Keele University
Procurement Strategy
25th February 2004
Issue 1
Contents
Page
1 Introduction
3
2 Strategic
Objectives
3
3
Strategy Development and Review
3
4
Best Practice
4
5
Procurement Skills and Training
4
6
Analysis of External Expenditure
5
7
Measuring Performance in Procurement
5
8
Major Purchases
5
9 Tender
and
Quotation
Thresholds
6
10
Procurement of General Goods and Services
6
11
Procurement
Procedures
Manual
7
12
Systems
8
2
1 Introduction
The University operates a decentralised Procurement system that is
overseen by the Procurement Section of the Finance Department.
Total non pay spend for the year 2002/2003, which could be influenced
by the Procurement Section, was approx £20M or 50% of total
expenditure.
This expenditure is authorised by approximately 30 Heads of
Departments or is delegated appropriately. The number of staff authorised
to raise orders is now standing at approximately 200 with many more who
directly influence or specify procurement requirements.
Keele Facilities Management operates separate purchasing procedures and
has independent ordering systems. However, use of the Keele contracts
should be utilised wherever possible to ensure best value is being
achieved.
In some sections procurement responsibility represents only a small and
peripheral part of the core activity, but for others it is considered to be a
core activity within their role. Regardless of the level of procurement
responsibility it is critical that suppliers of goods and services meet and
exceed the University’s requirements and that communication is
maintained at all times.
It is important, with the above in mind, that these varying levels of staff
involvement can be placed within an overall strategy that recognises and
accommodates the different styles of approach, ensuring that efforts to
improve procurement performance are applied to areas that will achieve
best value.
2
Strategic Objectives
The aim of the Procurement Section is to make a recognised and
measurable cost effective contribution to the success of the university and
the achievement of its strategic aims. The Procurement Section will work
to become a recognised centre of expertise in external resource
management.
3
Strategy Development and Review
The development of the Procurement Strategy is the responsibility of the
Procurement Working Party, and receives the support of and endorsement
by the Finance Sub-Committee and senior management. Overall the
Procurement Working Party monitors performance against the Strategy. It
is important that all staff involved in procurement should have access to
and understand the Procurement Strategy, and be able to contribute to its
development through the membership of the Procurement Working Party.
3
4
Best Practice
Keele University’s Procurement Policy and Procedures state that budget
holders shall obtain the supply of all goods, supplies and services of the
optimum quality and quantity at the lowest delivered price at the time
they are required regardless of the source of funds.
Wherever possible, procurement practices should be compared with best
practice within the university sector and the public and private sectors
generally. Keele is receptive to innovative changes where these are likely
to be beneficial, particularly with regard to improvements in procurement
processes and practice.
5
Procurement Skills and Training
Staff involved in procurement – Staff involved in procurement within the
Procurement Section and beyond should be given the opportunity to
improve their procurement skills through continuous training and working
to clear published procedures and guidelines. They will be active in
understanding and working to satisfy the requirements of internal
customers, meeting regularly with customers and suppliers to ensure best
value is being achieved and to continually improve procurement practice.
The Procurement Manager will be a qualified member of the Chartered
Institute of Purchasing and Supply (CIPS) via the examination route. The
Procurement Manager will also determine the appropriate level of NVQ
training and procurement skill development for staff outside the
procurement section that are involved in a significant level of expenditure
with outside suppliers.
The university will maintain a record of the number and location of NVQ
trained purchasers throughout the university and set targets and monitor
progress towards an appropriate level of competence achievement.
End Users – The internal customers who are the end users of the services
of procurement will be in a position to specify requirements to ensure a
right first time service is provided.
Suppliers – The range of suppliers used will be able to meet our
requirements in terms of quality, delivery, service, responsiveness, and
contribution to innovation and value for money. Procurement staff will
work with these suppliers as partners not adversaries with the emphasis
clearly placed on ensuring that the university’s requirements and the
suppliers capabilities are clearly understood, that best value for money is
obtained and all unnecessary costs eliminated.
4
Supplier performance will be monitored against pre-determined, clear and
agreed criteria set out in the contract. Self-measurement by suppliers is
encouraged, providing the data is periodically tested by sampling. Input
from end users is critical, especially when it is obtained systematically.
6
Analysis of External Expenditure
The Procurement Working Party will report to the university’s senior
management through the Finance Sub-Committee and will examine the
proportion of annual expenditure paid to external resource providers.
Consideration will be given to the appropriateness of central and devolved
control and application of trained procurement staff. Alternative
approaches will be considered for areas of major expenditure in terms of
total cost, risk or strategic impact to the university.
Progressive targets will be set and the progress monitored to bring all
expenditure on external resources under the control of staff, inside the
procurement office or beyond, who have appropriate levels of skill
development.
The Procurement Working Party will need to fully understand
departmental requirements, current working practices and review
procurement mechanisms by holding meetings with departmental co-
ordinators/ office managers on a regular basis.
