Roundtable: Purchasing Power – Mark Reed
In the fourth in our series, Steve Wright quizzes five experts on the key issues, pitfalls and best practice in university procurement
Mark Reed is Head of procurement at University of Kent
Q. What exactly constitutes effective procurement? Is it simply about getting the best price-to-quality ratio in each sector of university life or is there much more to it?
I think of a university procurement team as the problem-solvers on campus. An HR department works with people, sets contracts and applies remedies to staff workplace issues, and we are similar; we just manage supplies instead of employees. And supplies are just as important as the people that work there.
Effective procurement means that people don’t even see that procurement at work. It operates under the surface, and things happen as if by magic: computers turn on, people have chairs to sit on, etc. Procurement delivers solutions to problems (often problems that people don’t even know they have), answers questions, and ensures that the right questions are being asked such as ‘can you get that cup of coffee?’ and ‘are we going to be able to deliver this lecture?’ In brief, do we fulfil the needs of this business?
Q. Open, restricted, negotiated, competitive – tell us about the different procurement routes and which are most suitable for which university department.
Legislation dictates that any project of over £180K during the contract lifespan, or £4.5m in the case of large property or construction, must be advertised in the Official Journal of the European Union, where companies can express an interest. The principle here is to ensure a fairness and openness in how the public sector is spending its money. This spending has to be fair and open, and the decision-making transparent.
Most universities use the restricted route, because it allows for the Standard Selection Questionnaire (or Pre-Qualification Questionnaire as was) to take place, which in turns help to ensure the selection of a provider with a financially stable background. There are also a huge number of frameworks and consortia that set up contracts for the provision of services – SUPC, LUPC, CCS to name but three.
Sometimes, though, you may want to do some specialist research of your own before making procurement decisions. At universities, we are often dealing with the leading edge of thinking, where there aren’t always readily available commercial solutions, and occasionally we will have to go into a competitive dialogue or negotiated solution – largely in cases where we are doing something new and unusual.
Q. How much of the procurement process can be carried out in-house, and how much benefits from specialist external oversight?
Assuming they have the resources, universities can do it all in-house – but it all comes down to decisions around staffing and how much they want to invest.
There are certain projects that universities, like any other public sector organisation, will undertake every five years and, for these, you would probably get in an outside consultant. Examples include specialist provisions such as fire and asbestos safety, security, access control equipment – very tightly regulated fields which require the relevant expertise. There is no point keeping someone on the payroll just for these occasional projects.
Q. Should universities be looking to source goods and services with small and medium-sized enterprises (SMEs) wherever feasible?
Here at Kent, we are looking at implementing the forthcoming Social Value Act 2020, which will make stipulations here – and we’re examining how to ensure that SMEs have fair access to our projects.
According to HEPA’s Procurement Value Survey (PVS) for 2017–18, the average university has 31% of its spend with SMEs. At Kent, some 41% of our £72m annual spend goes to SMEs. We try to be visible and present with things like Meet the Buyer events; we give talks to local businesses and SMEs. So, while there isn’t yet any specific legislation to mandate a certain percentage of our spend with SMEs, we try to make ourselves open and accessible.
Some parts of the public sector are like a Berlin Wall, in terms of access for SMEs. Smaller businesses wanting to find out about upcoming projects often don’t know who to talk to, who makes the decisions, or even where to start.
We want to be more accessible. Our procurement team has a Twitter feed, LinkedIn channel and website, and we publish information on how we make our decisions.
We are very aware that we have a large amount of influence, and that the decisions we make are responsible for a large amount of employment, in the local area. We want to make decisions that are understandable and justifiable.
Q. Does it make sense in certain cases for universities to approach procurement as a group rather than individually?
We work with groups including TUCO, who are responsible for our food and beverage purchasing across campus. We are, effectively, a small town – 20K students, 6K residents, with several restaurants – it makes sense for us to have a consortia agreement rather than setting up our own unique contracts.
I think that resources are generally stretched in the sector, with not enough people trying to do too much, so the consortia exist to help us go through our common and frequent requirements – whether that’s catering, books, overhead projectors or specialist bits of learning equipment. In these cases, one university’s requirement won’t differ wildly from another’s.
But there are times when we want to procure separately, especially around research or necessarily local contracts. Manned security, taxi services, gardening – these, by definition, must be delivered locally, so there we would look at setting up a contract ourselves.
Q. Are there ways in which the student body can get involved with procurement – eg sitting on tender assessment panels, collaborating on major projects, helping to safeguard against unethical practices in procurement and supply chain management?
Yes, and many do. We have ongoing dialogue with our students here: we meet with the SU once or twice a year, to talk through the projects we’re going to take to market. Students will also contact us and say, ‘I don’t want you to work firm x because [for example] they provide security services to the Israeli state’. And that’s very good in principle – but legally, we have to have open competition around certain resources, as explained above.
We listen to students’ opinions, and we involve them in the decision-making process where possible. They are major stakeholders, and we need to consider them as we would our staff and the general local environment (the needs of the city of Canterbury, in our case). That’s simply being a responsible corporate actor.
Q. With all these variables and factors to weigh up, it’s clear that universities need a competent, well-trained procurement team. Do you think the expertise is there, in most UK HEIs?
Everything could always be improved but, in my experience of the universities I have seen and worked with, everyone wants to do a good job. They have the right people in the role 99% of the time, and all working towards the same end. I have certainly worked in less competent sectors. We have lots of people who work very hard and are very good at what they do.
To find out more about University of Kent Procurement, visit: www.kent.ac.uk/finance/procurement