Exploring collaboration in procurement

As a purchasing consortium by name and by nature, CPC is acutely aware of the benefits of working together to facilitate successful procurement, with collaboration itself the topic of this feature from our Procurement L&D Lead, Mark Pearson.

One aspect of procurement regularly overlooked is that of collaboration with likeminded/nearby institutions. There might be some instances where your institution’s procurement need is so specific, it's almost unique, but this will be the exception, not the norm. There is no institution-specific way of buying stationary and paper, emptying bins, sweeping floors, serving food, servicing M&E installations or, indeed, awarding curriculum/examinations provision; certainly not to the extent where such contracts must be individually considered and sourced. This approach goes beyond the collaborative benefits of procuring through our pre-established frameworks, though there is nothing to prevent the resultant collaborative requirement being procured as a call-off contract from one of our (or another public sector buying organisation’s) regular routes to market.

Do you have limited procurement resources?

Would those resources benefit from a reduction in workload to achieve the same results?

If your answer to these questions is ‘yes’, then collaboration could be the solution.

Consider your four or five highest value, most procurement resource-intensive repeat contract requirements. Are there perhaps three or four other local, likeminded institutions with whom you could collaborate, with each institution taking the lead on one of these four/five key contracts? If your answer here is ‘yes’, you have to potential to reduce your own institution’s workload for these contracts, dramatically. Gosh, that sounds simple... and it is.

The arguments I experienced when sat at the procurement coalface, attempting to persuade my institutions to collaborate, were essentially centred on loss of control, the need to make specifications too generic, the loss of payment control and the lack of direct institution-to-supplier relationships and contract management.

If you are reading this and thinking the same things, then let me dispel these myths...

Collaboration, simply put, is working jointly to achieve economies of scale while making larger value contracts more attractive and sustainable to the supply market. It can take several forms, from piggybacking on another institution’s contract through lead-buyer arrangements, to fuller shared services, leading to assurances of supply while offering opportunities for supplier innovation. There is a wide range of generic supplies/services appropriate for pursuing a collaborative approach, with each collaborating institution agreeing to take the lead on a major contract (re-)procurement, freeing up resources to dedicate to other in-house requirements.

Collaboration in procurement is as much about each collaborator achieving its own requirements as it is about joining forces.

a. Institutions collaborating to procure a service or supply can benefit greatly from homogenising their contract specification. This does not prevent institution-specific specification appendices, to set out minor matters that only apply to one institution.

b. Contract awards from collaborative procurements can still be institution-specific. Consider the lotting of the contract where each lot represents one of the collaborating colleges, trusts or schools. If the invitation to tender sets out that each lot will be awarded directly by the institution to the successful supplier, that element of direct contract obligation and control is retained.

c. Likewise, the contract(s) can provide for direct supplier-institution invoicing and payment processes.

This article is aimed at planting a seed of thought in your minds about collaboration, alerting you to the potential for your own institutions to consider its various benefits, from cost savings through scaled-up quantities/requirements through to reduction in the procurement resource dedicated.

If you want to read more, we have recently added an updated Guide to Collaborative Procurement to our Crescent Learning Procurement Toolkit.