parliament Sally Collier, Chief Executive Officer Crown Commercial - - PowerPoint PPT Presentation

Public sector procurement and supply chain management today and during this parliament

Sally Collier, Chief Executive Officer Crown Commercial Service

COUP Event

Circa £230bn spend p.a. on goods and services across the public sector

Why commercial is important

Imperatives

Saving money to protect front line public services Supporting economic growth Enabling innovation and new delivery models

Better commercial practices saved £5.9bn in 2014/15 against a 2009/10 spending baseline

Saving money to support deficit reduction

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What we do

COUP Event

Our challenge: up to £1bn savings (2014/15 baseline) and increasing over this new parliament

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Direct Buying

• n behalf of the public

sector - £2bn of fully

managed spend in 2015/16

Policy Delivery

Ministerial priorities and driving value for money

Our Purpose: Savings & Service Indirect Buying

• n behalf of the public

sector - £13bn of

spend in 2015/16

Some key facts

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• c£5.9bn savings in 2014/15 against a 2009/10 baseline through

better commercial practices; price and demand savings and renegotiating large contracts.

Savings

• c£15bn of public sector spend through CCS deals in 2014/15.
• £2bn under direct management via a managed service.
• >1800 procurements carried out in 2014/15.

Spend

• 61% of the 2,600 suppliers we work with are small businesses.
• 500+ supplier contracts managed on behalf of our customers.
• New contracting models have led to a 40% reduction in active

framework agreements.

Suppliers

• 14,500 customers across 1,400 organisations
• Business Partners in place - a primary point of contact

focused on delivering excellent service to customers (central government and sector leads).

Customers

Policy priorities

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• One third of central government spend with small business by

2019/20; agreeing targets with each department. Prompt payment.

Small and medium sized businesses

• Contributing to the creation of three million apprenticeships

through procurement. Where appropriate, contracts over £10m expected to facilitate a contribution.

Apprenticeships

• Consultation on the draft utilities and concessions directives;

both designed to simply process and to make it easier to do business with government.

Directives

• Additional commercial information such as price and any

incentivisation mechanisms, contract performance metrics etc to be disclosed at contract award.

Transparency

T

• p 10 reforms in the new Directive
• Much simpler process of assessing bidders’ credentials
• More freedom for buyers to negotiate with suppliers
• Poor performance under previous contracts is grounds for exclusion
• Greatly simplified rules on Dynamic Purchasing Systems
• Expressly permits the use of electronic catalogues
• Reduced red-tape on suppliers’ response times
• Clarity that buyers can take into account relevant skills and experience
• Clarity that social aspects can now be taken into account
• A turnover cap and provisions on breaking up large contracts to help SMEs
• Temporary exemption for public service mutuals

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Deploying a more intelligent approach to delivering savings with our customers

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Joint approach to identifying savings Aligned delivery plans Joint savings delivery teams One collective pot

• f savings

Partnership with a shared goal

Using the full range of commercial levers to deliver savings requires a partnership approach

Specification Price Demand management Compliance Supplier scale Total cost of ownership (TCO) savings levers Price 10-20%

• Negotiate and bid competitively
• Develop fact base on spend and true costs

Specification 10-20%

• Optimise product specifications and service levels

Demand management 20-30%

• Challenge the user – implement strong demand

management policies (only minimum required) Compliance 5-15%

• Ensure compliance with preferred suppliers
• Implement tracking tools and reporting
• Optimise payment cycle to optimise reduction in unit

prices vs. carrying cost Supplier scale 10-20%

• Leverage scale – Harmonise demand between

departments

• Exploit changes in supplier utilisation, capacity etc.

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Robust supplier management – we expect suppliers ….

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To embrace competition To be innovative through proposals for how we can improve services To be transparent through open book accounting To demonstrate high levels of corporate responsibility To deliver what we are asking for as an intelligent client To deal effectively with CCS as one customer – the Crown To make a reasonable but not excessive profit To provide

• pportunities to

small businesses in the supply chain To deliver savings for taxpayers

Corporate Solutions

• Property
• FM
• Energy
• Travel
• Fleet
• Communications
• Financial Services
• Office Solutions

People Technology

• Professional Services
• Consultancy &

Contingent Labour

• Network Services
• Cloud Services
• Technology

Products

• Software Licensing

Buildings

Critical Success Factor - specialist capability

• Our focus - accelerating savings through taking a more strategic approach
• Listening to customers and suppliers

Improving capability

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Highly skilled specialists with high capability driven by innovation Recruitment of more experienced commercial experts – fewer but more senior people Better management of the talent we have Improving performance through assessment and development programmes