Agenda item

The Head of Procurement and Commissioning introduced the report on the Review of Procurement within Hillingdon – Second Witness Session and provided a detailed overview.

The second witness session focussed on the operational perspective of how the Council delivered value for money through the procurement process.

The Committee heard that there were three broad stages as part of the procurement cycle including:

·         Pre- tender - Strategic decision making around delivery model, route to market, required outcomes and commercial model

·         Tender - Technical and transaction process of running a tender process including social value and local supply market.

·         Post- tender - Management of contract during implementation and delivery phase to ensure supplier meets the agreed contractual commitments.

Pre Tender Stage

It was reported that the pre-tender process involved identifying the Council’s needs and seeking the best commercial and quality outcomes.

The Committee heard that this stage required officers to engage with provider markets to better understand how Hillingdon requirements could be met. For the London Borough of Hillingdon’s part, officers considered how the tender was positioned in order to elicit the best response from providers. Engagement with suppliers also allowed the Council to look at how others were delivering services both within local government and outside. It allowed the Council to challenge how work was currently done, understand cost drivers and support the delivery of efficiencies.

As well as engagement with supplier markets, the pre-tender phase was supported by an analysis of spend to confirm the scope and benchmarking against others to validate the strategy.

Once an understanding was established of what was required and the way in which it would be tendered , this needs to be articulated clearly into a specification so that suppliers could understand and accurately respond to the Council’s tender. A clear specification was key to future phases. As part of this phase, thought also needs to be given to developing a contract management framework to ensure the supplier delivers on its commitments

Tender Stage

The Committee heard that the tender stage of the process was more transactional and officers assessed the suppliers’ ability to provide the required goods, works or services to Hillingdon through a formal tender process. There were various processes for tendering, all set down with the Public Contract Regulations. Areas considered within tenders included: 

·         Governance / Assurance - H&S, Insurance, Financial health etc.

·         Capability – Experience in similar contracts, competence of teams engaged in delivery of the contract, capacity to meet LBH requirements, method statements as to how supplier will deliver the contract etc

·         Financial / Commercial – Supplier response to the pricing model.

It was noted that bids were submitted by tenderers and evaluations were based on a pre-determined set of price and quality criteria.

Social Value / Environmental

The Committee was informed that social value was considered an important component of the tender process in extracting value for public money. Officers took a broad view of social value inclusion within a tender and how it might be used to improve economic, social and environmental wellbeing.

The London Borough of Hillingdon had no mandated approach and retained flexibility dependent upon the requirements. This meant that up to 10% of the overall evaluation of a tender was allocated to social value aspects. Bids were evaluated in the qualitative section of the tender using generic evaluation criteria.

Local Supply Market

The Committee heard that closely linked to social value was the desire for local authorities to play a more active role in the communities in which they operated to support community wealth building, levelling up, net carbon zero, job creation, skills & training etc.

It was noted that whilst benefits of awarding to local business were clear, there were a number of challenges with the approach including the make up  of local business, the feasibility and size to support the tender and difficulties around engagement. It was also noted that there were different interpretations to what defined a local business.

Over the past 12 months, the Council had taken steps to increase its engagement with local businesses including updating tender documents and actively identifying and seeking out local suppliers. There was work in place to develop web pages to support local businesses, support with pre-package requirements and additional support for potential local organisations.

Committee discussion

Members agreed that there was strong consideration on supporting and selecting small business as part of the tender process. However, there were some concerns raised in relation to the barriers and disadvantages in place for small businesses.

In terms of actively seeking out local suppliers and avoiding them being a disadvantage through submitting tenders, it was accepted that the bigger corporate business submitted tenders in different ways as they were experts and had full teams in place. However, as part of the tendering process, questions are shaped in a way that allows them to promote their strengths such as being  more adaptive and responsive to meet Council needs. Ultimately a business needs to be in a position to deliver services and provide assurances through the tender process that they can do so. .

It was clarified that the Council ran multi-phase ‘Open’ tender processes however there could be ‘Restricted’ tender process where it was narrowed down to five – eight providers.

In terms of reverse process and local supply market, it was explained that every instance was conducted on a case by cases basis to ensure transparency and that due diligence checks were conducted. As part of the tender process questions on capability and capacity would also be asked to avoid the failure of service delivery.

In regard to improving procurement in the future around social value and the local market, it was important to get the balance right and not focus on one organisation. Officers had attended conferences at Heathrow to engage with local businesses highlighting opportunity for second tier providers. Although there was no preferred bidder register, there was a requirement to tender. In terms of the design process for carbon zero by 3035, it was explained that this was driven through the specification process and more work on this area needed to be done.

RESOLVED: That the Committee noted and commented on the information presented.