Procurem

ent
Strategy
Template

Procurement Strategy: [Procurement Project Title]

LUV Ref: [Ref No.]

Departmental Procurer [Name]

Procurement Unit Lead /

[Name]
Author:

Date [Date]

1. INTRODUCTION

1.1 Purpose
This document sets out the preferred procurement route for the supply/provision of
[goods/service], following consideration of all of the options, and their relative
benefits and risks. The strategy is based on [reference the stakeholder meeting(s),
focus groups, questionnaire results, spend/category data, market developments,
project/programme that has informed/prompted the strategy]

1.2 Objectives of the procurement

This section should include:
High-level background information on the project, including the aims and key
points from the business case
The requirement, including whether Supplies, Services or Works, potential
future requirements/developments, and any associated support and training
The objective based on an as assessment of the requirement using the
Supply Positioning (Kraljic) Matrix, i.e. establish partnership (Strategic
Critical), ensure security of supply, (Strategic Security), leverage position
(Tactical Profit) or (Tactical Acquisition)
Any relevant University policy/strategy

1.3 Out of scope

To prevent scope creep and to ensure focus remains on the requirements defined
within the business case, detail any potentially related requirements that are
agreed as out of scope for the project. For example, repository software is in scope,
however, servers are not. In addition, are there any dependencies with other
requirements/contracts/projects, including any attributable (integration) costs?
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2. MARKET ANALYSIS

2.1 Current supply

This section should describe the current supply/contract arrangement(s) and its
level of effectiveness and compliance. The expiry of current contracts, any
maverick spend, lessons learnt, opportunities for consolidation/collaboration
and/or reducing transaction costs may also be mentioned

2.2 Supply market capability, capacity and competition

This section should describe the supply market:
Dynamics
o Capacity and capability
o Shape and extent of competition (5+ competitors?)
o Power balance (based on assessments using both Kraljics Supply
Positioning and Supplier Preferencing matrices)
o Substitutes
Geography & Segmentation
o By geography, product, industry
o Specialist, generalist, niche
o Differentiation
o Local, national, global
Restructuring trends and developments
o Mergers and acquisitions
o Strategic alliances
o New entrants
o New products and services
Pricing
o Mechanisms
o Strategies
o Trends
o Sources of cost and value
Customers
o Who are they?
o What are they buying and from whom?
o What is our/their impact on the market?
o How do they buy?

2.3. Duration of contract

The contract period should be established from the start, within the advert /
Invitation to Tender documents, including any extension options. Consideration
should be given as to the potential opportunities to collaborate and what might be
done to align requirements/contracts, including arranging for current contracts to
co-terminate. The contract duration should also be informed by the Supply
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 Positioning (Kraljic) Matrix assessment, e.g. where the requirement falls into the
Strategic Security box 5+ year contracts should be considered. Now is the time to
devise the exit strategy

3. SAVINGS ANALYSIS

3.1 Estimated contract value/Available budget

Detail the estimated contract value over its whole life (taking account of any
extension options), including procurement, acquisition (incl. VAT rate/reverse
charge VAT), ownership and disposal costs, and the available budget

3.2 Estimated savings/efficiencies

Detail any potential savings/efficiencies (also recording in the Savings Tracker):
Added value:
o Modification/re-specification
o Lease/hire/financing alternatives
Process re-engineering, e.g. consolidated invoicing
Price Reduction:
o Competitive tendering
o Negotiation
o Specification revision
o Aggregation of demand resulting in volume discounts
o Early payment discount
Sustainability:
o Reduction in waste
o Reduction in consumption
o Recycling, reuse
o Cost avoidance

4. PROCUREMENT STRATEGY

4.1 Procurement options appraisal

Outline the procurement options (e.g. do nothing, call-off framework agreement,
collaborative opportunities, tender, procedure types, lotting strategies, waiver etc.)
and the criteria for evaluating them against each other, for example, using a matrix
such as the one below:

Value for Speed Flexibility

Money Compliance
(25%) (15%)
(30%) (30%)

Optio Scor Commen Scor Commen Scor Commen Scor Commen

n e ts e ts e ts e ts

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4.2 Recommended procurement route to market
Identify and summarise the preferred procurement option based on the appraisal
above
Where a contract is not to be divided into separate lots, the reason for this decision
must be stated here. Where the contract is to be divided into lots, the number of
lots for which tenderers may bid, and the number of lots which may be awarded to
any one tenderer, including the criteria for making such a decision, should also be
noted.

