A Critical Analysis of the Procurement Policy for a Local Government

Executive Summary This paper analyses the recent changes to the procurement strategy of Leeds City Council and how such changes are comparable to the procurement strategy of Staffordshire County Council. Important parameters of the procurement strategy of Leeds City Council are discussed, such as category management, whole lifecycle approach, skills and capacity of procurement professionals, and openness and transparency. These dimensions are compared to the principles and objectives listed in Staffordshire County Council’s procurement strategy. In addition, the paper provides recommendations to improve procurement practices available at Leeds City Council. Eventually, a tender specification sheet is provided to invite bids from private players to run the woodhouse car park in front of the University. Key performance indicators to evaluate tenders are included. Introduction Leeds City Council has made certain changes to its procurement strategy recently. The council emphasised specific elements indicating the importance placed on ensuring high quality procurement services. Such elements refer to category management, whole lifecycle approach, skills and capacity of procurement professionals, and openness and transparency (Leeds City Council Procurement Strategy 2013). These dimensions are similar to the principles and objectives set in Staffordshire County Council’s procurement strategy. Therefore, the purpose of this paper is to analyse the recent changes to the procurement strategy of Leeds City Council and how they compare to Staffordshire County Council’s procurement strategy. Leeds City Council’s Procurement Strategy Compared to the Procurement Strategy of Staffordshire County Council Leeds City Council demonstrates a primary objective to improve outcomes and value for money obtained from a wide range of goods and services it purchases. Therefore, the council’s procurement strategy is based on essential principles to include whole lifecycle approach, accountability to the public, openness and transparency (Hawkins et al. 2011). The strategy indicates the council’s concerns to rely on expertise in the field as well as utilise relevant examples of adequate practices maintained at local and national levels. The common expectation presented with the enforcement of the council’s new strategy is to realise its full potential within two years. The council extensively supports not only its ambitions but also the ambitions of its partners in the process of delivering quality outcomes for service users (Leeds City Council Procurement Strategy 2013). A relevant part of Leeds City Council’s procurement strategy is the adoption of a category managem ent approach, where procurement professionals tend to group together related purchasing. Such approach is entirely focused on exploring variances in buying needs and provider offerings (Iyer and Pazgal 2008). In this way, the council is concerned with maintaining high quality of services along with savings. Similarly, the procurement strategy of Staffordshire County Council presents diverse orientation in terms of proper identification of the goods and services purchased by activity and function. Staffordshire County Council also states the importance of achieving value for money. Another recent change to the procurement strategy of Leeds City Council is associated with the adoption of a whole lifecycle approach. It is essential to point out that such approach starts from ongoing evaluation of buying needs as well as analysing different options. In fact, the mentioned approach receives optimal application through careful preparation and procurement (Niezen and Weller 2006). Mobilising the council’s resources is a significant priority to the professionals responsible for the implementation of the procurement strategy. Such principle corresponds to Staffordshire County Council’s strategy of relying on the voice of all people of Staffordshire on specific issues that matter to them (Staffordshire County Council 2014). This shows a strong sense of collaboration with residents and communities in order to identify proper solutions to any emerging problems. Staffordshire County Council places importance on leading and influencing as well as sharing knowl edge with representatives from the public sector in Staffordshire (Kennekae 2012). Early engagement is crucial in maintaining savings and improvements that further reflect in transformational changes in the council’s procurement strategy. The whole lifecycle approach adopted by Leeds City Council regarding its procurement strategy assumes that service delivery should not be compromised. Other significant dimensions of this approach relate to contact management and exit which contribute to achieving extensive value for many. In addition, the recent changes observed in the procurement strategy of Leeds City Council and that of Staffordshire County Council reflect the importance of the skills and capacity of procurement professionals. They are mostly responsible for ensuring the maintenance of a relevant procurement process based on supporting the council’s business continuity needs (Niezen and Weller 2006). The latter is extensively manifested in the procurement strategy of Staffordshire County Council. Procurement professionals structure arrangements with key providers in an attempt to manage the risks pertaining to the process of supplying goods and services. Thus, professionals in the respective field are expected to set high quality processes through cross-functional strategic activities that are evident in both Leeds City Council and Staffordshire County Council (Loppacher et al. 2006). Leeds City Council’s procurement strategy considers the significance of employing common principles a nd rules which are properly designed to correspond to the needs of all included categories. Emphasis is on reflecting the needs of the specific service areas along with stakeholder needs. This recent change in the procurement strategy of Leeds City Council is in line with ensuring quality outcomes (Leeds City Council Procurement Strategy 2013). Such procurement strategy is comparable to the one of Staffordshire County Council due to the process of aligning delivery of goods and services with the corporate needs identified by Staffordshire County Council (Staffordshire County Council 2014). The respective council utilises the expertise of procurement professionals to ensure social values outcomes as well as sufficient savings achieved through a balanced scorecard used for procurement. The focus on the skills and capacity of procurement professionals is among the improved areas of Leeds City Council’s procurement strategy. Having skilled and experienced staff is important in delivering high quality outcomes to local communities. Moreover, Leeds City Council manifests its responsibility to support the development and training of procurement professionals in order to maintain high standards across the profession (Loppacher et al. 2006). There is a solid sense of accountability evident in the practice of each procurement professional working at Leeds City Council. In comparison, Staffordshire County Council emphasises the capacity of its procurement staff in terms of providing legal training packages. This indicates an ongoing process of developing the knowledge and expertise of all professionals involved in the procurement practice (Arora et al. 2007). In this way, procurement professionals can work together with other experts in the field to implement the spe cific objectives listed in the procurement strategy of both