University Audit Committee

Annual Procurement Report 2009/10

Aim

The aim of this paper is to report on our procurement enterprise during the last financial year in support of the Universitys vision to be the
enterprise University.

Procurement Strategy 2009-2012

We have re-focussed our Procurement Strategy, aligned with the Corporate Strategy 2009-12 and the five University ambitions, to reflect the
wider remit of the Office of Procurement and Sustainability (OPS).

Audit Committee is asked to note the extended role of OPS across the following four areas, which collectively provide a comprehensive and
embedded approach to sustainability for the Universitys operations:

Procurement and insurance services

Capital Projects >1 million
Energy and Environmental Management
Space and Property management

We have submitted separate annual reports for insurance and energy for 2009/2010 but will provide a consolidated OPS report for 2010/11
across each of the four functional areas.

The revised Sustainable Procurement Strategy is attached as Annex A for approval.

Procurement Theme 1: Delivering Value for Money

We are clear that the achievement of value for money is essential in delivering financial sustainability. Our achievements for 2009/10 are
measured in the Efficiency Measurement Model and the UUK Strategic Procurement Group Best Practice Indicators, where we have
demonstrated a 77% increase in cashable savings year on year, delivering 1.86 million pounds savings in 2009/10. Under our Best Practice
Indicators, we are either beating or running very close to the targets, with the single exception of e-procurement. The introduction of Parabilis
our e-procurement system has not progressed as swiftly as intended and following a successful bid for HEFCE funds (60,000) is a priority
objective for this year.

Key value for money priorities during this year are in space and asset utilisation projects and the modernisation of support services (MoSS)
which need to deliver significant cost reductions for the Universitys operations. The Director of OPS, as Chair of AUPO, has been invited to join
the UUK Efficiency and Modernisation Task Group, to identify specific areas in which the sector can achieve large-scale cost reductions
through more efficient operation. The Task Group is due to report in Spring next year.

The Efficiency Measurement Model is attached as Annex B

The BPI score sheet is attached as Annex C.

Procurement Theme 2: Achieving Advanced Procurement

The definition of Advanced Procurement is outlined in the Procurement Strategy and our progress towards achieving this is reflected in our
continued assessment against the HEFCE Best Practice Checklist, where we have increased our overall score again, and are now very close
to achieving Superior Performance. We have no areas of non conformance, and only two remaining in conformance being e-procurement and
risk management and value for money.

The HEFCE Best Practice Checklist is attached as Annex D.

We have also piloted a new procurement maturity assessment for a HEFCE funded shared service through the Southern Universities
Management Services (SUMS). We have not yet received a formal report, however the initial feedback indicates that we have no areas of non
compliance, although three areas in conformance being: specification of goods and services; contract and supplier management and
purchasing processes and systems. The assessment provided a much deeper insight into procurement processes than the HEFCE Checklist,
however in view of the early adoption of the maturity study, we have now decided to undertake the rigorous Procurement Competency
Assessment run for all Universities and Colleges in Scotland, and are currently preparing for our assessment on 26 November 2010. The
results of this will allow us to benchmark against the Scottish HEIs this year as they are somewhat further forward than England in terms of
competency assessment. We are also piloting the AUPO e-tool developed to measure individual professional competency which is
complementary to the current University appraisal process. Its wider use in the sector is being promoted through the UUK Strategic
Procurement Group.
Procurement Theme 3: Embedding Sustainable Procurement

The development of OPS presents a strategic approach to embed sustainable operations for the University and a unique approach in the
sector. We are committed to basing our strategies upon the excellent research carried out by the University in relevant disciplines and to work
with colleagues in relevant Schools to provide a wide range of student learning opportunities. The wider OPS team brings strength and depth
to a sustainable approach to procurement.

Our progress in respect of sustainable procurement is measured against the Flexible Framework, where we continue to make progress
towards the Best Practice Indicator of achieving Level 4 in all and Level 5 in one category (and we have achieved Level 5 in one category). It
should be noted that our progress against this framework is a self assessment only and in line with our underpinning philosophy of evidence
based sustainability, this will need to be externally verified.

The Flexible Framework is attached as Annex E

Procurement Theme 4: Working in Partnership

The extended remit of OPS drives partnership working; For example, in relation to our sustainable food policy, we have supported the Student
Union to hold the first Farmers Market, we are working with student and academic colleagues in developing our Fair Trade Programme and
Sustainable Food Policy and are partners with wider Plymouth agencies in the Plymouth Food Network, leading to the development of a
Plymouth Food Charter. We are also working with the Soil Association, Bare Foot Partnership and the Plymouth Procurement Forum in a
public procurement sustainable food project. This in turn will feed into the Management Objective relating to the food offering on campus.

