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GO Interview – Ken May

Sunday March 21st, 2010

By Morven MacNeil, GO Features Editor

Ken May, Director of Eastern Shires Purchasing Organisation, speaks to GO Features Editor Morven MacNeil about the importance of purchasing consortia and the role of The Pro5 Group.

Buying consortia exist to enable public bodies to benefit from bulk-buying, achieve economies of scale and secure procurement expertise. A consortium is effectively an arrangement to optimise buying power and make best use of scarce procurement skills by aggregating the requirements of more than one local government organisation.

Consortia can be categorised in various ways, but the main distinctions are to be found between joint committees and collaborations. Equivalent benefits may also be offered by single local authority stores trading beyond their boundaries. Consortia can offer goods and services – most have their own stores, although some operate without, and most offer procurement management services. They have no tied customers and schools are their single largest group of customers.

GO spoke to Director of Eastern Shires Purchasing Organisation (ESPO) Ken May about public sector purchasing consortia and the latest frameworks from The Pro5 Group.

You are Director of ESPO. What are the core objectives of your organisation?

Although we have a statutory obligation to recover our operating costs, the core objective of ESPO is not to maximise profits, but to provide our customers with best value for the goods and services they require. All other objectives support this primary goal.

Purchasing consortia have risen in prominence in recent years. What do you see as being their key benefits and achievements, and how do you expect them to evolve in the future?

The key benefits and achievements of consortia are collaboration, collaboration, collaboration in order to achieve aggregation of the demand market which enables us to influence the supply market. Regional collaboration via consortia does not by any means harness the full potential of total local government expenditure on goods and services; acknowledging this gave rise to the formation of The Pro5 Group, which is one of the largest public sector buying consortia in Europe. Names such as Central Buying Consortium, ESPO, North East Purchasing Organisation, Yorkshire Purchasing Organisation and West Mercia Supplies are likely to be familiar to many suppliers, and it is these regional consortia which have come together to make Pro5.

 ESPO is part of The Pro5 Group. What is the overall aim of this combined purchasing consortia group?

I would simply reiterate collaboration. In this regard, we are receiving significant support from the OGC and DCSF.

There is still a great deal more we should do to ensure the demand and supply markets are aware of the aims of The Pro5 Group. Events such as the recent Procurex National exhibition organised by BiP Solutions certainly assist in achieving this aim. There will be, I’m sure, future articles in publications such as GO magazine on the ongoing activities of the Group.

How important are framework agreements in achieving best value on commonly purchased goods and services, and what types of frameworks have already been set up by The Pro5 group?

Framework agreements accessible by the entire local authority sector are crucial on commonly purchased goods and services. Pro5 currently have nationally accessible contracts ranging from E-Solutions to Playground Equipment, from Business Travel Services to Microgeneration Energy Products. We also have a number of framework agreements as Works in Progress, ranging from Telecommunications Equipment to Catering Services, from Temporary Staff to Electric Vehicle Delivery.

These contracts are, however, the tip of the iceberg. Individual members of Pro5 have literally hundreds of framework agreements currently in place and, as these fall due for renewal, the Invitations to Tender will be issued on behalf of Pro5 and the wider local government sector. One prominent Pro5 framework is the E-Solutions framework which commenced in July 2009 and has been extremely successful thus far. The solutions available include E-Tendering, E-Contract Management, E-Document Exchange, E-Evaluation and E-Auctions.

Are SMEs effectively engaged in public procurement? If not, what else can be done to engage them?

Arguably, SMEs are not engaged in public procurement to the extent that perhaps they should be, but we do attempt to structure Invitations to Tender in such a way as to facilitate a comparison between large companies tendering to undertake the contract on a national basis and a number of SMEs tendering to be awarded the contract on a local or regional basis. I would like to take this opportunity to express the view that consortia in general, and Pro5 in particular, are beneficial to SMEs. SMEs rarely have extensive sales or marketing operations and making contact with up to 450 local authorities is a formidable task, but with Pro5 seeking to aggregate demand, SMEs only have to contact a limited number of authorities. Pro5 members are also very active in holding seminars to help SMEs tender for local government contracts, as is the Society of Procurement Officers in Local Government (SOPO). Representing over 3100 members, SOPO provides area networks and forums and produces guidance on best practice. Its aim is to advise local authorities throughout the UK on all purchasing and supply matters of national/general interest, and to represent its members on other bodies to promote SOPO and its aims.

Supplier accreditation is becoming an increasingly important area for buyers and suppliers. How does this fit in with better quality procurement?

Supplier accreditation is crucial in terms of achieving better quality procurement, particularly in the current economic climate, which is characterised by company closures and mergers. Local authorities are raising the bar with various initiatives in areas such as environmental, social, economic, financial, innovation, cost reduction and so forth, but all these areas make supplier accreditation crucial to better quality procurement.

What are the most important issues that need to be addressed by the public sector regarding its role as the procurer of goods and services?

Again, I must stress collaboration. It has been emphasised on many occasions in the press that public sector spend is over £200 billion per annum on goods and services. Savings both cashable and administrative can and should be made, but making the best use of that level of expenditure requires collaboration on a scale we simply have not seen in the past.

What single element would you change in order to improve procurement?

I cannot resist the opportunity to be frank and arguably contentious, but the single element I would change to improve procurement would be to radically redraft the EU Procurement Directives. They have become far too prescriptive, restrictive, complicated and regulatory and, as a result, there seems to be more focus placed on compliance rather than on achieving best value. I am sure there are those who feel they are not mutually exclusive but, after spending 45 years in procurement in both the private and public sectors, I would argue otherwise.

It is ironic that, when the Commission sought to harmonise the Goods and Services Directives, one published objective was to simplify the Directives and, in my view, the Commission failed spectacularly in this endeavour.

Thank you for speaking to GO

Profile

A Fellow of the Chartered Institute of Purchasing and Supply (CIPS), Local Government Representative on the CIPS Council and Secretary of the Society of Procurement Officers in Local Government (SOPO), Ken joined the Eastern Shires Purchasing Organisation (ESPO) from the private sector in 1981 as Assistant Director. He was appointed Director of ESPO in 1998.

 For further information, please visit: www.espo.org

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