Procurement Group

FE Sussex has been a pathfinder in establishing a joint procurement agenda across its 12 member colleges.

Introduction

FE Sussex has six key strategic aims, the second one of which is to 'facilitate shared services, joint procurement and value for money'.

Planning and purpose

The combined annual turnover of Sussex colleges is in excess of £228M pa. FE Sussex recognised three years ago, the considerable scope to use this financial muscle to sercure best value procurement from businesses supplying its colleges.

The FE Sussex procurement group comprising of finance directors, purchasing managers and procurement offciers from member colleges was formed over four years ago. It has met regularly for the past three years. Orginially conceived as a self-help and peer group forum the group did not coordinate procurement but concentrated exchanging good practice and building up networks.

Following the appointment of a new CEO, Dr Tim Strickland, FE Sussex reviewed its strategic aims with the objective of substantially increasing the benefits it could facilitate for its consortium colleges. The further development of the joint procurement agenda was fully recognised and the CEO of FE Sussex devised a joint procurement strategic plan, with the aim of producing significant cost savings for member colleges over a period of three years, followed by self-sustaining actions thereafter. Each college principal gave commitment to this policy.

The original procurement forum of FE Sussex was given an increased profile with regular reports to the finance directors of the colleges. Representatives of suppliers and buying groups were now invited to meetings with the express purpose of raising members' awareness of the preferential buying opportunities available. Similarly, the LSC Procurement Team provided invaluable feedback on national initiatives and actions taken by college groups elsewhere in the country.

Aims and objectives

The Joint Procurement Project has the overarching aim of ensuring the procurement of goods and services provides best value. It also has the aim of ensuring savings made are reinvested in the colleges to the ultimate benefit of the learner.

Our aim also recognises that 'best value' does not always mean the cheapest. Best value acknowledges the need to ensure equipment is fit for purpose, robust, (comes with the longevity of service agreements) etc and has a suitable lifespan. Similarly, best value can refer to the provision of additional services and materials supplied at zero cost by suppliers. Donations of surplus equipment, provision of staff development at no cost to the college, cash injections for activities across Sussex such as the sponsorship of college awards and prize all constitut 'best value'.

To quote from the relevant strategic aim in our annual business plan ... the aim of FE Sussex's involvement in joint procurement is:

To play the lead role in establishing joint procurement and shared services across members colleges with the aim of financial savings and a lowering of college operating overheads ... leading to improvement for the learner'.

The FE Sussex Joint Procurement Project Plan

Phase one 2008/9: Establishing joint procurement group for all Sussex colleges.

Phase two 2008/9 - 2010/11: Planning target savings and value added services.

Phase three 2009/10 and 2010/11: Address shared services and facilities management. Continue with phase two sustainability.

The aims of the procurement project have been divided into three phases:

2.21     Phase one, already completed, centred on establishing the collaborative and cooperative ethos between colleges essential to the outcome of the project.  The success of this manifested itself in the meetings of the Sussex Procurement Group and the free interchange of information and support between FE Sussex and its member colleges.  

2.22     Phase two which deals with detailed implementation of cost saving exercises is now well underway and has already achieved two of its objectives ahead of target. 

Originally, the objective of phase two was to target six primary areas for cost saving.  In the light of experience two additional areas were added - capital purchase of PCs and purchase of energy costs. 

Performance ahead of target

The joint procurement of examinations and assessment has been an outstanding success. It has achieved over 100% of target savings in the first year of the three year plan. Discount and total savings by year end 2010/11 is £419,200 63% ahead of target.

2.23     Phase three of the project - which will start in August 2010 - has two elements.  The first is concerned with sustaining the savings made under phase two of the programme and the identification of additional areas of significant spend which can be reduced.  Our pre-phase three planning includes food, cleaning materials and fixtures and fittings.  The target savings for these areas is 5% by the end of the academic year 2011.