TABLE OF CONTENTS
1 Management Summary 3
2 Introduction 3
3 eProcurement 3-5
4 Sustainability and the Environment 5-9
5 Procurement Best Practice 9-18
6 Central Core Procurement Team (CCPT) 18-27
7 Faculty / Divisional Purchasing Team (F/DPT) 27-28
8 Conclusion 28
9 Appendices 29-30
10 References to Diagrams, Figures and Tables 31
Role Name Signature Date
Author: Laura Watson 27/01/10
Approver: Alison Holmes 01/03/10
Stakeholders: Paulina Lubacz 22/04/10
This report looks to summarise the activities of the Procurement Service over the
calendar year 2009, and looks to the activities required throughout 2010.
Version Date Issued Reason for Issue
0.1 27/01/10 First draft to Alison Holmes.
1.0 01/03/10 Second draft to Paulina Lubacz.
2.0 27/04/10 Approved report.
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1 Management Summary
1.1 Achievements in 2009
Successful business cases approved for:
o Insurance Assistant.
Implementation of eSourcing;
Successful completion of 2 eAuctions, with impressive savings;
Increased communication with both internal and external customers;
Increased collaboration with contracted suppliers, through the introduction of
Contract Improvement Plans;
Increased collaboration with non-contracted suppliers through the successful
“Meet The Buyer” event;
Maintained level of service despite significant staffing issues.
1.2 Plans for 2010
Implementation of eProcurement in to pilot sites then roll out to all current
phases of the P2P project;
Commence roll out of eProcurement to the Faculty of Science;
Continue to implement strategic contracts;
Utilise the skills of the procurement staff in core procurement roles.
This report is provided to give information on the activities of the Procurement
Service throughout 2009 and the projected activities required for 2010.
The year has seen the commencement of the eProcurement project, and some
successful eAuctions that have generated savings for the University.
Procurement activity is undertaken by the Procurement Service for the majority
of University Departments and Colleges, with the only exception being non-
capital purchases sub-£25K for the Faculty of Science.
The Procurement Service is now a separate department within the Treasurer’s
Division, and has its own budget.
Following approval of the business case submitted to the 2009/10 planning
round, funding was approved to purchase the eProcurement software from Wax
Digital. After a competition and discussion with marketing, it was agreed that
the name of the software, for both sourcing and Purchase to Pay (P2P) would
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As eSourcing only directly affects staff within the Procurement Service (end
users are indirectly affected), it was decided to go-live with this much sooner
than with P2P. Training was provided to the Strategic Contracts Managers and
Purchasing Team Leaders and two tenders were started, with assistance from
Wax Digital, through the eSourcing tool, for Uniforms and Facilities
After a month, it was decided that all new tenders over £25K should be procured
through the eSourcing platform. The benefits of this are that tenders are not
sent out and received on paper (therefore saving money on paper, ink and
postage, as well as the environmental benefits this brings) and the quantitative
questions can evaluate themselves, ensuring the Strategic Contracts Managers
can add value to the more complex areas of evaluation.
To date, there having been 22 completed processes in acquire, as shown in
Table 1, with end users in the Departments and Colleges being responsible for
reviewing the technical submissions. The most successful to date has been the
Facilities Management (FM) tender, see section 5.3.
Table 1 – Completed Processes in acquire
Process Number of
Mini Competition (MC) - from Framework Agreements 1
Request for Quotations (RFQ) 0
Request for Tenders (RFT) 7
Invitation to Tender (ITT) 11
EU Advertisement (EU) 1
3.2 Purchase to Pay (P2P)
Various activities have been taking place on this part of the roll-out, with a lot of
data collected so that the system build can commence. Several workshops
have taken place with Wax Digital, and “webinars” which have allowed
Implementation Team chance to view the system have been especially useful.
As per the business case, the roll-out of P2P will be on a phased basis,
commencing with the pilot sites:
Estates and Buildings;
The Trevelyan College community;
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It is believed that these pilot sites give a good representation of University
procurement, and work will commence in earnest with these Departments from
March 2010. Process maps, test scripts and training material is being
developed, with system testing taking place from February 2010.
Roles and responsibilities within the Procurement Service have been amended
as a result of the change in job roles due to the software, and this re-structure
has been approved by the Treasurer, the HERA team and delivered through
close working with Human Resources and the Unions. The staff consultation
has now concluded. See Appendix A for the structure that will take effect from
1st June 2010.
4 Sustainability and the Environment
4.1 Sustainable Procurement
A new Sustainable Procurement Action plan was created by the Procurement
Service for 2008/2009 which like previous years continues to focus our
development in the five areas set out in the Government’s flexible framework.
The flexible framework has been developed to assess the quality of
procurement activity and provide a clear route to better performance. It covers:
2. Policy, strategy and communication
3. Procurement process
4. Engaging suppliers
5. Measurement and results
Following discussions with colleagues in other institutions and meeting with the
Sustainable Procurement Centre of Excellence for Higher Education (a HEFCE
funded project), it is clear that we are continuing to lead the way in sustainable
procurement within the Higher Education sector. It is through this success that
we were invited to host a workshop at the bi-annual Conference on University
Purchasing (COUP) and deliver presentations to the North Eastern Universities
Purchasing Consortia (NEUPC) and the Southern Universities Purchasing
Contracts that have significant environmental benefits have been implemented
through this period, covering:
o Contract ensures waste is:
Disposed of correctly;
Diverted from landfill where possible;
Segregated to be recycled or composted.
o Considerations in the tender process made to:
Age and conditions of vehicles with a view to pollution;
Compliance with all applicable legislation to avoid such malpractices
as burning and fly tipping.
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o New contracts put in place for:
Fruit and Vegetables, Dairy and Sliced Bread;
Frozen and Fresh Fish and Seafood;
o Contracts have demonstrated numerous benefits, e.g.:
Reducing food miles through using local small and medium sized
Focusing on local, fresh and seasonal produce;
Please see Section 5.2 for further information.
Fairtrade Accreditation was retained, as the university continues to show year-
on-year improvements. The process for re-application will commence in May
2010 and this year will be undertaken by the Environment Team.
All procurement staff continue to produce a monthly savings log which not only
highlights financial savings but also lists the social and environmental benefits
attached to the purchase. This may include the likes of reduced or combined
deliveries, using local suppliers and buying environmental or Fairtrade certified
products. In addition to this as part of the tender award process the Strategic
Contract Managers demonstrate what considerations have been made in terms
of the environment and CSR and what benefits are to be gained.
Contract Improvement Plans (CIPs) were also introduced in 2009. A CIP is to
act as the source, driver and baseline, against which to monitor any future
contract change, thus it is to bring about an acceptable and beneficial change to
the contract. This applies to both parties so as well as the supplier improving
the onus is also on the University to make changes where possible. Not only do
the CIPs capture quality and service level improvements but they are used to
facilitate further environmental and social benefits which can be gained from the
4.2 Poverty Aware Procurement
Liam Glasper, Strategic Contracts Manager started work on an EAUC project in
2008 which is to promote more poverty-aware procurement in Universities and
Colleges. Due to factors outside of our control this project has been put on hold
and we are awaiting a revised timetable and action plan. The project is aimed
at responsible institutions and at people in other organisations who want to
reduce Third World Poverty. The project is funded from the UK Department for
International Development’s (DfID) development awareness fund and was
originally intended to run until 31st March 2010.
As a result of the recession there was significant debate regarding what is
poverty. It was determined that as well as considering developing countries
there was also an increased duty of care to the UK and in particular for the
Procurement Service to focus on regional suppliers. The work in this area is
further explained in section 4.3.
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4.3 Local Sourcing
Although the University does not seek to discriminate against any supplier
regardless of their geographical dispersion, the Procurement Service recognises
that there are benefits from utilising local resources. When using the term
“local” it was necessary to identify what that is in definition and it was agreed
that this would be those located in the North East Region. A significant amount
of work has also been undertaken on SMEs (small and medium sized
enterprises) which can be described in the following table.
Table 2 – SME definition
Name Employees Annual Turnover
Micro Enterprise Fewer than 10 Not exceeding £1.4M
Small Enterprise Fewer than 50 Not exceeding £6.8M
Medium-sized Enterprise Fewer than 250 Not exceeding £34M
The advantages to local sourcing are numerous, but include:
Keeping local people in jobs and promoting local business which ensures
that this is good for the local community;
Reducing the delivery miles which may not only reduce cost but also will
serve to reduce the associated carbon footprint of the product being
Offering good value for money, particularly where seasonal items are
Increasing PR as suppliers often understand the area to which they are
serving and can satisfy local preferences;
Creating a shorter supply chain makes it easier to predict delivery and
lower delivery costs.
The university has an ethos which includes assisting SMEs and local suppliers
and to help them to understand how they can identify and act on opportunities
when they arrive. The Procurement Service has been proactive in helping
suppliers throughout this period by:
Membership of the North East Chamber of Commerce Buy North East
Developing a “How to do business guide” to supplying goods and services
to the University;
Hosting a “Meet the Buyer” event to explain the EU legislation and tender
procedures to local suppliers and SMEs;
Providing information to suppliers to notify them of upcoming tenders and
Through research, it was found out that 70% of contracted suppliers were local
(see Figure 1) and 37% of suppliers were SMEs (see Figure 2). Some
examples of contracts that have been awarded to either a local supplier or SME
are in the following table.
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Figure 1 – Local Suppliers
Figure 2 - SME
The Procurement Service will not discriminate against large or national
suppliers, and will seek to source the most appropriate solution.
The following table details some recently awarded contracts and how they fit in
with the local sourcing and SME agenda.
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Table 3 – Local Suppliers
Contract Supplier Contract Detail
Skip Hire John Wade Local supplier and
medium sized company.
Fruit and vegetables, JR Holland Local supplier and
dairy and sliced bread medium sized company.
An advocate of
and purchase from a
local dairy farm.
Fresh and frozen fish Taylor Foods Local supplier and small
and seafood. sized company.
Facilities Management Mitie National supplier with
5 Procurement Best Practice
5.1 Professional Services – tender process
The renewal of the Professional Services Framework Agreement for Estates
and Buildings (E&B) gave the Procurement Service a valuable chance to work
closer with the E&B Department and put in place a more workable framework
than the previous one. The previous Framework, whilst used within its
parameters had too many suppliers on it some of which were hardly utilised if at
This is problematic for Public Sector Organisations as the challenge culture is
on the increase. As EU tenders cost suppliers time and money to complete,
where suppliers do not receive work, they are more likely to put in a challenge,
or as a minimum a request for a full debrief.
To address this and to deal with the likely volume of responses, and time
needed by both Procurement and E&B to evaluate, the tender process began
12 months before the OJEU advert due date.
The formula and criteria used to evaluate the submissions was discussed at
great length and all relevant parties were brought together to take part in
evaluating both pre-qualification and tender submissions. The interview stage
proved to be invaluable in maintaining momentum and interest in the project.
Following evaluation, and during the mandatory standstill, unsuccessful
suppliers were debriefed on the reasons that they had failed to be placed on to
the framework. The de-briefs took a number of days to conclude, but no
challenges were received.
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E&B now ensure that the work is shared equally by ensuring mini-competitions
are carried out and work awarded based on suitability to undertake.
5.2 Fruit, Vegetables, Dairy and Sliced Bread – tender process
An EU tender exercise was undertaken to renew the Fruit and Vegetable, Dairy
and Sliced Bread contract. A detailed evaluation process was undertaken which
initially looked at the supplier’s response in relation to the specification and their
pricing. The top four suppliers were then invited to interview.
JR Holland performed best at interview, in particular scoring highly in terms of
environmental factors such as food miles, local sourcing and the way in which
they operate their fleet and premises. Site visits to the Team Valley Fruit and
Vegetable Market were undertaken at 6am to view the wholesaler to JR
Holland, followed by a visit to JR Holland’s premises to evaluate their production
and packaging in process. The site visit raised no concerns. The evaluation
panel were in complete agreement to award all lots to JR Holland.
The aim of the contract was always to deliver quality, seasonal, fresh, local
produce at the right price. As the contract had to be advertised in the EU it is
difficult to stipulate local produce, but careful consideration has been given to
the impact on the environment and the food miles have been taken into
consideration. The benefits to this contract are detailed below.
Fairtrade produce included which will help in the retention of Fairtrade
Collaboration in producing menus to advise on what produce will be in
season, to ensure that this will be within the University’s budget and to
deliver nutritional menus to students.
JR Holland will support the University’s chef development days and
Due to the volatile food industry particularly with fresh produce monthly
pricing is to take place.
18.104.22.168 Efficiency Savings
As the same supplier has been awarded all three lots this will significantly
reduce the amount of administration for all departments involved in the P2P
The estimated financial saving to the University in terms of staff time is
£15,700 per annum, based on the current paper based requisition process.
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22.214.171.124 Environmental Savings
There will be a significant reduction in deliveries.
A reduction in food miles and carbon emissions as local and seasonal
produce will be purchased in favour of imported cheaper or out of season
produce which has been produced in energy intensive practices and shipped
or flown into the UK.
JR Holland has made a number of improvements to minimise the impact
they have on the environment, such as purchasing green energy, upgrading
the refrigeration units to cut down CFCs, harvesting the rainwater from the
roof of their premises to be used for the toilets and washing of vehicles.
Further improvements are also intended to be made during the contract such
as a wind turbine to power the premises.
All cardboard packaging is made from recycled cardboard, and will be
recycled after use.
JR Holland is a local medium-sized enterprise.
JR Holland support Cyrenians (charity for the homeless).
Where possible waste products from JR Holland are sent to a local animal
sanctuary as opposed to being sent to landfill or composted.
JR Holland is an advocate of Northumbrian Fields, which is a group of
farmers based in Northumberland selling their local produce to commercial
grocers and where possible this produce will be used to supply the
JR Holland purchase their dairy from a local dairy farm, Embleton Hall
Dairies, and will be providing a pergal machine for each college which will be
branded with Embleton Hall, so students and guests can clearly see at meal
times we are using a local County Durham product.
Pre-prepared vegetables (washed and sliced vegetables and salad) are
purchased through the contract. JR Holland is arranging for the local
farmer’s produce to be dropped off at JR Holland’s so the preparation
supplier will take with them on their return journey. The vegetables will then
be prepared and returned to JR Holland. JR Holland are not charging the
local farmers for this service, but the added benefit is increasing the income
of the farmers as the vegetables used in preparation are class 2 or class 3
items which would not fetch as much at wholesale and JR Holland are able
to provide locally prepared products to their customers which is of benefit to
A reduction in the number of suppliers has not lead to any reduction in added
value or environmental benefits associated with this contract.
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5.3 Facilities Management – tender process
Due to the value of the contract Procurement were obliged to undertake an EU
tender through which:
36 pre-qualification questionnaires (PQQ) were received;
6 suppliers were invited to tender;
3 suppliers declined to tender;
The remaining 3 completed the online tender submission, participated in the
eAuction and attended interview.
This was the first tender to use the University’s eSourcing system, acquire.
Feedback from suppliers suggests that this was an easy to use system and
provided more visibility on the tender process than traditional tendering
processes. This is of particular importance as this was a key area raised by
suppliers during the ‘Meet the Buyer’ event in April 2009.
Interviews were undertaken with all 3 suppliers invited to tender. Suppliers were
given a topic for the presentation which encouraged an innovative approach to
the contract. This was followed by a set of interview questions regarding the
services to be provided.
The auction itself was split into 3 separate events which were run consecutively.
This auction was concerned with the daily management fee that would be
applied to temporary catering and domestic staff. This was a reverse auction,
i.e. supplier bids should decrease as the management fee becomes lower.
Suppliers were asked to detail the percentage reduction on fees they would
offer the University if we employed temporary staff on a permanent basis. This
was a forward auction, i.e. supplier bids should increase as the percentage
reduction offered gets higher.
This was the most highly anticipated auction as this was relating to the
management fee for the FM service and was considered to be the area where
the highest level of saving could be made. Additionally, by undertaking this
auction visibility would be given to the management fee applicable across the
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This auction was extremely exciting to watch and the software package used
showed the viewer what each supplier was doing, i.e. whether they were making
a bid, in real time. In total, 20 bids were received resulting in the price quoted
for management fees dropping from £204,060 (11% of current contract price) to
£88,250, a saving of 56.75%.
The structure has provided visibility on all suppliers proposed profit margins;
this is an element which has not been fully quantified in the past.
It quickly became apparent that the auction would deliver the savings
anticipated as the opening bids on the auction were lower than prices
In addition to the auction the e-system for submission has assisted the
University in maintaining its own sustainability policy as no paper
submissions were received. All evaluation has been completed ‘online’.
126.96.36.199 Efficiency Savings
The successful supplier has identified several areas where they feel further
savings could be made to the contract in year 1:
Novation of optional contracts prior to end date;
Move to output based specifications;
Bundling further services.
Anticipated savings can be found in the Table 4 shown below.
188.8.131.52 Environmental Savings
The successful supplier have also identified areas where the services to be
provided have an impact upon the environment. Suggestions for improvement
can be seen below:
Use of LPG vans;
Web based reporting and MI;
Use of local suppliers ;
Use of microfiber and steam cleaning technology;
Ethically sourced uniforms;
Reuse of green waste;
Low energy usage equipment.
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Table 4 – Cash Saving Summary
Description of Saving Amount per year Contract Savings
(amount per year x 4)
Reduction in contract price £358,869 £1,435,476
Efficiency savings £110,000 £440,000
Total £468,869 £1,875,476
To put this cash saving into context this should be compared to the historical
price of the contract. Essentially it could be argued that by re-tendering this
contract in the manner that it has been the University has achieved a year’s free
service, based upon current costs.
5.4 Uniforms – tender process
The contract for Uniform, Work wear, Personal Protective clothing, Safety
Footwear and Lab coat was due for re-tender in 2009. Due to the value of the
contract the University was obliged to undertake an EU tender. As there were
likely to be a high number of applications it was agreed to undertake an EU
tender using the restricted procedure through which:
38 suppliers expressed an interest in the tender;
25 suppliers submitted a PQQ;
13 suppliers were invited to tender;
2 suppliers declined to tender;
6 suppliers did not submit a tender;
The remaining 5 suppliers completed the online tender submission for one or
more Lots; all 5 suppliers were invited to participate in the auction.
The tender was issued using the acquire eSourcing system which requires
suppliers to complete the tender on line eliminating the need for suppliers to
provide multiple paper copies of their tender submission. As part of the tender
suppliers were asked to provide details of the following information:
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184.108.40.206 Efficiency Savings
The auction has delivered the following potential savings:
101 bids were placed by 6 suppliers against auction 1, with a potential
annual saving of £2,470 against historic spend of £10,490, equating to
58 bids were placed by 4 suppliers against auction 2, with a potential annual
saving of £19,021 against historic spend of £66,458, equating to 28.62%
18 bids were placed by 6 suppliers against auction 3, which has resulted in a
small increase of 4.5%, which would have been a larger increase had the
auction not been undertaken.
These savings still need to be reviewed prior to the award of the contract.
220.127.116.11 Environmental Savings
As part of Procurement Service’s Sustainability, Fairtrade and CSR policies the
University requires suppliers to review and adhere to the University policies
where possible as well as their own and the following are included as standard
in the PQQ document:
Corporate and Social responsibility (CSR);
As well as the above sections suppliers were requested to provide
supplementary information relating to sourcing in an ethical manner, through the
Details of the procedures that suppliers have for selecting and managing sub
contractors and suppliers in the supply chain.
Interviews and presentations were overseen by key University staff who would
be using the new contract, and covered the catering, housekeeping, retail and
procurement areas. Interviews were chaired by the Deputy Director of
All suppliers were asked to present on ethical trading within the supply chain, an
area that has made the press on several occasions, and is closely linked to the
University’s corporate and social responsibility policy for procurement. In
addition to this, they were asked to bring along samples of Fairtrade lines.
Following the presentation, each supplier was asked a set of standard questions
and at the end of the process, the panel agreed scores.
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The contract is currently being concluded and will be implemented in March
5.5 Pest Control – contract management
Durham University’s Procurement Service let a contract for Pest Control in
August 2004 which covered callouts and ad hoc pest control requirements. The
University re-tendered this requirement to coincide with the end of the contract
August 2007. The contract is now more pro-active, environmentally friendly,
sustainable, user friendly and offers better value for money.
In 2007 the Procurement Service at Durham University reviewed the current
arrangements for Pest Control and decided the reactive approach was not
appropriate and a more proactive solution would be sourced for the replacement
With over 60 sites across the city, when it came to Pest Control it was essential
to keep all management information in a central location, easily accessible for
all end users. An easier way to manage the information, as well as a way to
reduce the amount of paper used was required, whilst reducing carbon
emissions and increasing ethical and Fairtrade procurement were also at the top
of the ‘green’ initiative.
After reviewing the tender returns interviews were arranged and the successful
supplier was able to demonstrate their appropriateness of solution as well as
value for money.
Quarterly contract management meetings and staff training were agreed in the
service levels as a way of managing and improving the contract.
To administer a paper free agreement;
To utilise available technology for ease of access;
To provide a pro-active approach to pest control;
To provide training into how to prevent/reduce infestations;
To provide an ethical solution where possible to pest control methods;
To manage responsibly the disposal of hazardous substances;
To obtain real time information on call outs;
To make financial savings based on a better and more ethical solution;
To have instant access to management information;
To achieve a pest free environment for staff and students.
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5.5.4 Obstacles and solutions
University buy-in Procurement set up a management team
including a member from:
E&B Facilities Management;
Colleges Division to represent end
Procurement Service Strategic
Supplier – MITIE Pest Control.
Meetings have included the setting up of
contract improvement plans,
communication by website and training.
Getting departments and Instructions were set up for end users
colleges to use the contract to follow on the Procurement website.
Workshops carried out to discuss and
recognise the signs pests leave
behind and what action to take.
Key departmental and College staff
were invited to attend contract
management meetings so issues
could be discussed and resolutions
agreed by both parties.
H&S agreed to discuss pest control at
the H&S co-ordinators meeting and
provided MITIE’s online link and how
to navigate around the portal.
Turning the initiative from Pro-active procurement and constant
paying lip-service to making improvement of the contract through
it happen management meetings have made
savings possible on a long term basis.
Ensuring the project is MITIE use the University as a case study
known about outside of and a tool for best practice which they
Durham University feel has lead to more business
5.5.5 Performance and Results
Performance is managed through management information showing the
success and/or improvement required within the contract;
Measure methods used to control pests to see how environmental
alternative products are used and how the usage increases;
Measure costs from previous financial year undertaken with previous
supplier against the first year of the current contract, which shows a 54%
saving on price;
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Constantly working with the supplier to improve contracts, and targets set for
improvements such as paper free contract by end 2009. Note, this has been
achieved, and a series of workshops have been arranged to ensure that staff
are able to use the on-line alternative.
5.5.6 Lessons Learnt
This contract would not have had as much success were it not for the
enthusiasm of the Procurement Service, and the buy-in from Departments
Environmental benefits of contracts can be captured in the same way you
can with financial savings. This means you can report on the difference
being made and quantify the potential impact of each area within a contract
Selection of a pro-active supplier has proven benefits in cost savings, ease
of information, training and willingness to improve environmental areas
Communication and training of end-users is important to ensure an effective
Communication with the contacted supplier is vital to make sure that they
understand the culture, procedures and processes of the university and how
all parties can work together to achieve that aim;
Regular ongoing training for staff involved in the use of the contract helps
keep them focused and helps to prevent infestations occurring.
6 Central Core Procurement Team (CCPT)
Throughout 2009, 111 tenders have been commenced, an increase of 3.61% on
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Figure 3 - Tenders 2009
Science Social Sciences & Health
Central Services Queens Campus
Colleges Durham Business School
Libraries Business & Regional Development
26 for the Faculty of Science, with costs totalling approximately £1.4m (34%
of this within Physics);
o 10 for Physics, 4 of which were for Centre for Advanced Industry
o 2 for Biological and Biomedical Sciences
o 3 for Chemistry
o 4 for Computer Sciences
o 2 for Earth Sciences
o 5 for Engineering
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Figure 4 - Faculty of Science
Faculty of Science
Physics Computer Sciences Earth Sciences
Engineering Biological & Biomedical Chemistry
7 for the Faculty of Social Sciences and Health, with costs totalling
approximately £691,644 (81% of this within Geography);
o 1 for Anthropology
o 2 for Archaeology
o 2 for Geography
o 2 for Sport
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Figure 5 - Faculty of Social Sciences and Health
Social Sciences & Health
Anthropology Archaeology Geography Sport
52 for the Central Services Divisions, with costs totalling approximately
£8.54m (64.5% of which is within E&B);
o 24 for Estates and Buildings (E&B)
o 15 for ITS
o 1 for Finance
o 5 for HR
o 4 for Registrars (1 of which is in collaboration with ITS)
o 2 for Treasurers
o 1 for Development and Communications
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Figure 6 - Central Services Division
Central Services Tenders
Development & Communications
4 for Queens Campus, with costs totalling approximately £5.62m (1 of which
was let in collaboration with E&B);
11 for the Colleges Division, with costs totalling approximately £4m;
2 for Durham Business School;
1 for Libraries Division;
1 for the Business & Regional Development Department;
8 University Wide.
Savings of £2,154,266 were generated throughout 2009 by adopting
professional procurement practices. Further details can be found in Appendix B.
77 new contracts have been awarded throughout 2009. This is more than
double the number of contracts awarded in 2008 and demonstrates the
proactive nature that the Procurement Service now have in identifying areas
where contracts could be implemented and would add value.
14 were above the EU Public Procurement Regulations threshold and were
therefore advertised in OJEU. Of these 14, the following 7 tender exercises
resulted in contracts: These were for:
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o DHS1 District Heating;
o Professional Services;
o Facilities Management;
o Fruit & Veg, Dairy and Sliced Bread;
o Fresh & Frozen Fish and Seafood;
o Ventilation Plant Maintenance;
o Inter-Campus Bus Service (Category B).
The remaining 7 tender exercises resulted in one-off purchases and were
o Rubber Crumb Rugby Pitch;
o Echelle Grating for South African Large Telescope High Resolution
Spectrograph (SALT HRS) project;
o Gateway Project Construction;
o Confocal Microscope for Biological & Biomedical Sciences;
o Mass Spectrometer for Chemistry;
o High Performance Computer;
o Camera system for SALT HRS project.
5 mini-competitions were held on existing frameworks, resulting in the University
not having to undertake EU procurements in the following areas:
o Communications Infrastructure Framework Agreement – Lot 3
o Audio Visual Equipment – OGC framework;
o Audio Visual Equipment – NEUPC framework;
o IT Training – OGC framework;
o Mobile Telephones – OGC Framework.
The remaining 58 were below the EU Public Procurement Regulations
threshold, and were therefore tendered with suitably identified suppliers. Of
these 58, 30 were one-off purchases and 28 resulted in longer term contracts.
47 contracts and tenders have been identified for 2010 which demonstrates the
way in which the Procurement Service are able to plan workload. This number
does not include those tenders that are requested through the 2 week Service
Level Agreement. Where these tenders can be planned this helps ensure that
the Procurement Service is involved in the initial discussions prior to the need to
begin the process in acquire, so that work can adequately be built in to
portfolios, an accurate specification created, evaluation agreed, risk mitigated,
and effective contracts implemented that demonstrate contract improvements.
Out of the 47 contracts and tenders so far identified:
8 are due for the Colleges Division;
25 are due for the Central Services Division, of which 11 are for E&B;
7 are due for the Faculty of Science;
7 are University wide contracts.
Out of these, 18 are subject to EU legislation.
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In 2009, 579 new supplier requests were received whilst 744 supplier details
have been removed from Oracle, a reduction of 7.7%. More suppliers continue
to be removed from the database than are added, which demonstrates the value
provided by the CSFPT and CQPT who continue to review all options available
such as using suppliers already on the system, using contracted suppliers,
suggesting new contracts to be put in place and using the purchasing card
6.4 Capital Orders
There has been 267 Capital Orders placed throughout the duration of 2009, this
is a 73% increase on the total placed in 2008.
There has been more capital lab equipment refurbishments awarded to
Departments from the Research Capital Equipment Fund (sometimes referred
to as SCAP), these often include lower value items which when combined are
treated as capital. Spending commenced in August 2008 by Departments from
this fund, which had a slow start at the beginning and the bulk of the purchasing
was done during the final 2 quarters of the financial year, ie: January – July
2009. The Research Capital Equipment Fund also has approval of £3million of
capital equipment expenditure during Aug 2009-July 2010.
In addition to Research Capital there has also been awards from the capital
programme for ITS and BSI equipment, ITS will continue to purchase equipment
until 2011/12 for the IT Infrastructure, IT Vision and IP Telephony Projects. The
BSI Phase 2 refurbishment completed in July 09, purchasing for this project
consisted of many lower value lab items, no further orders will be placed for this
6.5 Purchasing Card
Information on card usage is still regularly reviewed to ensure compliance and
appropriate use of the cards. There has been an increase of 73 cardholders
throughout the University in the last year bringing the total to 552 cardholders of
which 55% are registered on the online system.
Since Barclays introduced an online system for cardholders an upgrade of this
system has taken place. This has had little effect on the cardholders however it
has had a positive impact on the Barclaycard online administrators within
Procurement. They are now able to:
Raise cardholder limits;
View cardholders authorisations;
View where cards have been declined and resolve issues so that the
purchase can be made;
Run more reports to facilitate contract management, on areas such as:
o Spend by supplier;
o Zero spend.
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Work will start with the Business Assurance department in the New Year to
discuss the possibility of carrying out the monthly download in electronic format
as this will provide a further environmental saving.
2009 has seen some significant changes to the Insurance Service including:
The return of Claire Robinson from 12 months maternity leave in March
The appointment of Barbara Dick to the position of Insurance Assistant
working 21 hours a week from August 2009.
The Insurance Service is constantly looking to improve the way that insurance is
handled and some of the topics currently being worked on are as follows:
Reviewing the travel forms currently used for student travel to make them
more user-friendly and comprehensive;
Investigating the feasibility of an online travel system;
Standardising the asset register process with all asset register information
being compiled for departments and colleges so that they only need to
update the information provided. This will make it much easier for
Departments and Colleges to update their information, which should speed
up this part of the compilation of information for UMAL;
Improving the internal claim file system to show ongoing claims and closed
claims to facilitate ease of use and understanding;
Working with UMAL on paying travel claims electronically as part of our
Corporate and Social Responsibility policy.
Some of the successes of the Insurance Service since January 2009 include the
All insurance queries were handled within the Service Level Agreement
despite an increase of 39% to date in the number of queries received;
The large claim for the July floods has had an interim payment of £160,000
paid by UMAL;
The Buildings and Contents exercise and the Insurance Renewal were both
submitted to UMAL within the deadlines requested.
6.7 Balanced Scorecard
The Procurement Service continues to monitor performance using customer
satisfaction surveys. The feedback covers the performance of all staff, including
the F/DPT, CCPT and Insurance. Whilst there have been some minor criticisms
(2%), which were followed up directly by the Deputy Director of Procurement,
there is clear evidence that internal customers are satisfied with the level of
service they receive.
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In 2009 the questionnaires were amended and developed to ensure we have a
full 360° feedback process. Therefore as well as amending the surveys to
capture environmental and social activity new surveys were created to capture
supplier and staff feedback. Consequently all suppliers who now participate in a
tendering process are invited to provide feedback on the process. Procurement
staff complete regular surveys to ensure their needs as well as the customer
and supplier are being met, to highlight any concerns they have and to capture
potential improvements to processes and procedures.
Throughout 2009, Procurement have undertaken further training and awareness
sessions for University staff, via workshops and training sessions, with suppliers
and with Procurement Service staff. These workshops and training included:
Training for 9 members of ITS on the current paper based P2P process;
Quarterly P2P training courses delivered to 64 members of internal staff
across all Departments and Colleges;
Oracle training with Unisys delivered to end users on how to reconcile
purchasing card transactions. The Purchasing Team Leader for the CCPT
now attends all Unisys training to end users on the reconciliation of their
purchasing card. The importance of this is made clear when cardholders
collect their cards from the Procurement Service, and while Unisys explain
the training on the Oracle System, they were unable to provide answers to
questions on processes. The result of combining this expertise is that the
cardholders are now fully aware of what is required of them and why. Since
starting the training last year the numbers of queries and problems have
Konica Minolta delivered a workshop to the end users reviewing the
functions of the machines and providing help and guidance;
Procurement staff carried out internal training for other colleagues within the
section covering the following areas:
Refresher training for the F/DPT;
EU Framework Training;
Sustainable Procurement Training will be carried out in January 2010.
Sophie Sowerby, University Training Manager delivered 2 specific
Communicating Assertively training sessions across the F/DPT;
Specific training courses were delivered for a group of Procurement Staff on:
EU Framework training delivered by Achilles;
Sustainable Procurement training by Achilles;
eSourcing by Wax Digital.
A 2 day “Meet the Buyer” event was held for suppliers in April 2009. There
were over 266 suppliers who contacted Procurement Service declaring an
interest in the event. The purpose of the event was firstly to help suppliers
The EU Public Procurement Directives and Regulations affect the
University’s tendering processes and how they are encompassed within
them to obtain goods, services and works;
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To complete and return the relevant documents that are used during
tender exercises and giving advice and guidance on completion of these
documents. This event was a huge success
Work will continue in 2010 to engage with SME’s and local suppliers, through a
series of “Meet the Buyer” events. University staff will also be invited to some
“Meet the Supplier” events to meet with potential and current suppliers.
7 Faculty / Divisional Purchasing Team (F/DPT)
Staffing throughout 2009 has been a problem across both teams. There have
been 3 resignations, with the staff being brought in on Fixed Term Contracts to
see the implementation of eProcurement in all leaving before their termination
date. To date, there is 1 member of staff remaining on a Fixed Term contract
until end July 2010, and there are 3 Temporary Purchasing Staff, and 2
Temporary Administrative Staff. The structure of the Procurement Service is
under review as a result of the implementation of eProcurement, and for that
reason, it was felt more sensible to allow the existing permanent staff the
opportunity to apply for the jobs that most interested them, and for the
vacancies to be filled on completion of this re-structure.
In addition, there has been a very high level of long-term sickness this year, and
at times, it has been very difficult to hit the service levels with the number of
staff available. This was particularly bad over year end. However, our
customers have not been aware of these issues, work has been completed to
the best of the staff in the F/DPTs ability, and they are to be commended for
their attitude throughout these difficult times.
Hopes for 2010 are that the teams will be able to stabilise, though this is only
possible once the vacancies are filled, and the new roles appointed to.
See Section 3.2 for further details on changes, and Appendix A for new
7.1 Colleges and Queens Purchasing Team (CQPT)
From 1st January 2009 to 31st December 2009 the CQPT has processed 3,282
requisition forms, placing orders to the total value of £14,135,914.81. 61% of all
orders were placed with contracted suppliers where prices have already been
agreed. As the majority of these are also blanket orders, it makes it difficult to
negotiate further savings, which have already been made on the implementation
of the contract.
Out of the 39% (1,280 orders) not placed with contracted suppliers, the CQPT
have undertaken the following process:
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Mini Competition (MC) 75
Request for Quotation (RFQ) 23
Request for Tender (RFT) 8
Verbal Quote (VQ) 78
7.2 Central Services and Faculty Purchasing Team (CSFPT)
From 1st January 2009 to 31st December 2009 the CSFPT processed 5,320
requisition forms placing orders to the total value of £41,430,963.85. Out of
these requisitions, 70% are made with contracted suppliers where prices have
already been agreed. 19% of all orders placed were blanket orders which again
makes it difficult to negotiate savings as prices have already been made when
the initial contract was let.
Out of the 30% (1,596 orders) not placed with contracted suppliers, the CSFPT
have undertaken the following process:
Mini Competition (MC) 228
Request for Quotation (RFQ) 281
Request for Tender (RFT) 9
Verbal Quote (VQ) 218
Despite the difficulties that have been faced in terms of staffing, the Director and
Deputy Director of Procurement feel that this has been a very successful year
for the Procurement Service, in terms of the value that has been added for the
University, and the way that the Procurement function will now be able to move
Activities in 2009 will be used as a starting point for 2010, where bigger savings,
more sustainable purchasing, and the full introduction of eProcurement will be
If you have any queries on this report, please do not hesitate to contact the
authors, details below.
Alison Holmes MCIPS Laura Watson FInstLM MCIPS
Director of Procurement Deputy Director of Procurement
Telephone: 0191 3344524 Telephone: 0191 3344525
Email: firstname.lastname@example.org Email: email@example.com
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Appendix A – Revised Organisation Chart from Implementation of eProcurement
Deputy Director of
to Director & Deputy
Margaret Parry Rebecca Morris Neil Petch Dave Armstrong Liam Glasper Linda Meade Rachael Scott Lyndsay Keane Claire Robinson
Purchasing Procurement Contracts and Strategic Contracts Strategic Contracts Strategic Contracts Strategic Contracts Strategic Contracts Insurance Manager
Manager Manager Catalogues Manager Manager Manager Manager Manager (f/t)
Angela Healer Nicky Ord Wendy Woollett Barbara Dick
Assistant Procurement Assistant Contracts Insurance Assistant
Purchasing Administrator & Catalogues (p/t)
Rob Biggins Chris Slade Teresa Hogg
Purchasing Officer Procurement Officer Contracts and
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Appendix B - Savings
Jan- May- Total
Feb-09 Mar-09 Apr-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09
09 09 Savings
500 2,500 459,534 331,193 10,480 - 48,033 306,814 15,088 352,586 470,443 24,805 2,021,976
1,609 2,997 4,430 11,100 6,699 14,627 14,529 1,816 5,282 7,307 1,811 222 72,429
287 4,850 13,128 3,965 2,750 15,063 2,348 609 4,650 4,028 2,465 5,716 59,861
2,396 10,347 477,092 346,258 19,929 29,690 64,910 309,239 25,020 363,921 474,719 30,743 2,154,266
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1. Local Suppliers
3. Tenders 2009
4. Tenders - Faculty of Science
5. Tenders – Faculty of Social Science and Health
6. Tenders – Central Services Division
1. Processes completed in acquire
2. SME definition
3. Local Suppliers
4. Cash Saving Summary
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