THIS ARCHIVED VERSION OF THE PROCUREMENT JOURNEY IS APPLICABLE ONLY TO PROCUREMENTS WHICH COMMENCED ON APRIL 17TH 2016 OR EARLIER.
Procurement JourneyRoute 3
Contents – Please click on the name of the chapter
Introduction 77
Route 3 - Start 77
Route 3 - Develop Strategy 79
Route 3 - Develop Strategy - Stakeholder Identification 79
Route 3 - Develop Strategy - Profiling the Commodity 82
Route 3 - Develop Strategy - Profiling the Commodity - Contract Status & Spend Analysis 82
Route 3 - Develop Strategy - Profiling the Commodity - Sustainable Procurement 84
Route 3 - Develop Strategy - Profiling the Commodity - Commodity Characteristics 86
Route 3 - Develop Strategy - Profiling the Commodity - Supply Market Analysis 87
Route 3 - Develop Strategy - Profiling the Commodity - Shaping the Requirement 93
Route 3 - Develop Strategy - Initial Opportunity Assessment 94
Route 3 - Develop Strategy - Develop Commodity Strategy 95
Route 3 - Develop Strategy - Procurement Route 99
Route 3 - Develop Strategy - Procurement Route - Open 101
Route 3 - Develop Strategy - Procurement Route - Competitive with Negotiation 101
Route 3 - Develop Strategy - Procurement Route - Negotiated Proc Without Prior Publication 102
Route 3 - Develop Strategy - Procurement Route - Innovation Partnership 102
Route 3 - Develop Strategy - Commodity Strategy Executive Summary 102
Route 3 - Develop Documents 103
Route 3 - Develop Documents - Specification 104
Route 3 - Develop Documents - Selection, Award and Exclusion Criteria 109
Route 3 - Develop Documents - European Single Procurement Document ESPD (Scotland) 115
Route 3 - Develop Documents - Pre-Qualification Questionnaire (PQQ) 120
Route 3 - Develop Documents - Invitation to Tender (ITT) 121
Route 3 - Develop Documents - Contract Notice and Advertising 123
Route 3 - Supplier Selection 124
Route 3 - Supplier Selection - Publicising the Contract 124
Route 3 - Supplier Selection - Issuing Pre-Qualification Questionnaire (PQQ) 125
Route 3 - Supplier Selection - Assessing Responses 126
Route 3 - Supplier Selection - Limiting number of potential suppliers 126
Route 3 - Issue ITT 127
Route 3 - Issue ITT - ITT Administration 127
Route 3 - Issue ITT - Open Suppliers' Meeting 128
Route 3 - Issue ITT - Questions from Suppliers 129
Route 3 - Open & Evaluate Tender 129
Route 3 - Open & Evaluate Tender - Receipt of Tenders 130
Route 3 - Open & Evaluate Tender - Opening of Tenders 131
Route 3 - Open & Evaluate Tender - Technical Evaluation 132
Route 3 - Open & Evaluate Tender - Price evaluation 133
Route 3 - Open & Evaluate Tender - Evaluation Tools 135
Route 3 - Post Tender Clarification 135
Route 3 - Post Tender Clarification - Tender Clarifications 136
Route 3 - Post Tender Clarification - Post Tender Negotiation 137
Route 3 - Contract Award - Remedies Directive 139
Route 3 - Contract Award - Notification of Contract Award Decision 140
Route 3 - Contract Award - Standstill 140
Route 3 - Contract Award - Debriefing 141
Route 3 - Contract Award - Challenges During Standstill 142
Route 3 - Contract Award - Award 143
Route 3 - Contract Award - Contract Award Notice 143
Route 3 - Contract Award - Points to Remember 144
Route3 - Contract Implementation 145
Route 3 - Contract Implementation - Communication 146
Route 3 - Contract Implementation - Content Management 148
Route 3 - Contract Implementation - Buyer/End User Information Packs 148
Route 3 - Contract Implementation - Supplier/Buyer Events 149
Route 3 - Contract & Supplier Management - Planning & Governance 152
Route 3 - Contract & Supplier Management - Managing & Improving Performance 161
Route 3 - Contract & Supplier Management - Admin & Tools 168
Route 3 - Contract & Supplier Management - Exit Strategy 173
ROUTE 3
Introduction
Route 3 is designed for use by Procurement Officers. If this does not apply to you, please contact your ProcurementFunction or Centre of Expertise.
