Learning legacyLessons learned from the London 2012 Games construction project

Using CompeteFor to drive competition in the supply chainCompeteFor is an opportunity portal, originally designed to open up competition at all levels of the Olympic Delivery Authority (ODA) supply chain, driving better value and more competitive businesses. To support the technology, a Buyer Engagement team (BET) was deployed to encourage buyers to post opportunities on the system – over 9,000 opportunities were listed. For each procurement opportunity the ODA let, over seven further opportunities were created in the supply chain, creating a competition multiplier effect.

The context of CompeteFor CompeteFor is a portal that was developed to create an online market place for the ODA construction programme. It was envisaged that it would open up private sector procurement opportunities to competition for local and UK small and medium-sized enterprise (SME) suppliers at all tiers of the ODA’s supply chain (Figure 1).

The ODA mandated the use of CompeteFor to all Tier One contractors to advertise sub-contracts on CompeteFor. The service was administered by the London Development Agency (LDA) on behalf

of the regions of England and the devolved administrations of Scotland, Northern Ireland and Wales.

Delivering SME growth through procurement It was recognised that while the London 2012 Olympic and Paralympic Games could bring many different benefits to UK businesses, the contracts within the supply chain were the most tangible of these, and that finding a way of opening these contracts up to competition with as many businesses as possible would have the potential to have a significant impact, instead of the traditional situation of competition

Figure 1: How CompeteFor Works Figure 2: Diagram of supply chain flow down theory

being limited to the top tier only. Two potential benefits were envisaged: – opening up the supply chain

contracts below Tier One for competition and drilling down the supply chain as far as Tier Five (Figure 2) would allow more businesses to compete for these contracts. By making contracts throughout the supply chain more competitive, better value-for-money would be secured for the ODA;

– as competition increased, companies needed to improve their business offering and this would increase the overall quality of businesses in the UK.

CompeteFor is a supplier short-listing toolSuppliers register and choose to respond to opportunities by completing the on-line questionnaire

•SupplierA•SupplierB•SupplierC•SupplierD•SupplierE•SupplierF•SupplierG•SupplierH•SupplierI•SupplierJ

Buyer selects their own number of short-listed suppliers to progress to the next stage (Supplier names appear)

Com

peteFor short-listing

CompeteFor questionnaire

Supplier

Buyer

System generates a long-list

anonymously

Suppliers not meeting Buyer’s

criteria are notified via

system

Short-list•Smiths•Jones•Blaggins•Johnsons•Gascoignes

Buying organisation

eg highways management eg day nurseriesTier One: Major contractors

eg electrical sub-contractor eg catering sub-contractorTier Two: Large contractors

eg supplier of switch gear eg specialist food supplierTier Three: Your local SMEs

eg personal protection clothing eg vehicle hireTier Four: Your local SMEs

eg website design eg vehicle cleaningTier Five: Your local SMEs

eg office furniture eg chemical supplierTier Six: Your local SMEs

eg catering supplies eg health and safety trainingTier Seven: Your local SMEs

Buyer Engagement team (BET) It was recognised that having an online portal in itself would not be enough to ensure participation from the ODA’s supply chain; therefore it was decided to also establish a BET.

The LDA provided funding to the ODA to procure a BET. This competition was won by BiP Solutions. The BET was established to: – follow up the contractual obligations

set for Tier One contractors to ensure their sub-contracting opportunities were advertised;

– promote the use of CompeteFor to the buyer community;

– engage, train, support and embed CompeteFor within ODA contractors;

– open the Supply Chain to the UK Business community;

– work with other public agencies, Transport for London (Crossrail), Metropolitan Police, etc to ensure a legacy for the CompeteFor service.

BET achieved this set of objectives with a four-year strategy that had two significant phases. Phase one concentrated on marketing the CompeteFor brand and building up the marketplace with large numbers of users, all supply chain companies were met and encouraged to work with the portal. This phase was vital to establish a community and a number of contracts advertised that would give the service credibility.

The second phase was all about improving users experience and establishing major buying organisations’ continued use of the portal. By introducing change management principles, consultancy support to embed CompeteFor as part of each organisation’s buying procedures, and extensive training, the service now has key account users that offer a sustainable future for CompeteFor as a portal.

Results Over 9,250 contracts were posted onCompeteFor,startinginJanuary

2008, by more than 1,000 buying organisations. The majority of these contracts were at the Tier Two and Three levels, but contracts from stakeholders (ODA) (that is, the level above Tier One) through to Tier Five were posted. Over 140,000 suppliers were registered on the system.

Conclusion This approach used a major public sector procurement opportunity, the London 2012 Games, as a catalyst to drive change in the way works, goods and services are procured at all levels of the supply chain. Using the power and position of the public purse has supported a cultural change which included transparent procurement opportunities that otherwise would not have been accessible to open competition within the private sector. It is the focus on exposing lower level contracting opportunities not controlled directly by the public sector but influenced as part of their supply chain which supports local and SME participation in the economic benefit of the Games.

Lessons learned – Technology alone will not drive

change in procurement behaviour, proactive intervention such as a buyer engagement team is required.

– All stakeholders and strategic partners must fully embed and support the service to drive change.

– Projects should expect to adapt their buyer engagement strategy and approach as they progress.

– New business development is a key driver to adoption by private sector; by using CompeteFor, as both buyers and suppliers, businesses have built new relationships among themselves.

– This approach brings a ‘multiplier’ effect to procurement competitions, each ODA opportunity resulted in at least seven further opportunities in the supply chain, with their accompanying benefits.

ProjectProcurement

SupplierBiP Solutions, provider of the CompeteFor Buyer Engagement Team

AuthorChris Bell – Buyer Engagement Manager, BiP Solutions

© 2011 Olympic Delivery Authority. The official Emblems of the London 2012 Games are © London Organising Committee of the Olympic Games and Paralympic Games Limited (LOCOG) 2007. All rights reserved.

The construction of the venues and infrastructure of the London 2012 Games is funded by the National Lottery through the Olympic Lottery Distributor, the Department for Culture, Media and Sport, the Mayor of London and the London Development Agency.

For more information visit: london2012.com/learninglegacy Published October 2011ODA 2010/374

CompeteFor won the Mayor of London Responsible Procurement Award 2010