The City of Cardiff Council has been working in collaboration with Local Government Association to improve procurement practices and shared opportunities in order to improve value for money, which can be achieved through research and implementation of Dynamic Purchasing System.
The Cardiff DPS was for the provision of all passenger transport services including the home to school transport service for children in mainstream education, children with special educational needs (SEN), children and adult services, local bus services and ad hoc taxis and any other passenger transport services provided by the council. The nature of the DPS is to provide scheduled and non-scheduled passenger transport routes via a broad range of appropriate vehicles. Wheelchair adapted vehicles will form part of the requirement.
Discussions with the service demonstrated that requirements were expected to change in 2012/13, therefore it was agreed that an interim arrangement would be put in place to ensure compliance and value for money throughout 2013 whilst longer term requirements were scoped and agreed. The interim framework arrangement had 31 contractors operating 616 routes across 60 mainstream and SEN schools, children and adult services routes. This was awarded on a price per mile basis and all suppliers were ranked within a number of lots. The council’s in-house passenger transport team managed the above arrangement to meet all their existing requirements.
The estimated annual spend placed via DPS for the council is £6.4 million per annum. It was broadly accepted that implementing a DPS would bring benefits to the council who were encountering a number of challenges through the existing process such as:
- Low quality of service as suppliers had become complacent
- Lack of innovation and continuous improvement from suppliers, no added value
- New suppliers were being excluded from entering the arrangement and then had become less incentivised to develop services
- Lack of competition once initial routes had been awarded, cost increased significantly
- Lack of ﬂexibility within the arrangement.
The council, through implanting a DPS wanted to improve the quality of the service, suppliers were not accepted onto the DPS without passing all the selection questions and quality threshold, as well as encouraging suppliers to be less complacent when tendering and to be innovative with new approaches to service delivery. Finally the councils wanted to achieve savings with more suppliers being able to bid on routes and to increase competition throughout the life of the arrangement.
A number of benefits have been identified since implementation, the evaluation process is quicker enabling the directorate to now manage the DPS themselves. The improved service has meant there is less need for day-to-day contract management with suppliers. The DPS and e-auctions of the DPS have achieved a £500,000 saving for Cardiff and because the streamlined, electronic process routes can be tendered simply
Regular project group meetings with the central in-house passenger transport team and a cross functional project team including finance, legal, stakeholders and procurement, were implemented and so internal communications with this team were important as were regular communication with managers and the portfolio member and head of transport via the passenger transport team. With the assistance of Business Wales Cardiff held a ‘meet the buyer’ event with suppliers to explain the change in process, the reasons for the change and the draft timetable of events. They also held group training sessions with suppliers on the use of the DPS, Proactis and e-auctions. Business Wales also held small session with suppliers to help them through the process. If suppliers failed to be accepted onto the DPS Cardiff held debrief sessions with them.
The evaluation of new entrants on to the DPS in the first six months was time consuming but now there are only one or two new entrants every month or so. The DPS has been running for three years now and Cardiff plan to run another one next year. The ongoing administration of the DPS is carried out by the directorate, as it is easy and simple now that the system has more functionality. With regards to costs for the system, it was not costed into the business case but cost has been absorbed by the efficiency saving of a totally electronic system. Management information is also simpler.
For full report please access: https://www.local.gov.uk/guide-dynamic-purchasing-systems-within-public-sector-it-right-you-and-your-suppliers