Reference no: EM133149480 , Length: word count:1400

PSPPCM025 Influence and define strategic procurement direction

Task - Strategic Procurement Plan

This assessment task requires you to formulate an organisation's strategic procurement goals and act to gain support for strategic procurement directions. Further, it requires ensuring that the organisation's strategic procurement direction is aligned with that of the government.

You are required to produce a Procurement Strategy; the attached template may be used as a starting point. Note: You should append a Stakeholder Engagement Plan to the Procurement Strategy. A sample template for the Stakeholder Engagement Plan follows.

Your produced Procurement Strategy should be systematic and comprehensive and address the following:

Executive summary
Provide a high-level summary of the procurement strategy including:
the procurement objectives;

the responsible organisation's experience and capability in delivering projects under the preferred procurement delivery method and, as necessary, any strategies to mitigate procurement risk;

the outcomes of any market testing undertaken;

the evaluation methodology used to identify the preferred procurement methodology, including assessment criteria and rankings for both the procurement model options short-listing and detailed analysis processes;

a high-level table summarising the procurement options assessment (show the ranking of each option against the criteria used to select the recommended procurement strategy, including an assessment of the merits of alternative procurement methods for delivery);

an outline of the preferred procurement strategy, demonstrating that the preferred procurement strategy is appropriate for this investment; and contractual issues

If a PPP procurement approach is being proposed additional details are required. The DTF Infrastructure Advice and Delivery, Partnerships Victoria Group can advise on these.

If project alliancing is being considered, full business case requirements are different; please contact the DTF Infrastructure Advice and Delivery, Alliancing and Contracting team for further advice.

Analyse key issues (data gathering)
Project oobjectives and dascription
Outline the key project objectives including:
Government policy and service delivery objectives.
Describe the primary benefits arising from addressing the problem(s) including:
Type and level of benefits (social, economic, environmental etc.);
Beneficiaries.

How benefits arise from solving the problem(s).

Describe dis-benefits that might or will arise from the investment.
Note: This section should deal with benefits associated with dealing with the problem; they should not pre-suppose any specific intervention or project option. For example, if the problem is increasing prisoner numbers or overcrowded prisons, the benefits should not presume that the solution is to build a new prison.

Describe the project, including scope, characteristics and timing including: any unique project characteristics;
procurement staging, for example, will the procurement process be simply the selection of a provider, or will it also include a preliminary stage to identify a preferred solution or technology;
project components that can be bundled or procured separately;
time dependencies, for example, closure of other infrastructure;
project duration and estimated schedule; and
Likely impacts on users and stakeholders.
Identify the preferred technical solution.

Project service delivery requirements
Describe the expected outcomes:
What factors will determine whether the procurement has been successful? This should include design, quality and performance criteria that can be used to measure benefits realisation and project success.
Have the critical project success factors been clearly defined and agreed and signed off with stakeholders?
Describe what is the capability to be acquired (i.e. what is being bought?)
How will value for money be achieved and measured?

Risk analysis
Describe key risks to the procurement/project, considering:
‘show-stopping' risks.
Describe how identified risks will be managed through the procurement process, including:
implications of transferring risks; and
Implications of delivery models on risk.
Evidence presented in this section should demonstrate:
stress test modelling under various risk scenarios has been undertaken (do not limit this to the ideal or most likely scenario but consider consequences if one or more key risks emerge); and
Strategies to lower overall risk.

Opportunity analyses
Identify any opportunities (additional to intended benefits) that may arise during procurement and project delivery, and outline any strategies to capitalise and manage their potential.

Policy context
Describe the government policies that impact on or influence the procurement, including:
the ability of each procurement method to address policy requirements;
probity risks and ethical issues; and
Outline how the project priorities align with other departmental and broader government projects and operations including:
Interfaces with other governmental projects, including location and timing synergies.

