1. Commodity Profile & Strategy for the Framework
Agreement for: [insert]
Reference: [insert]
For info – delete prior to issue
The strategy is used in the planning stage of any procurement to determine how key
issues will be addressed e.g. route to market, CSR issues, pricing strategy etc which is
then translated into the procurement process and documentation
It identifies and minimises risk and assists in ensuring all key factors have been taken into
account when conducting the procurement leading to fit for purpose and VFM.
V9 Slide 1
18/03/2010

2. Version Control
Version Name Date Completed Comments
When drafting and amending the Profile & Commodity Strategy, the Procurement Officer should complete the above table to ensure
changes can be tracked and queries can be directed to the appropriate UIG member/others as appropriate
V9 19/11/2009 Slide 2

3. Contents:
Except where stated as optional the slide contained in this template are the recommended mandatory minimum contents of
the Profile & Commodity Strategy. Other slides can be added on a commodity specific basis as appropriate. Further slides
are contained in the Scottish Public Sector Toolkit
Contents (complete as appropriate) Slide Number
V9 Slide 3
19/11/2009

4. Mandatory consultation with the Head of Collaborative
Procurement (HOPC)
If consultation with HOPC is required detail outcomes here;
Procurement Officer must consult with the HOPC in the following circumstances:
• where Single Tender Action (non competitive action) is proposed
• where a procurement has a strong potential to influence CSR issues
• where an extension to a contract or framework agreement is proposed
• where the negotiated procedure, competitive dialogue, or dynamic purchasing system is the proposed
tendering option
• where it is proposed to shorten the EU minimum tendering timeframes or use the Accelerated Restricted
procedure (NB use of the Accelerated Restricted MUST be highlighted in the Contract Notice. For further
information about the Accelerated Restricted Procedure please refer to this Scottish Procurement Policy
Note (SPPN 1 2009): http://www.scotland.gov.uk/Resource/Doc/1265/0076383.pdf)
• where it is proposed that the duration of a framework agreement will exceed 4 years
• where TUPE may apply
V9 19/11/2009 Slide 4

5. Executive Summary – Procurement Officer to complete this slide after completion of the Strategy
and prior to forwarding for sign off by the UIG/HOPC
• Current status: [list]
• Spend – total versus addressed: [list]
• Scope: [detail]
• Strategic recommendations and reasoning: [detail]
• Benefits – how much, how, by when?
 Price parity opportunities:
 £a achievable by DATE
 Benchmarking opportunities:
 £b achievable by DATE
 Market competitiveness:
 e.g. new player breaking into the market, driving pricing down but want commitment , £c by DATE
 Product standardisation/ rationalisation potential:
 £d, assuming xyz by DATE
 Supply chain redesign, moving to ex-works,
 £e by DATE
• Any major barriers to success:
V9 19/11/2009 Slide 5

6. UIG Role & Input
Procurement Officer to agree with the UIG their role, responsibilities, input and actions at each stage in the
strategic sourcing process
• Agree with the UIG who will agree the final draft of the key stage documentation e.g. all or a nominated number of
UIG members re the strategy, award recommendation etc
• Agree with the UIG the role UIG members will play in PQQ and tender evaluation and how Tender Evaluation
Board scores for PQQ/ITT results will be collated e.g. overall weighted results or the average of score.
V9 19/11/2009 Slide 6

7. Stakeholder (& UIG) Contacts for [Contract/Framework Agreement]
• List names and contact details of all stakeholders relevant to this commodity:
Name Job Title Division Contact Tel E-mail
V9 19/11/2009 Slide 7

8. Business Need and Functional Requirements
Sector Requirements
Where we are… Where we want to be
• What does the commodity do, standard v • NB use of generic specifications – if these
customised, level of customisation, quality don’t exist the UIG needs to start working on
requirements, real v perceived function, them as soon as possible
service requirements, user perception, value to
institution, specific specifications
• Consider the procurement innovation issues
for highly complex procurements
V9 19/11/2009 Slide 8

9. Scope of [Name of Commodity]
• Scope the commodity to be covered i.e. what is included in this commodity group, breakdown into sub-
commodities, which products fall under which sub-commodity
V9 19/11/2009 Slide 9

