Agenda item 4(f)

Strategic Procurement Group /

REVIEW OF PROCUREMENT ORGANISATION

Purpose of Document:

To initiate a review of the way Procurement is organised within the Council in order to develop proposals for its future shape and focus. The main drivers for this review are:

  • The cashable savings of 3% per year required to meet the target set in CSR 07. Sixty percent of this target is expected to be secured through better procurement
  • The need to raise public confidence in our ability to deliver VFM, keep Council tax down, expand the Herts Procurement forum & Marketplace, engage with local partners and businesses and improve our ‘use of Resources’ score.
  • To meet central government’s agenda to raise the calibre of procurement professionals, achieve better value, use innovation and sustainability as a driver and use ‘forward procurement’
  1. Background

In February 2008 the Head of Procurement submitted a paper to SMBentitled ‘Transforming the Procurement Vision’. SMB approved the core proposal to form a Strategic Procurement Group with effect from 1st April 2008 (Phase 1). The Board also agreed that that the newly formed Group,supported by departmental representation where appropriate, should undertake a detailed review into how the Council’s procurement activity should be developed in order to meet the drivers listed above (Phase 2).

  1. Objective of the Review:

To investigate all aspects of procurement within the Counciland best practice elsewhere with the objective of recommending to SMB the procurement organisational model to be adopted by the Council with effect from April 2009.

  1. Scope

The scope of the Review shall include in particular the following activities:

Feasibility

Investigate the models further (e.g. full scale centralisation, centralisation of core activity with contract management remaining in departments)

Look at what other authorities are doing (involve appropriate representatives from departments)

Talk to each departmental service board

High level review of potential savings of each model

Investigation and Analysis

Confirm the number of procurement related staff and identify current activities

Look at where schools’ procurement fits

Look at where commissioning, property & highways fit

Look at where Hertfordshire Business Services fits in

Look at contract management

Look at sourcing and contract management systems

Review service level agreements

Look at models of joint working / collaboration in procurement area

Proposal to SMB

Report on findings

Make recommendations

Outline business case

Draft implementation plan

Following Approval by SMB the Review Team will:

Confirm the implementation plan

Produce a consultation document for the Trade Unions

Issue re-organisation document

Engage with staff in accordance with the Council’s procedures covering re-organisation

4. Timescales

Review to commence in April 2008.

All investigative activities to be carried out during the period April – July 2008

Report to SMB in October 2008

Implementation activities November 2008 to end March 2009

Go live 1 April 2009

5. Assumptions

That sufficient resource and time shall be available within the Review Team, departments and external organisations to enable the timescales to be met.

6.Success Criteria

Approval of recommendations by SMB

Implementation successfully completed by April 2009

7.Review - Roles and Responsibilities

Role / Name /
  • Key Responsibilities

Review Sponsor / Chris Sweeney / The person appointed to champion the Review throughout and who:
  • Facilitates progress of the Review
  • Has authority to make decisions on behalf of HCC
  • Chairs Review Board meetings

Review Board / Mike Collier? (Env)
Iain MacBeath? (ACS)
Andy Nightingale (Corp)
CSF? / The supervisory board for the Review comprising senior managers from HCC. The Review Board’s role is:
  • High level monitoring of Review progress against plan
  • Review and resolve issues and risks escalated by the Review manager
  • Sign off key deliverables

Review Team / A range of employees nominated by Procurement Board Members to work with the Lead Officer and the Review Manager / The investigative team for the Review. The ReviewTeam’s role is to carry out the feasibility, investigation and analysis work listed in paragraph 3 (Scope).
Lead Officer / Peter Maguire / The person who owns and champions the functional strands of the Review throughout and who:
  • Facilitates the functional progress of the Review

Review Manager / Ian Williams / The person responsible for the management of Review activities to:
  • Obtain commitment to necessary resources (people, materials, buildings etc) and manage resourcesassignedto the Review
  • Prepare Review plans, manage and monitor delivery against those plans
  • Prepare and manage the risk register
  • Report to Review Board monthly, escalating issues for resolution as necessary

Communication /
  • Produce communications plan
  • Produce and circulate Review communications for interested parties

Critical Friend / John Sellgren /
  • Provide a challenge to assumptions and conclusions made in Review reports
  • Provide a ‘helicopter’ view of the Review to help the Lead Officer ensure strategic objectives are being met

8Review controls

8.1Review Plan

The Review Manager will produce a Review Plan outlining the overall timescale and the dates for the delivery of key milestones within the Review. A high level version of this is attached as Appendix 1.

8.2Review Status Reports

The Review Manager will update the Review Status Report monthly. This report will be reviewed by the Review Board at its monthly meetings.

Risk Assessment & Prioritisation

The following process is to be used for categorising and reporting on identified risks on the Review.

  1. Assess the impact of the identified risks on the Review (time, cost and performance) and the likelihood of the risk occurring.

Likelihood Refers to the possibility that a particular event will (or won't) occur. It is a general term which, for the purposes of this document, is intended to mean either probability or Frequency.

Ratings / Descriptions
Almost Certain / Will occur in most instances
Likely / Could occur in most instances
Moderate / Should occur at some time
Unlikely / Might occur occasionally
Rare / Will only occur in exceptional circumstances

Impact Refers to the extent to which a given event has an adverse effect on Review objectives.

Ratings / Descriptions
Extreme / Will cause cancellation of significant parts of the Review
Very High / Significant time or cost overruns
Medium / Some time or cost overruns
Low / Some inconvenience
Negligible / No noticeable effect

Prioritise the risk using the traffic light scoring system. This will be done based on the results above impact and likelihood assessment and the table below:

Impacts
A / B / C / D / E
Likelihood
/ Extreme / Very High / Medium / Low / Negligible
Almost Certain / 1 / Red / Red / Red / Amber / Amber
Likely / 2 / Red / Red / Red / Amber / Amber
Moderate / 3 / Red / Red / Amber / Amber / Green
Unlikely / 4 / Red / Amber / Amber / Green / Green
Rare / 5 / Red / Amber / Green / Green / Green
Priority /
Description
Red / Those risks requiring immediate management and monitoring

Amber

/ Those risks requiring management and monitoring but less time critical

Green

/ Those risks which do not require a specific management attention

Identify responsible owners for the risk control measures. The risk owners will be expected to develop treatments for the risk identified. The reduction or control of identified risks can be broadly categorised into actions to:

Reduce the likelihood;

Reduce the Impact;

Transfer the risk;

Accept the risk;

  • Avoid the risk.

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