Regulated Procurement Strategy - Scottish Ambulance Service · Audit Committee 07/12/16 0.04...

8 December 2016

Regulated Procurement Strategy 1

st January 2017 – 31

st March 2018

Regulated Procurement Strategy (1st January 2017 – 31st March 2018)

Scottish Ambulance Service, Gyle Square, 1 South Gyle Crescent, Edinburgh EH12 9EB

Telephone: 0131 314 0000

www.scottishambulance.com

VERSION 0.03 DOCUMENT CONTROL SHEET: Key Information:

Title: Regulated Procurement Strategy 1st January 2017 – 31st March 2018

Date Published/Issued: 08/12/16

Date Effective From: 01/01/17

Version/Issue Number: 0.04

Document Type: Strategy

Document status: Approved

Author: Jenny Neville

Owner: Procurement

Approver: Audit Committee

Contact: Jenny Neville (0131 314 0085)

File Location: Procurement drive

Revision History:

Version: Date: Summary of Changes: Name: Changes Marked:

0.01 10/05/16 Initial draft JN No

0.02 14/09/16 Revised draft JN No

0.03 25/10/16 Additional sustainable procurement content included

JN No

0.04 17/11/16 Minor amendments JN No

Approvals: This document requires the following approvals.

Name: Date Approved: Version:

Audit Committee 07/12/16 0.04

Distribution: This document has been distributed to

Name: Date of Issue: Version:

Gerry O’Brien 14/09/16 0.02

Senior Procurement Team 14/09/16 0.02

Senior Management Team 25/10/16 0.03

Key suppliers 26/10/16 0.03

Audit Committee 01/12/16 0.04

Linked Documentation:

Document Title:

Procurement Shared Service: Procurement Strategy 2015 – 2018 Shared Procurement Service Workplan 2016/17 Collaborative Procurement Plan 2016/17



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Equality and Diversity Impact Assessment

Contained in Procurement Shared Service: Procurement Strategy 2015 – 2018



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Table of contents

1. Introduction

2. The regulated procurement strategy development process

3. The Scottish Ambulance Service regulated procurement strategy

3.1 Consultation and approval process

3.2 Mandatory requirements of the regulated procurement strategy

3.2.1 Delivering value for money

3.2.2 Treating suppliers equally and without discrimination

3.2.3 Transparent and proportionate procurements

3.2.4 Complying with the sustainable procurement duty

3.2.5 Policy on the use of community benefits

3.2.6 Policy on consulting and engaging with those affected by its Procurements

3.2.7 Policy on the payment of a living wage to persons involved in producing, providing or constructing the subject matter of regulated

procurements

3.2.8 Policy on promoting compliance by contractors and sub-contractors with the Health and Safety at Work etc Act 1974 and any provision made under that Act

3.2.9 Policy on the procurement of fairly and ethically traded goods and services

3.2.10 Policy on how it intends its approach to regulated procurements involving food to:

improve the health, wellbeing and education of communities in the

authority’s area

promote the highest standards of animal welfare

3.2.11 Payment processes

4. Implementation, monitoring, reviewing and reporting

5. Policies, tools and procedures

6. Appendix 1 – High level commercial targets for Procurement



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1. Introduction During the summer of 2015 the three organisations comprising the Procurement Shared Service (Scottish Ambulance Service, Health Scotland and Healthcare Improvement Scotland) agreed a shared Procurement Strategy for 2015 – 2018. This was approved by the appropriate governance structures in all three organisations. The Procurement Reform (Scotland) Act 2014 came into effect on 18th April 2016. The Act requires contracting authorities with regulated procurements in excess of £5m per annum to have a strategy for dealing with their regulated procurements. Regulated procurements are contracts in excess of £50,000 for goods and services, and £2m for works. The Scottish Ambulance Service is the only partner within the shared service expected to reach the £5m threshold for the first period for which a strategy for regulated procurements is required. The strategy for regulated procurements must be published by 31st December 2016 for the period 1st January 2017 – 31st March 2018. Since the Scottish Ambulance Service is already has a Procurement Strategy, this strategy for regulated procurements will form an addendum to the Procurement Strategy until it is reviewed in 2018 when it is intended that these will come together into a single document. This strategy for regulated procurements should therefore be read in conjunction the Procurement Shared Service ‘Procurement Strategy 2015 -2018’ and the resulting Shared Procurement Workplan for 2016/17, which is the action plan to implement the Shared Service Procurement Strategy. As set out in the Best Practice Guidance, a regulated procurement strategy must be aligned with the organisation’s functions and purposes to ensure that it uses its procurement activity to help to deliver its objectives. More detail on the development process and contents of a regulated procurement strategy as outlined in the Guidance are contained in section 2 below. Regulated procurement strategies must be published on the internet as a minimum, with the Scottish Government being notified of this. 2. The regulated procurement strategy development process The Act requires contracting authorities to consider:

Effective and relevant consultation on developing and aligning their regulated procurement

strategy with the organisations functions, purposes and the National Outcomes.

Effective contract and supplier management to monitor the effectiveness of regulated

procurement

High level commercial targets

Community and stakeholder consultation during procurement exercises

Use of clear outcomes

The Act also requires contracting authorities to set out:

how it intends to ensure that regulated procurements will deliver value for money

how it intends to ensure that regulated procurements will be carried out treating suppliers

equally and without discrimination

how it intends to ensure that its regulated procurements will be carried out in a transparent

and proportionate manner



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how it intends to ensure that its regulated procurements will comply with the sustainable

procurement duty

a statement of the authority’s general policy on the use of community benefit requirements

a statement of the authority’s general policy on consulting and engaging with those affected

by its procurements

a statement on the authority’s general policy on the payment of a living wage to persons

involved in producing, providing or constructing the subject matter of regulated

procurements

a statement on the authority’s general policy on promoting compliance by contractors and

sub-contractors with the Health and Safety at Work etc Act 1974 and any provision made

under that Act

a statement on the authority’s general policy on the procurement of fairly and ethically

traded goods and services

a statement on the authority’s general policy on how it intends its approach to regulated

procurements involving food to:

(i) improve the health, wellbeing and education of communities in the authority’s area

(ii) promote the highest standards of animal welfare

the authority must set out how it intends to ensure that, so far as reasonably practicable,

the following payments are made no later than 30 days after the invoice for

(i) contractors

(ii) sub-contractors

(iii) sub-contractors to sub-contractors

All of these mandatory requirements will be addressed in this document. The regulated procurement strategy must be approved by the appropriate organisational owner. Given that the Service already has a signed off corporate procurement strategy that is extant until 2018, approval of this regulated procurement strategy has been delegated to the Service’s Audit Committee by the Chief Executive. 3. The Scottish Ambulance Service regulated procurement strategy 3.1 Consultation and approval process In the case of the Scottish Ambulance Service, the following stakeholder groups have been identified:

Executive Team

General Managers & Heads of Department

Key suppliers

It is proposed that consultation and engagement is undertaken throughout the development of the regulated procurement strategy, in particular:



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Briefing on requirements for Exec Team

Discuss key themes with specific stakeholders where appropriate

Discuss sustainable procurement issues with key suppliers

Circulate a draft regulated procurement strategy to stakeholders for comment

Obtain Exec Team approval of the final version

Obtain Audit Committee sign off of the final version

3.2 Mandatory requirements of the regulated procurement strategy The Service’s existing Procurement Strategy is fully aligned with the organisation’s corporate objectives and priorities and the wider landscape of public procurement in Scotland. This regulated procurement strategy will form an overlay to ensure full compliance with the Procurement (Scotland) Regulations 2016 that came into effect in April 2016. An integrated strategy will then be produced in 2018 when the current Procurement Strategy is due to be renewed. The Service has contract and supplier management processes in place. These have been further refined and formalised this year through the implementation of a Contract and Supplier Management Policy that was approved by the Audit Committee in June, together with a documented process for procurement staff to follow. In addition, this topic is one of the NHS National Shared Service workstreams for procurement. Any further improvements to contract and supplier management recommended through this workstream will be implemented in due course. High level commercial targets for Procurement are agreed with the Director of Finance on an annual basis. The format for this has been changed for 2016/17 onwards, and a wider range of targets are now in place to enable outcomes to be measured and improved on an ongoing basis. This includes targets for sustainable procurement. These targets are shown in Appendix 1. Community and stakeholder consultation is already embedded within the procurement process, and this is reflected in updated specification setting guidance available to staff on the Procurement intranet page. This is required by some specific technical experts e.g. health and safety, infection control, but will also help to further embed wider consultation as appropriate. Some community consultation already takes place for specific procurements for patient-facing goods and services, such as ambulance conversions and the air ambulance service. Procurement will discuss how this might be extended further with key stakeholders on a project by project basis. 3.2.1 Delivering value for money The Procurement Team will ensure that all regulated procurements follow the Scottish Model of Procurement, with bids being evaluated against a range of criteria based on cost, quality and sustainability. The Procurement Team will utilise the Procurement Journey processes and templates while conducting procurements. Regulated procurements and the corresponding awards will be advertised on Public Contracts Scotland. Procurement will seek to maximise the amount of expenditure subjected to competition in order to demonstrably secure best value. The recent reduction in the Service’s internal thresholds for three quotes to be obtained (£5,000 for goods and services, £25,000 for works) will support this objective. The Procurement Team actively looks for collaborative opportunities in order to use our resources as efficiently as possible. Frameworks awarded by a range of UK contracting authorities are used in addition to Category A and B contracts awarded by Scottish Centres of Expertise. The



