Procurement Principles and Objectives

Procurement Principles and Objectives

In order to meet it's obligations under the National Public Procurement Policy Framework, Clare County Council has set out the following objectives and actions for implementation. This will ensure that the Council is focused on delivering value for money outcomes and that purchasing practices are professional and procurement staff have the necessary capabilities to operate in line with best practice.

Objective 1

1. Develop a planning framework that seeks to deliver a coherent and consistent approach to procurement and support the introduction of best procurement practice initiatives.

Main findings

The procurement function within Clare County Council does not operate within an organised structure. This is evidenced in part by the fact that a number of contracts for goods and services (excluding consultants and works contracts) are currently in operation but not strictly adhered to. These include contracts for Advertising, Cleaning, Legal Services, Mobile Phones, Office Requisites, Personal Protective Equipment, Cleaning Products, Feminine Hygiene Bins and Water Tankards.

For example the analysis of the spend on Printing and Office consumables indicates that we purchase from 299 suppliers, while the 18 month contract entered into in February 2006 is with one supplier.

Likewise, an analysis of the account element for Cleaning indicates that we do business with 93 suppliers, even though we entered into three separate cleaning contracts with three suppliers. One contract was entered into in 2005 with one supplier and was extended until relocation to the new offices. This supplier received a total of €97,000 in 2006. Another contract was placed with one supplier for the Fire Station, and the Quin Road offices and has been in place for a number of years. This supplier received €35,000 in 2006 and a third contract for Cleaning Products was entered into in January 2006 for an 18 month period with one supplier who received €14,000 in 2006.

The number of suppliers listed within each of these account elements indicates a high level of mis-coding and a lack of understanding of Account Elements. It also highlights the need to follow national procurement rules when awarding such contracts.

Actions

  1. Senior Management to sign off on Corporate Procurement Plan
  2. Deputy Manager to oversee the implementation and review of the Corporate Procurement Plan through the Value for Money Committee and provide half yearly reports to Management Team
  3. Provide Agresso Training and organised refresher training for PO raisers. It is evident from the report that expenditure is being charged incorrectly against account elements. PO raisers need to understand the significance of the use of Account Elements, Products etc.
  4. Responsibility for the preparation of the annual Corporate Procurement Plan should be assisgned to one Department. This process should involve a detailed analysis of expenditure, which will require thorough data cleansing, and constant monitoring of expenditure. A detailed analysis of all products needs to be undertaken to ensure that they are linked to the correct expenditure account elements. This exercise will be necessary if the Council is to analyse expenditure by account element in the future.
  5. Responsibility for overseeing the procurement function in each Department should be delegated to a senior official in each Department. A deputy should also be identified.

Objective 2

1. Develop specialist purchasing structures and capabilities necessary to provide the strategic direction, analysis and advice to deliver effective purchasing performance. This includes consideration of how best to group and coordinate internal resources to manage total purchasing expenditure on goods, services and capital works.

Main findings

Currently, responsibility for procurement rests within individual Departments.

A number of contracts have been awarded by the Corporate Services Department (i.e. Advertising, Cleaning, Legal Services, Mobile Phones, Office Requisites, Personal Protective Equipment, Cleaning Products, Feminine Hygiene Bins, Water Tankards).

The purchase of computers, printers, IT equipment etc is managed by the IT Department. Contracts with consultants and contractors are managed by individual departments (mainly Transportation & Infrastructure, Housing, Environment, Corporate Services and Planning). The purchase of photocopiers, AO printers and scanners is managed by individual Departments.

This fragmented ad hoc arrangement results in inconsistency of approach right across the organisation.

Actions

  1. Appointment of a Procurement Officer with responsibility for planning and strategic work i.e. management of the purchasing function (excluding consultants and contractors), spend analysis, monitoring and control of spend, monitoring of data input to Agresso, making recommendations on achieving value for money, examining supplier base with a view to widening it (where there are few suppliers) and narrowing it where there may be too many one-off suppliers. The procurement officer should also oversee the contract award process for such goods and services as cleaning, canteen, stationery/printing, photocopiers, printers, computers etc. Monitoring of these contracts should be undertaken quarterly. The Job Specification for this role should be defined
  2. Provide training to staff on procurement of consultants and contractors thereby ensuring compliance with EU and national procurement rules. Two staff members (one administrative, one technical) from each of the Transportation & Infrastructure, Housing, Environment, Corporate Services and Planning Departments should receive this basic training. Each staff member to undertake a two-day course and be responsible for the management of the procurement function within his or her respective Departments.
  3. These trained staff should meet quarterly to review and discuss procurement issues and to note changes in legislation, rules etc.

Objective 3

1. Develop information management procedures to inform procurement planning and practice at all management levels of the procurement function

Main findings

A number of staff are currently involved in managing the procurement of goods and services in the organisation.

While staff are aware of the national and EU procurement rules, there is a requirement to provide training and follow up training to those staff members. This should ensure that the risk associated with non-compliance of procurement rules is minimised.

Actions

  1. Produce a Basic Guidance Manual on Public Procurement, which can be used for reference purposes by all Departments in the Local Authority. The manual should document procedures regarding the tender opening process, keeping of procurement project files, procedures, selection criteria, award criteria, procurement reforms, etenders etc
  2. Provide procurement training to staff (see objective 2)
  3. Establish a procedural framework for different categories of expenditure. This should outline which expenditure is centrally purchased, locally purchased, including which purchases should be supported by market analysis ahead of tendering, which should be purchased using purchase cards, review of PO approval limits, procedure for procurement in terms of a Major Emergency etc
  4. Make general procurement information available on the Councils Intranet Site

Objective 4

1. Ensure that organisational ICT systems, in particular the financial management system can support information-based procurement management and streamlined procurement processing

Main findings

The Finance Department carried out an analysis of all Purchase Orders raised during the period January to June 2006. The total number of orders raised was 9,864, of which 5,173 relate to purchase orders with totals of less than €350 (i.e. 53%). The introduction of low value purchase cards for expenditure less than €350 would reduce the number of purchase orders greatly. They would also result in significant timesaving as the three-way match required with a purchase order needs to be done regardless of value.

Actions

1. Introduce a Corporate Procurement Card for low value purchases, evaluate its benefits and develop control procedures. The introduction of a card should result in the reduction of transaction costs associated with administration.

2. Reduce transaction costs by reducing the size of the supplier base

3. When contracts are awarded, monitor future purchases to ensure that goods and services are being purchased from the preferred tenderers