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Yorkshire and Humber Region Councils Establish Strategic Procurement

Local authorities use shared service to streamline sourcing, tendering, contract & supplier management.

Profile

With a GVA of over £80 billion, the Yorkshire and Humber region ranks in the top 20% of the world's national economies and represents 8% of UK output according to the UK Trade & Investment agency. The region's local authorities collaborate on many issues in support of a population of nearly five million people.

One important area of regional collaboration is procurement, where 22 local authorities participate in a shared strategic procurement platform from PROACTIS. The system is centred on a web-based portal called the Supplier and Contract Management System (SCMS). Together, these councils represent a combined annual spend of approximately £1.25billion, with 29,000 registered suppliers and nearly £2.5billion in active contracts.

Challenge

Prior to PROACTIS, it was clear there was great disparity around the way contracts and suppliers were sourced, and in some councils, contract management was seen as a key area for development. Many councils used a variety of manual processes supported with paper forms, spreadsheets and various types of stand-alone computer systems. Several councils had jointly implemented an electronic tendering application, but none had what could be considered an integrated procurement system.

Besides the inherent inefficiencies of this approach, there was little consistency of process, making it difficult for councils to collaborate on contracts or share best practices.  From the supplier perspective, each authority undertook the procurement process slightly differently, making it difficult - and therefore less attractive - to pursue public sector business in the region.

Spurred on by the recommendations of the UK Gershon Efficiency Review which identified improved procurement as a key element in delivering efficiency improvements, and by the initiatives implemented by the newly formed Regional Centres of Excellence, the councils making up the Yorkshire and the Humber region determined to implement a shared procurement platform to improve collaboration and streamline key processes and documentation.

Why PROACTIS?

Following approval to procure the required system, all 22 councils were invited to participate in establishing core specifications. "We set out to source a product that supported the procurement cycle from supplier registration and approval, through the tender stage and on to the formal contract award and beyond," says Steve Kelvin, Leeds City Council Procurement Performance and Systems Manager and a member of the regional team. "We also needed a solution that was tried and tested in the Public Sector and that we could implement quickly."

After considering several options, the team agreed that the best way forward was to procure an off-the-shelf solution from a Private Sector provider. Following an exhaustive procurement exercise, the solution from the PROACTIS was seen as the option which most closely matched the Group's requirements. "We selected the PROACTIS solution because it integrated electronic sourcing (tenders and PQQs), contract management, and supplier management into a single closed loop system," says Kelvin. "It needed relatively little customisation, and it had a proven track record in the Public Sector."

Results

The SCMS solution provided by PROACTIS is now available to local authorities throughout the Yorkshire and the Humber region. A phased implementation saw the first ten councils using the system within just five months of contract award, with the remainder up and running four months later.

Today, SCMS is used by over 2,600 buyers and procurement professionals. The shared system has over 29,000 registered suppliers and is being used to manage over 4,600 active contracts with a value of over £2.5billion, and about 2,000 tendering events per year.

"The PROACTIS system has been a key building block in our objective of improving collaboration among Yorkshire and the Humber local authorities" says Kelvin. "Every council participated in the pre-implementation workshops to configure the system - that alone got us all working together more closely. Now we all have region-wide access to professionally procured contractual arrangements and approved suppliers. That shared access enables us to collaborate far more easily than before. Similarly, suppliers have improved access to each council's procurement information, making it much easier for them to do business with us."

The single web-based SCMS portal provides both buyers and suppliers with secure access to the functionality they need to support the procurement process. Buyers can create and publish tenders to a central electronic bulletin board, manage responses (questions, tenders, etc), turn awards into contracts, manage the contract lifecycle, maintain approved supplier lists, and monitor supplier performance. They can also view existing awarded contracts across all councils, making it far easier to benefit from any existing arrangements that may be in place. Suppliers can self-register with one or more councils simultaneously, maintain their own profile information, and apply for as many categories of works, service or supply as they wish. They can also browse opportunities on the public bulletin board, view and download tender documents, upload tender responses, view details of awarded contracts, and access their own historical records.

The SCMS solution has helped participating councils streamline their respective internal processes. For instance, Kelvin states: "One of our goals was to increase the use of eTendering and that is definitely happening. Some councils are now seeing 75-80% of all responses being submitted electronically - in some cases 100%. This is a fantastic achievement bearing in mind that eTendering remains optional for suppliers." Contract management has also been greatly simplified while aiding in the reduction of supplier risk. Using contract lifecycle templates, buyers are automatically notified when contract activities need to be performed. For instance, an email alert is generated when a supplier's insurance is about to expire so the buyer can make contact and verify its renewal.

Summarising the impact of the system from his point of view, Kelvin says: "Because it integrates everything from tendering to contract and supplier Management into a common regional system, the PROACTIS platform is helping us achieve many of the objectives set out by the original Regional Centre of Excellence initiative."

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