4.3 Specification Type

Establish the specification type to be used, i.e. Detailed, Performance or Functional.

The specification type should be informed by the Supply Positioning (Kraljic) Matrix
assessment, e.g. where the requirement falls into the Strategic Critical box more of
a performance specification should be considered

4.4 Advertisement
Identify the method(s) by which the contract opportunity will be advertised, for
example:
Official Journal of the European Union (OJEU)
In-tend
Contracts Finder Must be used where the contract opportunity is openly
advertised
Direct e-mail
Source East Midlands
Trade publications

4.5 Selection/Award criteria

Set out the Selection and Award criteria and sub-criteria

4.6 Pricing strategy

Set out the pricing structure to be employed, for example: (Informed by Supply
Positioning (Kraljic) Matrix assessment)
Fixed price
Daily rate
Target pricing and cost disclosure
Schedule of rates
Volume discounts
Arrangements for optional costs
Payment schedules
Payment terms
Time and materials

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 Software as a service
Pay as you go
Cost of IPR ownership
Performance payment
Gain / share arrangements
Price variation options

4.7 Other special considerations

Flag any special considerations that particularly relate to this procurement
(particular relating to the exit strategy):
Financial Stability
Insurance Levels
Business Continuity/Disaster Recovery
Escrow
IT element/interfaces, including the product or service based on Cloud
Services? Compatibility with IT stack? (Contact IT Business Partner)
Information Security. Is it possible that personal data might be processed
outside the EEA? (Must comply with the Universitys Outsourcing and Third
Party Access Policy)
Health & Safety. Do the Construction (Design & Construction) Regulations
2015 apply?
Slavery/human trafficking within the supply chain, particularly in low pay
sectors (e.g. agriculture, construction, hospitality and manufacturing) and
less developed countries
TUPE
Management Information
Liquidated Damages
Intellectual Property Rights
External funding body requirements (e.g. ERDF)
Service Level Agreement / Key Performance Indicators (Technical and/or
Contract based)
Sciencewarehouse e-Catalogue
The Public Services (Social Value) Act 2012 requires public authorities (including
universities) to consider the economic, social and environmental wellbeing benefits
that could be gained through public services contracts and framework agreements
(excluding call-offs) subject to the Public Contracts Regulations 2006, and where
relevant to the nature of the contract in question
Environment
Social Clauses Apprenticeships, targeted training, long-term unemployed,
payment of sub-contractors
SME-friendly procurement process
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 Equality

4.8 Key risks

Identify the key risks for the procurement project, including owners and counter
measures:

Risk Likeliho Impact Owner Counter

od Measure

5. PROCUREMENT PLANNING / RESOURCE

5.1 Proposed procurement timetable

Outline the activities/stages of the procurement process, indicative timescales and
those responsible for undertaking the activities: (Amend according to the
procurement procedure to be used, and inserting any broader project approvals)

Deadline / Responsible
Activity/Stage
Period Person
PIN published
Supplier Engagement Day
Specification drafted
Contract Conditions drafted
PQQ drafted
ITT drafted/assembled
OJEU Notice, PQQ, ITT published
PQQ return date
PQQ evaluation/shortlisting
Unsuccessful PQQ & ITT letters
Bidders Conference
Tender returns
Tender evaluation
Tender
interviews/presentations/demos
Contract award decision
Acceptance and/or User Testing
Intention to Award letters issued
(Noting that subject to successful
testing)
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 Deadline / Responsible
Activity/Stage
Period Person
Standstill period
Contract award
(Noting that subject to successful
testing)
OJEU Contract Award Notice
published
Implementation
Contract commencement

5.2 Key stakeholders

Provide a summary of the key internal and external stakeholders. Do any of the
special considerations necessitate the involvement of particular disciplines, for
example, HR for any TUPE implications or Research Support Office where the
project involves a grant application?

5.3 Project governance

Provide an overview of the project team and their roles and responsibilities,
including the Senior Responsible Owner, the Project Manager, members of the
Project Board, the Tender Evaluation Panel and the Contract Manager:

Role Name Responsibilities

Note: For 50k+ contracts, all those on the Tender Evaluation Panel must complete the
Conflict of Interest Declaration Form at the outset