National Library of Scotland Procurement Strategy period September 2012 September 2014 Aims This document aims to identify NLS strategy for the development and continued improvement of procurement systems, processes and procedures in support of the Scottish Government (SG) Procurement strategic objectives. These are: Capability, Competitiveness, Capturing Savings and Benefits, Coverage, Collaboration, Corporate Social Responsibility and Communications. This strategy outlines the key approaches required by NLS to achieve these procurement aims. Background Procurement is the process adopted for the purchase of goods, services and works from external suppliers. The procurement process begins when a need to buy something is identified and will generally end after the contract is awarded. Contract management will be carried out throughout the duration of the contract. Contract management is usually carried out by the business area for whom the contract has been awarded who in many cases will be the Delegated Procuring Officer (DPO) for that contract. What we procure and how we procure it is becoming increasingly important in our need to achieve greater efficiencies in a time of economic constraints as well as meeting the client s/user s demand for high quality and effective services. NLS, as an NDPB, also has an obligation to comply with European Union (EU) principles of transparency, equal treatment and non-discrimination, proportionality and mutual recognition, as instructed through Public Contracts (Scotland) Regulations 2012 and the EU Remedies Directive. Procurement is a devolved responsibility within NLS. DPOs authorised to procure goods, services and works need to do so within agreed policy and procedural parameters fully endorsed by NLS Executive Leadership Team (ELT). NLS procurement policy was endorsed by NLS ELT on 30 June 2012. NLS procurement policy, procedures and guidance published on the intranet reflect current public policy and guidelines as advised by Scottish Procurement & Commercial Directorate (SP&CD). SPCD Policy Handbook 1
Procurement principles The procurement strategy is based on a number of procurement principles as described below: The National Library of Scotland must provide value to the public. All procurement must comply with EU procurement principles of transparency, equal treatment and non-discrimination, proportionality plus mutual recognition. Clear procedures will be provided to facilitate compliant procurement. The roles of the Budget Holder and the Delegated Procuring Officer must be kept separate; Procurement contracts must be issued in writing and awarded by a DPO with a relevant Delegated Purchasing Authority (DPA); Contracts should be awarded on the basis of value for money and through genuine and effective competition Non Competitive Action (NCA) is only granted in exceptional circumstances. NLS must achieve greater value for money by collaboration with other National Collections and appropriate partners. NLS must obtain greater value for money through the use of appropriate procurement strategies. We must investigate the use of National or Sectorial Collaborative contracts before entering into a new procurement process. NLS has to achieve continuous improvement in all categories of procurement expenditure by putting in place mechanisms for the measurement of performance and by supporting these mechanisms. Procurement activity and the activity of those awarded public contracts must conform to robust ethical standards and contribute fully to sustainable development. Within the NLS, we strive to achieve value to the public and value for money. Within the overarching goal of achieving value for money there are three main pillars delivering savings and value for money, buying sustainably, improving the quality of public services and ease of access for suppliers. There are seven areas which relate to these three pillars, which will form the backbone of this strategy document: Capability Competitiveness Capturing savings and benefits Coverage Collaboration Corporate social responsibility, and Communication. 2
Each section of this strategy document begins with the SP&CD definition of the seven strategic objectives. For the purpose of this strategy document the Procurement and Project Unit will be referred to as the Procurement team. Capability 'To ensure that procurement activity and commercial decision-making is conducted to the highest possible standard; efforts are not duplicated; and that resources are allocated where they are most needed.' NLS Procurement team will continue to provide information to the ELT. The ELT will continue to provide support for the Procurement team, including the implementation of this strategy, by providing resource and communications as appropriate. The Procurement and Project Manager will continue to be responsible for managing procurement activity and processes within NLS. Non-conformant procurement might result in formal challenges; complaints may be brought against NLS alleging a breach of these rules. The consequences of a successful challenge may, depending on the nature of the breach, result in NLS being