Procurement Strategy

City of York Council 2021 - 2024

Vision

To work together with partners and suppliers to develop effective solutions that deliver quality, value for money goods and services and deliver broader economic social and environmental outcomes.

Introduction and context

This strategy sets out the Council’s ambitions for procurement and the actions necessary to achieve those ambitions.

All aspects of the public sector are continuing to face challenging times due to reducing funding and increasing demand.  It is therefore necessary that we use our resources effectively and that the Procurement Strategy helps to deliver the Council priorities of:

· A prosperous city for all

· A focus on front line services

· A council that listens to residents

A commitment to sustainability, fairness and the development of our local economy will be built into our purchasing decisions. We will develop a mixed economy of delivery, with the Council commissioning services from those who are best placed to deliver them effectively, whether that is the private sector or community and voluntary sectors. 

Economic considerations must be balanced with the need for environmental and social outcomes and this must all be done within the bounds of procurement legislation.  We can build in measurement of broader social outcomes or carbon reduction targets alongside more traditional measures of cost and quality.

The council is strengthening its relationship with local people and its communities, building on the assets and strengths within the city.  The procurement strategy will need to reflect this new, evolving relationship with citizens and enable innovative solutions that capitalise on our commitment to be a One Planet Council.

Commercial Procurement will support the delivery of the Council plan by:

· Focussing expenditure on our priorities whilst ensuring that all specifications are driven by customer requirements

· Protecting vulnerable people through sourcing appropriate levels of quality goods and services

· Delivering excellent value for money

· Supporting the local economy

· Collaborating with other public sector organisations to ensure maximum benefit for York

· Protecting our local environment by ensuring we source sustainable goods and services and build carbon reduction targets into our contracts

Commissioning and Procurement

Commissioning is the local authority’s cyclical activity to assess the needs of its local population for care and support services that will be arranged by the authority, then designing, delivering, monitoring and evaluating those services to ensure appropriate outcomes.  Effective commissioning plays a central role in driving up quality, enabling people to meaningfully direct their own care, facilitating integrated service delivery, and making the most effective use of the available resources.

Procurement is the process we use to buy work, goods or services from external companies to deliver agreed outcomes.  It includes the activities involved in establishing the fundamental requirements, sourcing activities such as market research and supplier evaluation and the negotiation of contracts.

Our commissioning and procurement activities will work in an integrated way, informed by our business intelligence, and will be actively shaped and designed by our service users and partners. Specialist commissioning skills will be augmented by specialist procurement skills to achieve the best results and outcomes for our residents.

The council’s current operating model is organised around a central procurement unit which is based in the Customer and Corporate Services directoratecorporatecentre and contracting / commissioning functions that sit within two service Directorates – Health, Housing and Adult Social Care and Children, Education and Communitiesthe People Directorate.  These arrangements recognise the statutory responsibilities of the Corporate Director for People Director of Children Services and the Director of Adult Social Services and reinforce accountability for outcomes in these critical service areas.

Compliance and transparency

Public procurement operates in a highly regulated environment that is governed by legislation and policies set nationally through statute and locally by the Council’s Contract Procedure Rules and Financial Regulations.  In addition, the Council is also required to fulfil the obligations of the Transparency Code 2015.

We will pro actively monitor compliance and will ensure transparency by publishing a contracts register.  The Council is committed to being open and transparent in all aspects of procurement.

Where the aggregate contract value exceeds £500k this is a key decision and must be entered onto the Forward Plan and treated as a key decision.  The Executive has delegated authority to the Director of Customer and Corporate ServicesChief Finance Officer to approve routine procurements, as defined in the Contract Procedure Rules.  This requirement is for extensions to existing contracts as well as new procurement exercises.

The Council’s procurement activity will be driven by 6 key objectives;

1. Commissioning and Procurement

We will work in an integrated way, informed by our business intelligence, and will be actively shaped and designed by our service users and partners. This strategy will link closely to the Councils Commissioning Strategy, currently being developed.

Within Social Care, personalisation is responding to individuals needs, wants and hopes rather than fitting people into existing services and ensuring that they have the means and support to live a full life and can contribute to society.  Procuring compliant and cost effective services, whilst at the same time delivering choice and control for residents, creates a challenge for the Procurement Strategy.  This can be overcome by engaging with stakeholders and ensuring a focus on outcomes.

2. Delivering Quality & Value for Money

We will deliver value, both financial and social, ensuring that the maximum benefit is achieved throughout the life of the contract and that whole life costs and broader social benefits are delivered throughout the procurement process.

We will manage contracts and supplier relationships to ensure the benefits of contracts are delivered throughout the lifetime of the contract.

We will not operate approved supplier lists but may, where appropriate, use framework agreements. Decisions will be taken on a case by case basis to ensure fairness and transparency to all potential providers.

3. Social, Economic & Environmental Benefits

We will use procurement to achieve social, economic and environmental outcomes, through the One Planet Council framework. We will carefully manage the risks, balancing compliance and control with the potential to innovate and achieve more significant savings and social outcomes. 

We will embed the principles of the Single Equalities Act in all tenders and contracts. Our suppliers will have to support our commitment to equalities, be responsive to the needs of our communities, ensure services are accessible to all groups and appropriate to those with differing needs and commit to developing a diverse and inclusive workforce.

