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3 The Key Performance Areas
Core Deliverables
The group agreed the following 'Core Deliverables' for public sector procurement:
- To provide a value-for-money procurement service that delivers financial savings
- To provide quality advice and contracts which deliver quality products and services
- To procure goods and services in a lawful and ethical manner which encourages participation and sustainable economic growth
These are the three overarching aims of every procurement function. A high-performing, efficient and effective procurement function will deliver these central objectives. The rationale behind these core deliverables is explained below:
To provide a value-for-money procurement service that delivers financial savings.
It is a primary function of the procurement team to ensure that public money is spent wisely, ensuring value for money when purchasing the goods, works and services that address the needs of the organisation and of wider Scottish society. In an increasingly tight fiscal environment, the ability of the procurement team to achieve financial savings while ensuring that vital goods, works and services are still provided at the required levels is crucial to the long-term sustainability of the public sector.
To provide quality advice and contracts which deliver quality products and services.
The need to deliver financial savings must be balanced against the continuing requirement to ensure the timely delivery of quality goods and services that are fit for their intended purpose. To ensure that the drive to achieve savings does not lead to an unacceptable drop in quality, procurement must have an excellent understanding of its customer's needs, providing good customer service and assistance where required, and should remain open to feedback from its customer and stakeholder base.
To procure goods and services in a lawful and ethical manner which encourages participation and sustainable economic growth.
It is a fundamental duty of procurement to ensure that public money is spent legally, through open and transparent contracting procedures and, where possible, taking account of prevailing economic, social and environmental policies. Public spending should also contribute to the growth of a wealthier Scotland, and should aim to engage all parts of the third and private sectors (including SMEs). Procurement must be qualified to give professional advice, and must have influence and visibility within the organisation to ensure compliance with legal, policy and contractual decisions. Good governance is critical for success.
Key Processes
To achieve these Core Deliverables, the following processes and behaviours must be established:
- Working effectively across public procurement sectors and organisations
- Ensuring effective contract and supplier management
- Communicating effectively and ensuring productive stakeholder and customer relations
- Ensuring compliance with good procurement practice
- Continuously improving performance and innovation
Working effectively across public procurement sectors and organisations - procurement must be able to look outwards, learn from others, share ideas - and contract collaboratively.
Ensuring effective contract and supplier management - the procurement team must work closely and continuously with their customers and suppliers to ensure that business is conducted professionally throughout the life of a contract.
Communicating effectively and ensuring productive stakeholder and customer relations - the procurement team must be visible and accessible within their organisation, understanding their customer's needs, and offering clear, user-friendly professional and legal advice.
Ensure compliance with good procurement practice - the procurement team must have authority to ensure that established contracts are used and to discourage maverick, off contract spend. This is crucial to ensure that all public money is spent legally and transparently.
Continuously improving performance and innovation - procurement staff should be open to feedback and should seek out opportunities to improve their internal operation and the service they provide.
Organisational Capacity
Underpinning these processes, the following resources must be in place:
- Effective governance and accountability of procurement
- The procurement process must be resourced by skilled staff appropriate to spend
- The organisation should adopt an end-to-end e-procurement service
- A competitive supply base
Effective governance and accountability of procurement - every organisation will have in place appropriate levels of accountability and sign off for key stages of contract negotiation, recommendation, and award - with professional qualifications as standard at senior levels.
The procurement process must be resourced by skilled staff appropriate to the value and risk of spend - procurement staff will be encouraged to develop their skills by following structured training opportunities appropriate to their level of responsibility, and will view procurement as an exciting career option.
Adopting an end-to-end e-procurement service - procurement teams should encourage their organisation to embrace technology to ensure good practice is consistently followed, accelerate change, and minimise process costs and the administrative burden across the organisation.
Encouraging a competitive supply base - the procurement team should have a good understanding of the demands placed on its supply base, and will tender accordingly.
How to measure progress - the Best Practice Indicators
The Best Practice Indicators are the specific measures by which we will all be able to monitor our progress towards these Key Performance Areas.
The Core Deliverables, Key Processes and Organisational Capacity key performance areas are shown with their corresponding best practice indicators on a balanced scorecard (fig. 1).
When taken as a balanced group, the BPIs are designed to help managers and public procurement officials monitor their progress against the key performance areas and national vision described above. In summary, the BPIs are designed to encourage improvement and best practice in the areas of: Efficiency; Collaboration; Compliance; Skills; and e-Procurement.
Efficiency - we will measure cash (and non-cash) savings achieved by the procurement function. This will be balanced by a customer satisfaction measure which checks that efficiency is not achieved through an unacceptable loss of quality.
Collaboration - if we work together we will improve faster, save more money and eliminate duplication. We will measure how much spend is through collaborative contracts.
Compliance - the best contracts in the world are worthless if people don't use them. We will measure the proportion of total spend that is with contracted suppliers on contract , and will use the customer satisfaction questionnaire to ensure that our customers know how to access these contracts.
Skills - to be the best we must get the best out of our people. We must view procurement as a professional discipline with a clear training path, and track progress along that path. We must also ensure that procurement decisions are handled professionally and strategically, and that procurement resources in organisations are appropriate to the complexity and size of spend.
e-procurement - the Scottish Government has pledged to see an increase in the use of e-procurement systems, and we will measure the use of e-technology throughout key stages of the procurement process, to identify best practice, and areas of national weakness.
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