This Route of the Procurement Journey provides guidance for high value/high risk/strategic procurements as determined by the Decision Matrix.
The main objectives of the toolkit are:
· To provide a step-by-step guide to conducting a strategic procurement exercise for high value/high risk requirements
· To provide a set of guides and templates that can be used to collate and analyse the data required when conducting the procurement exercise
· To standardise the public sector procurement process across organisations
· To highlight the minimum legal and policy obligations involved at each stage of the process
In any procurement process, the key roles of budget holder and Procurement Officer should not be performed by the same individual. For more information please see theScottish Procurement Policy Handbook.
Considerationmustbe given toPlanningandRisk Managementthroughout the Journey and records should be kept for audit purposes. It should be noted that purchases of goods and services are routinely the subject ofFreedom of Informationrequests.
Please be aware that where the term 'commodity' is used, this can equally refer to services.
Now you are ready to begin your Route 3 Procurement Journey.
Please ensure the guidance is used in conjunction with the internal governance, policies and procedures for your Organisation.
Route 3 - Start
In these unprecedented economic times, good procurement is obviously not just about buying well but it's about buying less or, indeed,not buying at all.
Depending on the specifics of the procurement exercise, the types of question you might ask of your stakeholders prior to commencing the procurement could include the following (these should already have been answered in the decision matrix prior to commencing the journey):
· Have alternatives to procuring being considered and discounted and do you have a budget?
· Is there a robust documented business case supporting this procurement?
· Will this expenditure stand up to public scrutiny?
· Have procurement been involved in the development of the business case to help cost options, enable flexibility, minimise risk and/or inform decisions regarding the route forwards?
· Are you aware of opportunities to buy your specific requirement through existing collaborative contracts and do you know how to access them?
Consideration must also be given toplanningandrisk managementthroughout the Journey.
There are natural break points within the Procurement Journey that can be used as review points for sign off and approval to proceed to the next stage of the process.
Suggested review and sign off points are:
· At project initiation
· After initial opportunity assessment
· For approval of strategy including budget
· For approval of Contract Notice, PQQ and/or ITT
· At contract award stage
· At implementation stage
Throughout the Journey you will see reference to these sign off points at the relevant sections. Any review and agreement to the project plan should be subject to your organisation's governance arrangements.
Route 2 Strategy Development is a much lighter version than the Route 3 Strategy Development. The Strategy Development stop is therefore displayed as a 'linked station' on the main route map. You can however supplement the Route 2 documentation with any guidance or documentation from Route 3.
You should use lessons learned from previous contracts/procurement exercises to inform your new strategy. As you progress through the Journey you should constantly re-inform your strategy with any new information.
Route 3 - Develop Strategy
This part of the Procurement Journey is to help you develop commodity and category strategies.The guidance to profile the commoditycan equallybe used to profile categories.
A strategy is always required for Route 3 procurements. The strategy however should be proportionate to risk, value and strategic importance of the commodity to the Organisation. Consideration must also be given toPlanningandRisk Managementthroughout the Journey.
The individual stops under Develop Strategy provide guidance to assist you in completing theStrategy Development Pack. To save templates in a version that you can edit yourself you should click the appropriate template hyperlink, right mouse click over the "Open File" link and select the option "Save Target As".
Strategy Development Pack
Route 3 - Develop Strategy - Stakeholder Identification
To ensure stakeholders requirements are met and maximum compliance is achieved, a cross-functional team, or User Intelligence Group (UIG), should be established. The UIG will assist you when developing the commodity strategy, assist with tender evaluation and the ongoing activities of contract/supplier management, monitoring, implementation, compliance and benefits tracking.
This group should have representation from key stakeholders within the participating organisation(s) and should include procurement and business/technical/customer representatives.
Depending on the nature of the procurement, this UIG could consist of only two members e.g. the Procurement Officer and the end user.