7
Measuring Performance in Procurement
Performance will be measured by the Procurement Manager against
criteria and targets agreed by the Procurement Working Party. The results
will be presented in an annual report to the Finance Sub-Committee.
The Procurement Working Party will set demanding but realistic targets
for procurement improvements, both financial and organisational. Most of
these targets will be measurable year-by-year to demonstrate performance
trends; others will be one-off project-specific objectives.
8
Major Purchases
The Procurement Manager will maintain a register of all tenders over
£25,000 and will oversee all projects that exceed the tendering thresholds
in the European Union Procurement Directives. The Procurement
Manager on behalf of the Vice Chancellor of the university will ensure
compliance with the EU Procurement Directives.
The Procurement Section will be informed of major projects involving
significant external expenditure at an early stage. This will enable the
appropriate input to investment appraisal and whole life costing analysis
to be made in a timely and effective manner.
5
The Procurement Section will be able to advise on the level of
specification detail appropriate and refer to earlier examples of similar
projects. Timely involvement will enable a constructive ‘value
engineering’ process to be carried out to identify and examine the critical
parts of the specification and ensure that these are clearly understood and
stated. Even when the end user may feel that the project is so specialised
that the Procurement Section will have nothing to contribute, the decision
on this must be left to the Procurement Manager. Procurement Sections
have a well-developed network of information sharing across a wide
section of commodities.
Grant applications – If the Procurement Section is not involved in the
project before the application is submitted, the Office of Research and
Development must inform the Procurement Manager at the time of
application. This allows the correct decision to be made as to whether to
go out to tender in parallel with the application consideration and
approval period, or at lease to carry out the necessary preparatory work to
enable the competitive tendering process to be initiated.
Targets will be set and regular reports made on the number of competitive
tenders conducted and level of contribution of the Procurement Section to
the project or grant application success and the value for money benefits
achieved.
9
Tender and Quotation Thresholds
For proposed external expenditure with anticipated values of £25,000 a
formal tendering process must be used. The Procurement Section can
provide this service or the procedures defined on the Procurement Web
page can be followed.
10
Procurement of General Goods and Services
Aggregation will be used wherever appropriate to maximise procurement
power and attractiveness to suppliers. Maximum use will be made of
National, Regional or Consortium Agreements to avoid duplication of
effort and dilution of benefit. Where these agreements are not found to
provide best value for money, notice of this should be given to the
Procurement Manager who will take the necessary action.
Orders should only be placed with approved suppliers. Where these
suppliers are found not to provide best value for money, notice of this
should be given to the Procurement Manager who will take the necessary
action.
All purchases of goods and services must be correctly and appropriately
authorised. If this rule is broken, the university may hold the individual
concerned personally liable for payment of the costs incurred.
6
The Procurement Section will promulgate information on these and local
agreements as widely as appropriate within the university and make sure
that they are readily accessible to and useable by the staff that needs them
throughout the university.
Improvements to the cost-effectiveness of the procurement process shall
be sought by:
a) Developing procurement procedures that devolve procurement
decision-making to the point closest to the end user, paying due regard
to financial probity, the relative importance and value of the goods or
services purchased, and the skill level of the purchaser.
b) Developing procurement procedures and systems that, as far as
possible, minimise the workload, eliminate non-value added tasks and
remove duplication for all of those involved in the procurement
process.
c) Identifying those goods and services that would benefit from a more
concentrated application of procurement resource and skills.
Generally, these procurements will be a relatively high overall cost or
strategic importance to individual departments or to the university as a
whole, or are of high overall cost when requirements are consolidated
across the university, or require specialised knowledge to comply with
EU procurement regulations.
Responsibility for procuring high cost/strategic goods and services
should be carried out by the lead departmental buyer who will receive
full professional, and in the case of EU tenders, administrative support
of the Procurement Section. In some cases, e.g. university wide
procurement, the Procurement Section should assume overall
responsibility, seeking technical advice where required from end users
with the correct skills ensuring a teamwork approach. A considerable
amount of time and resources will be invested in these projects;
therefore, the use of such contracts should be compulsory throughout
the university unless the Procurement Section determines otherwise.
11
Procurement Procedures Manual
The Procurement Manager will write, review and maintain a Procurement
Manual containing detailed guidance, both mandatory and where
appropriate, advisory on all necessary parts of the process of working
successfully with external suppliers. This document will be issued under
the authority of the institution’s governing body and the procedures
defined in it will be subject to audit.
7
12
Systems
The University Computerised Procurement System should have the
capability of being able to integrate effectively with new technology,
especially in the development of E-Procurement. Regular
reviews/maintenance will be carried out to ensure the systems are
effective and efficient.
8
Document Outline
- Contents
- 1.Introduction
- 2.Strategic Objectives
- 3.Strategy Development
- 4.Best Practice
- 5.Skills & Training
- 6.External Expenditure
- 7.Performance
- 8.Major Purchases
- 9.Tender Thresholds
- 10.General Purchases
- 11.Manual
- 12.Systems
