Procurement Policy

“Procurement” is the process of acquiring supplies, works and services, covering both acquisitions from third parties and from in-house providers. The process spans the whole cycle from identification of needs, through to the end of a services contract or the end of the useful life of an asset. It involves options appraisal and the critical “make or buy” decision, which may result in the provision of services in-house in appropriate circumstances.

In the context of a procurement process, obtaining “best value for money” means choosing the bid that offers “the optimum combination of whole life costs and benefits to meet the customer’s requirement”. This is not necessarily the lowest initial price option and requires assessing the ongoing revenue/resource costs as well as initial capital investment. In setting out the business need, the Council can include social, environmental and other strategic objectives as part of its requirements and is defined at the earliest stages of the procurement cycle. The criterion of best value for money is used at the award stage to select the bid that best meets the requirement.

Procurement is also about making choices.

National Procurement Strategy

The recently published National Procurement Strategy sets out how central and local government, working together with partners from the public, private and voluntary sectors should go about improving local government procurement. It was written jointly by central and local government and involved many other partners. It identifies where some Councils have already found ways to deliver significantly better services at lower costs through streamlining their procurement, working in partnerships, redesigned the delivery of services, shared ‘back office’ systems and pooled their buying power. The national strategy sets out a route map of how government expects Councils to improve service delivery and value for money through better procurement. In developing the Council’s own strategy it has sought to put in place the means by which the objectives of the national procurement strategy can be delivered.

The objectives that government are trying to achieve by 2006 for all Councils are set out below. Torbay Council’s  Procurement Strategy should be the means by which those national as well as our own local objectives are delivered.

• Delivering significantly better quality public services that meet the needs of all local citizens through sustainable partnerships they have forged with a range of public, private, social enterprise and voluntary sector organisations
• Developing and operating a mixed economy of service provision, with ready access to a diverse, competitive range of suppliers providing quality services, including small firms, social enterprises, minority businesses and voluntary and community sector groups
• Achieving continuous improvement from all categories of procurement expenditure, by putting in place an appropriate procurement strategy and the necessary resources for implementation
• Obtaining greater value for money by collaborating with partners at local, regional, national and European levels
• Realising economic, social and environmental benefits for their communities through their procurement activities
• Demonstrating equality and opportunity for businesses, service users and Council staff
• Stimulating supply markets and using their buying power creatively to drive innovation in the design, construction and delivery of services.

Local Context

Improvement through best value is one of the organisational objectives in support of the Council priority of transforming Torbay into an excellent authority. Torbay Council has now developed the Procurement Strategy, alongside the establishment of a “Centre of Excellence” for Procurement. This approach is in keeping with the National Procurement Strategy, government circulars 10/ 99 and 03/03 (statutory guidance on best value, competition and procurement) and the widely accepted recommendations of the Byatt Report on Local Government Procurement.  This report specifically suggests that each Council should have "a clear procurement strategy" at a corporate level. The strategy will co-ordinate cross-directorate plans to deliver procurement reform as a corporate priority. It is important that any strategy makes clear reference to the Council’s overall vision and priorities, and that the aims of the strategy have clear links to organisational and service priorities. To achieve this the key procurement objectives have been clearly linked to the strategic vision for the Council.

As Council services become more dependent on external suppliers it is increasingly important to develop a clear strategy for how these externally provided resources are selected, acquired and managed. Even where services are currently provided in-house, a range of supplies, works and services are procured externally in order to support service provision.

Tendering for Goods & Services

Other preferred suppliers of goods and services are chosen via a competitive tender exercise.  All contracts over £154k have to comply with EU rules e.g. Lyreco (stationery) awarded via tender advertised in the Official Journal of the European Union (OJEU) in 2004.

Aims of the Strategy

This strategy has been developed to assist the Council in achieving the objectives and milestones contained within the National Procurement Strategy.  In addition it is aimed at promoting effective procurement across the whole organisation.  This flexibility is required to respond to the rapidly changing environment around public sector procurement and to allow learning from our own experiences and from the experience of others. Technology currently associated with e-procurement and the implementation of the CedAr financial system, for example, demonstrates the need to build flexibility into this strategy.

The purpose and aims of this strategy are:

• To ensure that procurement strategy reflects the Council’s core values, corporate aims and objectives
• To secure commitment to effective procurement from Members and officers at all levels throughout the organisation
• To provide a corporate focus to procurement, thereby assisting co-ordination of procurement activity and helping to achieve optimum resource allocation whilst avoiding duplication of effort
• To map out the way forward on reforming and continuously improving the Council’s procurement function
• To facilitate and assist managers with monitoring and assignment of budgets, tasks and targets to meet the key procurement objectives identified
• To draw together, in one document, all the existing elements of a procurement strategy developed in response to 'Best Value'
• To encourage long-term thinking and commitment to strategic procurement issues
• To identify and promote the benefits of strategic procurement

The strategy is not intended to be a procurement manual.

Procurement Strategy