Commodity Profile & StrategyAgreement Title: [insert]

Reference: [insert]

For info – delete prior to issue

The strategy is used in the planning stage of any procurement to determine how key issues will be addressed e.g. route to market, CSR issues, pricing strategy etc which is then translated into the procurement process

and documentationIt identifies and minimises risk and assists in ensuring all key factors have been taken into account when

conducting the procurement leading to fit for purpose and VFM.

Version Control

When drafting and amending the Profile & Commodity Strategy, the Procurement Officer should complete the above table to ensure changes can be tracked and queries can be directed to the appropriate UIG member/others as appropriate

ContentsExcept where stated as optional the slides contained in this template are the recommended mandatory minimum contents of the Commodity Profile Strategy. Other slides can be added on a commodity specific basis as appropriate . Further slides are contained in the Scottish Public Sector Toolkit

Contents (complete as appropriate) Slide Number

V10 24/04/23 Slide 3

Mandatory consultation with the Head of Collaborative Procurement (HOPC)

If consultation with HOPC is required detail outcomes here;

For info – delete prior to issueProcurement Manager must consult with the HOPC in the following circumstances:• where Single Tender Action (non competitive action) is proposed• where a procurement has a strong potential to influence CSR issues• where an extension to a contract or framework agreement is proposed• where the negotiated procedure, competitive dialogue, or dynamic purchasing system is the proposed tendering option• where it is proposed to shorten the EU minimum tendering timeframes or use the Accelerated Restricted procedure (NB use of the

Accelerated Restricted MUST be highlighted in the Contract Notice. For further information about the Accelerated Restricted Procedure please refer to this Scottish Procurement Policy Note (SPPN 1 2009): http://www.scotland.gov.uk/Resource/Doc/1265/0076383.pdf)

• where it is proposed that the duration of a framework agreement will exceed 4 years• where TUPE may apply

V10 24/04/23 Slide 4

Executive Summary Procurement Manager to complete this slide after completion of the Strategy and prior to forwarding for sign off by the UIG/HOPC

Current status: [list]

Spend – total versus addressed: [list]

Scope: [detail]

Strategic recommendations and reasoning: [detail]

Benefits – how much, how, by when?Price parity opportunities:

- £a achievable by DATEBenchmarking opportunities:

- £b achievable by DATEMarket competitiveness:

- e.g. new player breaking into the market, driving pricing down but want commitment , £c by DATEProduct standardisation/ rationalisation potential:

- £d, assuming xyz by DATESupply chain redesign, moving to ex-works,

- £e by DATE

Any major barriers to success:

V10 24/04/23 Slide 5

UIG Role & InputProcurement Manager to agree with the UIG their role, responsibilities, input and actions at each stage in thestrategic sourcing process

Agree with the UIG who will agree the final draft of the key stage documentation e.g. all or a nominated number of UIG members re the strategy, award recommendation etc

Agree with the UIG the role UIG members will play in PQQ and tender evaluation and how Tender Evaluation Board scores for PQQ/ITT results will be collated e.g. overall weighted results or the average of score.

V10 24/04/23 Slide 6

Stakeholder (& UIG) Contacts for [Contract/Framework Agreement]

List names and contact details of all stakeholders relevant to this commodity:

Name Job Title Division Contact Tel E-mail

V10 24/04/23 Slide 7

Business Need and Functional Requirements

What does the commodity do, standard v customised, level of customisation, quality requirements, real v perceived function, service requirements, user perception, value to institution, specific specifications

Consider the procurement innovation issues for highly complex procurements

Where we are

Sector Requirements

V10 24/04/23 Slide 8

NB use of generic specifications – if these don’t exist the UIG needs to start working on them as soon as possible

Where we want to be

Scope of [Name of Commodity] Scope the commodity to be covered i.e. what is included in this commodity group, breakdown into sub-commodities, which products fall

under which sub-commodity

V10 24/04/23 Slide 9

Expenditure Analysis - Spend Distribution

In scope spend distribution by universities and colleges, supplier, by sub-commodities: [detail]

What is the value of the requirement? How does this inform the procurement process?

