Awards Winners and Finalists

The Society of Procurement Officers in Local Government is pleased to announce
the Winners and Finalist for its SOPO Awards for Outstanding Achievement in Procurement 2011 under four categories

County Council

Winner: Suffolk County Council

This submission detailed the innovative use of ‘concept viability’ in the competitive dialogue process for the award of a £607 million Waste Treatment PFI contract for the design, build, finance and operation of an energy from waste facility treating 269,000 tonnes of municipal waste a year.

The European Landfill Directive required all waste disposal authorities to find alternatives to landfill at the same time, raising concerns regarding the market’s ability to deal with such a huge surge in demand. Suffolk County Council needed to agree a strategy that would not only be fit for purpose in achieving their objectives but also stand out from the crowd and appeal to potential bidders.

The project undertaken by the council was delivered on time, to budget and significantly within the affordability threshold of the original business case. It will save taxpayers in Suffolk between £357 million and £438 million in avoided costs over the course of its operation and will produce 20MW of electricity, enough to power 30,000 homes. It increases recycling and achieves a diversion from landfill of over 95%.

Others shortlisted:

Northumberland County Council

While recognising the many drivers for efficiencies in procurement, Northumberland County Council also recognised that they had a responsibility to help develop and sustain the economy of one of the poorest regions of the UK, using public procurement as a tool.

The aim of their project was to work across the procurement and regeneration functions of the local authority, supporting the local economy through assisting local businesses to tender for county council contracts and acting as a business support vehicle to enable businesses to develop and grow.

This initiative has seen Northumberland businesses win £15 million worth of direct contracts while sitting on frameworks worth another £10.6 million.

Over 365 businesses, social enterprises and community and voluntary groups have also received quality support from the authority, and more than 110 jobs have been safeguarded or created from direct contract wins.

Surrey County Council

Surrey County Council serves an area with well over one million residents and has a total spend on goods and services in excess of £650 million and a revenue budget of £1.2 billion.

The council’ s submission was a detailed examination of the journey the procurement and commissioning service has taken from being a group of buyers to being a professional operation contributing greatly to the savings and efficiencies which have delivered improved outcomes and value for money services to residents, thereby helping the team make a successful contribution to the objectives of the authority.

The procurement function developed a vision based upon four principles:

• developing commissioning, category management and partnership
• transforming service delivery
• developing their people
• serving their customers

Against a medium-term financial plan that required £60 million savings in 2010-11, the procurement and commissioning service was responsible for a contribution to this total of £21.5 million.

They have set a £30 million savings target for 2011-12, with £24 million already delivered.

Single Tier (Unitary Council)

Winner: Coventry, Solihull and Warwickshire Sub-Regional Shared Procurement Partnership

The authorities working together in this shared procurement service do so voluntarily for the benefit of the sub-region. They state that they have not ‘wasted’ large sums of money, time and effort on complicated legal structures. There is also total support for the service from members and authority chief executives.

The upper-tier authorities have an agreed three years savings plan which details categories and anticipated savings figures. In the first year the partnership delivered £7.3 million of savings against a target of £2.6 million, and in the first six months of financial year 2011-12 it delivered £3.7 million against a target of £2.09 million.

The partnership is not an exclusive club and anyone who wants to work with it is welcomed. The partnership continues to proactively participate in regional and national procurement activity to ensure wider collaborative opportunities arise.

Others shortlisted:

City of York Council

The major financial challenge faced by the City of York presented the council with a key opportunity to transform its procurement activity and to position procurement at the forefront of a new approach to the council’s spend based on professionalism, commercialism and value for money.

The authority set up a ‘commercial hub’ at the very centre of the organisation with the objective of not only delivering savings and greater value for money but also putting in place the necessary infrastructure to enable the wider buying community to both buy compliantly and work with their multitude of suppliers to bring about innovation in delivery.

In a short space of time the commercial hub, working in partnership with service departments, has made significant improvements through category management, better use of technology and improved governance based on clear mandates with full business case and approvals, while at all times ensuring the end result is the right one for the end user.

Enfield Council

Enfield is a large outer London borough with a third-party spend of approximately £350 million a year. Procurement in the authority is devolved with the corporate procurement category management function providing dedicated advice and guidance through a team of three.

The submission detailed how Enfield Procurement developed a model of category management which took advantage of the benefits of the devolved procurement model, particularly the expertise and experience of the operational teams, while ensuring that procurements satisfied the authority’s wider requirements as well as those of its individual departments.

Their model, entitled ‘Operation Rubix Cube’, was sponsored by the authority’s Strategic Procurement Board with the key objective of maximising Enfield’s spending power by supporting cross-council or multi-council procurement projects. Substantial savings have been achieved already with a potential for a further £1.5 million in phase two of the project.

Non-Unitary District / Borough Council

Winner: Hampshire Districts and Boroughs Procurement Partnership

This partnership is a virtual hub comprising the procurement officers from the 15 councils within Hampshire.

The submission outlined the development of collaborative procurement across the councils, from an initial informal officers’ group to a more formally structured group that operates under agreed terms of reference governed by a Memorandum of Understanding approved by all the councils.