Leeds City Council and Staffordshire County Council. One of the observable recent changes in the procurement strategy of Leeds City Council is that the central procurement function is projected to serve as a flexible source of excellence and thus is accountable for providing a substantial source of expertise. Procurement professionals working in Leeds City Council and Staffordshire County Council are extensively trained to demonstrate ownership and accountability to the public in their respective communities (Kennekae 2012). Elements of structured governance and assurance make Leeds City Council’s procurement strategy rather effective. However, the procurement strategy of Staffordshire County Council is oriented towards indicating a ‘customer of choice’ model of delivering services. This implies that procurement professionals working in Staffordshire County Council are responsible for the creation of greater visibility of the council’s requirements for goods, services and provider performance (Staffordshire C ounty Council 2014). Therefore, professionals are determined to ensure proper communications and organising skills that help them in the establishment and implementation of linkage. Similarly, procurement professionals in Leeds City Council are devoted to research good practice documents and toolkits while trying to reinforce their skills and capacity. Furthermore, the procurement strategy of Leeds City Council is comparable to the one of Staffordshire County Council in the aspect of openness and transparency. Both councils indicate an ambition of being open and transparent which reflects in providing visible contracts as well as constantly updated management information (Kim and Netessine 2012). Leeds City Council places importance on presenting clear and accessible tender processes and documentation. Openness and transparency ensure the formation of a positive relationship between the council and its procurement partners. Likewise, such aspects are closely linked with instilling confidence in the public regarding the adopted procurement approach (McLean 2008). In comparison, the procurement strategy implemented by Staffordshire County Council indicates its staff’s commitment to ensure compliance and probity which may be associated with the principles of openness and transparency manifested by Leeds City Council. Recommendations The recent changes to the procurement strategy of Leeds City Council indicate that the respective council’s approach is comparable to the strategy of Staffordshire County Council. Yet certain recommendations are listed below to achieve further improvements in Leeds City Council’s procurement strategy: Procurement professionals should work on creating an inclusive procurement strategy in which smaller providers are presented with an opportunity to participate (McLean 2008); The council should constantly research and update its available procurement tools to guarantee competitively established standards in the field; The council should consider the removal of unnecessary restrictions which would allow the institution to evaluate suppliers in an objective manner rather than focus on limiting business criteria such as revenue (Loppacher et al. 2006); Professionals need to demonstrate sensitivity to financing issues to include established payment policies; It is fundamental to indicate potential hidden costs in terms of providing clear information on the actual insurance, liability as well as regulatory requirements; this practice would allow innovative suppliers to compete (Hawkins et al. 2011) Conclusion The paper indicated an analysis of Leeds City Council’s procurement strategy with special focus on its recent changes and how they are comparable to the procurement strategy outlined by Staffordshire County Council (Leeds City Council Procurement Strategy 2013). Thus, significant aspects of both procurement strategies have been discussed in order to identify the focus of procurement professionals working in the two councils. Certain aspects of the two procurement strategies were found similar especially with regards to category management and lifecycle approach. Moreover, the efforts of procurement professionals are equally important to the work of either Leeds City Council or Staffordshire County Council (Staffordshire County Council 2014). In this way, the paper ensured adequate arguments about the effectiveness of the procurement strategies adopted by these institutions. Tender Specification Sheet Leeds City Council is seeking tenders from various private providers for the maintenance and operation of the woodhouse car park in front of the University. The intention is that the car park will operate as a proper public amenity. There are certain standards of services that will be followed. The respective parking services are set at prices identified at proper market levels. Prices are competitive in order to encourage visitor parking regarding close distance to local businesses. Discouraging the practice of day-long parking is essential for the maintenance of the woodhouse car park. The park will be open 24 hours a day, seven days/ week. Personal security will be ensured to customers and visitors. They need to feel secure in the identified car park area. The integration of area security is a priority to the Council. All tenderers are invited to submit their applications by providing the following documentation: -Financial Proposal for a period of 3 years; -Details on the percentage of the turnover expected to be paid annually to the Council; -Evidence indicating previous experience in the area of car park projects; -Providing details of the resources available to complete the project; In order to evaluate the bids from the private players, it is important to provide a set of key performance indicators that will be consistently used (Iyer and Pazgal 2008). The first performance indicator is that the selected tender should provide the best value for money at reasonable cost. This may result from balancing cost and quality. Another key performance indicator that will be used to assess the bids is that of prequalification. Such indicator is implemented to make sure that only those who meet specific criteria will be considered for inclusion to bid (Loppacher et al. 2006). In addition, prequalification is associated with responses to a set of questions provided by the Council. Major questions should include elements of quality, capacity to supply and financial competence. The indicator of open and flexible communication is fundamental as no private player should be given preference. Even though meetings with tenderers who have placed their bids may be necessary at a cer tain point, they should take place solely for clarifying specific aspects regarding the tender (Hawkins et al. 2011). It is important to use recognised channels of communication in order to avoid confusion of private players or any misunderstanding of presented information. References Arora, P., Garg, A. K. and Vaidya, S. C. (2007), ‘Efficacy of Integrating Corporate Social Responsibility and Procurement Strategy’, South Asian Journal of Management, Vol. 14(1) pp105-119 Hawkins, T., Gravier, M. and Powley, E. 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(2008), ‘Choice in Government Software Procurement: A Winning Strategy’, Journal of Public Procurement, Vol.8(1) pp70-97 Niezen, C. and Weller, W. (2006), ‘Procurement as Strategy’, Harvard Business Review, Vol. 84(9) pp22-24 Staffordshire County Council (2014), Staffordshire Procurement [Online]. Available at: https://www.staffordshire.gov.uk/business/procurement/homepage.aspx [Accessed: 29 April 2014].