V10 24/04/23 Slide 10

Procurement Officer to add an acknowledgement, for future reference, of the source(s) of data used:

Future Expenditure Trends Demand profile: [insert]

V10 24/04/23 Slide 11

Spend Analysis & Conclusions Demand profile: [insert]

V10 24/04/23 Slide 12

[Commodity] - Typical Cost Breakdown

Profit % Complete the breakdown for the commodity Recommendations

What are the recommendations?

V10 24/04/23 Slide 13

Total Cost Model [Name of Commodity] (Optional) List the activities carried out under each step of the product life cycle. Determine the impact of each step on the total cost of ownership in terms of High, Medium or Low. Brainstorm the cost drivers associated with the activities under each step and determine the opportunities in each area. Which costs can be reduced (savings)/avoided (cost avoidance)? Identify Low, Medium and High Savings Opportunities Identify the barriers and enablers related to realising the opportunities

V10 24/04/23 Slide 14

Raise Need Acquire / Order Use Dispose

Activities:

Impact (on TCO):

Cost Drivers:

Savings Opportunity:

Barriers:

Enablers:

Total Acquisition Cost (OPTIONAL)

V10 24/04/23 Slide 15

Supplier Costs Total Acquisition Costs Organisation’s Costs

Product Driven Costs

Customer Driven Costs

OrderFulfilment

CostsAdministration

Costs

OrderFulfilment

Costs

OrderFulfilment

Costs

OrderFulfilment

Costs

Material LabourOverheadsWarehousingSpecial tooling

Quality specificationsDefects/rejects/returnsIT CostsCustomer supportSales

Inventory handlingTransportationPicking & Packaging

Requisition to P/OOrder TransmissionExpeditingInvoice ReconciliationTimely PaymentQueriesReporting

DefectsInspectionRejectsRepackagingReshipping

Storage costsLabourOverheads

Goods receiptDeliveryRequisitions

Cost Drivers e.g:•Product specification and range

• Delivery frequency and location

•Order frequency

•Order value

•Lead time

Example acquisition costs:

Supply Market Overview

NOTE: trends can reveal: who is winning/ losing business, who’s trying to win market share in the UK, whose business objectives match the sector, what do profit margins typically look like for the industry.

V10 24/04/23 Slide 16

Market Trends – detail what is happening in the market for the commodity, current and future technologies, changing customer demands, new players, mergers and acquisition

Supply Market Share – detail the key players within the industry, identify size in terms of turnover, sales, number of customers and capacity

Current Contract Position– [Contract/Framework Agreement]

Contract Contract Value Contract Start/End Dates (plus any extension period (s)

Comments

V10 24/04/23 Slide 17

Current APUC/Sector Suppliers of [Name of Commodity]

Current APUC/Sector Suppliers

Supplier Spend Total Revenue Background on the Supplier

V10 24/04/23 Slide 18

Main Suppliers in the Market in Context of their Total APUC/Sector Business

Supplier APUC/Sector Spend on Commodity

APUC /Sector Total Spend Other commodities supplied; recent APUC/Sector business awards or losses; other business they are tendering for…etc

V10 24/04/23 Slide 19

Benchmarking Opportunities (Optional) Look to understand opportunities from: internal APUC price parity I.e. if different Institutions pay different prices and all move to the

lowest price point; and, from benchmarking with other organisations e.g. PASA, Value Wales, N Ireland Procurement Service, OGC, Scotland Excel, councils, fire and police service, private sector etc

Product X Price Y Price Notes

V10 24/04/23 Slide 20

Risk Analysis for [Name of Commodity] Inc Barriers To Change

Risk Analysis

Description of Risk Probability of Risk Implications to APUC/Sector Measures to Minimise / Eradicate Risk

V10 24/04/23 Slide 21

Corporate Social Responsibility (CSR)

Procurement Officer & UIG to consider CSR issues relevant to this procurement: General issues:

Result of the Risk Coding Analysis for [goods/services] regarding relevance and risk:

Completion of the Sustainable Procurement Risk Assessment Tool (SPRAT) for [goods/services]: Are there any resulting actions are required to be managed. NB: areas may already be adequately covered by the existing CSR questions.

Which areas in PQQ CSR Questionnaire or ITT CSR Questionnaire are required.

Is EAUC assistance required? If ‘Yes’ approach EAUC via the standard letter of engagement.

Specific CSR Requirements for ITT:

V10 24/04/23 Slide 22

CSR -SMEs, Supported Businesses & Social Enterprises and Community Benefits:

Detail barriers to participation for SMEs and proposals for removing:

Can this be let as a Reserved Contract under Regulation 7 of the EU Procurement Regulations:

Identification of any social clauses or community benefits relevant to this procurement:

V10 24/04/23 Slide 23

CSR

Race Equality – Impact Assessment

To determine whether race equality is a core requirement in a contract or framework agreement for goods, services or works, the following questions should be considered:

1. What is to be provided under the contract or framework agreement? [list]

2. Is the provision of the goods, services, or works one of the functions or policies relevant to meeting the duty to promote race equality? [Yes/No]. Refer to Appendix 3 of the Procurement Manual

3. Is the provision of the goods, services or works likely to affect (directly or indirectly) the ability to meet the duty to promote race equality? [Yes/No]

4. Is it necessary to include requirements for promoting race equality in the contract to make sure the duty is met? [Yes/No]

5. What race equality requirements are appropriate for the contract or framework agreement? [list]If the answer to questions 2, 3, or 4 is ‘Yes’, race equality is a core requirement. Refer to paragraph 3.7 of APUC’s Procurement Manual which details how and where race equality should be implemented into the strategic sourcing process.

V10 24/04/23 Slide 24

Strategic Tendering Options

On the basis of the internal and external analysis, plus opportunity assessment, detail the available options and the pros/cons of each.

Several examples are detailed below:

Option 1: Negotiate and extend current contract Pros: analysis shows limited opportunity in this area compared with rest of portfolio, would achieve savings whilst

minimising resource effort; would also allow APUC to approach the market jointly with PASA next yearCons: will not optimise savings as suppliers looking for volumes commitments which is dependant on extended

work with stakeholders

Option 2: Use OGC framework for next 12mths to allow quick win and gathering of better management information

Pros: initial assessment shows saving of 3% on OGC contract, this could be quickly implemented and allow management information to be collated as currently data is poorCons: comparisons with industry suggest savings of 20% if had APUC commitment contract

Option 3: APUC tender and contract for x years, with the aim of being in y position in z period of time e.g. product rationalisation as part of contract requirements. Intention would be dual supply award to maintain competitive tension etc

Pros: Maximise savingsCons: Resource effort involved given other portfolio opportunities have higher potential

V10 24/04/23 Slide 25

Strategic Tendering Options

Lead-In Period - detail period required: NB: consider the period for implementing the commodity onto PECOS agreed with Supplier eEnablement during the project start up stage

Extension Period: detail proposed period (s):

Tendering route to demonstrate competition: Detail and insert justification

A framework agreement will be established as follows:Framework route: [single supplier/multi-supplier] Multi-supplier framework lots: [insert number proposed]Call off contract mechanism: [direct/ranked/ mini competition]

V10 24/04/23 Slide 26

ITT Considerations (particularly relevant to consider at this stage in more detail when the Open Procedure is proposed so as to reduce the time taken to compile the ITT at the ITT composition stage)

Statement of Requirements (SoR): Detail the main areas and issues needing to be inserted into the SoR

IPR: Does IPR apply and what is the impact.