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Collaborative Procurement Plan 2016/17 sets out current plans, and spend against collaborative contracts is monitored from year to year. The Procurement Team will work with stakeholders to review requirements to ensure that specifications are as open as possible to maximise potential suppliers’ participation, and that requirements are split into lots where appropriate to facilitate small and medium sized enterprise (SME) participation and compliance with the new regulations. The Procurement Team will work with stakeholders to increase the use of whole life costing in price evaluation where robust data can be obtained. Performance measures include:

Achieving the contract coverage target

Increasing the value of spend on collaborative contracts

Achieving the savings target

Use of sustainable procurement evaluation criteria monitored and published

Annual SME metrics monitored and published

Number of contract notices, award notices and Quick Quotes to be monitored and

published

3.2.2 Treating suppliers equally and without discrimination The Procurement Team will work with stakeholders to ensure that specifications are as open as possible, and evaluation criteria are clearly articulated and fairly applied. Procurement will take steps to ensure that conflicts of interest that may influence the outcome of a procurement process do not occur through identifying and recording any relevant interests of stakeholders involved in procurement processes. Any such issues will be addressed on a case by case basis to mitigate the risks that would arise from this. The Procurement Team will use the systems and processes (e.g. Procurement Journey) provided by the Scottish Government in order to standardise processes and build in equal treatment of suppliers. Procurement will undertake annual monitoring of spend with SMEs to ensure that they are appropriately represented in our supply chain. Performance measures include:

Annual SME metrics collated and monitored


published

Legal challenges against procurement processes to be monitored and published

3.2.3 Transparent and proportionate procurements Procurement processes will be proportionate to the value and complexity of the contract to minimise the burden on suppliers, and SMEs in particular. This will include the use of Procurement Journey processes and templates and the European Single Procurement Document where appropriate.



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The Procurement Team will ensure that all appropriate requirements and the resulting contract awards are advertised on Public Contracts Scotland. Less complex processes (such as Quick Quote) will be used for lower value procurements. Performance measures include:

Value of contracts in the contract register monitored and published


published

Number of call-off award notices to be monitored and published

3.2.4 Complying with the sustainable procurement duty The Act requires contracting authorities to comply with a new sustainable procurement duty. This requires the following to be considered before conducting the procurement:

how to improve the economic, social and environmental wellbeing of our area

how to facilitate the involvement of SMEs, third sector and supported businesses

promote innovation

The procurement must then be carried out with a view to securing these improvements. In order to support the implementation of the sustainable procurement duty, the Service’s Sustainable Procurement Policy has been revised. This will be submitted to the Audit Committee for approval later in December 2016. Work is currently underway to develop an appropriate training course on sustainable procurement for Procurement staff, to ensure they have sufficient skills to implement the new duty. The Procurement Team will aim to use the Prioritisation Tool to prioritise commodity areas, and implement the Sustainability Test for use in individual projects to identify relevant issues for specific procurements. The Procurement Team will work with stakeholders to seek to identify ways to achieve these objectives, and develop a means of recording what has been achieved. Performance measures include:

