Merseyside Collaborative Procurement Initiative

Merseyside County consists of five metropolitan boroughs that are responsible for all local functions within their area after Merseyside County Council was abolished in 1986. The combined population of the five boroughs is 1,365,900.

To combat the challenges of the Gershon Review, the five local authorities formed the Merseyside Collaborative Procurement Group whose key aims are:

• Share expertise and best practice
• Share resource and technology
• Leverage purchasing spend
• Joint focus on environmental sustainability
• Remove duplication of effort
• Deliver optimum best value for their authorities

The group works by democratically nominating a lead for each project taking into account resource availability to ensure that the workload is equally spread. This has proved to be an effective approach allowing the group to initiate multiple projects at any one time. They also take a strategic approach to the categories they are sourcing by identifying opportunities to standardise requirements, decide on the most appropriate tendering process and on single or multi source.

In 2006 the Merseyside Collaborative Group simultaneously embarked upon two sourcing projects for Office Supplies and Office Furniture. For both projects they decided to use

eSourcing technology to run the Tenders including the use of eAuction for the final and best offer stage. The reasons for taking this approach included sustainability, efficiency, best value and transparency. The group chose OGC framework providers e-Three to facilitate and support the projects and the North West Centre of Excellence (NWCE) provided financial support.

Following a robust eSourcing process from publication in OJEU, through publication of a Pre-Qualification Questionnaire (PQQ), Invitation to Tender (ITT) and eAuction, the group with the support of e-Three collectively agreed detailed weighting criteria early in the process. Project discipline and adherence to deadlines was rigorously applied to the project and the Group demonstrated an exceptional commitment to both projects.

The Group took a transparent approach with the supply base, clearly informing them when each of the member authorities were to switch their usage to the contract which also allowed alignment of contracts to synchronise contract expiry dates.

A product sample day was held and internal stakeholders were consulted during the process. A balance between taking individual boroughs' requirements into account with rationalisation of products was sought and the result was a reduction to the total number of line items from 9000 to 500. A rigorous minimum quality threshold was set and only those suppliers above this level were invited to the eAuction stage. The 4-year contract was awarded with savings of 25% - about £3.5 million over the contract period. Three additional authorities have since joined the contract. As a result of the tender, and through working with the suppliers, further savings have been identified by 'buying smarter' from the core list.

A similar sourcing process was followed for the Office Furniture. A furniture evaluation day was held where supplier products were rigorously reviewed with only quality-approved suppliers moving through to the eAuction stage. The sourcing project was a success with savings of approximately £3 million (40%) over the duration of the contract. An additional benefit was a boost to the local economy; a Merseyside SME in partnership with a quality furniture manufacturer rose to the challenge and were awarded the four year contract. In addition, part of the suppliers' service was the collection of obsolete furniture for recycling at no cost to the councils. This also led to the set up of a new company to recycle 'end of life' furniture with metal and plastic components melted down to form ingots for reuse in desks and MDF components will be shredded and burnt to heat the factory.

Both contracts have been successfully implemented; the benefits achieved so far by the Merseyside Collaborative Procurement Group include cost savings of about £6.5 million over a 4-year period, support for local economy, best use of procurement expertise and resource and elimination of duplicated effort.