Access by institutions: detail the number of institutions, affiliated bodies, and if APUC requires to access the contract or framework agreement. Estimate number anticipated to access the contract/framework agreement from commencement date

TUPE: establish if TUPE is likely to apply. If yes, obtain the detail of name(s), sex, employment location of individuals who may be subject to TUPE and consult with the HoP or Human Resources or seek legal advice

Pricing Strategy: detail the how the commodity will be priced (taking into account whole life costing and cost avoidance). Can an e-Auction be utilised for this commodity? State the period of price stability (e.g. 1 year etc) and the reasoning for this.

V10 24/04/23 Slide 27

ITT Considerations Mechanism for addressing variation in the charges e.g. via RPI/CPI etc: More info can be found at www.statistics.gov.uk/statbase/product.asp?vlnk=868

Payment period: The default position under the Late Payments of Commercial Debts Act 1998 is 30 days

Parent Company Guarantee/bond: state if either is to be included in the ITT for the framework agreement and/or call off contracts or a contract and why use would be beneficial.

Ts&Cs: list any clauses required over and above the standard ts&cs.

For Part B services: If the procurement is considered to be high risk/high value, a standstill period should be considered (with reference to Federal Security Services Ltd vs Police Service of Northern Ireland).

V10 24/04/23 Slide 28

Information re Evaluation of References, Site Visits, and Presentations

References:

In a Restricted procedure, ascertaining an applicant’s past experience in terms of “technical or professional ability” (as determined by Regulation 16(7)(b)(ii) of the Public Contracts (Scotland) Regulations 2006) can be included in a Pre Qualification Questionnaire as a section criteria.  Written evidence of past performance, which can be objectively evaluated, can be used but it is not recommended written evidence is used as a Minimum Standard. Standard forms can be used to request references , but returned references should then be used for information purposes only.The above also applies to an Open procedure.

Site visits:

If a site visit is required before tender return i.e. to be used to inform tenderers more clearly regarding the outputs of the requirement e.g. visit to an Institution's property or visit to a new build, then this is not evaluated. If a site visit is deemed to be required post tender return and as part of evaluation process (because the information to be ascertained from the site visit directly relates to the subject matter of the Contract or Framework Agreement), this must be detailed as an award criteria in the Contract Notice or ITT, be capable of evaluation, and make clear what is being assessed in the site visit.

Presentations:

If a presentation is deemed to be necessary as part of tender evaluation and/or bid clarification,  it can only be used for information purposes and cannot be detailed as an award criteria in the Contract Notice or ITT and used to evaluate tenders because it is subjective, and not capable of objective evaluation i.e. performance at interview is not an evaluation criteria. Evaluation of a presentation’s written output is permissible where as part of bid clarification tenderers are requested to present on common areas in the submitted tenders (which following tender evaluation have been revealed to be areas where clarification would be needed).  These areas cannot be in addition to the award criteria detailed in the Contract Notice or ITT.  Ensure any area of concern remaining after the presentation is followed up in writing as part of bid clarification.

V10 24/04/23 Slide 29

PQQ Selection CriteriaFurther information OGC Selection/Award criteria PPN

Part A – Background Information

Part B – Economic & Financial Standing

Part C – Conviction of Criminal Offences

Part D – Business Probity

Part E – Technical & Professional Ability

Part A - Section not scored – for info only

Part B - Insert minimum standards in the Contract Notice or list as objective criteria in section III.2 in the Contract Notice .See APUC’s of Financial Analysis of Accounts for recommended levels. NB: if minimum standards are set and aren’t met, the applicant should be excluded from the process

Part C - If the applicant answers ‘Yes’ to any question they MUST be excluded from the process

Part D - If the applicant answers ‘Yes’ to any question they MAY be excluded from the process

Part E - If minimum standards are set and aren’t met, the applicant should be excluded from the process otherwise use objective scoring criteria to shortlist those applicants meeting minimum standards

