Making Spend Matter Toolkit - Strategic Procurement Plans Frequently Asked Questions (FAQs 2)
The following FAQs provide responses to common questions around Strategic Procurement Plans, one of the themes explored by the Making Spend Matter partners as part of the optional transfer activities.
For more details on Making Spend Matter and how you can take a more strategic approach to public procurement see Making Spend Matter and our Making Spend Matter Toolkit.
To view a designed copy of our FAQs see the Strategic Procurement Plans FAQs (PDF) [1MB] .
1. What is a Strategic Procurement Plan?
Strategic Procurement Plans are known as different things in different countries and cities. They can also be known as (amongst others) Procurement Strategies, Procurement Plans, Sustainable Procurement Policies, and Procurement Statements. In essence they are all the same thing - they set out how a city is going to approach the process of procurement from a legal perspective, a practical perspective, and a strategic perspective. They also often outline the goods and services which a municipality will be buying over a specific time- period.
2. What does the word 'Strategic' mean?
Since the amendments to the EU Procurement Directives in 2014, Member States, regions, and cities have been encouraged not to just use procurement as a mechanism for buying goods and services, but also to use it as a lever to address wider economic, social and environmental challenges. A 'strategic' approach is the realisation of such encouragement, so using procurement as a means of creating jobs or mitigating environmental concerns, for example. It means using procurement to address the challenges a city may face.
3. Why does creating a Strategic Procurement Plan matter?
Countries and cities across Europe face many economic, social and environmental challenges. These challenges can be global, such as that of climate change or migration; they can be Pan-Europe, such as that of youth unemployment; and they can be regional or local, such as that of poor skills and qualifications. All of these challenges are things that have been historically addressed through regeneration or other types of projects. However, given changing levels of budgets for such activities, procurement can be viewed as part of the response to such challenges, and as such a Strategic Procurement Plan, provides the means of detailing how procurement will respond to such challenges, alongside other process activities.
4. What does a 'Strategic' approach to Procurement look like?
The process of procurement is not just about buying a good, service or work. It is a much longer process that moves through several stages and which means that the actual purchase is not isolated. A 'strategic' approach to procurement would require the completion of each of the stages with the production of the Strategic Procurement Plan just being one aspect. It links procurement inherently to wider city and municipality strategy.
5. Why is it important to develop a Strategic Procurement Plan?
There are a number of reasons why it is important for municipalities to develop a Strategic Procurement Plan. These are European, national, and local reasons and include:
- It demonstrates an adherence to relevant legislation - a Strategic Procurement Plan will include a description of the frame for it, including how it is shaped by the European Procurement Directives and National Level Procurement Law;
- It promotes the importance of the function of procurement - all too often, procurement is not seen as a core function of municipalities. It is integral, however, and developing a Strategic Procurement Plan promotes its importance as a central and corporate function;
- It links procurement to wider challenges - a Strategic Procurement Plan will outline the wider economic, social, and environmental challenges which a city is looking to address.
- It enables procurement to be undertaken in a systematic manner - t means that all procurers and buyers are utilising a universal approach that is common and framed within an individual strategy;
- It enables municipalities to plan for the future - a Strategic Procurement Plan will also include a list of upcoming procurement opportunities along with values and timeframes. It enables procurers to work effectively with those designing goods and services;
- It enables local businesses to be more aware - businesses will not always be aware of the types of goods and services a municipality buys - a Strategic Procurement Plan and a forward plan of upcoming opportunities can help raise this awareness.
6. Who needs to be involved in developing a Strategic Procurement Plan?
A range of stakeholders should be involved in the development of a Strategic Procurement Plan including:
- The Mayor of the City or another Political Representative;
- The person with responsibility for overarching City Strategy;
- Individuals with knowledge around policy challenges, such as unemployment and climate change;
- The Director or Head of Procurement;
- Those with responsibility for buying particular goods and services;
- Those with responsibility for monitoring.
The individuals outlined above will have different levels of importance as the process progresses. For example, it will be important to engage the Mayor at the outset of the process, but not necessarily throughout, whereas the person with responsibility for overarching City Strategy.
7. What are the sections of a Strategic Procurement Plan?
A Strategic Procurement Plan will normally consist of the following five sections:
Section 1
Section 1 will set the context to the Plan. In particular, it will detail:
- The legislative context around EU Procurement Directives and National Level Law;
- The linkages to wider strategy including City and Economic Development Strategy;
- The stakeholders who the Plan is for and to whom it applies;
- A critique of the existing approach to procurement - SWOT Analysis.
Section 2
Section 2 will detail evidence about procurement including:
- The amount which is spent on an annual basis buying goods and services;
- The findings of any spend analysis undertaken around geography, nature and sectors of spend;
- The findings of and wider impact analysis of the outcomes procurement is currently contributing towards;
- Information about current procedures and thresholds.
Section 3
Section 3 will detail the overarching aims of the Strategic Procurement Plan. These could be, for example, 'to increase spend with SMEs' or 'to engage with business prior to going to the market' or 'to reduce the use of single-use plastics by suppliers'. The aims should be informed by the context from section 1 and the evidence from activity 2.
Section 4
Section 4 will detail the actions which the municipality will undertake in order to meet the aims of the Strategic Procurement Plan. These may include activities such as holding meet the market events,or creating a Social Value Procurement Framework, or developing questions around the environmental credentials of suppliers.
Section 5
Section 5 will detail an implementation plan for the Strategic Procurement Plan and will include information about timeframes, resources, partners, and measures of success.
8. What happens after the Strategic Procurement Plan is produced?
The most important stage of producing a Strategic Procurement Plan is probably after it has been produced and that is in terms of implementing it. There are a number of activities which municipalities can undertake to ensure effective implementation:
- First, they could create a Social Value Procurement Framework in response to Question 4. This would relate to the overarching outcomes which the city is seeking to achieve and would set out: questions that could be asked during procurement; activities that suppliers could undertake to realise outcomes, means of evaluating responses, measures for monitoring impact during delivery
- Second, they could practically implement the Plan and Framework internally in response to Question 4. This would include activities such as providing social value training or setting weightings in procurement exercises around social outcomes or working cross-departmentally. All of the activities would be detailed in Section 4 of the Strategic Procurement Plan as detailed in the response to Question 7
- Third, they could practically implement the Plan and Framework externally in response to Question 4. This would include activities such as the provision of information around upcoming opportunities and meet the buyer events, for example. Again, the activities would link to the actions of the Strategic Procurement Plan