fined, the duration of the contract being shortened, award of damages against NLS or reputational damage. As a means of mitigating these risks NLS will provide the necessary internal or external resources and ensure that professional external expertise is sought should the need arise. NLS will continue to ensure that all DPOs are given formal authority annually, by means of a DPO letter, to procure goods, services or works prior to the commencement of a procurement process. During the period this authority will be developed to incorporate at least two levels of authority, (below 50k and above 50k) taking cognisance of the procurement route journey and associated procurement risk. Consideration will also be given as to how these authority limits can dovetail with erequest, NLS' online ordering system. NLS will aim for all DPOs to be appropriately trained in NLS procurement policy and procedures. EU procurement training will be available annually for staff within the Procurement and Estates teams as well as for DPOs planning a procurement exceeding EU thresholds. 3
Professional staff within the Estates team will lead on all works / construction related procurement processes. Professional staff within the IS team will assist with all information and communication technology related procurement processes. We will continue to ensure that procurement processes are reviewed annually, addressing any significant findings directly or by building into our future action and improvement plans. Forward job plans for Procurement staff will continue to reflect the procurement strategy plus the associated action and improvement plan, and will be updated annually. We aim to develop a methodology for capturing benefits and savings by 31 March 2014. We will continue to monitor procurement outcomes, produce and widely share procurement management information, including quarterly and annual Best Practise Indicators (BPIs) reported to the ELT. We will also continue to support the SP&CD work in capturing benefits and savings. The contracts database will be bedded in and developed further to Procurement and Contract Managers. We will consider the creation of a procurement ICT strategy to underpin the automation of procurement processes, and will investigate the potential for SharePoint (the system underpinning the Intranet) to support this. We have begun to address risk management during sourcing, with the Procurement team now conducting checks on supplier viability, and will continue this process ensuring all suppliers invited to participate in tenders are bona fide. We will consider formalising the processes around demand management, supplier management, and the development of commodity strategies. Competitiveness 'Scotland is seen as a good place to do business by making it as easy as possible to compete for public sector contracts, particularly for Small, Medium Enterprises (SMEs).' We will maintain our Buyers Profile on Public Contracts Scotland. We will continue to use the Quick Quote process for low value / low risk tenders, and will ensure that all contracts which fall below the EU Tender advertising threshold for goods, services and construction but are above the advertising threshold as advised in SPPN 4/2009 (or as amended) will be advertised using www.publiccontractscotland.gov.uk unless there is a strong business case against advertising. We are committed to the transparency of the procurement process and the equal treatment of all prospective suppliers within NLS procurement activity. In this respect we will adopt the standard Scottish Government Prequalification Questionnaire (SPQQ) for all advertised contracts and objectively assess the capacity of organisations and suppliers to deliver our requirements. Further, during 2012/13 we will aim to publish lists of forthcoming tenders in PCS Tender and other business journals as appropriate. We will continue to support events for suppliers wishing to understand our processes in more detail. By 31 March 2013 we aim to have processes and procedures in place to allow all tendered procurement, including works related procurement, to be tendered and evaluated on the basis of the Most Economically Advantageous Tender (MEAT). Capturing savings and benefits 'Procurement across the public sector delivers further, real and lasting benefits on the ground.' The Procurement team will continue to provide quarterly procurement management information to the ELT, and from 2012/13 onwards will show comparisons against the 4