10. Expenditure Analysis - Spend Distribution
• In scope spend distribution by universities and colleges, supplier, by sub-commodities: [detail]
• What is the value of the requirement? How does this inform the procurement process?
Procurement Officer to add an acknowledgement, for future reference, of the source(s) of data used:
V9 19/11/2009 Slide 10

11. Future Expenditure Trends
• Demand Profile: [insert]
V9 19/11/2009 Slide 11

12. Spend Analysis & Conclusions
• Demand Profile: [insert]
V9 19/11/2009 Slide 12

13. [Commodity] - Typical Cost Breakdown
Profit 10% Recommendations
Complete the breakdown for the
commodity • What are the recommendations
xxxx
V9 19/11/2009 Slide 13

14. Total Cost Model [Name of Commodity] (OPTIONAL)
• List the activities carried
out under each step of Raise Need Acquire / Order Use Dispose
the product life cycle,
Activities: • • • •
Determine the impact of • • • •
each step on the total • • • •
cost of ownership in • • • •
terms of High, Medium Impact: • • • •
(on TCO ) • • • •
or Low, Brainstorm the • • • •
cost drivers associated • • • •
with the activities under Cost Drivers: • • • •
each step, Determine the • • • •
• • • •
opportunities in each • • • •
area. Which costs can be
Savings • • • •
reduced Opportunity: • • • •
(savings)/avoided (cost • • • •
• • • •
avoidance)?, Identify
Low, Medium and High Barriers: • • • •
• • • •
Savings Opportunities, • • • •
Identify the barriers and • • • •
enablers related to Enablers: • • • •
realising the • • • •
• • • •
opportunities • • • •
V9 19/11/2009 Slide 14

15. Total Acquisition Cost (OPTIONAL)
Example acquisition costs:
Sample Cost Drivers
Supplier Costs Total Acquisition Costs Organisation’s Costs • Uniform specification and
range
• Delivery frequency and
Product Customer Order Administra Order Order Order location
Driven Driven Fulfilment tion Fulfilment Fulfilment Fulfilment • Order frequency
Costs Costs Costs Costs Costs Costs Costs • Order value
• Requisition to P/O
• Returns
• Queries
•Quality • Reporting
•Material specifications •Inventory handling •Requisition to P/O •Defects •Storage costs •Goods receipt
• Labour •Defects/rejects/retur •Transportation •Order Transmission •Inspection •Labour •Delivery • Goods receipt
•Overheads •Picking & Packaging •Expediting •Rejects •Overheads •Requisitions
•Warehousing
ns
•Invoice •Repackaging • Sewing Rooms
•IT Costs
•Special tooling •Customer support Reconciliation •Reshipping • Delivery
•Sales •Timely Payment
•Queries
•Reporting
Cost Drivers e.g:
•Product specification and range
• Delivery frequency and location
•Order frequency
•Order value
•Lead time
V9 19/11/2009 Slide 15

16. Supply Market Overview
• Market Trends – detail what is happening in the market for the commodity, current and future technologies,
changing customer demands, new players, mergers and acquisition
• Supply Market Share – detail the key players within the industry, identify size in terms of turnover, sales, number
of customers and capacity
NOTE: trends can reveal: who is winning/ losing business, who’s trying to win market share in the UK,
whose business objectives match the sector, what do profit margins typically look like for the industry.
V9 19/11/2009 Slide 16

17. Current Contract Position– [Contract/Framework Agreement]
Contract Contract Value Contract Start/End Comments
Dates (plus any
extension period (s)
V9 19/11/2009 Slide 17

18. Current APUC/Sector Suppliers of [Name of Commodity]
Current APUC/Sector Suppliers
Supplier Spend Total Revenue Background on the Supplier
V9 19/11/2009 Slide 18

19. Main Suppliers in the Market in Context of their Total APUC/Sector
Business
Supplier APUC/Sector APUC /Sector Other commodities supplied; recent APUC/
Spend on Total Spend Sector business awards or losses; other
Commodity business they are tendering for…etc
V9 19/11/2009 Slide 19

