Annual Procurement Report December 2020
Annual Procurement Report: August 2019 - July 2020
Malcolm Cutt - Director of Operations & Finance
The Procurement Reform (Scotland) Act 2014 (PRA) requires any public organisation which has an estimated annual regulated spend of £5 million or more to develop a procurement strategy and then review it annually. This requirement took effect from 31 December 2016. Organisations (including HE and FE institutions) required to develop and publish a procurement strategy were also required to publish an APR, reflecting on the relevant reporting period of the procurement strategy.
This report covers the period of 1 August 2019 to 31 July 2020 and addresses performance and achievements in delivering Queen Margaret University’s organisational procurement strategy.
The development of the procurement strategy was the outcome of consultation and discussion with internal and external stakeholders who have an interest in the institutional approach to procurement and its impact. Stakeholder engagement will also feature in the annual assessments of the achievement of regulatory compliance, strategic objectives of the institution, value for money [defined as the best balance of cost, quality and sustainability] and delivery against the institution’s broader aims and objectives, in line with Scotland's National Outcomes. This process of review and reporting will inform any adjustments to the procurement strategy deemed necessary to secure future performance improvements and to respond to the economic, political and financial influences to which the institution may need to adjust.
Queen Margaret University has analysed third party expenditure and has identified that over the period covered by this report the following expenditure has occurred:
- EU regulated procurements [goods and services worth more than £189,330; works worth more than £4,733,252] amounted to £6,422,847. There were 3 such procurements completed.
- Lower value regulated procurements [goods and services worth more than £50,000, works worth more than £2 million] amounted to £475,876. There were 4 such procurements completed.
More detailed information on the regulated procurements, sorted into procurement categories, is provided in Sections 1 and 2 and in Appendix 1 of this report.
Queen Margaret University has over 500 active suppliers with whom the University did business in the reporting period, and the total procurement expenditure was £8,295,407- £6,745,514 of regulated expenditure (recorded on the Contracts Register) and £1,549,893 on non-regulated.
The University has been optimising use of national, sectoral, local or regional C1 collaborative contracts and frameworks. As well as bringing leverage based savings, the burdens of risk, contract and supplier management are shared and the number of resource-intensive formal local tenders that need to take place is reduced significantly. 27% of the University spend went through collaborative agreements.
45% was spent with SMEs who constitute 83% of the total of active suppliers. 3 SMEs featured in the award of regulated procurements.
This report comprises six sections which address mandatory reporting requirements.
Section 1: Summary of Regulated Procurements Completed
Queen Margaret University strongly believes in conducting its procurements in an open and inclusive manner with procurement objectives aligned to the University’s Strategic Plan.
The details of regulated procurements completed are set out in a list at the end of this report with details summarised in Appendix 1. That information, coupled with the publication of the institutional Contracts Register and the systematic use of Public Contracts Scotland and Quick Quotes, provides complete visibility of the University’s procurement activity over the reporting period.
In Appendix 1, information is set out to show lower value regulated procurements completed and EU regulated procurements completed. These are separated into contract categories and distinguish collaborative contracts from institutional ones. For each completed regulated procurement the information provided shows:
- the date of award
- the start dates
- the category subject matter
- the name of the supplier
- estimated value of the contract – total over contract period
- collaborative or institution owned
- the end date provided for in the contract or a description of the circumstances in which the contract will end.
- SME / supported business
- Supplier Living Wage status
Section 2: Review of Regulated Procurement Compliance
Where appropriate, Queen Margaret University has made use of collaborative contracts to deliver improved contract terms, supported contract and supplier management, sustainable procurement outcomes and value for money (the best balance of cost, quality and sustainability).
In making its regulated procurements every care has been taken to ensure that the University awards the business to suppliers who are capable, reliable and who can demonstrate that they meet high ethical standards and values in the conduct of their business.
In the period covered by this report the University has conducted all its regulated procurements in compliance with EU Treaty Principles of equal treatment, non-discrimination, transparency, proportionality and mutual recognition.
Successful delivery against the procurement strategy objectives is part of a customer valued, continual improvement process (CIP) that seeks incremental improvements to process and outcomes over time.
The PCIP assessment was conducted in 2019 and the institutional score fell into the Bronze band. The intention now is to improve upon this score and move into the Silver band in time for the next assessment due in 2021.
A LEAN working group is in place which aims to maximise efficiency across the University. It will work in a collaborative way with the procurement team.
|Procurement aims and focus||Annual report commentary on strategy delivery/compliance|
Support Academic and Professional Services Departments to enhance the learning experience, for the many and diverse needs of stakeholders, by providing innovative solutions for their procurement decisions.
