The mechanism to ensure that the commercial approach to commissioning and procurement takes place in accordance with the Council’s strategic aims, that it is effective and delivers best value to residents.
This strategy shall underpin Dorset Council’s commissioning and procurement activities as it moves through a programme of transformation and will be subject to review to ensure that it continues to reflect the needs and aspirations of the Council.
As with all bodies in the public sector, Dorset Council is publicly accountable for how it manages its budget.
It is estimated that 51% of the Council’s annual budget will be spent on buying external goods, services and works.
Spend ranging from Stationery to ICT Infrastructure (Corporate); Speech Therapy to Residential Placements (People – Children); Adult Day Services to Residential Care (People – Adults); School Transport to Surface Dressing (Place); School Nursing to Drug and Alcohol Treatment Services (Public Health Dorset).
The effective commissioning and procurement of these and other future requirements is crucial in the light of ever challenging budget reductions.
In this context, delivery of the Council’s ambitions requires resourcefulness, being more commercially minded and more business-like in the approach.
Decisions need to take account, as appropriate, of quality and all the costs that will be incurred by the Council throughout the life of a contract period, or asset, not simply the initial price.
Commercial approach to commissioning and procurement can make a major contribution.
This Commercial Strategy is the mechanism to ensure that commissioning and procurement takes place in accordance with the Council’s strategic aims, is effective and delivers best value to residents of the Council’s local authority area.
It supports the focus of the Corporate Plan of Dorset Council to make Dorset a great place to live, work and visit, priorities being:
As with other local authorities, Dorset Council’s future looks set to be increasingly dependent to the success of its local economy therefore there is a need to understand the impact of spending decisions to the local tax base and ways to retain the Dorset Pound within that economy.
For the purpose of this Strategy, the definition of “Local” means the postcodes of the authority area of Dorset Council and shall apply equally to residents, service users and suppliers.
Through commissioning and procurement activity the Council’s goal is to achieve long-term sustainable commercial success with the ambition to help deliver benefits to communities through specifying additional social value, engaging with local suppliers and voluntary sector groups to maximise the “Dorset Pound”.
By the utilisation of social value criteria, the Council can also maximise the social, environmental, and economic impact, as being more commercial is so much more than purchasing of goods, services or works.
Delivering value for money is key to what commercial activity does.
This Commercial Strategy – Commissioning and Procurement, identifies and describes the Council’s commercial principles, with explained key objectives to deliver the ambition. It applies to all commissioning and procurement activity of Dorset Council.
It is recognised that the context in which the Council operates will continue to evolve, both locally and nationally.
Therefore, this strategy will be updated and refreshed as necessary to ensure that it reflects the continued ambition to have a commercial approach to commissioning and procurement that is innovative, efficient, and effective.
This strategy is subordinate to the Council’s Constitution including Contract Procedure Rules and is complemented by the following corporate guides:
The consultation on a Green Paper on Procurement Reform closed in March 2021 and it is anticipated a new Procurement Bill will come into effect late 2023.
The purpose of the Bill is to streamline and simplify public sector procurement regulations, which currently mirror EU rules.
Making new UK procurement rules that are more modern and flexible, with more focus on wider society benefit and community economic growth. It involves replacing the four different regulations covering public contracts, utilities, defence, and concessions with a ‘single uniform framework’.
There are also plans to replace the seven current different procurement procedures with three procedures only.
This Strategy may be subject to revision depending on the outcome of the Public Procurement Reforms.
This Government Statement states to contracting authorities that public procurement should be leveraged to support priority national and local outcomes for public benefit.
The Statement sets out the national priorities that all contracting authorities should have regard to their procurement where it is relevant to the subject matter of the contract and it is proportionate to do so.
It states that contracting authorities should consider the following national priority outcomes alongside any additional local priorities
This Commercial Strategy compliments and supports the National Procurement Policy Statement
In delivering value means to ensure that commercial arrangements and contracts awarded by the Council provide great value for money, and that spend is used to deliver social value to residents and take opportunities for added value.
The corporate approach is to provide a central team of procurement professionals within the Commercial and Procurement service, based on a Business Partner Model, that will support business areas of the Council by:
The Council recognises that it faces many challenges, but equally opportunities, in the delivery of a corporate approach to commissioning and procurement, and it needs to be more commercially minded in order to tackle challenges and opportunities such as:
The term “Being more commercially minded” and other terms such as commercialism, commercial, commercialisation etc mean different things to different people.
