Source: https://www.procurement.govt.nz/broader-outcomes/implementing-broader-outcomes/
Timestamp: 2020-07-03 22:54:50
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Implementing broader outcomes | New Zealand Government Procurement and Property
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The government is committed to achieving positive cultural, environmental, social and economic outcomes from its procurement activities. Together, these are called broader outcomes.
Why you need a broader outcomes procurement strategy Key elements of a broader outcomes procurement strategy Part 1: Consider broader outcomes in the context of your agency
Part 2: Prioritise broader outcomes initiatives Part 3: Plan for successful delivery Reviewing your strategy
Government agencies are expected to leverage their procurements to achieve broader outcomes.
The information on this page is designed to help you to develop policies to incorporate broader outcomes into your procurement activities. As a starting point, you should develop a broader outcomes procurement strategy.
Why you need a broader outcomes procurement strategy
Strategy is all about our choices. As individual procurement teams and agencies, we have limited resources to manage. Because of this, it’s important to recognise that we may not be able to deliver broader outcomes in every procurement activity. By developing and implementing a strategy, we can prepare ourselves to make the best choices for our resources to maximise the broader outcomes we can deliver on.
Having a strategy can also help the different teams in your organisation to a get shared view of how you can work together to use procurement to meet the needs of your organisation and to deliver broader outcomes for New Zealand.
Key elements of a broader outcomes procurement strategy
For your strategy to be most successful, it should include:
1. Leadership's commitment to deliver broader outcomes 1. Agency opportunity analysis 1. Governance arrangements for broader outcomes
2. Any relevant broader outcomes learnings to date 2. Agency broader outcome priority areas 2. Monitoring and reporting framework
3. High-level approach for procurement activities 3. Action plan (including strategy review dates)
Part 1: Consider broader outcomes in the context of your agency
Start by getting the right people in the room
In many agencies more than one area has purchasing responsibilities. To develop a successful broader outcomes procurement strategy, you’ll need to work together with all of the different teams and people who have these responsibilities. You may need to consult with your finance, environment and procurement officers, and specialist teams, such as construction, energy, or IT.
Get sponsorship from senior leadership
Developing an effective strategy will help your agency to balance competing priorities and to deliver multiple outcomes using the resources you have. As part of developing your strategy, you should engage with your Senior Leadership Team to make sure they understand and support the government’s expectation that agencies use procurement to deliver better public value by helping to achieve broader outcomes. This means getting their support to formally determine the intentions and objectives of the strategy, and how these align with your agency’s and the government’s priorities. If you don’t yet have senior level sponsorship for your broader outcomes strategy, this should be a priority for your agency.
Understand existing broader outcomes initiatives and learnings
Many agencies have been delivering procurement projects that are helping to achieve broader outcomes. It’s important to have a good understanding of what your agency is already doing to help achieve broader outcomes, and what it’s learned about their delivery so far.
These learnings can help you to:
prioritise broader outcomes for future procurements
make sure you’re not allocating more resources than you need to, and
identify who in your agency has experience with delivering broader outcomes through procurement and use them to help you deliver on future projects.
There are also many cross-government initiatives, which could influence how your agency decides to implement broader outcomes. It’s important to understand how your agency fits into this wider picture and where your risks and opportunities are.
Think about how your agency contributes to wider government priorities, including work on:
Eliminating the public service gender pay gap 2018-2020 Action Plan [PDF, 740 KB]
Part 2: Prioritise broader outcomes initiatives
Carry out an opportunity analysis
Use an opportunity analysis to work out which procurement activities offer the best opportunities to deliver broader outcomes. You’ll need to engage with the market and key stakeholders to do this. Make sure you consider:
Designated contract areas – if your agency has contracts in ‘designated contract’ areas, think about your existing arrangements and the steps you need to take so that you meet the Government Procurement Rules’ minimum requirements for those contracts.
High-spend areas – these usually give agencies more opportunity to leverage the procurement to achieve broader outcomes.
High-influence areas – sometimes agencies are in a position to influence a particular industry. This can create opportunities to use that influence to encourage suppliers or other agencies to help deliver broader outcomes.
