NHS Institute Case Study- 2009 - Page 1

Procurements & OJEU Tenders: Faster & Focused

For many years, an assumption prevailed that the public sector procurement process for OJEU (Official Journal of the European Union) tenders required 6 months from start to finish and 2-3 months for non-OJEU tenders. However, the NHS Institute for Innovation and Improvement demonstrated that the timescale for OJEU tenders could be reduced by at least 50%. As a result, their streamlined processes are not only faster but, with skilful application of eSourcing, a most effective use of time, money and resource.

This report presents historical procurement evidence, to illustrate the issues encountered, followed by a brief description of the change management process adopted by the NHS Institute with the specialist guidance of Ashgreen Business Services and Curtis Fitch Limited. The strategic decision by the NHS Institute to embrace eSourcing has re-energised the procurement process and the results deliver a clear and decisive message of fundamental change and commercial success.

60% Efficiency Saving Achieved

The NHS Institute is central to the driving force for change in UK healthcare industry processes by development and rapid dissemination of new ways of working, new technology and innovative change leadership. The NHS Institute has national focus and has achieved unparalleled success, through rigorous methodology, in developing fully integrated solutions with the NHS Executive.

In 2006, the NHS Institute had encountered the reality of the traditional public sector procurement timescales, when endeavouring to source suppliers for marketing communications support. The tender involved 8 categories but was not especially complicated. Nevertheless, the process lasted from 3rd April 2006 to completion on 13th September 2006 - very much in keeping with the generally accepted timescales but an extravagant use of valuable resource.

The NHS Institute recognised that the traditional public sector procurement functions were handicapped by reliance upon paper-driven processes and people intensive routines and that the time expended had become the established and accepted standard. Statistical research indicated that, on average, 80 hours were required to run a standard tender but this increased to 175 hours where such tenders needed to ensure compliance with specific EU procurement regulations, commonly referred to as OJEU tenders. The NHS Institute procurement team, which over the course of 2007 comprised an average of 2.5 Full Time Equivalents (FTEs), successfully sourced 100 tenders during 2007 (91 standard and 9 full OJEU tenders). The team also devoted at least 40% of their time to other responsibilities including contract management of business services and facilities management. Based on the statistical averages, the total tenders in 2007 would have required 8,855 hours.

However, the maximum number of hours available from the procurement team was 3,645 and, using a generous assumption that 60% of such time was devoted to tenders, then only 2.187 actual process hours were available. The number of hours provided by non-procurement team members, in evaluating tenders, increased the dedicated time by a further 1,200 hours, putting total available hours at 3,387. This efficiency saving target of more than 60%, compared to the preceding statistical averages, represented one of the biggest challenges faced by NHS Institute.

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