The Vale of Glamorgan Council
Cabinet Meeting: 11 May, 2015
Report of the Leader
Purpose of the Report
1. To update Cabinet on the progress being made to develop electronic procurement practices within the Council.
2. To seek approval to enter into a Memorandum of Understanding with Value Wales for the introduction of the e-Bravo electronic procurement system.
1. That Cabinet note the contents of this report in relation to progress of electronic procurement.
2. That Cabinet approve the proposal to implement the e-Bravo electronic procurement system as described in this report.
3. That Cabinet delegates authority to the Head of Finance, in consultation with the Leader and Managing Director, to enter into a Memorandum of Understanding with Value Wales regarding the provision and implementation of the e-Bravo electronic procurement system.
Reasons for the Recommendations
1. To provide Cabinet with an update on the progress being made to introduce electronic procurement practices across the Council.
2&3. To enable the Council to make use of the E-Bravo electronic procurement system and to access the support that is provided by Value Wales
3. In 2014, the Welsh Government commissioned KPMG to undertake reviews ("Fitness Checks") of the procurement functions within public sector organisations in Wales. The fitness checks identified areas of good practice in addition to providing a series of recommendations for development. One opportunity for development for this Council was in the further use of electronic procurement processes and practices.
4. Electronic procurement refers to the use of electronic communications when buying supplies and services or tendering public works. The council already has some experience in this area. For example, the Oracle iProcurement module which forms a part of the corporate Electronic Resource Planning (ERP) system supports electronic purchase orders and product catalogues. The Council has also successfully used reverse electronic auctions in the past to secure efficiencies on the contract for mobile telephones. The Council also utilises Purchasing Cards which can be used to procure goods and services online.
5. The Welsh Government has published a series of procurement principles which the Council has indicated its commitment to work towards. One of these principles is that procurement processes should be open and transparent and therefore based on standard approaches and use of common systems that appropriately minimise complexity, cost timescales and requirements for suppliers, including making best use of available procurement tools. Electronic procurement contributes to achieving this principle.
6. The European Commission have also committed into legislation the requirement for public sector organisations to use electronic procurement practices by mid-2016.
Relevant Issues and Options
7. Value Wales is the division of the Welsh Government responsible for shaping procurement policy, monitoring procurement practice, supporting and advising procurement professionals and developing the procurement profession while ensuring compliance with EU regulations.
8. Value Wales aims to assist the Welsh public sector to realise improved value for money through ‘smarter procurement’ by increasing savings through collaboration and improving process efficiency especially through the use of technology that seeks to protect the economy by encouraging smaller local suppliers via training and support packages. One of the ways in which Value Wales seeks to achieve this is via the rollout to public sector bodies of the e-Bravo electronic procurement system.
9. The e-Bravo electronic procurement system is a suite of electronic tools that allows an integrated approach to Electronic Procurement. The system comprises of four main modules:
- E-Tendering - an end-to-end procurement process management system that provides secure, EU compliant tendering and automated analysis tools. E-Tendering provides web-based technology that allows buyers and suppliers to securely manage their interactions during the tender process online.
- E-Contract Management - provides web-based technology that facilitates the contract management life cycle from the establishment of a contract through to its expiry including contract authoring, vendor management and performance monitoring and automated alerts for key contract milestones.
- E-Auctions – provides a tool to enable the conduct of electronic auctions that enable buyers to capture multiple revised offers for business, speeding up the negotiation process and promoting competitive behaviour amongst the supply base.
- Vendor Management – provides a supplier profiling and database tool, which enables the build of strategic sourcing databases, and enables suppliers to access relevant category specific opportunities, quickly and efficiently.
10. The Authority proposes to work towards the implementation of the above modules where appropriate in order to improve current procurement practice, to build upon the existing supply base and achieve better value purchasing contracts.
Resource Implications (Financial and Employment)
11. Value Wales has agreed to assist the Council with the implementation of the e-Bravo electronic procurement system at no cost to the Authority. This includes development, support, initiation, post implementation review and appropriate transfer of skills to Council employees to ensure that the technology is sustainable. In return, the Council would agree to commit staff resource towards the implementation, rollout and post implementation of the project, with the intention of driving forward electronic procurement within the organisation. The requirements of both organisations are set out in the draft Memorandum of Understanding (Appendix A).
12. All software, implementation, training and support will be funded by Welsh Government until March 2016. However, negotiations are expected to be concluded imminently which would extend this availability until March 2020. Value Wales have agreed to fund the cost of an initial trial electronic auction, with further electronic auctions subsequently incurring a cost of up to £3,114.00 per auction if the Council utilised the external assistance of Bravo Solutions/Value Wales. It is the intention that electronic auctions would only form part of the procurement process where there is evidence that use of the auction tools would potentially provide a significant saving to the Council.
13. Value Wales will provide the initial training to the Council during the implementation phase whilst ongoing training post implementation would be the responsibility of the Council. The Council intends to resource the implementation and (limited) local maintenance of the system from internal resources (ICT and Business Improvement). Initially the use of electronic tendering and electronic auctioning tools will be trialled with the Transport and Social Services divisions, with a view to enabling electronic procurement of school transport and domiciliary care services. Developing the use of electronic tenders would therefore contribute to the Reshaping Services programme, specifically in respect to transport savings required. A report specific to these tender exercises will be presented to Cabinet prior to any proposed retendering. A full corporate rollout of these tools would commence after a successful evaluation of the initial trial.
14. Implementation of electronic tendering will assist with achieving the savings required and identified by the Council’s medium term financial plan.
Sustainability and Climate Change Implications
15. Implementation of electronic procurement will assist to reduce the Council's carbon footprint. For example, electronic procurement reduces the need for printed documentation which leads to a physical reduction in paper and printer usage along with a reduction in physical post.
Legal Implications (to Include Human Rights Implications)
16. A Memorandum of Understanding will form the basis of the relationship between Value Wales and the Council for this project. This is a formal statement of intent from both parties to constructively engage and develop this project but not a legally binding document.
Crime and Disorder Implications
17. There are no specific crime and disorder implications associated with this report.
Equal Opportunities Implications (to include Welsh Language issues)
18. There are no specific equal opportunity implications associated with this report.
19. This project will contribute towards the achievement of the following objectives:
Compliance with EU Regulations regarding e-Procurement
Enforcement conformity to The Authority's procurement procedure
Possible cost savings
Alignment with the Procurement Improvement Plan / Procurement Strategy
Improved Procurement Practice
Policy Framework and Budget
20. This is a matter for Executive decision.
Consultation (including Ward Member Consultation)
21. No specific consultation has been necessary with Elected Members.
Relevant Scrutiny Committee
22. Corporate Resources
Tom Bowring - Business Improvement Manager
David Vining – Head of Strategic ICT
Steve Leat - Senior ICT Officer
Alan Jenkins - Head of Finance
James Rees - Senior Business Improvement Partner
Kyle Phillips - Senior Transportation Officer
David Vining - Head of Strategic ICT