20. Benchmarking Opportunities (Optional)
• Look to understand opportunities from: internal APUC price parity I.e. if different Institutions
pay different prices and all move to the lowest price point; and, from benchmarking with other
organisations e.g. PASA, Value Wales, N Ireland Procurement Service, OGC, Scotland Excel,
councils, fire and police service, private sector etc
Product X Price Y Price Notes
V9 19/11/2009 Slide 20

21. Risk Analysis for [Name of Commodity] Inc Barriers To Change
Risk Analysis
Description Probability of Implications to Measures to
of Risk Risk APUC/Sector Minimise / Eradicate Risk
V9 19/11/2009 Slide 21

22. Corporate Social Responsibility (CSR)
Procurement Officer & UIG to consider CSR issues relevant to this procurement:
• General issues:
• Result of the Risk Coding Analysis for [goods/services] regarding relevance and risk:
• Completion of the Sustainable Procurement Risk Assessment Tool (SPRAT) for [goods/
services]: Are there any resulting actions are required to be managed. NB: areas may already
be adequately covered by the existing CSR questions.
• Which areas in PQQ CSR Questionnaire or ITT CSR Questionnaire are required.
• Is EAUC assistance required? If ‘Yes’ approach EAUC via the standard letter of engagement.
• Specific CSR Requirements for ITT:
V9 19/11/2009 Slide 22

23. CSR -SMEs, Supported Businesses & Social Enterprises and
Community Benefits:
• Detail barriers to participation for SMEs and proposals for removing:
• Can this be let as a Reserved Contract under Regulation 7 of the EU Procurement
Regulations:
• Identification of any social clauses or community benefits relevant to this procurement:
V9 19/11/2009 Slide 23

24. CSR
• Race Equality – Impact Assessment
To determine whether race equality is a core requirement in a contract or framework agreement for goods,
services or works, the following questions should be considered:
• What is to be provided under the contract or framework agreement? [list]
• Is the provision of the goods, services, or works one of the functions or policies relevant to meeting the duty to
promote race equality? [Yes/No]. Refer to Appendix 3 of the Procurement Manual
• Is the provision of the goods, services or works likely to affect (directly or indirectly) the ability to meet the duty
to promote race equality? [Yes/No]
• Is it necessary to include requirements for promoting race equality in the contract to make sure the duty is met?
[Yes/No]
• What race equality requirements are appropriate for the contract or framework agreement? [list]
If the answer to questions 2, 3, or 4 is ‘Yes’, race equality is a core requirement. Refer to paragraph 3.7 of
APUC’s Procurement Manual which details how and where race equality should be implemented into the
strategic sourcing process.
V9 19/11/2009 Slide 24

25. Strategic Tendering Options
• On the basis on the internal and external analysis, plus opportunity
assessment, detail the available options and the pros/cons of each.
• Several examples are detailed below:
 Option 1: Negotiate and extend current contract
 Pros: analysis shows limited opportunity in this area compared with rest of portfolio, would achieve savings whilst
minimising resource effort; would also allow APUC to approach the market jointly with PASA next year
 Cons: will not optimise savings as suppliers looking for volumes commitments which is dependant on extended work with
stakeholders
 Option 2: Use OGC framework for next 12mths to allow quick win and gathering of better
management information
 Pros: initial assessment shows saving of 3% on OGC contract, this could be quickly implemented and allow management
information to be collated as currently data is poor
 Cons: comparisons with industry suggest savings of 20% if had APUC commitment contract
 Option 3: APUC tender and contract for x years, with the aim of being in y position in z period of time e.g. product
rationalisation as part of contract requirements. Intention would be dual supply award to maintain competitive tension etc
 Pros: Maximise savings
 Cons: Resource effort involved given other portfolio opportunities have higher potential
V9 19/11/2009 Slide 25

26. Strategic Tendering Options
• Lead-In Period - detail period required: NB: consider the period for implementing the
commodity onto PECOS agreed with Supplier eEnablement during the project start up stage
• Extension Period: detail proposed period (s):
• Tendering route to demonstrate competition: Detail and insert justification
• A framework agreement will be established as follows:
 framework route: [single supplier/multi-supplier]
 Multi-supplier framework lots: [insert number proposed]
 Call off contract mechanism: [direct/ranked/ mini competition]
V9 19/11/2009 Slide 26