The Council’s Commercialisation Transformation Programme defines “Being more commercially minded” as four themes of:
These themes are separate, but connected, workstreams that compliments this Commercial Strategy in supporting the Council priorities of:
The Institute of Public Care (IPC) links within a commissioning cycle a series of commissioning activities that are grouped under four key performance management elements:
The cycle is represented as 2 circles, the commissioning circle and the procurement circle. There are 4 areas
Under this section, in the commissioning circle these areas are considered
Under this section, in the procurement circle these areas are considered
Under this section, in the commissioning circle these areas are considered
Under this section, in the procurement circle these areas are considered
Under this section, in the commissioning circle these areas are considered
Under this section, in the procurement circle these areas are considered
Under this section, in the commissioning circle these areas are considered
Under this section, in the procurement circle these areas are considered
All of the 4 areas flow into each other in a cycle. The procurement cycle is inside the commissioning cycle.
For the Council to have effective third-part arrangements in place, procurement activity has a role to play throughout the commissioning cycle; from understand to review.
This section describes the vision for the Council in terms of this Commercial Strategy – Commissioning and Procurement.
The strategy principles provide the structure and framework from which the Council will plan and prioritise the commercial activity of commissioning and procurement.
The principles are summarised below and will be subject to review each year of the strategy.
Each of the principles are of equal importance in ensuring the delivery of the Council’s commercial ambitions and to meet overall purpose.
To have a continued focus on people, skills, and development. It is recognised that commercial activity has a wider role to play in the development of contract management and other skills to enable the Council to be commercially effective – “Being more commercially minded”.
To ensure that the professional skills and experience that the Council staff have are used in a wide variety of projects through providing innovative commercial support, to a growing range of projects that optimise the use of Councils assets, drive income and budget savings. Investing in, and supporting these activities, will continue to be part of the Council’s Commercial Strategy.
To identify needs, develop effective commissioning models and to develop the market to meet those needs in the most cost-effective way.
Commissioning to be a co-design process with others, internally and externally, that: tests ideas; capacity and appetite for developing services to tackle outcomes; develops innovative operating models; and outcome specifications.
Approach “To commission as One Council”
It is recognised that commissioning option appraisals may not always conclude that procurement to secure a supplier delivery is the best value route to meet the identified need.
An appraisal may conclude that insourcing, in part or wholly, represents the best value for the Council.
Whatever the route the commissioning should be an effective model.
The Council’s staff and suppliers expects that high quality and efficient strategic sourcing is delivered. Simple and streamlined processes, delivered by experts with a strong focus on the supplier experience will be a core part of commercial activity - “Being more business friendly”.
The Council will continuously review its commercial approach to ensure it responds to feedback from suppliers and others, to develop future commercial approaches accordingly.
This includes the eProcurement system that is used for procurement and optimising the statutory and legal boundaries of relevant legislation, e.g., procurement rules, to deliver the best outcomes.
Underlying all commercial activities there needs to be a consistent culture of strong project management and programme governance.
Securing the very best value from all such activities, and a robust, structured and well managed approach is vital.
This will ensure that the Council is a using the resource and skills it has, to deliver the very best return within decreased budgets.
Improving contract management continues to be a key deliverable for the Council.
It is essential that a contract management framework to strategic and critical suppliers is applied in accordance with the Contract Management Procedure Guide, the Guide to Managing Critical Contracts and Guiding Principles of Managing Contract Price.
As suppliers delivering council services evolve, the importance of managing relationships in a more complex environment will dramatically increase and focus – “Being more commercially minded”.
To drive the greatest benefits, there will be the need to continue to review tools, processes, and skills, and look across all commercial activity to ensure the approach reflects the very best practice.
To further enhance, develop and promote partnership working, locally and nationally, with other contracting bodies such as other local authorities (South West and others), NHS Dorset, and the third sector; including partnership working with suppliers, benchmarking, and networking through membership of the Central Buying Consortium (CBC).
The Council works with NHS Dorset, and others, to support the mutual aim of the Integrated Care System (ICS) – “Commissioning as One Council” with partners.
To deliver additional value for residents through the way the Council spends money on goods, works and service.
Consideration to the use of innovative approaches, such as social value, to help to maximise the Dorset Pound so it goes further than just the delivery of core services. “If one Dorset £ is spent on delivery of services, can that same £ be used to also produce a wider benefit to the community of Dorset?”
The Council to embed a clear message about its intention to maximise the Dorset Pound through commissioning and procurement every time it communicates with the marketplace – “Being more business friendly”.
There is clear scientific evidence to show that climate change is happening and is due to human activity.
This includes global warming and greater risk of flooding, droughts, and heat wave.
As a local authority, Dorset Council has a responsibility to play its part in helping tackle this growing danger and as such declared in the Council’s Climate and Ecological Emergency Strategy.