The partnership has undertaken a programme of procurement projects using combined spend to leverage cost savings and improve effectiveness, with chosen projects based on data gathered through a central spend analysis of all the participating authorities. Individual projects have nominated leads for various districts and boroughs.

The virtual hub approach, as opposed to a formal shared services hub, has produced significant cashable savings of approximately £2 million since November 2008, and it is hoped that this example proves that significant savings and efficiencies can be achieved without the need for high levels of financial investment and restructuring.

Others shortlisted:

Worcestershire and Warwickshire Districts Procurement Group

The six Worcestershire districts – Bromsgrove District Council, Malvern Hills District Council, Redditch Borough Council, Worcester City Council, Wychavon District Council and Wyre Forest District Council – having realised that there was no other relevant procurement forum for them to join, decided to form their own group to network and identify opportunities to collaborate on suitable procurements and in doing so save money and time. Since then the group has expanded to include two of the Warwickshire districts – Warwick District Council and North Warwickshire District Council – and developed close working links with the West Midlands Regional Improvement and Efficiency Partnership.

The group has managed by practical demonstration to win support from participating authorities that devolved budgets and silo culture can be overcome, and by doing so has produced savings for these disparate services releasing time which they can then use to concentrate on their core activities.

The group works closely with SMEs providing guidance on where to find business opportunities and in the completion of our sometimes onerous documentation. It has harmonised tender thresholds across the districts and adopted a standard PQQ, RFQ and ITT, and is now looking to standardise all terms and conditions of contract.

Hambleton and Richmondshire District Councils

In August 2010 Hambleton and Richmondshire District Councils created a new shared procurement service for the two authorities.

The aim was to:

• address identified weaknesses in the quality of the procurement services in both authorities; and
• deliver the required cash and service efficiency savings.

The authorities established a single procurement team which now deals with 46% of the collective annual spend of the two authorities, achieving substantial savings – up to 94% in some areas.

The team now leads on several regional and sub-regional procurements and works closely with both suppliers and elected members to provide innovative solutions and achieve desired outcomes. This team has demonstrated in a short space of time the role procurement can play in helping authorities achieve their strategic objectives.

Wider Public Sector (eg Police, Fire, Consortia, etc)

Winner: Eastern Shires Purchasing Organisation (on behalf of Pro5)

The submission detailed the innovative, flexible and consultative approach adopted by Eastern Shires Purchasing Organisation (ESPO) in the establishment of the MSTAR (Managed Services for Temporary Agency Resources) framework. This was a truly national collaborative project ‘by the sector, for the sector’.

With a value of between £2 billion and £4 billion over its four-year duration, MSTAR offers real potential to improve the way in which local government, education and the wider public sector procures temporary staff. In its first five months, the framework saved 12 customers in the region of £1.49 million – approximately 8% of total spend.

This project proves that local government buying authorities have the capability and expertise to deliver large-scale complex procurements of this nature, having taken responsibility for the procurement following discussion among the local government collaborative group of procurement professionals created in the wake of central government’s Operational Efficiency Programme.

The framework is already being used by authorities in many regions of England, including London, the South West, Lincolnshire, Nottinghamshire, the North East, Suffolk and Staffordshire, with early indications that between 20 and 30 authorities will access the framework in its first six months with even more set to follow.

Others shortlisted:

North East Procurement Organisation

This entry recognised the successful set-up and launch of the new North East Procurement Organisation (NEPO) and the progress achieved in its first year.

In 2009 the North East decided to transform the role and structure of the then North Eastern Purchasing Organisation from a consortium which since 1976 had procured commodity goods and services for local authorities in the region, into a strategic collaborative procurement organisation focused on high-spend areas such as social services, construction and professional services.

In order to achieve this NEPO merged with the collaborative procurement agenda of the North East Regional Improvement and Efficiency Partnership, combining the procurement engine of the consortium with the RIEP’s category management, spend analysis and supplier development programmes.

There is a high level of innovation in the interrelationships between NEPO and the region’s procurement teams, delivering solutions in the high-spend areas mentioned.

NEPO is on track to achieve its savings targets and has saved an additional £3.2 million in its first nine months.

Procurement Lincolnshire

Over the next four years residents of Lincolnshire’s social housing can expect to see significant improvements in their living conditions thanks to the success of a new housing stock framework. This framework expects to generate savings of £4.6 million over its life which will be reinvested into Lincolnshire’s Decent Homes Programme.

The project represents a major breakthrough in collaborative working among the four Procurement Lincolnshire partners who still have social housing stock, who have worked closely with the service to ensure the success of the framework.

The project was split into nine lots ensuring that local businesses and SMEs had significant opportunity to bid. Reducing the sizes and values within the framework meant SMEs and local suppliers could effectively compete against the larger national suppliers.

The success of this framework has made authorities and suppliers more receptive to engaging with Procurement Lincolnshire and has proven to be the catalyst for collaborative working between the partner authorities.

On behalf of the SOPO National Executive Committee, we would like to congratulate all the finalists and urge all SOPO members to submit an entry for 2012.