Procurement Policy Executive Summary The delivery of the venues and infrastructure for the London 2012 Olympic Games and Paralympic Games is a tremendous challenge and great opportunity for this country and its industry. Delivering a multi-venue park on this scale within a ﬁxed timetable is a task unprecedented in the history of UK construction. It is also an unprecedented opportunity for business to provide the platform for the regeneration of an area of east London that suffers from severe economic inequality and social deprivation. The 2012 Games can be the catalyst for the legacy of economic and social renewal of this area and can produce economic beneﬁts across the country. For the Olympic Delivery Authority (ODA) to deliver world class venues and infrastructure, and a permanent positive legacy for east London, we will need to work with the best in design and construction. We will need to procure and manage the delivery of a signiﬁcant amount of goods and services within the given budget, and keep the delivery programme ﬁrmly on track. The Procurement Policy sets out how we intend to achieve these objectives. It describes in detail the legislative framework the ODA will operate within. It also sets out the fundamental values that will guide our procurement, which include our commitments to sustainability, health and safety, legacy and achieving quality and value for money. This revised Procurement Policy follows a consultation in 2006 that generated constructive responses from over 60 groups and organisations. I would like to thank those organisations for contributing to the formation of this policy, and as we take our procurement programme forward we will endeavour to ensure it is inclusive, fair and transparent. Sir Roy McNulty Acting Chair of the Olympic Delivery Authority 2 Procurement Policy Executive Summary Procurement is at the core of the ODA’s programme to deliver the venues and infrastructure for London 2012 Games and its legacy. The Procurement Policy, along with the Strategy and Code, details the principles and processes that the ODA will apply to their procurement of a range of contracts and projects. Procurement Policy Executive Summary 3 Delivering the Programme The ODA is developing a ‘contract packaging’ approach which will break down the entire programme of work to deliver venues and infrastructure into suitable elements for procurement. This will be reﬁned in discussion with the potential suppliers and contractors. To meet the ODA’s objectives, on time and in the given budget, it is likely that the ODA will procure around 2,000 contracts and projects of varying size and value. The ODA will adopt a robust, fair and transparent approach to procuring, managing and monitoring these agreements and will carefully manage the risks associated with the overall programme and related projects. The ODA appointed a Delivery Partner ‘CLM’ in September 2006 to provide resource, management, technical capability and systems, as required. They will manage the planning, design, procurement and delivery of the construction for the venues and infrastructure. Although the ODA will manage a number of procurements directly it will instruct CLM to undertake the majority of procurements associated with the construction programme on its behalf. The ODA will, however, always remain the contracting authority. The ODA’s funding package is made up of grants from the National Lottery, the London Development Agency and the Department for Culture, Media and Sport. Additionally the ODA receives Council tax precepts from the Greater London Authority. Procurement framework As a public body the ODA is required to operate in the procurement framework set out by European Union Procurement Legislation and UK Regulations. As part of its best practice approach to procurement the ODA has established an eTendering service through which it will advertise and procure contracts. eTendering is an online, efﬁcient use of the normal tendering process and does not imply the use of electronic auctions. The ODA will also give advance notice of contracts through a ‘future opportunities’ website. Other means of advertising will also be used where appropriate. To operate effectively in the marketplace the ODA will use standard procurement documentation and contracts such as the New Engineering Contract Version 3 in its various forms for major construction procurements. The ODA will not simply award contracts according to lowest price but will take into consideration its broader objectives and values. Ahead of every contract competition the ODA will develop a ‘balanced scorecard’ of selection and award criteria that will inform companies of the commercial and technical factors their bids will be scored against. This will include: time, quality, safety and security, equalities and inclusion, sustainability and legacy. Appropriate criteria will be added and different weightings applied to each criteria on a contract by contract basis, according to the nature of the goods, services or works being procured and best practice guidance from the Ofﬁce of Government Commerce. To avoid costly and time consuming disputes the ODA will seek to make clear agreements with all parties while agreeing and managing contracts. 4 Procurement Policy Executive Summary Levelling the procurement playing ﬁeld for business Future opportunities Companies can look ahead at large-scale and direct contracts the ODA intends to procure using the ‘Future Opportunities’ section of the London 2012 website. The service enables businesses to identify major ‘tier one’ contracts, which are signed directly with the ODA and are likely to be signiﬁcant in size, ahead of tender competitions. From summer 2007 companies will be able to register to receive an email alert as a particular contract or contract class they are interested in develops or goes live. london2012.com/futureopportunities eTendering The ODA’s eTendering website will provide information on current ‘tier one’ contract opportunities. Businesses can browse contracts, register to be alerted automatically to all opportunities and submit responses and bids electronically. Tenders for all ODA contracts will now be sent and received through this secure website. Details of the ODA’s main contractors will be published on the website, enabling businesses to identify potential supplying and subcontracting work. The ODA will require the main contractors of the ﬁve major Olympic Park venues to set up a space on the london2012.com/business website through