You should undertake appropriate research prior to the first meeting, for example:
· Gain an understanding of the market for a commodity from desktop research, e.g. via the internet
· Speak to supplier or industry representatives
· Meet with individual key stakeholders and end-users
· Review historical spend patterns if appropriate
· Gather information from other public sector contacts, such as Centres of Expertise
· Read previous tenders or commodity strategies
This research will help you gain an initial understanding of the commodity, the organisation's requirements, market conditions and some of the risks, issues and barriers to success they may face. It will also help highlight any contracts which you may be able to access for your requirement without the cost, time and risk of developing your own contract.
Stakeholder Mapping
The benefits of establishing a UIG are:
· The ability to draw on the cross-functional expertise within the group
· Ensures stakeholder views are considered in the decision making process
· Clear communication channels can be established
· Presents 'one face' to suppliers
· Formalises the governance arrangements and identifies the decision makers
· Clarifies roles and responsibilities
· Facilitates the generation of ideas
· Facilitates buy-in and compliance
· Stakeholders should work together to understand and overcome any the barriers to success, to embed best practice and to support the implementation of continuous improvement processes to safeguard the future of public service for future generations, and to bring together the ideas and insights of these groups to obtain a holistic view.
· Stakeholders should work to:
o Embed best practice
o Encourage and sponsor continuous improvement
o Encourage innovation
o Understand and remove any potential barriers to sucess
Where there are a large number of stakeholders, for example a collaborative contract, it may not be possible to have all stakeholders represented on the UIG. Stakeholder mapping is a useful tool to help identify who should be represented based upon their likely impact upon the success of the project. You must also ensure you understand your organisation's policy or requirements regarding engaging with end users/customers of the commodity or service and whether they should also be involved in the UIG.
Depending on the specifics of the procurement exercise, the Procurement Officer may ask stakeholders the following questions prior to the commencement of the procurement exercise (these questions should already have been answered at the Decision Matrix stage of the process):
· Have alternatives to procuring been considered and discounted and do you have a budget?
· Is there a robust documented business case supporting this procurement exercise?
· Will this expenditure stand up to public scrutiny?
· Are you aware of opportunities to buy your specific requirement through existing collaborative contracts and do you know how to access them?
Stakeholder Map & Degree of Engagement
Blank Stakeholder Map
For the procurement exercise to be effective it must meet the reasonable expectations of stakeholders and end users therefore a clear understanding of stakeholder and end users' views is essential. In order to obtain this understanding there must be effective engagement and you must take into account all views of your stakeholders. Many stakeholders will be positive and supportive however, it is also important that you consider the reasons why stakeholders may not be fully supportive.
In order to manage this you may wish to consider some of the following:
· Ask your colleagues whether they know of any strong views stakeholders may hold to gain an understanding of any issues that may arise and reasons for these
· Meet with stakeholders on a 1:1 basis in advance to understand their viewsand concerns
· Ensure stakeholders are encouraged to contribute fully
· Ensure a good governance structure is in place which should include identifying and addressing any conflicts of interest
The stakeholder map is a useful tool for the UIG to plan communications to stakeholders who are not UIG members. Some of thekey characteristics of a successful UIGare shown in the attached slide.
You may wish to issue the attachedUIG Welcome Packwhich covers Roles and Responsibilities, core competencies, business conduct, gifts and hospitality and a Stakeholder Declaration of Interest. AUIG chartershould be agreed and anexample is provided.
Members of the UIG should not underestimate the amount of time and commitment involved in being a team member. Although the team itself may typically meet only fortnightly or monthly there will be work to be completed in-between meetings and members should come to meetings fully prepared. TheUIG Membership Templatecan be used to record UIG membership and contact details.
Stakeholders should always be open to new ways of shaping the requirement by sounding out the market and identifying what the market is able to provide. They should give consideration to the options for shaping the market, encouraging the market to develop in such a way that it can meet organisations’ future requirements. There should be an assessment of future demand of the commodity, based upon the knowledge and expertise within the team and upon information obtained from communications with non-team members. Engaging the market provides an opportunity to ensure that the services provided are at the forefront of those available. Market sounding should also take in account the knowledge held by other buying organisations, trade bodies and business support organisations e.g. Federation of Small Businesses and Chambers of Commerce etc.
Any documents you need are listed below: