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SERVICE OVERVIEW

GOVERNMENT PROCUREMENT SERVICE. SERVICE OVERVIEW. The Past. Buying Solutions was an Executive Agency of the Office of Government Commerce (OGC) A national Professional Buying Organisation (PBO) for UK public sector services.

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SERVICE OVERVIEW

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  1. GOVERNMENT PROCUREMENT SERVICE SERVICE OVERVIEW

  2. The Past • Buying Solutions was an Executive Agency of the Office of Government Commerce (OGC) • A national Professional Buying Organisation (PBO) for UK public sector services. • Remit was to maximise value for money and savings through framework agreements • Spend through Buying Solutions - £7bn pa • NHS spend through Buying Solutions- £2bn pa

  3. Strategic Review • “If you always do what you’ve always done, you’ll always get what you’ve always got!!” Background • Review – internal and external • There is a recognised need to implement centralised systems and deliver greater quantifiable savings from centralised procurement effort. • Increasing spend under central management <£2.5Bn to >£10bn and delivering the consequent savings • Leverage total expenditure to benefit whole public purse • Tighter control and better demand management have led to savings of approx £1.5Bn in 2010/11

  4. Key Recommendations Centralised Procurement: Creation of Government Procurement - procurement for common goods and services to be mandated and centralised in central government Formalised agreements between Cabinet Office and Depts Accountability – Ministers, Perm Secs and Commercial Directors to be held accountable for channelling spend through GPS Rename & transform Buying Solutions to Government Procurement Service to: • Deliver expert sourcing, contract, category & data management • Implement & operate the Govt procurement spend data warehouse • Provide mechanism to fund GPS and help Dept’s to invest in improving capability of procurement staff 4

  5. Government Procurement Service • Executive Agency of Cabinet Office, retain trading fund status and supplier funding model • Lead executive will be a MD • A procurement service provider for the whole public sector • Management of £9.7bn public sector procurement spend 2011-12 • Operating Board will have a customer representative • Reduced headcount & accommodation • Continue to operate in the following categories: energy, fleet, travel, office solutions, professional services, property/FM and ICT

  6. Operational Priorities • People: Development and continuous improvement of high quality professional teams at every level in the organisation • Operational and financial efficiency • Effectively and commercially managing public sector spend. Delivering in-year cashable savings and ongoing service level improvements • Full eEnablement of our operations • Becoming customer centric and delivering what our customers, need, want and value most

  7. Vision Statement: “To be valued as the integral delivery partner of Government Procurement, working with customers and suppliers to reduce public sector spending, improve value for money and deliver savings efficiently and effectively.” Mission Reform Government Procurement through centralisation of common goods and services spend, to fund improvements in technology, processes and Government wide procurement resources to better manage total spend, in support of Departmental SR cost reduction targets. To Deliver: “Savings for the Nation” Making government work better

  8. Scope Nine centralised categories: • Energy • Fleet • ICT • Learning & Development • Media & Advertising • Office Solutions • Print • Professional Services • Travel A centralised strategy for Property is now also being developed.

  9. Key Facts • £7.6bn of public sector procurement spend in 2010-11. • 1,350 suppliers including many SMEs. • 14,500 customers across 1,400 organisations. • 4,500 contracts. • Over 80 EU-compliant framework agreements. • 272 staff across two sites – Liverpool and Norwich.

  10. Targets • £15bn of public sector spend under active management. • Deliver savings within a minimum range of 5-8%. • Reorganise and restructure to improve operational efficiency: - reduce staff from 435 (budget FY 10/11) to 272. - reduce non-operational staff to 15% of total headcount. • Reduce operating costs by 30%. From £97K (budget FY 10/11) to £70k per FTE by FY 12/13. • 30% reduction in procurement cycle times.

  11. Overview High Level Operational & Functional Delivery eEnablement Category Development Sourcing Business Performance Management     PROCUREMENT SERVICES Demand Management E-auctions Ready Access to Best Prices via Catalogues Market & Supplier Analysis EU Compliant Procurements Supplier Relationship Management Spend Monitoring Contract Compliance Capture Requirements Governance Spot Buying Project Management Savings Generation Contract Management Data Management & Reporting Prompt Payment Contract T&Cs Development Supplier Audit Support Transparency Policy Implement Policy through Procurement Innovation in Procurement & Technology ACTIVITIES Customer Support Price Benchmarking Customer & Stakeholder Engagement

  12. Service Offerings Category Development

  13. Service Offerings Sourcing

  14. Service Offerings Business Performance Management

  15. Service Offerings eEnablement

  16. Financial Model • Key principles: • Government Procurement Service is a not-for-profit executive agency of the Cabinet Office with trading fund status. • It does not receive any central funding. • It recovers it costs by collecting a small commission from suppliers based on the value of transactions through its contracting arrangements. The average is currently 0.5% with the intention to move to a maximum of 0.5%.

  17. What it means for NHS Customers • Committed to Health – dedicated relationship managers • Opportunity to aggregate & benefit from the leverage of the whole public purse • Access to best value deals through e-catalogues • Department of Health represented on Extended Procurement Executive Board • Building Customer Board across the NHS • More transparency • Access to MI on spend and savings • Continue to work with DH on QIPP • Simpler average Supplier Commission model • Access to NHS specific frameworks in addition to general portfolio • NHS specific best practice roadshows

  18. A practical example – office supplies ‘As was’ Model Model ‘Now’ 5 Departments represented 83% of CG spend in Office Supplies Single contracting authority • Drivers for change: • Aggregation • Efficiency • Environment • Resources 2 Suppliers 5 suppliers accounted for 99% of total CG business Volume bound contract 6 separate contracting vehicles 1 product price for Government 144 individual CG contracts 3,500 individual product items 15,000 individual product items 2,600,000 data lines over 18 months Delivering real, cashable saving in region of 12-29%

  19. Benefits • Greater aggregation and commitment leads to improved public sector leverage with suppliers and better prices. • Simple & quick access to best value deals through Government Procurement Portal (website) and e-catalogues on the Government eMarketplace (GeM). • Greater transparency and visibility of procurement activities and prices achieved. • Greater efficiency and removal of duplication. • Consolidated, Government wide view on spend and savings. • Investment in procurement capability across Government. • Greater sharing of knowledge and category expertise.

  20. Summary

  21. Need help? Customer Service Desk • Dedicated team – 0345 410 2222 • Lines open between 8.30 – 17.30 • Head of Customer Service Health – Joan Murray • Joan.murray@buyingsolutions.gsi.gov.uk Second Line support • Category specialists available to take your call • Provide detailed advice on using a framework

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