2011/12 baseline information. To assist the Contract Manager manage the expenditure against the contract award value for individual contracts, we aim to have contract and supplier management information covering spend and commitment readily available by 31 March 2013. In addition we aim to review and improve our processes and procedures for measuring engagement with SMEs. As a first step, by end of September 2012 actual spend achieved with SMEs and engagement with SMEs throughout the procurement process will be included in the quarterly BPIs. Similarly during 2012/13 the Procurement team will look at a means of reporting cash and non cash savings made through the use of direct procurement. Consideration will be given to developing the Contracts Database to allow high-level recording and reporting of supplier performance. This would enable DPOs to review the past performance of suppliers prior to any procurement process. With regards to overall procurement capability, NLS' aim is to achieve around 45% in the 2012 PCA Lite, and moving forward aim to achieve at least Improved' status in all sections, resulting in an 'Improved' status overall. NLS will introduce appropriate processes and procedures that will aim to increase NLS contracted spend from 63% at 31 March 2012 to 70% by 31 March 2013 and 90% in longer term. Coverage 'Improved procurement has the widest possible coverage across the Scottish public sector.' We will continue to promote available contracts to procurement users, and highlight and explain procurement processes via our Intranet pages and through our training programme. We will consider formalising the procedures for dealing with maverick and off-contract spend following the bedding in of formal and consistent procurement processes across the organisation. NLS Procurement team will continue to review all suppliers invited to tender, ensuring sourced suppliers are fit for purpose. By 31 September 2012 we will have a live central database of all awarded contracts with planned renewal dates. We intend for this database to cover initially over 70% (by 31 March 2013) and then at least 90% of NLS procurement spend in longer term. In the longer term consideration will be given to adopting PCS Tender for sophisticated route 2 and 3 procurements. We will look at processes and procedures for introducing, where appropriate, the five step plan produced by SP&CD for Contract and Supplier Management. In addition we will consider adopting a balanced scorecard approach from the SG procurement journey for Library key suppliers, with a more simplified approach for low value / low risk procurement. Collaboration 'The Public Sector is working collaboratively, ensuring that effort is not duplicated, that best practice is shared and we learn from each other.' We will continue to work with colleagues in SP&CD, National Institution s Shared Services Group and Procurement Cluster Group to deliver procurement efficiencies through collaboration and sharing best practise. We will continue to analyse spend in order to review opportunities to collaborate with local partners. 5
NLS will remain fully engaged with the collaborative efforts of SPCD and representatives from NLS will participate in National Forums and User Intelligence Groups, where appropriate. We will continue to monitor our usage of applicable Centre of Expertise contracts and aim to increase this where appropriate. We aim to participate in more than 75% of such appropriate contracts by 31 March 2013. NLS will continue to develop local collaborative procurement with members of National Institutions Shared Services and / or Procurement Cluster Group covering but not exclusive to the following: NLS / NROS - Archival Boxboard NLS NGS HR Shared Services Systems NLS / NGS Internal audit consultancy services. NLS will continue to work with the Scottish Digital Library Consortium. Corporate social responsibility 'Procurement activity and the activity of those awarded public contracts conforms to robust ethical standards and contributes fully to sustainable development.' NLS will ensure that its standard Terms and Conditions (T&Cs) of contract for goods, services and non works consultants are reviewed and updated during the first half of 2012/13 to ensure compliance with changes to legislation in particular the Bribery Act and The Library Bill. Thereafter consideration will be given to developing robust T&Cs for non routine IS procurement. For the time being and until advised otherwise GC Works suite of contracts will be the standard form of contract for works and works consultant procurement. However within the period consideration will be given to adopting NEC 3. NLS Procurement team will develop its policies to reflect the public policy sustainability agenda, in so far as permitted by statute. During the period of this strategy document, NLS will review the current sustainability policy and consider introducing the Marrakech Approach to Sustainable Public Procurement into current procurement processes and procedures, where appropriate, and produce an achievable sustainable procurement delivery plan. In addition we will reassess ourselves against the flexible framework within the Scottish Sustainable Procurement Action Plan, and prepare our own action and improvement plan aiming to achieve level 2 compliance by 31 March 2013 with level 3 by 2014/15 and level 5 in longer term The commitment of NLS to the discharge of its Corporate Social Responsibility (CSR) will be incorporated into NLS procurement processes. The three main strands are Social, Economic and Environmental. NLS will ensure that DPOs are aware of specific policy advice on how environmental and equal opportunities criteria can be incorporated within tender selection criteria, as well as in contracts specifications and within major projects. We will review our policies and procedures against the Procurement Reform Bill when it becomes an Act of the Scottish Parliament. Our policy and procedures aim to ensure equal and transparent treatment of suppliers throughout the procurement process, and we will strive to promote the formulation of contracts that will facilitate participation by SMEs, third sector organisations and supported businesses, whilst achieving the best value for money solution. To further this aim NLS is committed to ensuring these groups understand how our tender process works, and can access opportunities to bid for low value contracts. 6
