Eyre Region Roadmap Workshop Agenda 1 Confidential Chris Newman 0412 318 384...
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Transcript of Eyre Region Roadmap Workshop Agenda 1 Confidential Chris Newman 0412 318 384...
Eyre RegionRoadmap
Workshop Agenda
1
Confidential
Chris Newman0412 318 [email protected]
Rob Ackland0477 370 [email protected]
Steve Gillis0403 603 [email protected]
Agenda
Introductions Context
Program Objectives Roadmap Common Themes
Governance risk assessment Capability & capacity development – collaboration opportunities
LGAP support and development Spend Analysis & Category Opportunities
Spend analysis overview Identify potential collaborative opportunities Consolidate and prioritise potential action plan
Program governance, resourcing and implementation Agree next steps
4
Regional Procurement Development ProgramObjectives & Process
Program Objectives: Make sustainable savings & create efficiencies Stimulate economic development Improve probity and reduce risk Build staff and organisational capability in procurement Strengthen regional collaboration
Joint Council Kick-off
Data Collection
Individual Council
Workshops
Detailed Joint Spend
Analysis
Opportunity Analysis
Workshop
Regional Roadmap
Development and
Validation
Final Roadmap Workshop
Progress Reviews and
Support
Roadmap Common Themes Governance risk assessment Capability & capacity development
Discussion: collaboration opportunities
6© PMMS Consulting Group
• Professional procurement
• Influencing the business
• Transactional• Order placement
Level 1
Emergent
Level 2
Basic
Level 3
Developing
Centre of Excellence across all expenditure
Procurement foundations in place with improved controlsSome functional and category strategies in place
Focus on meeting legislative requirements
Largely uncoordinated procurement with gaps in
compliance
Level 4
Advanced
Levels of procurement maturity
7
Maturity Assessment
Strategic Procurement
External Focus Internal Focus
MissionDeliv
ery
Enablers Framework
8
Key Areas of Opportunity
• Significant potential for savingsExternal– Introduction of strategic procurement practice– Establishment of new co-ordinated council contracts
• Better use of aggregated sector contracts• Establishment of regional arrangements
– Improved and standardised procurement/ supplier documentation and process– Improved contract management practice
Internal– Reducing volume and cost of low-value transactions– Better use of technology– Organisational co-ordination of purchasing and procurement
• Opportunities to improve probity and reduce risks– Introduce and ensure the consistent use of good practice processes and documents– Establish simple compliance tracking and accountability
Form project team
Internal analysis
Supply Market analysis
Planning and analysis
Develop sourcing strategy
Go to Market
Develop specification
Analyse strategic options
Set evaluation criteria & weightings
Risk analysis
Prepare documentation
Issue RFx
Clarifications
Receive responses
Evaluation
Shortlist
Negotiate
Agree and sign contract
Evaluate responses
Negotiate contract
Manage supplier
relationship
Contract Management Plan
Monitor performance
Benefits realisation
Approval of recommendations
Strategy Execute Manage
Procurement Strategy
ArcBlue Procurement Model
© ArcBlue Consulting
Compliance Gaps: Activity Area Risk Consequence
Select Quote / Tender
Conflict of interest not managed / documented
Perceived or actual bias/ Ombudsman/ ICAC risk
inadequate Contractor WHS capability & insurance
WHS incident & potential insurance risk/ Legislative breaches
Inadequate Contractor capacity
Delayed project or lack of service
Limited response & lack of competitiveness
• VFM not achieved or validated• Responses < policy guidelines
Non-preferred contractors unable to compete
• New entrants not attracted• Excluded contractors challenge
procurement processFinancial Approval Funding approval &
capacity not validated• Cost exceeds budget• Uncontrolled expense
Sourcing Phase
Compliance Gaps: Activity Area Risk Consequence
Quote /Tender Documentation
Incorrect and Inconsistent use of documents
• Process does not comply with policy
• Contractors fail to respondPO / Contract lack of formal agreement
Lack of clarity and consistency re contract formDefault to contractor T&C
• Inappropriate Commercial risk accepted
• Process not compliant with Policy• Lack of control on T&C
Evaluation Evaluation criteria not defined prior to responses & limited VFM criteria
• Unable to demonstrate fairness and VFM assessment in process
• Ombudsman/ ICAC risk Inadequate Contractor
financial sustainability reviewContractor financial failure
Approval Lack of documented recommendations / approval
• Process does not comply with policy
Lack of segregation of duties • Potential fraud
Execute Phase
Compliance Gaps: Activity Area Risk Consequence
Contract approval
Lack of control of contract expenditure
Contract spend exceeds approval
Variations Uncontrolled negotiations and acceptance of contract variations
Approvals does not comply with Policy
Contract renewal
Lack of control of expiring contracts
Commercial risk
Contract adoption
Lack of awareness and usage of preferred contracts
Contract leakage Actual spend not aligned with strategy
Contractor performance
Performance is not measured and managed
Poor performance and related risks not addressed
Manage Phase
Compliance Monitoring
– Clear agreed processes– Consistent application– Prioritisation/ planning/ time allocation– Available expertise– Internal controls and compliance monitoring– Controlled use of Registers
• Prequalified contractors• Contracts
– Management Reporting – Risk Management
14
Emerging Themes - Mission
Procurement Strategy; Organisation & People– Annual/ Forward Procurement Plans– Category Procurement strategies– Whole of organisational co-ordination & oversight– Movement towards Centre-led Procurement models– Led by a Procurement Steering Group– Staff awareness and training needs
Collaboration Opportunities– Annual/ Forward Procurement Plan process and template– Annual/ Forward Regional/ Cluster Plans – Regional Category Strategies– Explore potential for resource sharing/ central resourcing– Steering Group structure & reporting– Training Planning & Delivery
Strategic Procurement
Mission
15
Emerging Themes - Framework
Policy, Procedures; Systems; Data and Compliance– Review & update processes & documents– Update Procurement Guidelines / Manual– Introduce Acquisition Plans– Strengthen Evaluation and COI processes– Regional/ Cluster approach Prequalification / Preferred Contractors /
Panel Contracts– Contractor WHS Management Practices– Consistent records management practices– Knowledge Management - linkage to LGAP processes and contracts– Internal control and compliance audit – method & resources
Collaboration opportunity – all of above
Strategic Procurement
Framework
16
Emerging Themes – TBL Enablers
Economic Development; Social & Environment– Develop TBL objectives into Annual Procurement Plan – Develop approaches and models to apply in practice– Develop local supplier education program– Develop Buy local program– Case studies to stimulate Social Procurement opportunities
Collaboration opportunity – all of above
Strategic Procurement
Enablers
17
Emerging Themes - Delivery
Contract Mgt; Category Mgt; Benefits Reporting– Develop Contracts Management process & guidelines– Establish contractor performance management– Streamline low value / high volume transactions– Develop spend analysis– Introduce Category Management approach– Develop & Implement KPI– Develop standard Procurement reports
Collaboration opportunity – all of above
Strategic Procurement
Delivery
What do we do?• A procurement aggregator to increase the purchasing
power of Councils, reduce costs and risks• Preferred supply panels from which Councils can
purchase, to any value, without tendering, using Vendor Panel. National and SA based
• Consulting services to meet specific Council(s) needs/projects
• Support collaborative procurement strategies within and across regions
• Promote the development of sector wide procurement capability
Capability BuildingDevelopment of consistent good practice• On line access to suite of procurement documents and
contracts
Discussion on user group experience and future development opportunities
Skills Development• LGAP Training Program future direction
Tendering can cost money?• Anecdotal evidence from NSW, MAV and WALGA &
supported by State Governments • Standard tender, $15-$25k• More for complex tenders, $50- $70k+, waste, construction,
etc.• Supplier costs, $10-25k to respond to simple bids• Feedback from suppliers is the variations in Council tender
requirements for the same good or service are increasing their costs and risks
• One supplier(engineering services) has responded to 162, State and local government tenders this year at an estimated $10k each so $1.62M just to bid
Sharing the load……. and the benefits
Everything in one place
National – Oils & Fuels
Statewide - Consulting Services Panels
Statewide – IT and Telecommunications Panel
Statewide – Library Resources Panel
Regional – Panels
Regional - Pre-Qualified Contractors
Regional – Contractors (not pre-qualified)
Open Market (Public)
Managed by Council
Managed by Region
Managed by NPN via LGAP
Managed by LGAP
Local – Council Pre-Qualified Contractors
Local – Contractors (not prequalified)
National – Vehicles, Truck Vehicles Panels
National – Mobile Garbage Bins
National – Plant & Machinery
National – After Hours Call Service
Current LGAP focus: 1. Engineering Services Panel2. Temporary Labour Panel
Vendor Panel• A contract supermarket• Pre-qualified suppliers so risk already managed• Simple, quick, safe and easy to use• Removes the need to tender so low cost and risk• Provides access to NPN and LGAP preferred suppliers• Issue an RFQ, evaluate and place an order• Can be tailored by Council, Group or Region by adding
your own contracts• The more it gets used the better the response by
suppliers
Some thoughts on collaboration
Cooperation is the thorough conviction that nobody can get there unless everybody gets there. ~Virginia Burden
No one can whistle a symphony. It takes a whole orchestra to play it. ~H.E. Luccock
None of us is as smart as all of us. ~Ken Blanchard
Thank you for the opportunity to introduce the LGA Procurement
team, our services and capabilities!