Optimal procurement strategies are developed and agreed through consultation with key stakeholders, end users and suppliers. This intelligence gathering approach is also used to deliver innovation, to improve skills and competencies in securing the most appropriate procurement routes to market that yield best value outcomes consistent with the guidelines set out in the Scottish Procurement Journey.
Procurement activities follow the guidelines set out in the Procurement Journey. This helps to manage the expectations of stakeholders, customers and suppliers alike and facilitates best practice and consistency with what other organisations do across the Scottish public sector.
For every procurement over £4m, the institution will consider how it can improve the economic, social or environmental wellbeing of its area through inclusion of community benefit clauses. Where possible and proportionate, such clauses may be included in procurements below £4m.
Care is taken to ensure that procurement operations chime in with and support institutional strategic objectives.
Embed sound ethical, social and environmental policies within the Institution’s procurement function to ensure compliance with relevant Scottish, UK and EU legislation in performance of the sustainable procurement duty.
Procedures are in place to ensure that consideration of environmental, social and economic issues and benefits is made, where appropriate, on a contract-by-contract basis during the planning stage utilising tools including Prioritisation, Flexible Framework, APUC’s Supply Chain Code of Conduct, and Supply Chain Management Programme (section 2 questions = Sustain)
Procedures are also in place to ensure that regulated procurements are only awarded to businesses that are capable, reliable and, where relevant, meet high ethical standards and values in the conduct of their business. The institution is committed to contracting only with suppliers that comply with all appropriate and relevant legislation. Where appropriate, and on a contract by contract basis, the institution will assess the legislation applicable to a procurement and take steps to ensure bidders comply with it e.g. Health and Safety, Late Payment legislation. Where relevant and proportionate the Living Wage and fair work practices of suppliers are promoted in tender documentation. The University is a Living Wage employer.
The Institution complies with its duties under the Modern Slavery Act.
Promote the delivery of value for money through good procurement practice and optimal use of procurement collaboration opportunities working with the supply chains to ensure continued value, managed performance and minimal risk throughout the life of contracts for the benefit of customers and students.
The best balance of cost, quality and sustainability is consistently used to assess value for money delivered and to identify sensible aggregation opportunities through collaborative contracting.
Queen Margaret University sorts regulated procurements into procurement categories. How these goods, services and works are bought - joint purchasing, use of local, regional and national framework agreements, consolidated contracting – is subject to annual review with APUC and, through user consultation, optimal category strategies are agreed, sensible aggregation opportunities are exploited, category and commodity strategies are developed, recorded, signed off and processed.
Sustain and further develop partnerships within the sector, with other publicly funded and professional bodies, and where appropriate with supply markets that will yield intelligence, innovation and deliver value to users of procurement.
The engagement with internal and external stakeholders and suppliers provides valuable feedback which informs the University of possible necessary adjustments and improvements to strategy and process.
For each procurement, the institution considers the community affected by the resultant contract and ensures that any affected o enceons rganisations/persons are consulted (e.g. impact on service for students, or a local contract that could be combined with other similar institutions’ needs). Such consultation will always be on a scale and approach relevant to the procurement in question.
The institution contributes to sector contracting plans.
The institution actively engages with other bodies through HE and FE specific events, Scottish public-sector events and wider UK HE events.
Develop management information to measure and improve procurement and supplier performance, assisting key stakeholder areas in meeting their requirements for best value goods and services.
Internal governance procedures, policies and tools such as e-enabled workflow enhancements are introduced to effect improvements to procurement process and efficiency.
Expenditure segmentation analysis and data located on the Hub, Hunter (including Contracts Registers) and Procurement Data Dashboard Where relevant, use is made of appropriate standards and labels in procurements to take account of fair and ethical trading considerations with due consideration given to equivalent tender offerings from suppliers. Use is made of PCS and PCS-T to publish procurement opportunities, appropriate use is made of lotting, output based specifications and clear evaluation criteria to ensure that procurements are accessible to as many bidders (including SMEs) as possible.
Queen Margaret University has procurement process and sign off arrangements that are consistent with the guidelines set out in the Procurement Journey and that have met the objectives and obligations set out immediately above.
Section 3: Community Benefit Summary
For every procurement over £4m, Queen Margaret University will consider how it can improve the economic, social or environmental wellbeing of its area through inclusion of community benefit clauses, to assist with achieving sustainability in contracts activity, including targeted recruitment and training, small business and social enterprise development and community engagement. Where possible, relevant and proportionate, and where they are considered not to have a negative impact on the delivery of value for money, such clauses may be included in regulated procurements valued at below £4m.