Annual SME metrics will be monitored and published

Annual supported business use will be recorded, monitored and published

Economic, social and environmental improvements will be recorded, monitored and

published

Innovative initiatives will be recorded, monitored and published

Percentage of Category C contracts where sustainable procurement is included in the

evaluation criteria to be monitored and published

Proportion of key suppliers with recognised environmental accreditation to be monitored

and published

Proportion of key suppliers with membership of recognised ethical trading or corporate

social responsibility scheme to be monitored and published



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Flexible Framework scores will be monitored and used as the basis for developing the

sustainable procurement workstream within the annual Procurement workplan

3.2.5 Policy on the use of community benefits It is Scottish Ambulance policy to seek community benefits for all procurements values at £4m and above in line with the requirements of the Procurement Reform (Scotland) Act 2014. The Procurement Team will work with stakeholders to identify opportunities to secure community benefits for these contracts and any other contracts that may be appropriate. Whilst there are most likely to be opportunities within larger works contracts, this will also be explored for other contracts. The Procurement Team will also implement a means of recording community benefits obtained. Performance measures include:

Community benefits achieved to be recorded, monitored and published

3.2.6 Policy on consulting and engaging with those affected by its procurements The Scottish Ambulance Service has a well-established Patient Focus Public Involvement (PFPI) Steering Group. There are patient and public representatives on this group from a range of communities across Scotland. This Group informs patient and public engagement and co-production priorities in relation to service development. The Procurement Team is able to share procurement priorities with and seek feedback from this Group. The Group is linked to our five divisional PFPI leads. The divisional PFPI leads have access to NHS Health Board Public Partnership Fora (PPFs) for local public engagement activity. The Service has a successful track record of engagement in relation to procurement activities which directly impact patients. This includes the recent national air ambulance re-procurement project, where the Service engaged with communities across Scotland in order to develop the tender specification in 2009. The Service maintained communications with these communities, including a launch event of the new and refurbished aircraft, and a series of “show and tell” visits to remote and island communities during the pilot training phase of the new helicopters over the summer of 2015. The Scottish Government Gateway Reviews described stakeholder engagement, which included the public, as “exemplary.” During 2015 and 2016, patients have also been involved in developing the tender specification for Accident & Emergency and Patient Transport Service vehicles, which has been very helpful in understanding the needs of patients using our unscheduled and scheduled care resources. 3.2.7 Policy on the payment of a living wage to persons involved in producing, providing

or constructing the subject matter of regulated procurements The Scottish Ambulance Service supports the right of employees to earn a fair wage. The Service is not permitted to enforce the application of the Living Wage within its supplier community. However, it will work with suppliers through contract and supplier management, and through addressing fair work practices in its procurement processes to encourage suppliers to pay the Living Wage within their staff structures. Suppliers will be asked about fair work practices, including the Living Wage, in all future procurements where relevant.



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3.2.8 Policy on promoting compliance by contractors and sub-contractors with the Health and Safety at Work etc Act 1974 and any provision made under that Act

The Service has a policy for the Management of Contractors which is aimed at promoting compliance with the Health and Safety at Work etc Act 1974, and a broad range of other health and safety legislation. This policy is provided to contractors and they are required to comply with it. In addition, the Service uses standard NHS terms and conditions of contract which require contractors to comply with health and safety legislation, and provide remedies for any failure to comply with this. 3.2.9 Policy on the procurement of fairly and ethically traded goods and services The Service will consider the requirement for specifying fairly traded and ethically traded goods and services in relevant procurements on a case by case basis, as set out in its sustainable procurement policy. 3.2.10 Policy on how it intends its approach to regulated procurements involving food to:

improve the health, wellbeing and education of communities in the authority’s area

promote the highest standards of animal welfare

Due to the nature of its activities, the Service only buys small quantities of foodstuffs and the value

of this falls well below the threshold for regulated procurements. As a result, the Service does not

have a policy pertaining to the purchase of food. If this situation changes in future, an appropriate

policy will be put in place.

3.2.11 Payment processes

the authority must set out how it intends to ensure that, so far as reasonably

practicable, the following payments are made no later than 30 days after the invoice

for

contractors

sub-contractors

sub- contractors to sub-contractors

The Service has a policy for the Prompt Payment of Suppliers. This policy states that approved invoices will be paid within 30 days, although the Finance Department aim to achieve payment within 10 days. In addition, the Service uses standard NHS terms and conditions of contract which require contractors to pay their sub-contractors within 30 days. If this does not occur, sub-contractors may apply to the Service for support to resolve the matter. However, the Service is also required to comply with the NHS policy on ‘No PO no pay’ (i.e. invoices must quote purchase order numbers). Invoices without a valid purchase order number are returned to suppliers. The requirement for invoices to show order numbers is made clear in the Service’s terms and conditions of contract, and is stated on its website. Payment performance is monitored on a monthly basis.