Selection Criteria Refer to PQQ GUIDANCE NOTECriteria

V10 24/04/23 Slide 30

ITT Award & Weighting Criteria

Minimum Standards (if necessary)

Service Delivery – Detail Requirements PASS/FAIL

Service Delivery – Detail Requirements PASS/FAIL

CSR – Detail Requirements PASS/FAIL

Supplier Stability & Viability – Detail Requirements PASS/FAIL

PQR Weighting (%)

Award CriteriaSub-

weighting (%)In this example the headings below are for six award criteria. All questions to be asked of tenderers in the ITT must relate to this criteria and have corresponding weighting. Any sub-criteria and weightings must also be listed. Refer to ITT Schedule 6 for further info.

Price 40% - 100%

Quality 60%

Service Delivery 20%

Design Scenarios 25%

Staffing 5%

Project Planning & Implementation 25%

Warranty & Support 10%

Continuous Improvement 15%

Price Quality Ratio:[insert] Weighting Criteria:

Further information OGC Selection/Award criteria PPN Award Criteria: award criteria is based on [MEAT/lowest price]

V10 24/04/23 Slide 31

ITT Call Off Contract Award Criteria

[insert criteria] [insert weighting]

Award Criteria:award criteria is based on [MEAT/lowest price]

Price Quality Ratio:[insert] Weighting Criteria:

V10 24/04/23 Slide 32

Contract Implementation – Lead-In Period Detail what will need to happen, when, and who has responsibility

– Communicate with universities and colleges to prepare them for any changes– Conduct product trials (if applicable)– Start running down stocks of current product ranges (if applicable)– Prepare/ complete any required training– Clarify supplier change management/ implementation expectations– Ensure smooth transition– Follow-up on progress

Note requirements for completion later in the strategic sourcing process:

–Systems updates, CUPID, SharePoint–Savings notification to individual institution –Notification and award letters–Buyers Guide/ Commodity Action Report (CAR)/ ePS Bulletin etc

V10 24/04/23 Slide 33

ePS Trading Strategy Detail how End Users will see and access the Framework Agreement content in PECOS:

1. Use APUC’s Supplier Report showing ePS active suppliers through Institutions & ePS Supplier Report to determine PECOS:

– Content Availability

– Connection Type

2. Develop a list of specific and general ePS issues / requirements relevant to the commodity: [list]

Plan how these will be accommodated on PECOS: [detail]

3.Decide PECOS trading strategy:

– on catalogue

– Catalogue

– Punchout

V10 24/04/23 Slide 34

Strategic Contract and Supplier Management

All contracts or framework agreements will be contract managed by the Procurement Officer. Refer to ITT for Procurement Officer and User Group roles and responsibilities. Detail considerations for Contract and Supplier Management

GuidanceScotland strategic contract and supplier management guidance, processes, and templates are available at http://www.scotland.gov.uk/Publications/2006/11/16102303/0#a10. These are currently being develop and once finalised will be incorporated fully into strategic sourcing documentation.

V10 24/04/23 Slide 35

Timelines

V10 24/04/23 Slide 36

Prior Information Notice (PIN)

Use of PINs is not mandatory. PINs can be published through OJEU in order to alert the market to forthcoming contract opportunities.

Once a PIN has been published, reductions in timescales for competitions identified in the PIN are possible.

PIN should be published at least 52 days before and not more than 12 months before the contract notice.

The PIN should contain details of supply and services contract for which the public body expects to seek tenders in the next 12 months. PINs must be published on OJEU website (this can also be done through the Public Contracts Scotland website).

V10 24/04/23 Slide 37

Commodity Strategy Sign-Off – UIG & HOPCUIG:

Name Title Institution Date

HOPC:

Profile & Commodity Strategy approved by HOPC,

APUC: …………………………….

Date: ……………………………...

V10 24/04/23 Slide 38