Fusion21’s five top tips for procuring with purpose

What does good procurement look like? The landscape has changed with the introduction of the Procurement Act 2023 but there’s more than just legislation that should be driving how you approach procurement.

Oliver Mooney, head of category at procurement specialists Fusion21, explains: “Good procurement should go beyond the transactional arrangement of purchasing or putting a contract in place. It needs to add value to an organisation and shift away from a sole focus on cost to looking at where it can do more.

“Whether this is delivering a wider benefit to the communities you operate in or improving operational efficiency, these need to be considerations in addition to achieving value for money.”

Our five top tips will help you make the most of the opportunities that procurement can bring:

1. Engage and understand your supply chains and wider network

Engaging with your current suppliers is a great way to understand them better. It shouldn’t just be about what they are currently doing for you but discuss what else they could do to help you. What areas of knowledge or expertise do they have that you could utilise in the future?

It also makes sense to expand this exercise beyond the people you normally work with so that you can understand other suppliers, especially when it comes to working with local supply chains. These smaller organisations might not have extensive resources when it comes to marketing their services so you need to do the work to understand who is on your doorstep and what they can do.

Mooney explains: “These relationships should be two-way and should involve helping them to understand your business too, so they have the opportunity to align against your organisations’ values and purpose.

“This will mean that elements of added social value in a contract will be seen as responsibilities they want to take on, rather than as a cost to them to comply with targets.”

2. Consider the design of your procurement and harness the flexibilities that you have

The Procurement Act 2023 has brought in more flexibility, especially if your project is below the threshold in terms of value. In that case, you could go to a list of suppliers you already know instead of going out to an open tender.

You can then design a process that works with the flexibility you need, and it’s worth looking at frameworks like Fusion21, where we work with a defined pool of suppliers who are competent, capable, and pre-assessed.

When it comes to going to market under a regulated procedure, you can use the competitive flexible procedure where it’s appropriate, which can help you use filters to reduce the number of bidders to just the most relevant and experienced before they start competing over price.

“The success of this comes down to the questions you ask,” says Mooney. “Too often the responses can end up so similar and this can be unhelpful when it comes to differentiating between bidders. Consider carefully what information is important to know and ask questions to uncover it.”

3. Focus on outcomes not just contract price

A good outcome when it comes to procurement in the housing sector is providing quality, affordable, and sustainable homes that are safe, warm, and decent. This should be the priority, rather than getting products or services for the lowest price possible.

“We need to move away from the old terminology of ‘most economically advantageous tender’ to ‘most advantageous tender’ knowing that we can have better outcomes for residents as well as delivering value for money,” said Mooney.

It’s important to understand what something should cost through research and using your own experience. It’s not just about getting the lowest price when it comes to value. You could spend more upfront but make savings in the long run through operational efficiencies with the right supplier at the right time.

4. Maximise the benefit of procurement

Organisations that will be successful and harness the real benefits of procurement are the ones that take time to define what success looks like, including the specific benefits that procurement can deliver.

Section 12 of the Procurement Act 2023 calls upon contracting authorities to maximise public benefit so social value must be a factor in determining the success of procurement. In addition, the National Procurement Policy Statement provides a clear set of aims for contracting authorities to follow.

“Everyone has a role to play, especially in the housing sector,” said Mooney. “The changes that are happening now aren’t just about government or large-scale procurement; it’s something everyone can get involved with. Just doing the bare minimum means achieving less for yourselves and the wider community. At Fusion21, we want to motivate sustainable change and procure with purpose to create more efficient and meaningful outcomes.”

5. Invest in training and development

To make the most of available opportunities, we must ensure people have the skills and knowledge to maximise all possible outcomes – including remaining up-to-date with best practice and legislation. For several years there has been an under-investment in training across the sector because of the wider financial circumstances.

We have seen a shift when it comes to training due to the introduction of e-learning within the Procurement Act 2023. There has been a strong uptake from the sector as staff were encouraged to get up to speed with the changes, but we can’t lose that impetus.

“Training doesn’t have to cost money, there are CPD opportunities, and webinars and courses available,” said Mooney. “Continuing to harness that collective knowledge base where peers can discuss their challenges with their network and solve common problems can only be good for the sector.”

Fusion21 is a national social enterprise specialising in efficient and impactful public sector procurement services and delivering visible social value, so we know what works and what doesn’t.

We have more than 1,100 members and have supported them with over £380m in savings with more than £200m generated in social impact to date.

More details and information about all our frameworks can be found at fusion21.co.uk/homepage or call 0845 308 2321.