27. ITT Considerations (particularly relevant to consider at this stage in more detail when the Open Procedure is
proposed so as to reduce the time taken to compile the ITT at the ITT composition stage)
• Statement of Requirements (SoR): Detail the main areas and issues needing to be inserted into
the SoR
• IPR: Does IPR apply and what is the impact.
• Access by institutions: detail the number of institutions, affiliated bodies, and if APUC requires to
access the contract or framework agreement. Estimate number anticipated to access the contract/framework
agreement from commencement date
• TUPE: establish if TUPE is likely to apply. If yes, obtain the detail of name(s), sex, employment location of
individuals who may be subject to TUPE and consult with the HoP or Human Resources or seek legal advice
• Pricing Strategy:
 detail the how the commodity will be priced (taking into account whole life costing and cost avoidance).
 Can an e-Auction be utilised for this commodity?
 State the period of price stability (e.g. 1 year etc) and the reasoning for this.
V9 19/11/2009 Slide 27

28. ITT Considerations
• Mechanism for addressing variation in the charges e.g. via RPI/CPI etc:
More info can be found at www.statistics.gov.uk/statbase/product.asp?vlnk=868
• Payment period: The default position under the Late Payments of Commercial Debts Act 1998 is 30 days
• Parent Company Guarantee/bond: state if either is to be included in the ITT for the framework
agreement and/or call off contracts or a contract and why use would be beneficial.
• Ts&Cs: list any clauses required over and above the standard ts&cs.
• For Part B services: If the procurement is considered to be high risk/high value, a standstill period
should be considered (with reference to Federal Security Services Ltd vs Police Service of Northern Ireland).
V9 19/11/2009 Slide 28

29. Information re Evaluation of References, Site Visits, and
Presentations
• References:
• In a Restricted procedure, ascertaining an applicant’s past experience in terms of “technical or professional ability” (as determined by
Regulation 16(7)(b)(ii) of the Public Contracts (Scotland) Regulations 2006) can be included in a Pre Qualification Questionnaire as a
section criteria. Written evidence of past performance, which can be objectively evaluated, can be used but it is not recommended
written evidence is used as a Minimum Standard. Standard forms can be used to request references , but returned references should
then be used for information purposes only.
• The above also applies to an Open procedure.
Site visits:
• If a site visit is required before tender return i.e. to be used to inform tenderers more clearly regarding the outputs of the requirement
e.g. visit to an Institution's property or visit to a new build, then this is not evaluated.
• If a site visit is deemed to be required post tender return and as part of evaluation process (because the information to be ascertained
from the site visit directly relates to the subject matter of the Contract or Framework Agreement), this must be detailed as an award
criteria in the Contract Notice or ITT, be capable of evaluation, and make clear what is being assessed in the site visit.
Presentations:
• If a presentation is deemed to be necessary as part of tender evaluation and/or bid clarification, it can only be used for information
purposes and cannot be detailed as an award criteria in the Contract Notice or ITT and used to evaluate tenders because it is
subjective, and not capable of objective evaluation i.e. performance at interview is not an evaluation criteria.
• Evaluation of a presentation’s written output is permissible where as part of bid clarification tenderers are requested to present on
common areas in the submitted tenders (which following tender evaluation have been revealed to be areas where clarification would
be needed). These areas cannot be in addition to the award criteria detailed in the Contract Notice or ITT.
• Ensure any area of concern remaining after the presentation is followed up in writing as part of bid clarification.
V9 19/11/2009 Slide 29

30. PQQ Selection Criteria
Further information OGC Selection/Award criteria PPN REFER TO PQQ GUIDANCE NOTE
Selection Criteria: Criteria:
• Part A – Background Information • Part A - Section not scored – for info only
• Part B – Economic & Financial Standing • Part B - Insert minimum standards in the Contract Notice or
list as objective criteria in section III.2 in the Contract
Notice .See APUC’s of Financial Analysis of Accounts for
recommended levels.
NB: if minimum standards are set and aren’t met, the
applicant should be excluded from the process
EX
AM
PL
• Part C – Conviction of Criminal Offences E
• Part C - If the applicant answers ‘Yes’ to any question they
MUST be excluded from the process
• Part D – Business Probity • Part D - If the applicant answers ‘Yes’ to any question they
MAY be excluded from the process
• Part E – Technical & Professional Ability • Part E - If minimum standards are set and aren’t met, the
applicant should be excluded from the process otherwise
use objective scoring criteria to shortlist those applicants
meeting minimum standards
V9 19/11/2009 Slide 30

