Agenda item

Review of Procurement Service

Minutes:

The Chair welcomed County Councillor Alan Vincent, Cabinet Member for Resources, HR and Property (Deputy Leader), Noel O'Neill, Director of Finance and Commerce, and Paul Fairclough, Head of Service Procurement and Contract Management to the meeting. The report presented provided a review of the Procurement Service in the county council. A presentation was presented to the committee to support the report, a copy of which is attached to the minutes.

 

The Chair, on behalf of the committee, thanked the officers for the detailed report provided, and the presentation presented.

 

The Chair referred to Lancashire County Council's participation in the Local Government Association Transformation and Innovation Exchange. It was noted that this network will support work on the development of the council's change agenda which is being considered by the Community, Cultural and Corporate Services Scrutiny Committee at its meeting scheduled for 9 December 2024.

 

Comments and queries raised from the committee were as follows:

 

·  The committee requested further data be provided on the following:

 

o  The names of suppliers and the category of Procurement contracts, grouped by the following amounts:

§£1m - £5m

§£500,000 - £1m

 

o  The numbers of suppliers and the category of Procurement contracts, grouped by the following amounts:

§£250,000 - £500,000

§£100,000 - £500,000

§Below £50,000,

 

o  For suppliers with a Procurement contract between £1m – 5m and £500,000 - £1m, how many subcontracts each of those contracts had with the county council, and the total value of each of the subcontracts.

 

· The committee noted that implementation had been delayed, and that further consideration may be needed by the committee should there be any proposed changes that would impact upon the council.

 

· It was also suggested as an area for improvement that an application be developed to extract procurement contract data from the county council’s systems, allowing users to see what contracts the council had and their respective categories. Additionally, it was noted that when examining the locality of contracts, more attention should be given to smaller contracts rather than large multi-million-pound ones, as the larger contracts typically went to large organisations.

 

·  Concerns were raised about the locality of contracts being awarded and whether contracts were being awarded more to National organisations, rather than local businesses, and it was noted that this was a potential area for development in terms of understanding the council's spend better. The committee highlighted a need to encourage local businesses to participate in bidding and training, and support processes were necessary to help smaller firms overcome the intimidation of complex bidding forms that were required to fill in.  The Preston Community Wealth model was given as an example to see what lessons could be learnt from the techniques and strategies used by Preston.

 

· The committee inquired about the level of communication between the procurement team and local organisations during the procurement process and it was noted that during the procurement process and the pre-market engagement, tenders were published, and a “supplier day” was often held, which provided an opportunity for suppliers to learn about upcoming tenders, understand the council’s requirements, and ask any questions. It was suggested that councillors should be informed when supplier days were being held, so they could notify their local businesses in case any of them wanted to bid for the contract.

 

· It was noted that a new procurement operating model was being developed, with plans to implement a dedicated contract manager resource as part of it. The model was to remain devolved to individual services, but the new resource aimed to enhance the management of strategic contracts and make better use of the council’s data and systems related to contract management. The importance of establishing clear guidance on the contract management strategy at the county council, including defining roles and responsibilities for both procurement and service areas, was emphasised. The committee requested that the updated model be presented at a future meeting.

 

· The use of ethical contracting in the procurement processes was raised by the committee and it was noted that additional questions had been included on the Procurement questionnaire which potential contract bidders were required to fill in, and it was noted that the service also looked at a range of exclusion criteria's such as checking for potentially disqualified directors and gross misconduct when assessing bids.

 

·  The committee stressed the importance of monitoring contracts, particularly larger ones, to prevent issues if a business encountered financial difficulties and went into administration, and it was noted that the council used a third-party software provider with a web portal capable of monitoring contracts. Therefore, if the service raised a concern about a contract’s performance, it would trigger an automatic email to the relevant contract manager to assess. The committee proposed a recommendation to seek assurances regarding the governance procedures and competence in monitoring contracts.

 

· The committee raised concerns about the awarding of contracts under urgency powers instead of the normal route. It was noted that although some contracts were awarded this way, the numbers were minimal. Additionally, any contract awarded under emergency powers that exceeded £75,000 had to be approved by the Cabinet.

 

· Key Performance Indicators were used in the evaluation of contract performance, and it was noted that there was a requirement under the new Procurement Act for details of contracts worth over £5m be published, which would include details of the contract and details of Key performance indicators.

 

· A suggestion was made to see if the Lancashire Business Board could promote and support the tendering process, and to offer guidance and support for organisations to help bid for contracts, as previously done by the Lancashire Enterprise Partnership.

 

The Chair thanked the Cabinet Member and officers for their presentation and for answering the committees' questions.

 

Resolved: That a future report be made to the committee, to include the following information:

 

i.  An update on the legislative framework in which procurement operates, the role of procurement and services in the associated activities including any relevant legislative changes and associated implications for the county council's approach.

 

ii.  Extended data concerning the County Council's spend data, including –

 

· performance based on supplier locality and the approach taken to the delivery of social value. This information to detail key information by category (including by the following spend bands £1m - £5m; £500k - £1m; £250k - £500K; £100k - £500k; and below £50k); and identify how many are Lancashire based with a significant presence in the county such as distribution sites and offices.

· identifying the multiple contracts that the organisations would possess in the future.

· Financial stability /competence of the suppliers.

 

iii.  Consideration of the potential for development of an internal enhanced data base application.

 

iv.  Benchmarking and learning opportunities and identify how the lessons learned have added value at the county council including the Contract Management and learnings that can be gleaned from Preston City Council's Community Wealth Building Model. 

 

v.  The potential future role of the Lancashire Business Board to promote and support the tendering process, and to offer guidance and support for organisations to help bid for contracts, as previously done by the Lancashire Enterprise Partnership.

 

vi.  An update on the strategic approach to the contract management function. This information to detail the numbers of contractors working on site at County Hall and the working relationships with those staffs.

 

vii.  An update on how well the Cabinet Office Centralised Single Platform system is working and the benefits it brings to the county council's processes.

 

viii. Assurances regarding governance, scrutiny and performance concerning procurement activity and the potential opportunities to enhance the same.

Supporting documents: