A slightly different train of thought this week, and a challenge to local authority procurement teams! How much of your authority’s spend is with suppliers based in your authority area? What about in your region? There are many reasons why local authorities procure services from companies based outside their authority area, all of which are valid (price, quality, availability, technical expertise and many others).
However, when did your authority last engage with local businesses to make them aware of what goods and services are procured locally? When did your authority last explain to local businesses what you expect of your suppliers? When did your authority last publish in advance the tenders that would be available to businesses in the forthcoming twelve months? When did your authority last review the levels at which you seek quotes, go out to full tender (excluding OJEU) and review where you advertise and promote tender opportunities.
Many local authorities operate a system whereby for contracts up to £30,000 it is sufficient to obtain three written quotes, but how do you select which businesses can quote for those contracts? Is it through a supplier listing? If so, how do companies get on to that supplier listing? How do you know that you are securing best value if those contracts up to £30,000 have not been openly advertised? For many smaller businesses, those smaller contracts could make a significant difference to their business.
If you haven’t reviewed your procurement activity recently, what are you waiting for? The benefits could be significant to the authority, to the local community and to local businesses. I read somewhere – and I can’t remember the source at the moment – that for every £1 a local authority spends with a local supplier, 76 pence of that is re-spent with local people and businesses, whereas for non-local businesses, that figure drops to 36 pence. Think about the benefit to the local economy..