31. ITT Award & Weighting Criteria Price Quality Ratio:[insert]
Further information OGC Selection/Award criteria PPN Weighting Criteria:
Award Criteria: award criteria is based on [MEAT/lowest price]
Minimum Standards (if necessary) EX
Service Delivery – Details Requirements AM PASS/FAIL
Service Delivery – Detail Requirements
CSR – Detail Requirements
PL PASS/FAIL
PASS/FAIL
Supplier Stability & Viability – Detail requirements E PASS/FAIL
Award Criteria
In this example the headings below are for six award criteria. All questions to be Sub-
PQR Weighting (%) asked of tenderers in the ITT must relate to this criteria and have corresponding weighting
weighting. Any sub-criteria and weightings must also be listed. Refer to ITT (%)
Schedule 6 for further info.
Price 40% - 100%
EX Service Delivery 20%
AM Design Scenarios 25%
PL Staffing 5%
Quality 60%
E Project Planning & Implementation 25%
Warranty & Support 10%
Continuous Improvement 15%
V9 19/11/2009 Slide 31

32. ITT Call Off Contract Award Price Quality Ratio:[insert]
Criteria Award Criteria:
award criteria is based on [MEAT/lowest price]
Weighting Criteria:
[insert criteria] • [insert weighting]
EX
AM
PL
E
V9 19/11/2009 Slide 32

33. Contract Implementation – Lead-In Period
• Detail what will need to happen, when, and who has responsibility
For example:
 Communicate with universities and colleges to prepare them for any changes
 Conduct product trials (if applicable)
 Start running down stocks of current product ranges (if applicable)
 Prepare/ complete any required training
 Clarify supplier change management/ implementation expectations
 Ensure smooth transition
 Follow-up on progress
• Note requirements for completion later in the strategic sourcing process:
For example:
 Systems updates, CUPID, SharePoint
 Savings notification to individual institution
 Notification and award letters
 Buyers Guide/ Commodity Action Report (CAR)/ ePS Bulletin etc
V9 19/11/2009 Slide 33

34. ePS Trading Strategy
• Detail how End Users will see and access the Framework Agreement
content in PECOS:
2. Use APUC’s Supplier Report showing ePS active suppliers through Institutions & ePS Supplier Report to determine PECOS:
• Content Availability
• Connection Type
. Develop a list of specific and general ePS issues / requirements relevant to the commodity:
[list]
Plan how these will be accommodated on PECOS: [detail]
3. Decide PECOS trading strategy:
• on catalogue
• Catalogue
• Punchout
V9 19/11/2009 Slide 34

35. Strategic Contract and Supplier Management
• All contracts or framework agreements will be contract managed by the Procurement Officer. Refer to ITT
for Procurement Officer and User Group roles and responsibilities.
Detail considerations for Contract and Supplier Management
GuidanceScotland strategic contract and supplier management guidance, processes, and
templates are available at http://www.scotland.gov.uk/Publications/2006/11/16102303/0#a10.
These are currently being develop and once finalised will be incorporated fully into strategic
sourcing documentation.
V9 19/11/2009 Slide 35

36. Timelines

V9 19/11/2009 Slide 36

37. Prior Information Notice (PIN)
• Use of PINs is not mandatory. PINs can be published through OJEU in order to alert the
market to forthcoming contract opportunities.
• Once a PIN has been published, reductions in timescales for competitions identified in the
PIN are possible.
• PIN should be published at least 52 days before and not more than 12 months before the
contract notice.
• The PIN should contain details of supply and services contract for which the public body
expects to seek tenders in the next 12 months.
• PINs must be published on OJEU website (this can also be done through the Public Contracts
Scotland website).
V9 19/11/2009 Slide 37

38. Commodity Strategy Sign-Off – UIG & HOPC
UIG:
NAME TITLE INSTITUTION DATE
HOPC:
Profile & Commodity Strategy approved by HOPC, APUC: ……………………………..
Date: ……………………………..
V9 19/11/2009 Slide 38