Market aanalyses
Provide an analysis of the market capability and capacity to meet the procurement objectives.
Evidence presented in this section should demonstrate:
general market capacity and expected interest in this project;
the opportunity and need to influence and develop markets;
market familiarity with the type of project;
the market's familiarity doing business with government; and
Market access to suppliers and resources, noting any expected supply anomalies in the availability of skills, materials or components.
This section should include (as appropriate):
current and forecast market activity levels;
supplier community characteristics;
supply chain characteristics and methods within applicable industries;
the market structure, for example, the number of players, if there is a monopoly; and
Maturity of the market.
Agency capability and management arrangements
Outline the capability of the agency to manage the procurement including:
the agency's capacity to manage what is required in the procurement under different delivery models;
management capability in the agency;
where projects cross organisational boundaries, clear management arrangements are in place to ensure ongoing alignment of all organisations business objectives;
governance arrangements within the agency;
if there is a skilled and experienced procurement/project team with clearly defined roles and responsibilities (if not, if there is access to expertise for those fulfilling the roles);
reporting and monitoring arrangements;
if there are systems and processes in place for monitoring and controlling project expenditure and for measuring and tracking realisation of project benefits;
if governance arrangements are robust enough to ensure that bad news is not filtered out of reports to senior management; and
if processes and training are in place to ensure ethical behaviour to support accountability and openness in the procurement process, giving supplier's confidence to participate and reduce the cost of managing risks (fraud, corruption etc.).
Procurement option evaluation process and outcomes
Outline the process used to evaluate procurement options and determine the preferred delivery model.
Present the outcomes of the procurement short-listing and detailed analysis.
Short-listing
Document the process and criteria for short-listing potential options, and present short-listing results:
Short-list an agreed range of procurement options to be considered in the detailed evaluation.
Outline the process and criteria used to short-list:
examine existing local, national and international precedents;
consider whether mandatory requirements exclude any delivery models; and
unique project characteristics.
Present the results of the short-listing:
Identify short-listed models, and clearly demonstrate the proposed options are capable of delivering the project.
Provide reasons for models not short-listed where applicable.
Detailed analysis
<Document the process, criteria and rankings for detailed analysis of short-listed options.>
Establish a framework for the comparative analysis of procurement options, including the identification and ranking of a set of evaluation criteria and a system for rating the options against each criterion. The evaluation criteria should be informed by the project objectives, as well as analysis of information compiled during the data gathering stage of the procurement strategy development and documented in the preceding template sections.
This should include:
identifying the project objectives and unique aspects of the project that can be used to determine procurement model suitability (note: these would also be measures of project success);
drafting evaluation criteria against which to assess each procurement option, consistent with the overriding objectives for the project;
agreeing the relative materiality of each criterion, ranking the criteria in terms of high, medium or low priority (establish a rating system to facilitate a qualitative assessment of the procurement options against the evaluation criteria); and
Undertaking an assessment of key project risks relevant to selecting a procurement approach (building on the risk analysis already completed to date).

Part 4A: Market Analysis

Provide an analysis of the market capability and capacity to meet the procurement objectives. Evidence presented in this section should demonstrate:
the ability of the market to deliver the project objectives and produce what is needed;
general market capacity and expected interest in this project;
the opportunity and need to influence and develop markets;
market familiarity with the type of project;
the market's familiarity doing business with government; and
market access to suppliers and resources, noting any expected supply anomalies in the availability of skills, materials or components.

Part 4B: Supplier Analysis
Obtain a high level overview of your organisation's suppliers to determine and ‘segment out' those that are strategically important to your organisation and/or that account for a significant proportion of your overall spend. Identify top suppliers by category and not just by spend, to ensure critical suppliers are not missed. You can use the following table to summarise the supplier analysis:

Part 4C: Spend Analysis:

Prepare a short profile of your organisation's anticipated spend against core procurement categories. You can make use of tables/graphs/descriptions. You can use the following points to determine your spend analysis:

Forecast by category-logically group similar items. These could then be listed based on level of expenditure.
Forecast spend by goods or services.
Forecast spend by key suppliers (could be listed based on critical to business and extremely high risk, etc.).
Forecast spend for major areas of procurement, total or major areas of spend for capital expenditure and operational expenditure by year.
Types of spend, i.e. how are goods and services being purchased? (e.g. percentage under state purchase contracts, panels).

Opportunity analysis

Identify any opportunities (additional to intended benefits) that may arise during procurement and project delivery, and outline any strategies to capitalise and manage their potential.

Project Service Delivery requirement

Describe the expected outcomes:

What factors will determine whether the procurement has been successful? This should include design, quality and performance criteria that can be used to measure benefits realisation and project success.

Have the critical project success factors been clearly defined and agreed and signed off with stakeholders?

Describe what is the capability to be acquired (i.e. what is being bought?)

How will value for money be achieved and measure

Risk analysis
Describe key risks to the procurement/project, considering:
the project risk management plan; and
‘show-stopping' risks.
Describe how identified risks will be managed through the procurement process, including:
implications of transferring risks; and
implications of delivery models on risk.
Risks may address the following areas: organisational risk, category risks (inventory), supplier related risks and/or market related risks.

Attachment:- Assessment Task Template.rar