Community benefit clauses will be incorporated into tendered contracts where appropriate. We will consider utilising the SG collaborative framework for supported factories and businesses currently out to tender, once awarded. All of NLS procurement processes will be fully documented and will provide an audit trail that will act as the basis for providing debriefing on procurement selection likely procurement challenges, for answering of any enquiries under the Freedom of Information Scotland Act (FOISA) and for the provision of feedback to suppliers. Communications - 'Greater awareness of how procurement and commercial decision making contributes to public services making the best use of public money and on helping the Scottish Government achieve its overarching purpose of sustainable economic growth.' NLS Procurement team is committed to ensuring the policies and procedures for procurement are updated regularly in line with guidance issued by SP&CD and that this information is quickly and effectively disseminated to NLS DPOs by means of: Updates to the Procurement Intranet Specific DPO training in NLS procurement processes and procedures Regular review and update of the Route 1 checklist Introduction of an evaluation checklist Regular review and update of NLS procurement calendar Introduction of procurement times lines for planning purposes. Updating lessons log on a regular basis. The Procurement team within NLS will use customer feedback to improve its performance. We aim to continue to conduct customer satisfaction surveys annually, as we have in 2011 and 2012. Additionally we aim to continue to collect feedback informally and on an on-going basis, act on this feedback by incorporating it into our action plans, and keeping our customers informed of progress. Timescales It is the aim of NLS to address the majority of these issues by 31 December 2014. An action, improvement and progress plan (A&IP) will be produced on formal endorsement of this procurement strategy by the ELT. The A&IP will be updated quarterly and available for review by the ELT. Exclusions Purchases from Collection Development Funds Due to their unique nature, the majority of collection items cannot be purchased via standard procurement routes and are therefore currently outside the remit of this strategy document. However during the period consideration will be given to their inclusion. Duncan Campbell Deputy Chief Executive Date 13 September 2012 7
Appendix A Summary of Targets Capability 1. Develop a methodology for capturing savings and benefits 31 March 2013 Competitiveness 1. Aim to have processes and procedures in place to allow all tendered procurement, including works related procurement, to be tendered and evaluated on the basis of most economically advantageous tender (MEAT) 31 March 2013. 2. We will aim to publish lists of forthcoming tenders in PCS and other business journals as appropriate During 2012/13. Capturing Savings and Benefits 1. Procurement Team will continue to provide quarterly procurement management information to ELT Quarterly during 2012/2013 and 2013/14 2. To assist the Contract Manager manage the expenditure against the contract award value for individual contracts, we aim to have contract and supplier management information covering spend and commitment readily available by 31 March 2013 3. Introduce measurement of engagement with SMEs in to quarterly BPIs September 2012 4. Investigate means of reporting cash and non-cash savings through the use of direct procurement 5. Aim to achieve 45% in the 2012 PCA Lite 6. Introduce appropriate processes and procedures that will aim to increase NLS contracted spend to 70% 31 March 2012 and 90% in the longer term. Coverage 1. Live central database of all awarded contracts with planned renewal dates 30 September 2012 2. Data base to cover over 70% of NLS procurement spend 31 March 2013 Collaboration 1. Aim to participate in more than 75% of Centres of Expertise contracts 31 March 2013 Corporate & Social Responsibility 1. Review NLS standard T&Cs for compliance with legislative changes 30 September 2012 2. Reassess NLS against SSPAP flexible framework wit action plan to achieve level 2 compliance 31 March 2013 8
Communication 1. Complete an annual assessment survey during 2013/14 and 2014/15 2. Produce quarterly updates to the action and improvement plans during 2012/13 and 2014/15 3. Majority of issues, tasks and targets identified in procurement strategy to be addressed by 31 December 2014 9