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PPM Policy

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Procurement Detail

Purpose

Procurement is the process by which resources (goods, services and works) required by a programme or project are acquired. It includes development of the procurement strategy, preparation of tender and contract documentation, selection and acquisition of suppliers and management of contracts.   Procurement is used to process the acquisition, usually by means of a contractual arrangement after public competition, of goods, services and works.

This definition covers both conventionally funded, more innovative types of procurement such as: Public Private Partnership Public Private Partnership (PPP) this is where the government uses tax revenue to provide capital for investment, with operations run jointly with the private sector or under contract.

An example of PPP would be;-

Access to Employment

The private sector contributes to a public/private partnership project supported with Single Regeneration Budget financial assistance that provides services and facilities to enable workers to access employment using sustainable transport methods within dedicated areas of the City. This successful scheme has been expanded annually and is now into its fourth year.

Private Finance Initiative (PFI) this is where capital investment is made by the private sector on the strength of a contract with government to provide agreed services.

An example of PFI would be;-

Cleveland Police Service Putting People First Campaign

The service entered a PFI with ‘Reliance’ to construct and manage buildings to house two district headquarters and two town centre police stations.(PPP)/Private Finance Initiative (PFI), and contracting out of services previously delivered by the public sector.

The process spans the whole life cycle from mutual conception and definition of need to the end of the useful life of an asset or the end of a contract. The outcome of the procurement process should be the achievement of “best value for money” which is defined as the “optimum combination of whole life cost and quality to meet the customer’s requirement”. In order to achieve best value for money, sustainable development should be considered at the earliest point of the procurement process.

Procurement activity within a programme or project can be in relation to the supplies required to operate the programme management office (stationery, computers, telephones, office accommodation etc), consultancy or legal support,  or it may be the main activity of the programme or project, for example; a construction project, or Business Process Outsourcing (BPO). If external consultancy is required, senior managers should refer to the DAO 03/05 for further guidance.

Public sector construction procurement is governed by the Policy Framework for Construction Procurement which, has been endorsed by the Procurement Board and Northern Ireland Audit Office (NIAO), and includes the Achieving Excellence Initiative as a key aspect. The Policy is consistent with the best practice initiatives set out in the NIAO report “Modernising Construction Procurement in Northern Ireland”. The NI Centres of Procurement Expertise (CoPES) have set out, in the Construction Procurement Guide, best practice guidance for the delivery of Departmental, Agency, Non-Departmental Public Body (NDPB) and other publicly funded construction related procurement.

In February 2006 NEC3 was adopted by all Centers of Procurement Expertise as the standard form of contract to be used in construction related procurement.

Where procurement is a significant element of a project or programme, it can be found in each of the Gateway Reviews from the engagement with delivery chains and/or markets to determine capability to meet the requirement in Gateway 0 review to the contract management and plans for ongoing improvement in value for money reviewed in Gateway 5.

It is crucial to the success of the project that the Business Case includes any/all anticipated financial information including potential procurement activity.  This equates to cost of the programme and project weighted against expected benefits to evidence value for money or savings.   

In order to undertake any financial review Senior Staff should refer to the NI Practical Guide (Green Book) which sets out the economic appraisal considerations. The link below will take you to the economic appraisal website.

http://www.dfpni.gov.uk/economic_appraisal_guidance.  

Sources

The Centres of Procurement Expertise (COPEs) in Northern Ireland are found within –

Central Procurement Directorate

Central Services Agency - Regional Supplies Service

Responsibilities

The main Programme/Project Management roles involved in making or influencing procurement decisions are illustrated below.

Role Responsibility
Senior Responsible Owner (SRO) The individual who is ultimately accountable for successful delivery ie the achievement of desired outcomes & realisation of expected benefits from the Programme or Project.
Programme Board / Project Board

Group that may be established to assist with the direction setting and leadership of the Programme/Project. There are 3 roles these are:-

  • Executive who will complete the Business Case
  • Senior User who represents the interests of the customer or persons affected; and
  • Senior Supplier who represents the interests of the project drivers and in some cases procurement matters.
Programme Manager Responsible for the set-up, management and delivery of the Programme. Oversees the Programme’s Projects on a day-to-day basis.  Awareness of any procurement or sub-contracting matters is vital to the success of the programme management.
Project Managers Report project progress on delivery of agreed capabilities to Programme Manager.  Awareness of any procurement or sub-contracting matters is vital to the success of the project management.