The Council to apply environmental considerations within commercial activities – “Being more commercially minded”.
At an early stage, a clear and concise business case for each commissioning activity should be developed that:
Where commissioning requires procurement activity, the Council’s Procurement Toolkit sets out the routes that will be followed for all procurement undertaken by the Council in accordance with the Council’s Contract Procedure Rules.
The following key procedures shall underpin effective and efficient procurement activity:
This defines as concisely as possible all major aspects of the commissioning and forms the basis for assessment of its overall success.
Along with the Business Case it enables the governance structure responsible to make the decision to give the approval to proceed and commit resources to it.
If a procurement does not appear viable or worthwhile it will not go ahead or will be referred to the Project Team for further information.
This provides the procurement routes available, based on the commissioning intentions, with a recommendation on the most appropriate and why.
Details include the implementation plan; the contract management plan - and how these will be managed.
Along with the PID, the sourcing plan enables the governance structure responsible to make the decision to give approval for the tender to be released (key approval being the Tender Evaluation Model).
This sets out how a tender will be evaluated in relation to the requirements and must contain the right criteria, scoring and weighting that ultimately secures the Most Economically Advantageous Tender (MEAT).
Particularly important is the criteria split in relationship to Price and Quality. Price should attract at least 50% weighting unless there is robust evidence not to do so. This model sits alongside the approval of the Procurement Sourcing Plan that secures the agreement to release the tender.
This outlines the key aspects on the outcome of the tender process.
To provide enough detail to enable the Council to make the final approval to award the contract in line with the governance structure.
Includes an explanation of how the winning offer demonstrates value for money and meets the essential aspects of the commissioning requirement.
Also stating any impacts of not awarding, e.g., delay in service delivery, further procurement activity, etc.
Public sector commercial activity can be attractive to organised criminals. It is therefore important for the Council to consider risks of fraud and corruption when commissioning and procuring goods, works and services.
Effective management of risk in these areas are part of being a risk-aware council, that manages its resources efficiently to secure value for money outcomes.
The Ministry of Housing and Local Communities (MHCLG) defines such fraud and corruption as: “… any fraudulent or corrupt activity occurring within the entire procurement lifecycle, from decision to procure through to the conclusion of the contract and including all purchasing with a value below the level of a formal tender process. This will therefore include commissioning, contract management and purchasing, as well as the tendering process itself”. Details can be found following this link
The Council mitigates the risk of fraud and corruption using various tools, such as:
The Council takes any fraud and corruption seriously. Any suspected fraud or corruption must be brought to the attention of Commercial & Procurement in the first instance, who will refer to Legal Services for guidance, investigation, or action with the appropriate authorities. Alternatively, issues can be raised via the Council’s whistleblowing policy.
Commissioning is about ensuring that the Council’s provides the right services, in the right place at the right time.
This means identifying needs, what’s available and what is not, planning and designing evidence-based solutions.
Procurement is the process of acquiring goods, works and services from third parties.
The process includes options appraisal (the ‘make or buy’ decisions) which is a key stage of major projects.
The aim is to achieve best value for money.
Contracting is the process of negotiating and agreeing the terms of a contract, and on-going management of the contract including payment and monitoring.
In the HM Treasury publication Managing Public Money value for money is defined as: ‘It means the best mix of quality and effectiveness for the least outlay over the period of use of the goods or services bought. It is not about minimizing upfront prices”
Optimum results are achieved by early market engagement as part of commissioning before commencing procurement, to achieve good response from suppliers.
Robust contract management, in accordance with the Contract Management Procedure Guide and Guide to Managing Contract Criticality, shall ensure what has been procured is being delivered to meet the initial requirements within the contracted terms and conditions
The Commercial Strategy – Commissioning and Procurement has set out the mechanism to ensure that the commercial approach to commissioning and procurement takes place in accordance with the Council’s strategic aims, that it is effective and delivers best value to the residents of the Council’s local authority area.
The strategy sets out the Council vision under commercial principles that will collectively aim to deliver robust and effective commissioning and procurement that will contribute to achieving value for money, create opportunities for savings and maximising the Dorset Pound. It supports the focus of the Corporate Plan of Dorset Council to make Dorset a great place to live, work and visit, priorities being:
The Council recognises that the context in which it operates will evolve locally.
Therefore, this Strategy will need to be updated and refreshed, as necessary, to ensure that commissioning and procurement continues to be innovative, efficient, and effective.
This Strategy shall underpin Dorset Council’s commissioning and procurement activities as it moves through a programme of transformation and will be subject to review to ensure that it continues to reflect the needs and aspirations of the Council.
This strategy was last reviewed in 2023.
The next review date will be in 2024.
