy are clear, the strategy includes the various approaches to procurement the Service may use in the future, and that the roles and responsibilities of the Authority and Service are made explicit.

2. As the strategy is intended to set the strategic direction for procuring goods and services for the next three years it is important that members are involved in developing the strategy at an early stage, and prior to the draft procurement strategy being presented for approval later in the year.

3. The strategy will include the benefits that can be delivered by having a fully effective strategic Procurement team in place that has a key role to play in:

• Keeping Londoners safe from harm;
• Driving radical change to the business;
• Supporting the strategic direction and corporate priorities of the organisation;
• Supporting delivery of effective operational policing;
• Driving innovation and competition in the market
• Providing broad commercial expertise to business groups, including support with bids/partnership working;
• Promoting the MPS as an employer of choice for procurement professionals;
• Viewed as leaders in Public sector procurement
• Develop category strategies in partnership with key customers;
• Collaborate with other forces and key public sector organisations

4. Members are therefore being asked to discuss and agree the following areas:

• Structure of the strategy
• Purpose of the strategy
• Procurement objectives
• Procurement principles
• Key actions for 2009-12

Structure of strategy

5. Attached at Appendix 1 is the proposed high-level structure of the procurement strategy. This is based on the Chartered Institute for Public Finance and Accountancy (CIPFA) guide for developing a procurement strategy, which is viewed as being good practice.

6. The strategy includes new areas such as:

• Procurement principles – which underpin the procurement objectives
• The respective roles and responsibilities of the Authority and Service
• Financial context
• Approach to procurement
• Methods of procuring

Purpose of the strategy

7. It is vital that we are clear about the purpose of the strategy from the outset and that we clearly articulate this in the strategy. Therefore it is proposed that the following paragraph is included in the executive summary.

8. The overall aim of the procurement strategy is to set a clear framework for all procurement activity, which reflects the MPA Corporate Priorities and the Corporate Objectives of the MPS. Alongside the MPA Standing Orders (which include Contract and Financial Regulations), the Strategy provides a context for how goods and services will be procured, whilst achieving value for money.

9. The strategy will also communicate clearly to all key stakeholders, operational managers, departmental heads, procurement specialists, users and suppliers and contractors the Authority and Service vision for the way forward on procurement and to allow progress on this to be transparent and measurable.

Procurement objectives

10. The following objectives are proposed as key goals for the Authority and Service for 2009/12:

• Ensure that the procurement process is clear, transparent and focused in the first instance on the principles of competition and achieving value for money;
• Ensure that procurement options are chosen on the basis that they directly support the corporate priorities and objectives of the MPA and MPS;
• Align strategic procurement to the business planning process, particularly the medium term financial and capital strategies to assist Business Groups deliver their efficiency targets;
• Maintain an appropriate balance between innovation and risk and cost and required service levels;
• Stimulate competition and build supplier capability where necessary;
• Collaborate and partner with other forces, GLA Group and other agencies where appropriate to obtain Best Value for the MPS;
• Conduct procurement in accordance with aims of the MPA and MPS Responsible Procurement Policy;
• Reduce the number of suppliers to improve supplier relationships and the ability to monitor and manage them professionally;
• Improve compliance and control through more effective procurement governance.

11. Members are asked to comment on the objectives above, and to make suggestions where appropriate to ensure the strategic direction for procurement fully reflects the views of the Authority.

Procurement principles

12. Underpinning the procurement objectives are a set of principles which are intended to reflect the Authority’s overall approach to procurement. These are intended to ensure amongst other things the Authority and Service continue to deliver value for money and drive costs down, that decisions are compliant with all regulations and that staff have the right capability and competency levels.

13. The following principles are proposed for comment and consideration.

• Drive business benefit and competition
• Regulatory compliance
• Accountability and Transparency
• Effective governance
• Capable, competent and adequate resources
• Use of technology to minimise the cost and complexity of procurement processes
• Effective engagement between central procurement and local business units
• High standard of professionalism and application of best practice procurement
• Effective risk assessment and management
• Continuous improvement
• Benchmarking to demonstrate value for money

Actions

14. To ensure that the objectives are implemented effectively the following key actions are being suggested:

• Develop and implement Strategic Procurement Plans to identify and deliver efficiencies and savings
• Develop Members strategic role in ensuring there are quality outcomes from procurement decisions and actions
• Continue to establish a skilled and competent central procurement team, supported by expertise at a local level throughout the Service. Undertaking a skills audit followed by a programme of training and awareness
• Deliver agreed savings and efficiencies utilising category management and supplier category management methodologies, reporting outcomes to the authority
• Developing and maintaining a comprehensive database of approved contracts to facilitate contract compliance
• Deliver the responsible procurement aims of the MPA and MPS
• Develop a procurement plan to support Service commitments in relation to the Olympics and Paralympics.
• Further develop and implement an effective performance management framework

15. Taking into account discussions that will have been had with regard procurement objectives, members are asked to consider the above and to make suggestions where appropriate. The final actions will then be incorporated into an implementation plan, which will support the overarching strategy.

16. Finally members are asked to consider how they would like to monitor delivery of the strategy going forward.

Next steps

17. Following on from today’s meeting the intention is to start to add detail to the broad framework attached at Appendix one and to incorporate members views. The draft strategy will then be discussed with representatives from business groups within the MPS to ensure their views are properly considered. A final strategy will then be presented to the Resources Sub Committee in March for approval.

C. Race and equality impact

In line with the GLA responsible procurement policy the Authority and Service will continue to promote and implement responsible procurement.

D. Financial implications

There are no direct financial implications associated with this report.

E. Background papers

None

F. Contact details

Report author: Annabel Adams, MPA and Anthony Doyle, MPS

For more information contact:

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

Appendix 1

Proposed structure

Foreword

1. Executive summary

1.1 Purpose
1.2 Procurement Objectives
1.3 Procurement Principles
1.4 Key Actions

2. Introduction

2.1 Metropolitan Police Authority (MPA)
2.2 Metropolitan Police Service (MPS)
2.3 Roles and Responsibilities (MPA, Procurement Services, Business Groups)
2.4 Definition of Procurement
2.5 Background
2.6 Context e.g. Expenditure Profile, budget breakdown, supplier numbers, etc.

3. Procurement strategy including

3.1 Vision
3.2 Procurement Objectives
3.3 Procurement Principles
3.4 Approach to Procurement
3.4.1 Category Management
3.4.2 Collaboration
3.4.3 Supply Chain Management
3.4.4 Responsible Procurement
3.4.5 Use of technology
3.5 Procurement Models
3.6 How Success will be evaluated

4. Action plan

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