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Performance measures include:

Payment performance metrics will be will be monitored and published

4. Implementation, monitoring, reviewing and reporting The Service’s corporate Procurement Strategy is implemented by way of annual workplans. The 2016/17 workplan will be adjusted as necessary to take account of any requirements arising from the strategy for regulated procurements. Progress against the workplan is monitored by the Head of Procurement on an ongoing basis, and reported to key stakeholders on a quarterly basis. In addition, an annual report on procurement performance is produced that measures performance against the agreed targets. This also contains targets for the following year. The 2015/16 report contains a wider range of performance measures for 2016/17, together with baseline data from 2015/16 to enable comparison. This includes several new sustainable procurement measures. In general, targets are increased annually. The first annual report on regulated procurements will be published as soon as reasonably practicable after 31st March 2018. This will address the requirements of the Procurement Reform (Scotland) Act 2014, and draw on the annual procurement performance reports from 2016/17 and 2017/18. The annual report will be signed off by the Service’s Executive Team, comprising the Chief Executive and Executive Directors. It will contain the following information as a minimum:

A summary of the regulated procurements that have been completed during the period

covered by the report.

A review of whether those procurements complied with this strategy for regulated

procurements.

If any regulated procurements did not comply with this strategy for regulated procurements,

a statement of how the Service intends to ensure that future regulated procurements do

comply.

A summary of any community benefit requirements imposed as part of a regulated

procurement that were fulfilled during the period covered by the report.

A summary of any steps taken to facilitate the involvement of supported businesses in

regulated procurements during the period covered by the report.

A summary of the regulated procurements that the Service expects to commence in the

next two financial years.

5. Strategy ownership and contact details This strategy for regulated procurements will be subject to ongoing review by the Service’s Director of Finance and Logistics and the Head of Procurement. This strategy for regulated procurements will ultimately by replaced by a new corporate procurement strategy from 2018 onwards.



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Director of Finance & Logistics: Gerry O’Brien

Head of Procurement: Jenny Neville

Email: gerry.o’[email protected]

Email: [email protected]

Telephone: 0131 314 0109 Telephone: 0131 314 0085

6. Policies, tools and procedures National policies and tools include: Scottish Model of Procurement Public Procurement Reform Programme Suppliers Charter EU Procurement Thresholds Procurement Journey PCIP Public Contracts Scotland Public Contracts Scotland – Tender Information Hub Scottish Ambulance Service policies and procedures Scottish Ambulance Service policies can be accessed on the www.scottishambulance.com

mailto:[email protected]

http://www.gov.scot/Topics/Government/Procurement/about/spd-aims

http://www.gov.scot/Topics/Government/Procurement/about/Review



http://www.gov.scot/Topics/Government/Procurement/Selling/Supplierscharter2

http://www.gov.scot/Topics/Government/Procurement/policy/10613



https://www.procurementjourney.scot/

https://www.procurementjourney.scot/procurement-and-commercial-improvement-programme

http://www.publiccontractsscotland.gov.uk/



https://www.publictendersscotland.publiccontractsscotland.gov.uk/esop/pts-host/public/pts/web/login.html



http://www.gov.scot/Topics/Government/Procurement/eCommerce/ScottishProcurementInformationHub

http://www.gov.scot/Topics/Government/Procurement/eCommerce/ScottishProcurementInformationHub

http://www.scottishambulance.com/



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Appendix 1 High level commercial targets for Procurement

Performance indicator

Target 2016/17

Expenditure influenced by Procurement

93%

Value of contracts in contract register

85%

Savings

3%

Spend with SMEs

65%

Spend with supported businesses

£5,000

eOrders

50%

eInvoices

70%

Return on investment

25%

% of Category C tenders and Quick Quotes by value with sustainability included in the evaluation criteria in financial year

50%

Proportion of key suppliers holding or working towards a recognised environmental accreditation (e.g. ISO14001, EMAS etc.) in financial year

65%

Proportion of key suppliers with membership of a recognised ethical trading scheme

35%

Note: Targets are adjusted annually.



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Other performance measures


published

Legal challenges against procurement processes to be monitored and published

Number of call-off award notices to be monitored and published

Economic, social and environmental improvements will be recorded, monitored and

published

Innovative initiatives will be recorded, monitored and published

Community benefits achieved to be recorded, monitored and published

Payment performance metrics will be will be monitored and published

Regulated Procurement Strategy - Scottish Ambulance Service · Audit Committee 07/12/16 0.04...

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