‘Equality and diversity… making it happen in procurement’

Margaret Burgess-Wood, Purchasing Manager

Strategic Objectives• Annual Procurement Report – Finance Committee• £149.2m Non Staff Expenditure• £80m direct influence of Purchasing• £20.47 act in advisory capacity• Finance Division Equality Action Plan - Procurement

Procurement Strategy - Key Objectives

• Obtaining Value for Money• Ensuring legal compliance in Procurement• Continuing to develop best practice and supply

management skills• Operating effective systems and processes• Embracing corporate social responsibility throughout the

purchasing process

“Embracing corporate social responsibility throughout the

purchasing process”

Tendering Activity for 07/08• During the reporting period the following tenders

were completed:– 11 EU tenders– 8 below EU threshold tenders– 3 mini bids under OGC framework agreements– 4 mini bids under National HE framework agreements

University Spend Pattern

• Pareto's principle where 80 per cent of the University’s spend is concentrated on 20 of its supplier base. The high value spend is targeted and managed by senior members within the Procurement team of the University

Reducing Supplier Base

• It is a University objective to reduce the number of orders placed on single suppliers.

• This is very difficult to accomplish due to the specific nature of some the goods and services being purchased.

• Organising the procurement of goods and services through large University/collaborative agreements reduces the opportunity for small SME’s to supply to the University.

No of Suppliers

0

500

1000

1500

2000

2500

3000

no of suppliers

Number of orders per supplier

Year 2008 2807 1426 248 240 43

Year 2007 2670 1352 235 238 41

Suppliers with one order

Suppliers with 2 – 5 orders

Suppliers with 6 – 10 orders

Suppliers with 11 – 99 orders

Suppliers with100+ orders

Spend 2008 Cumulative Supplier Spend Cumulative No of Suppliers

Aggregate Order values >£50K £67,362k 228

Aggregate Order values £10K to 49K £77,916k 706

Aggregate Order values £5K to £9K £80,280k 1036

Aggregate Order values <£5K £83,705k 4764

Financial Year 07/08

Total number of active suppliers used in 07/08 is 4764

Financial Year 07/08

Aggregate Order values >£50K

Aggregate Order values £10K to 49K

Aggregate Order values £5K to £9K

Aggregate Order values <£5K

80% 13% 3% 4%

Aggregate Order Values for Financial Year 07/08

80%

13%

3% 4%

Orders >£50K Orders £10K to 49K Orders £5K to £9K Orders <£5K

Financial Year 07/08

The Procurement Process

Selection

StartDefinition of needs

Specification and

contract conditions

Monitoringand managing

Immediate steps following

award of contract

Evaluationand award

Invitation to tender

Review

• Planning procurement – reaching budget holders at the earliest possible time

• Assess if the contract/requirement has high equality relevance i.e. in terms of all aspects of equality - Race, Gender, Disability, Age, Sexual Orientation

• Is equality a core requirement ? • Examples

– Catering contracts– Building contracts – access to buildings– Temporary Staff Agency contracts– Non-medical helpers– Software contracts – Accessibility to students– Printed materials– Security guarding

Early Stages of the Procurement Process

Designing the Tender Process• Decide on Tender strategy• Assess value • Decide procedure to be used - EU, Non EU,etc• Single source contracts• Draw up detailed specifications• Is Supplier Pre-qualification required? • Are there any Public Sector/ HE Sector Agreements

already in place

Advertising the Tender• Dependent on the procurement process• EU Tender Thresholds for Public Sector                                         

– Supplies       £139,893      – Services  £139,893– Works            £3,497,313

• OJEU - TED database• In-Tend E-Tendering website• Local advertising? Can we use locality as a qualification criteria?• Hitting the wider market place

EU Procurement Principles• Open/Transparent process for the award of public sector

contracts• Suppliers have the ability to challenge decisions if they

feel they have been unfairly judged• Remedies directive in place to ease the process of

taking legal action• Illegal to discriminate

Supplier Pre-qualification Process• Vendor Questionnaire includes a section on Equal

Opportunities• Any supplier expressing interest in the tender must

supply this information as part of a pre-qualification process. Any suppliers giving a negative response to any of the questions are excluded or investigated further

• Documents are submitted electronically through the University e-tendering system and archived with tender documents

Selection and Award Criteria• EU tenders are governed by procurement regulations

requiring the award criteria to be declared in advance and this needs to be strictly adhered to.

• If Equality is a core requirement of the contract then it can be one of the award criteria and given suitable weighting

• It will not be the only criteria, other value for money factors have to be taken into account.

Vendor Auditing • Assessing the capability of the supplier• Opportunity to inspect and discuss the requirements• Look for evidence to back up equality statements

– Evidence of disabled workforce– Evidence of ethnic and gender mix of workforce– Evidence of environmental and ethical practices

• How are these aims projected within the company?

Contract• Legally binding contracts or purchase orders will be

drawn up and signed.• Equality clauses are built into contracts especially where

there is high relevance.

Contract Management

• Contract Management on strategically important contracts that require active contract management

• Regular review meetings will cover any changes to information provided during the selection process or changes to contract conditions

• Opportunity to develop new ideas with suppliers• Different from Supplier Management

– Estates – construction, building

Monitoring and Reporting• Example of question in CRE vendor questionnaire:

Is your organisation an ethnic minority business (50% or more of which is owned by members of one or more ethnic minority groups, or, if there are few owners, where at least 50% of the owners are members of one or more ethnic minority groups)? http://www.cre.gov.uk/gdpract/em_cat_ew.html

• Given the large number of suppliers the University uses, how practical is it to use this question –

• When and how often is this information to be collected or checked ?

• How do we ensure it is kept up to date?• How is the data provided to be used? • How can we use existing systems to capture more information,

KPIs etc

Resources Issues• Can we do more? • Resource issues – small team dealing with many

legislative pressures• Suppliers regularly complain about the amount of

information required from multiple public sector bodies. Over load ……

Purchasing DepartmentThe Open UniversityWalton HallMilton KeynesMK7 6AA

www.open.ac.uk