We continue to be active with sell2plymouth, we now have nearly 1700 suppliers registered and have let nearly 2m of contracts using
sell2plymouth. We were delighted to win the Times Higher Education Leadership Management Awards for Outstanding Procurement Team for
our sell2plymouth initiative and continue to receive enquiries about its further adoption. Through the Plymouth Procurement Forum we are
exploring opportunities for shared services with other Plymouth agencies, for example shared legal services with Plymouth City Council.

Priorities for 2009-2012

Striving towards the Best Practice Indicators for efficiency and economy

Achieving externally evidenced advanced procurement

Achieving a full P2P system and realising the efficiencies from the current business process
 Delivery of customer focussed services

Improved procurement processes, systems and information

Strengthening our local, regional and national professional profile.

Recommendations

The Audit Committee is asked to note this Annual Report and to approve the Procurement Strategy 2009-2012 which will continue to inform
our planning.

Jenny Bushrod
Director of the Office of Procurement and Sustainability
November 2010
Audit Committee Nov 10 EMM Summary Table Annex B

Financial Year 2004/5 2005/6 2006/7 2007/8 2008/9 2009/10

Total Spend 144,114,000 156,161,000 165,980,000 180,257,000 195,766,000 202,549,000
Non-pay spend 52,489,000 58,771,000 79,694,000 77,835,000 57,351,000 72,917,000
Influenceable spend 42,571,994 49,076,893 57,022,102 48,221,022 38,241,484 39,497,207

Cashable Efficiencies (savings) 445,004 484,262 641,713 1,048,056 1,859,629

Uncashable Efficiencies 1,197,042 2,063,291 1,344,559 1,267,628 815,669
Total Efficiencies 1,222,448 1,642,046 2,588,145 1,986,272 2,315,684 2,675,298
as a % of Non-Pay spend 2.33% 2.79% 3.25% 2.55% 4.04% 3.67%
as a % of influencable spend 2.87% 3.35% 4.54% 4.12% 6.06% 6.77%
savings as % of influencable 0.91% 0.85% 1.33% 2.74% 4.71%

Efficiencies by type:
Price Reduction 1,068,592 1,457,393 2,427,661 1,822,723 1,596,052 2,311,110
as a % of influenceable spend 2.51% 2.97% 4.26% 3.78% 4.17% 5.85%
Added Value
Risk Reduction
Process Re-engineering 68,456 37,576 41,732 47,910 21,746 127,985
Sustainability 85,400 147,077 78,160 115,639 697,886 236,203
1,222,448 1,642,046 2,547,553 1,986,272 2,315,684 2,675,298

08/11/2010
Audit Committee Nov 10 Procurement BPIs Annex C

Best Practice Indicator Methodology 2005/6 2006/7 2007/8 2008/9 BPI Comments 2010 2009/10
Other operating expenses less
partner college payments plus Capital spend increased by
Non pay spend fixed asset additions 58,771,000 79,694,000 77,835,000 57,351,000 10m from 2009 72,351,000
Excludes payments to students,
Figure used for the PGEA return bursaries, landladies, public
to the consortia, plus the spend bodies, inidviduals, TTA
on applicable supplier groups payments, UCP projects, payroll
Influencable spend not analysed (spend under 5k) 49,076,893 57,022,102 48,221,022 38,241,484 deductions 39,497,207

EFFICIENCY
Category Manger vacancy from
Total cost of procurement Only Central team nett salaries April 2010; plus 0.33 additional
function as % of influenceable as at 31.07.10 x 2 as % of admin time plus 0.2 reduction
1 spend influenceable spend 0.46% 0.44% 0.57% 0.76% 0.90% from HoP 0.98%
%age of influenceable spend
channelled through collaborative All consortia spend as % of
2 procurement arrangements influenceable spend 6% 11.29% 10.48% 27.23% 25% 24.09%
only using Purchase cards. Will
%age of orders placed no of purchase card transactions make significant progress with
electronically and via purchasing divided by total no of orders intro of Parabalis and e-req on
3 cards placed x 0.63 n/k 13.47% 17.43% 18.07% 90% Agresso. 21.76%

EFFECTIVENESS
*includes active involvement,
% of influencable spend actively IBIS levels 1-3* from PGEA data formal agreements to waiver,
influenced by procurement divided by influencable spend as directed (through frameworks)
4 function above t.b.a. 83.34% 86.10% 87.71% 95% plus purchase card spend; 86.90%
Annual procurement savings Price Reduction efficiencies only
achieved as a % of influenceable from EMM return recorded as % 2010 "cashable" efficiencies at
5 spend of influenceable spend 2.97% 4.26% 3.78% 4.17% 3.5% 4.71% of influenceable spend 5.85%
% of professionally qualified 5 fully qualified staff out of the
6 procurement staff central team of 7 75% 75% 75% 67% 66.60% central procurement team only 71.43%

08/11/10
University Self Assessment against HEFCE Checklist Annex D

Attributes Assessed status

Score 0 1 2 3
Full and explicit delegation of
Institutional
authority. Procurement Full and explicit delegation
responsibility for
Delegation of authority Full and explicit delegation of professionals widely of authority. Procurement
procurement
incomplete authority consulted professionals fully engaged
Status and authority
Structure and Responsibility for procurement Seen as key function across Embedded as business
inadequate to deliver
Organisation controlled but dispersed the institution process
effective procurement activity
Authority to Procure Concept not adopted Partially adopted Widely adopted Fully adopted
Financial Regulations, Widely applied with
Complete but variable evidence
procurement policies Incomplete deviations being minor but Embedded
on application
and procedures not exceptional
Governance No involvement Partially Informed Proactive and questioning High priority focus
Procurement not recently RM and vfm frameworks Procurement strategic
RM and vfm frameworks
Risk Management and considered as part of risk reviewed within the last 12 management informs
used to develop procurement
value for money management and vfm months and considered developments to RM and vfm
effectiveness
processes adequate frameworks
Senior management not Senior management aware and Senior management active in Procurement strategy
Procurement
aware of the potential from supportive of current taking procurement strategy embedded as part of
Leadership
procurement procurement strategy forward institutional strategy

University Self Assessment against HEFCE Checklist

 Annex D

Attributes Assessed status

Score 0 1 2 3
Inadequate to deliver
Sufficient to deliver current Commitment to
effective procurement Commitment to development in buying and
People and skills level of procurement activity development in strategic
activity across the contracting
across the institution procurement
institution.
Influence sufficient to deliver Central Procurement
Extending the Central Procurement
minimum level of assurance or Commitment to extending influence of Central Team involvement in all
involvement of Team limited in its
Optimum influence in some Procurement Team procurement activities at
procurement influence
areas optimum levels
Procurement
Procurement processes
practices and Poorly defined and Procurement processes used to enhance
Minimum standards delivered used as a driver for
business implemented delivery
enhanced delivery
processes
e-procurement systems used by all
Electronic procurement departments in conjunction with traditional Fully integrated P2P, P-
Procurement
Majority of manual and systems used in part but not purchasing routes. Integration with finance card, procurement
information
paper based systems integrated and not in use and asset management systems and management and
systems
across whole of institution. producing meaningful management procurement MIS
information.
University Self Assessment against HEFCE Checklist Annex D

Attributes Assessed status

Score 0 1 2 3
Procurement management Management Information
Management information on Procurement management
information produced available on a real time basis.
Procurement procurement not produced as part information produced
regularly but only partial KPIs reported to senior
management of normal reporting routines and/or regularly on >80% of non-
information on activity management and integrated
information manual analysis required to pay spend. KPIs reported to
available. Limited use of into risk management
produce management information. senior management
KPIs framework.
Collaborative contracts used but Collaborative contracts Institution pro-active in
Collaborative contracting
Collaborative and procurement activity is not always considered for generating collaborative
embedded as part of the
co-ordinated assessed for collaborative centrally managed contracts contracting opportunities by use
procurement processes
procurement contracting potential on a regular but variable performance on of procurement management
across the institution
basis others information
Procurement Policy based on
the Flexible Framework* in
Corporate and Institution at Level 2 or 3 of
place and in operation by Institution at Level 4 of the
Social all elements of the Flexible
Central Procurement Unit Flexible Framework
Responsibility Framework
Sustainable Procurement Policy (Flexible Framework Level
NOT in place 1)*
*Flexible Framework is part of the UK Government Sustainable Procurement Task Force recommendations

Bold = 2008 assessment; Red = 2009 assessment, Green = 2010 assessment

Summary of University Self Assessment against HEFCE Checklist Annex D

Attributes Assessed status

Score 2010
0 2x1 5x2 6x3
Institutional Assessment
0-7 8-21 22-35 36-42
Sept 2009 27

Dec 2006 8
Overall procurement status Sept 2010 32
for the organisation
Sept 2008 13
Exemplary Superior
Non-conformance Conformance performance performance
Overall risk rating
Critical High Medium Low

Commentary on improvements:
The Vice Chancellor has taken a personal interest in/sponsorship of procurement culminating in a broadening of the remit of Head
of Procurement, to become Director of Procurement and Sustainability, which brings together a business portfolio covering
procurement and insurance, space and property, capital buildings and energy and environmental management. The increased
levels of investment in the team have been maintained and are now extended through this development, which delivers a business
synergy across all of these functions, not just procurement. The previous investment in professional procurement posts has
allowed the Director of OPS to engage fully with the senior management team and cross institutional strategies and objectives, for
example, projects under the Modernisation Programme. We have achieved improved compliance with Financial regulations and
procurement policies through raising awareness through the Chief Executive Group and Senior Management Team and systems
development in the adoption of workflow in Agresso and new tender waiver procedures.

Conformance/Non-Conformance
 Annex D

There are no areas of non-conformance. There are only two areas of conformance: one being the links and drivers between Risk
Management and Value for Money and Procurement, which need to become more explicit and systematic; the other being e-
procurement which is still not implemented, and in turn restricts the quality of management information and strategy development.
This will be addressed during this year, following a successful bid to HEFCE for funding (60,000) to support the roll out of e-
procurement.

The HEFCE checklist has not been externally validated this year, but the results are consistent with the SUMS procurement
maturity assessment undertaken in August 2010.
The Flexible Framework Self Assessment as at November 2010
Foundation Level 1
People Sustainable procurement
champion identified. Key
procurement staff have received
basic training in sustainable
procurement principles.
Sustainable procurement is
included as part of a key
employee induction programme.
Policy, Strategy & Agree overarching sustainability
objectives. Simple sustainable
Communications procurement policy in place
endorsed by CEO.
Communicate to staff and key
suppliers.
Procurement Process Expenditure analysis undertaken
and key sustainability impacts
identified. Key contracts start to
include general sustainability
criteria. Contracts awarded on
the basis of value-for-money, not
lowest price. Procurers adopt
Quick Wins.
Engaging Suppliers Key supplier spend analysis
undertaken and high
sustainability impact suppliers
identified. Key suppliers
targeted for engagement and
views on procurement policy
sought.
Embed Level 2
All procurement staff have
received basic training in
sustainable procurement
principles. Key staff have
received advanced training on
sustainable procurement
principles.
Review and enhance
sustainable procurement policy,
in particular consider supplier
engagement. Ensure it is part of
a wider Sustainable
Development strategy.
Communicate to staff, suppliers
and key stakeholders.
Detailed expenditure analysis
undertaken, key sustainability
risks assessed and used for
prioritisation. Sustainability is
considered at an early stage in
the procurement process of
most contracts. Whole-life-cost
analysis adopted.
Detailed supplier spend analysis
undertaken. General programme
of supplier engagement initiated,
with senior manager
involvement.
Practice Level 3
Targeted refresher training on
latest sustainable procurement
principles. Performance
objectives and appraisal include
sustainable procurement factors.
Simple incentive programme in
place.
Augment the sustainable
procurement policy into a
strategy covering risk, process
integration, marketing, supplier
engagement, measurement and
a review process. Strategy
endorsed by CEO.
All contracts are assessed for
general sustainability risks
and management actions
identified. Risks managed
throughout all stages of the
procurement process. Targets
to improve sustainability are
agreed with key suppliers.
Targeted supplier engagement
programme in place, promoting
continual sustainability
improvement. Two way
communication between
procurer and supplier exists with
incentives. Supply chains for key
spend areas have been
mapped.
Enhance Level 4
Sustainable procurement
included in competencies and
selection criteria. Sustainable
procurement is included as part
of employee induction
programme.
Review and enhance the
sustainable procurement
strategy, in particular
recognising the potential of
new technologies. Try to link
strategy to EMS and include in
overall corporate strategy.
Detailed sustainability risks
assessed for high impact
contracts. Project/contract
sustainability governance is in
place. A life-cycle approach to
cost/impact assessment is
applied.
Key suppliers targeted for
intensive development.
Sustainability audits and supply
chain improvement programmes
in place. Achievements are
formally recorded. CEO involved
in the supplier engagement
programme.
Annex E
Lead Level 5
Achievements are publicised
and used to attract
procurement professionals.
Internal and external awards
are received for
achievements. Focus is on
benefits achieved. Good
practice shared with other
organisations.
Strategy is: reviewed regularly,
externally scrutinised and
directly linked to organisations
EMS. The Sustainable
Procurement strategy
recognised by political leaders,
is communicated widely. A
detailed review is undertaken to
determine future priorities and
a new strategy is produced
beyond this framework.
Life-cycle analysis has been
undertaken for key commodity
areas. Sustainability Key
Performance Indicators agreed
with key suppliers. Progress is
rewarded or penalised based
on performance. Barriers to
sustainable procurement have
been removed. Best practice
shared with other
organisations.
Suppliers recognised as
essential to delivery of
organisations sustainable
procurement strategy. CEO
engages with suppliers. Best
practice shared with other/peer
organisations. Suppliers
recognise they must continually
improve their sustainability
profile to keep the clients
business.

Measurements & Key sustainability impacts of Detailed appraisal of the
procurement activity have been sustainability impacts of the
Results identified. procurement activity has been
undertaken. Measures
implemented to manage the
identified high risk impact
areas.
Sustainability measures refined
from general departmental
measures to include individual
procurers and are linked to
development objectives.
Measures are integrated into a
balanced score card approach
reflecting both input and output.
Comparison is made with peer
organisations. Benefit
statements have been produced.
Annex E
Measures used to drive
organisational sustainable
development strategy direction.
Progress formally
benchmarked with peer
organisations. Benefits from
sustainable procurement are
clearly evidenced. Independent
audit reports available in the
public domain.

Commentary on progress

People: the text in red indicates that we have not instigated an incentive programme, which is not currently anticipated. We also
need to discuss with HR how sustainable procurement can be incorporated into the general staff induction process however; we
have achieved both external and internal awards as a result of our sell2plymouth project and have been asked to share our good
practice, including the newly established Office of Procurement and sustainability with other HEIs. Improvement on last year.

Policy: we have now absorbed the sustainable procurement policy into our new Sustainable Procurement Strategy 2009-2012,
which is available on our web site and part of the suite of corporate strategies. As part of the Office of Procurement and
Sustainability (OPS) this is now much higher profile. Improvement on last year.

Procurement Process: we have not agreed any targets to improve sustainability with key suppliers, although their performance is
monitored through contract management, but we do undertake detailed risk assessment for high impact contracts and adopt whole
life costing in assessment, so we are mid way between Levels 3 and 4. The outstanding issues need to be picked up in the
development of our contract management processes.

Engaging suppliers: this needs to be our priority focus for 2010/11. This assessment does not reflect the level of engagement we
have with many of our key suppliers regarding sustainability but we accept that this needs to be mainstreamed and a more
systematic approach introduced.

Measurements & Results: we are currently working on appropriate KPIs and benchmarks across OPS to be in place by July 2011
for measurement next year. These will be reviewed by internal audit during the course of this year. These KPIs will then feed into
specific sustainability targets for staff. Our Universities That Count scores for Environmental and Social management in the Supply
Chain, were 72% and 55% respectively which is well above the sector scores, reflecting our maturity in terms of environmental risk
management.
 Annex F

Procurement External Links

Jenny Bushrod AUPO - Chair

SUPC Council - Member
UUK Strategic Procurement Group Member
UUK Efficiency and Modernisation Task Group - Member
Plymouth Procurement Forum Member
Plymouth Sustainable Food Network - Member
Steve Gill SUPC Computing group - Chair
SUPC AV commodity group
SUPC Sustainability Group
HE National Notebook Agreement - SUPC Representative
NDNA 2009 - SUPC Representative
Linda Morris SUPC Furniture commodity group and tender working group
SUPC Travel commodity group and tender working group
SUPC Stationery commodity group
Plymouth Sustainable Food Network
University of Plymouth Fair Trade Group
Simon Denham SUPC Estates group
The Energy Consortium Flexible Contract Working Group
Sheilagh Francis In-Tend User Group
Sell2Plymouth Forum
Procureweb User group
Parabilis User Group
Wendy Hardy Unison Plymouth Branch Chair