Rob AcklandCEO, LGA Procurement
[email protected] or 8224 2012
Discussion: LGAP contracts
Everything in one place
National – Oils & Fuels
Statewide - Consulting Services Panels
Statewide – IT and Telecommunications Panel
Statewide – Library Resources Panel
Managed by NPN via LGAP
Managed by LGAP
National – Vehicles, Truck Vehicles Panels
National – Mobile Garbage Bins
National – Plant & Machinery
National – After Hours Call Service
Which contracts are working well?
Where are the constraints to use of LGAP contracts?
Spend & Opportunity Analysis
Category Opportunities Collaboration
StateRegionCluster
Discussion: Category collaboration opportunities
Opportunity identification process
Cleanse data
Initial review
Define output requirements
Define coding structure
Check sufficient data granularity exists
Import additional data sets into database if necessary
Agree which fields are to be used for the analysis
Initial spend analysis
Develop graphs and analysis on spend
Highlight ‘influenceable spend’
Add in contract view to understand contracted spend
Develop hypotheses
Create hypothesis opportunities
Hypotheses cover areas of potential opportunity that has been highlighted through the spend analysis process
Validate
Validation teams launched to review each potential opportunity
Detailed spend analysis per opportunity
Review of constraints (eg contracts)
Discussion with key stakeholders
Validation of opportunity
Implement
Develop implementation plan
Incorporate into project charter
Approval of project charter
Tracking of progress
Implementation of plan
31 4 5 6Categorize
data
Review current coding structure
Remove irrelevant categories
Implement consistent coding structure
2
Spend Analytics Opportunity delivery
Potential Collaboration OpportunitiesCategory Spend Cluster Region
Bitumen $2.7mWest Coast Bitumen
• Consolidate spend• Common standards• Manage contractor(s)
Road Reseal, Civil & Materials• Road resealing/
Quarry materials/ Regional crushed rubble arrangements/ Carting
• Line-marking/ Kerbing
$11m • Regional longer term arrangements on quarry, rubble
• Shared services
• Cluster contracts
• Develop Common stds, documents, processes
• Regional contracts based on agreed Program and multi-year deal
Potential Collaboration OpportunitiesCategory Spend Cluster Region
Waste Management- Kerbside, transfer
stations, recycling, landfill
$4.4m • Expand arrangements
• Strengthen range of collaboration
• Regional Recycling strategy
• Consolidate spend & manage contractors
• Regional Landfill and Waste Strategy
Utilities $4.5m • Demand efficiency strategies
• Billing accuracy & efficiency
CWMS services and supplies, e.g. pumps, pipes, de-sludging service etc.
? • Develop Procurement strategies to support CWMS Group
Potential Collaboration OpportunitiesCategory Spend Cluster Region
Professional • Legal• Engineering
Asset Mgt
$1.7m$1.6m
• Consolidate spend• Managed Contractor
Panels• LGAP Contracts
R&M $6.4m Managed Panels Building mtce Street sweeping Trees & VegetationCross council contracting Kerbing Linemarking
• Develop Common stds• Managed specific
contracts• Pre-qualification Model
Fleet – Heavy and LightFuel/ Tyres etc.
$2.6m • Asset sharing• Managed Panels
Develop common stdsLGAP Contracts
ICT $2.1m Systems support leverage expertise
Systems strategy