We will require all our suppliers to demonstrate their commitment to maintaining and promoting high ethical standards, reminding them of their duty of care in the use of public funds.

We will ensure that opportunities to promote and encourage local economic growth are built into appropriate contracts whilst ensuring compliance with legislation. When contracting with national/international suppliers we will encourage them to engage local providers in the delivery of services.

We will ensure that (where relevant to the subject matter of the contract) sustainability criteria are built into our procurements to tackle . climate change and reducewaste.

The requirement for payment of the Foundation Living Wage will be explicitly made in the tender documentation, and the contract conditions that are issued with the tender, where permissible within the law.

4. Developing our markets

We will work with existing and potential suppliers to ensure there is market capacity to deliver our requirements no matter what size of organisation we are procuring from. We will identify where market capacity may be weak and where new markets may need to be developed in order to deliver against our requirements and to support the creation of . new businesses, new jobs and new skills.

5. Collaboration

We will collaborate with public sector partners to share best practice and seek out to maximise financial benefit and avoid duplication.  CYC will explore new models of service delivery and will work with communities and suppliers to achieve this.

We will encourage a diverse range of suppliers to work with us to deliver social value and allow opportunity for suppliers without an existing relationship with us to have the same opportunity as incumbents.

6. Effective Planning

We will prepare detailed forward plans of procurement activity which will set timescales and resources to enable us to combine our own spending power, collaborate with others and engage the market and our communities to explore innovative solutions.

All of these principles will be delivered by adopting the following commercial procurement approach.

· Demand management

We will only buy what we really need and ensure that the level of quality we specify is good enough to do the job over time but not better than we need. We will eliminate unnecessary spend, remove waste and reduce the overall amount of money being spent on goods and services.

· Category Management

The Council operates a category management approach, within a centralised procurement function where commissioning activity is delivered by individual service areas.

By grouping together products and services according to their function (e.g. travel, construction etc) across the whole Council (or in collaboration with other organisations) we can manage the overall spend and maximise our buying power and achieve economies of scale.

This does not mean that we just let a small number of huge contracts but that we ensure tenders are structured in a way that provides a level playing field for all potential bidders irrespective of size.

· Supplier Relationship Management

We will build strong, long term, positive relationships with our suppliers across all sectors, not just when actively procuring goods and services but also when considering alternative delivery models.

We will establish strategic relationships with suppliers to ensure that both parties are delivering against the commitments within the contract and to embed continuous improvement practices throughout the contracted period and beyond. Effective engagement with suppliers will also inform future specifications to ensure we are approaching the market with requirements that meet our needs and are commercially attractive to the market, and therefore generate value for money contracts that can be successfully delivered.

Our procurement activity will be driven and informed by engagement with customers and our partner organisations.

· Contract Management

By managing contracts from the point of award until expiry, we will be able to ensure we get what we pay for and that suppliers perform well and consistently over time.

· E-procurement

The Council recognises the importance of electronic procurement in delivering lower transaction costs, improving visibility of contract opportunities to the supply market, making procurement activity visible to all and providing a clear audit trail.

All procurements over £100k are required to be conducted using the corporate procurement portal.  Support is given to small businesses on how to use the portal.  Purchasing cards are used for low value purchases where relevant, but the majority of spend will be commissioned via the Council’s electronic purchase ordering system.

· Personalisation

Good commissioning is person-centred and focuses on the outcomes that people say matter most to them. It empowers people to have choice and control in their lives and over their care and support and ensures prevention and early intervention strategies improve outcomes for local people.

The Council will promote flexible, innovative person-centred models of care and ensure that there is a robust infrastructure in place to support micro-commissioning by people, through personal budgets, direct payments, Individual Service Funds and other approaches.   We need to assure ourselves that our commissioning and contracting processes demonstrably help to prevent or delay people’s care and support needs and support them to achieve their personal outcomes and an improved quality of life.

· Making it easy to do business with us

Our supplier and contract management system enables suppliers to update their information and load copies of relevant certificates and policies (e.g. insurance and health and safety) to help simplify the tender process and remove multiple requests for the same information each time we are tendering. This will reduce the time required to tender for all suppliers but especially SMEs and VCS providers.

By providing potential suppliers with accurate information about our requirements we will simplify and coordinate procedures for doing business with the Council. We will work collaboratively to agree effective contract monitoring arrangements.

We commit to making all procurement activity fair and transparent and encourage a diverse range of providers to bid for work irrespective of size and regardless of value to help improve supplier diversity, innovation and resilience..

All CYC staff involved in commissioning and procurement will be trained to ensure that we have a consistent approach to all our procurement activity.

A suite of standardised documents and contracts will be developed for use across the Council to ensure consistency and to make the procurement process more accessible to suppliers.

Deliverables

We will:

· Have a rolling 12 month Procurement Plan

· Ensure value for money in all our spend on goods and services

· Continue to reduce our off contract spend

· Provide appropriate training to all relevant staff

· Build a skilled professional procurement and commissioning network – internal and external

· Actively collaborate with partners on procurement activity

· Contract with a wide range of organisations from different sectors

· Performance manage and realise the benefits of all contracts

· Improve relationships with suppliers, ensuring small businesses have the opportunity to bid for council contracts and increasing the proportion of council spend with local businesses