which they will be able to advertise opportunities they intend to sub-contract, in addition to their existing supply chains. etenders.london2012.com Helping SMEs access supply chains A service is being launched in spring 2007 that will provide businesses, in particular small and medium size enterprises, with access to supply chain opportunities and business support services that will help them to get ready to supply. Procurement Policy Executive Summary 5 Governance The ODA intends to be a ‘smart’ and ‘thin’ client procuring and managing a relatively small number of direct contracts. The ODA’s ‘tier one’ contractors will then manage their own sub-contractors and supply chains. The ODA’s ‘balanced scorecard’ approach to selecting its direct contractors aims to spread its objectives and values through their sub-contractors and supply chains. The Procurement Policy sets out the standards the ODA will apply to approval processes, probity and ethics, conﬁdentiality, conﬂicts of interest and transparency. Value for money The ODA is committed to achieving value for money on costs and quality across all of its procurements. Balanced procurement The ODA will adopt an open approach to selecting contractors that balances cost, time and quality, as well as its corporate values and objectives. The ‘balanced scorecard’ is the ODA’s practical tool that implements this approach. Companies bidding for contracts will be given a scorecard developed speciﬁcally for the particular opportunity with weightings for each criteria adapted according to the nature of the contract. On top of cost and time the scorecard is broken down within ﬁve different themes that embody the ODA’s corporate objectives: Managing risk and opportunity The ODA will adopt a sophisticated approach to the management of risk and opportunity across the whole programme. Risk management will be embedded in the whole life cycle of each speciﬁc contract. The ODA Board and Audit Committee have approved a Risk Management Policy and Framework, developed in accordance with the HM Treasury’s Orange Book. Safe and secure Health and safety, design, behaviour and culture; security of operations. Equalities and inclusion Promoting equality and diversity; community engagement; inclusive design; supply chain management; employment, including skills, fair employment and wages. Environment Environmental responsibility including waste management and energy use; ethical sourcing. Quality and functionality Legacy Functionality; design impact; construction quality; promoting excellence and innovation. Financial viability and whole life cost; ownership and management structure; community and utilisation beneﬁts The ODA intends these values and objectives to be adopted by its main contractors and applied to their procurement of sub-contractors and suppliers, and throughout their supply chain. In certain cases, such as transport, the ODA recognises that it will have to work within the constraints of existing contractual arrangements. 6 Procurement Policy Executive Summary Communications and stakeholder engagement The ODA seeks to involve, communicate and consult effectively with stakeholders including local communities, business and trade unions to support the successful delivery of the Games and legacy. Sustainable development The ODA’s sustainable development commitments, which will be adapted for contracts on case by case basis and taken into account when evaluating bids, include: • Aiming to minimise the carbon emissions associated with the Olympic Park and venues through a 50 per cent reduction in carbon dioxide by 2013. • Reducing waste through design – 90 per cent of demolition material to be reused or recycled and at least 20 per cent of materials used in permanent venues and associated works and the Olympic Village to be recycled. • Aiming for a 40 per cent reduction in the demand for potable water in permanent venues and a 20 per cent reduction target for residential development. • Aspiring to transport 50 per cent of construction materials, by weight, to the Park by water and rail. • Protecting and enhancing the biodiversity and ecology of the Lower Lea Valley and other venue locations. • Maximising timber from sustainable sources with all timber used from known, legal sources, with clear supply chain evidence. Ethical sourcing The ODA will seek to work with suppliers who have a good track record in human rights and who use goods and materials that have been produced ‘ethically’. This includes seeking suppliers who operate within the laws of their country and who do not have discriminatory practices. Quality employment The ODA will make it clear in invitations to tender for its contracts that it wants to see contractors adopting the best employment practices including trade union recognition, absolute commitment to health and safety and sufﬁcient wage levels. For those tenders within London’s boundary, the ODA will make it clear that it fully supports the London Living Wage The ODA is required by Government to demonstrate value for money in all its contracting and has to consider how to achieve its overall objectives on a case by case basis, as it lets each contract. The ODA will ask its contractors if they would be prepared to adopt fair employment measures including the London Living Wage for any work they are doing as part of an ODA contract. These issues will be taken into account when the ODA advertises contracts and considers tenders. They form part of the overall value for money judgement which the ODA must make. Procurement Policy Executive Summary 7 Other languages This publication is available on request in other languages. Telephone: 020 8430 6291 For free translation phone Pour une traduction gratuite, téléphonez Reference: LOPS /40/07 Po bezplatne tlumaczenia prosimy dzwonic Para uma tradução grátis, telefone. Për një përkthim falas telefononi. Za besplatne prevode pozovite Haddaad u baahan tahay turjubaan lacag la’aan ah waxaad telefoon ku soo wacdaa Para obtener una traducción gratuita llame al: Del nemokamo vertimo skambinkinte Other formats This publication is available on request in other formats. Telephone: 0808 100 2012 Reference: LOPS /40/07 For a large print, easy read, braille or audio version please call 0808 100 2012 or email enquiries @london2012.com Telephone: 020 3 2012 000 Email: firstname.lastname@example.org Website: london2012.com Published March 2007. Printed on recycled paper at an environmentally friendly printer.
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