The general University policy on identifying community benefit requirements is to conduct risk and opportunities assessments through stakeholder consultation and engagement – on a case-by-case basis the question is asked, ‘could a community benefit clause be usefully included’? Where relevant and proportionate to the subject matter of the procurement, the requirement is then built into the procurement specification and into the eventual conditions of contract performance.
Where applicable, as part of the tendering process, suppliers are invited to describe their approach to delivering community benefits or achieving social value through a contract. Relevant community benefits are cited, such as:
- providing ‘upskilling’ opportunities (e.g. Toolbox talks) with students and staff,
- offering advice and assistance on the best practice methodology,
- employment, student work experience and vocational training opportunities,
- local subcontractor opportunities available to SMEs, 3rd sector and supported businesses,
- direct involvement in community based schemes or programmes,
- equality and diversity initiatives,
- supply-chain development activity,
- educational support initiatives,
- minimising negative environmental impacts, for example impacts associated with vehicle movements and/or associated emissions and impacts on protected areas, buildings or sites.
Tenderers are invited to describe how such benefits will be successfully delivered through the contract and promoted to contract users. Where community benefits are included in a procurement (at or above the £4 million threshold), the award notice would include a statement of the benefits that are expected to be derived from the contract.
Queen Margaret University has awarded seven regulated procurement contracts over the reporting period. One of these was over £4 million in value. The total number of these with community benefit requirements fulfilled was zero due to delays associated with the Covid-19 pandemic. Section 6 outlines our plans to manage this contract over the next two years.
Section 4: Supported Business
Higher value procurements, regulated procurements (between £50k and OJEU threshold and those equal to and above the OJEU thresholds) are conducted in line with Routes 2 and 3 respectively of the Procurement Journey. Both Routes 2 and 3 mandate the use of the European Single Procurement Document (ESPD (Scotland)). The ESPD covers exclusion, selection and award criteria and includes questions relating to companies self-certifying themselves in terms of size (micro, small or medium), or whether they are supported businesses.
The institution reviews each procurement to determine whether it could be fulfilled by a Supported Business, whilst remaining compliant with EU and Scottish Procurement Legislation and ensuring value for money for the institution (using the only Supported Business register currently available and published by Ready for Business).
The University aims to increase its contract uptake through the Supported Business framework agreement over the next two years. In tandem, the University will research opportunities for awarding contracts to third sector bodies including social enterprises.
Section 5: Future Regulated Procurements
Queen Margaret University is keen to encourage competition by promoting optimal participation in its procurement process and achieve better value for money in its procurements. One method of achieving this is to give notice to suppliers of tendering opportunities that are expected to commence over the next two financial years after the period covered by this report.
In preparing this forward projection of anticipated regulated procurements, it is difficult to be precise about providing details of actual requirements. Over a forecast period of two years it is very probable that circumstances and priorities will change so the list of projected individual regulated procurement exercises outlined in Appendix 4 should be viewed with this caveat in mind.
The information provided in the list of Future Regulated Procurements and Appendix 4 covers:
- the subject matter of the anticipated regulated procurement
- whether it is a new, extended or re-let procurement
- the expected contract notice publication date (where applicable)
- expected award date
- expected start and end date
- the estimated value of the contract.
- contract category: call off from framework, C – local contract or C1 – local collaboration
Section 6: Other Content for Consideration
In February 2020, the University awarded an integrated facilities management contract which included several community benefits within the tender. Due to the Covid-19 pandemic, community benefits planned to be delivered within the 2019-2020 academic year have been postponed.
Over the coming year, the University will put in place two contract management tools for this contract – one operational tool and the SCM tool provided by APUC to manage social and environmental benefits. The University also aims to use the SCM tool for its catering contract.
|Appendix Number||Appendix Title||Date Completed||Appendix Link|
|Appendix 1||List of Regulated Procurements (Compliant and Non-Compliant)||Completed in the Reporting Period 8/19 – 7/20||
|Appendix 2||List of Regulated Procurements with Community Benefit Requirements Fulfilled||N/A|
|Appendix 3||List of Regulated Procurements placed with Supported Businesses||N/A|
|Appendix 4||List of Regulated Procurements planned to commence in next two F/Ys 20/21 & 21/22||List of Regulated Procurements planned to commence in next two F/Ys 20/21 & 21/22|
|Annex A||Annual Procurement Report Template|
Report Approved on 30 November 2020
Approved by Senior Leadership Team
Signed: Malcolm Cutt
Position: Director of Operations and Finance