Your agency’s priorities – think about your agency’s priorities, and core functions and where there may be opportunities to align your broader outcomes procurement strategy with these.
Market capabilities – consider the markets where suppliers are already capable of delivering on broader outcomes, or alternatively markets where suppliers are less capable (or aware) and what your agency could do to develop their capability to deliver in the future.
Size of procurement activities – the size of procurement activities may create opportunities, for example, you may be able to put in place a category level broader outcomes procurement strategy for smaller and more regular procurement activities.
Prioritise broader outcomes
When you have a good understanding of the different opportunities your agency has to achieve broader outcomes, the next step is to prioritise them. After you identify the minimum requirements you need to apply to your agency’s designated contract areas, you should focus on those areas where your agency can make the biggest difference.
When determining your agency’s priorities, you should consider the government’s priority outcomes areas which are:
Increasing access for New Zealand businesses - identify opportunities for New Zealand suppliers, including Māori, Pasifika, ICT and regional suppliers, to be involved.
Increasing the size and skills of the construction sector – when your agency will be involved in significant construction works, think about how you can partner with suppliers and others to improve construction sector skills and training over the long term.
Lifting health and safety and employment standards - identify contracts where vulnerable New Zealand workers may be involved in the supply chain, and develop a strategy to make sure that primary suppliers meet their health and safety obligations, and comply with employment standards. Agencies must do this for designated contracts, which for health and safety are forestry and construction, and for employment standards are cleaning, security and forestry. But should also consider other areas where low-paid and vulnerable workers may be involved in your supply chain.
Transitioning to a net zero emissions economy – consider the following elements:
Environmental impact – select those products and services that have a high impact on the environment over their life-cycle and address these first, for example fleet vehicles.
Check the market for environmentally-friendly alternatives – analyse the market to determine whether alternative options are available that produce lower emissions or less waste. Check for relevant environmental labels and certifications.
Whole-of-life cost – sustainable procurement can offer significant cost savings, for example through lower energy bills, and reduced spending on unnecessary goods and services. Where there are opportunities to make savings on strategic investments by using sustainable procurement practices, you should prioritise these.
Depending on the objectives and functions of your agency, you may wish to consider a range of other factors when setting your priorities. But it’s important to remember that not every procurement can help deliver every broader outcome.
Align your broader outcomes procurement strategy with your agency’s goals and values
It’s important to check and validate your proposed broader outcomes priorities align with your agency’s goals and values, and are used to inform the objectives for your procurement policy and strategy.
The objectives for your broader outcomes procurement strategy should be specific, measurable, achievable, realistic and timely so that you can measure how you’re tracking against them.
As a quick check, make sure the broader outcomes priorities you set:
reflect your agency’s values, principles, objectives and goals
reflect your agency’s commitment to delivering the best public value
ensure your agency can meet the minimum requirements for the government’s priority outcomes in each of the designated contract areas
align with your organisational policies.
Set out a high-level approach for procurement activities that incorporates broader outcomes
As part of your broader outcomes procurement strategy, you’re encouraged to outline the high-level changes you will make to your procurement approach to help achieve your broader outcomes priorities. This can also be useful for informing changes to procurement policies.
If your agency hasn’t already made changes in the following areas, you may wish to consider:
Involving procurement in your agency’s strategic planning activities – procurement planning starts well ahead of developing a sourcing strategy. When your agency determines strategic priorities, develops budget bids, and programmes and activities, it can have a significant effect on the nature of goods and services it purchases down the line.
Encouraging early engagement with procurement teams – often, once a decision has been made to purchase a product or service it can be highly challenging for procurement teams to incorporate broader outcomes into the process.
Consider the scope of contracts during planning – the planning stage is also where key decisions are made about the scope of contracts. This can determine whether they’re accessible for New Zealand businesses, including Māori and Pasifika businesses, and ICT and regional suppliers.
Part 3: Plan for successful delivery
Determine the best governance arrangements
Good governance is critical to the successful delivery of any strategy – broader outcomes is no different. As part of the developing a broader outcomes procurement strategy, specific governance arrangements for prioritising, delivering, and monitoring broader outcomes should be put in place. These arrangements should take into account your agency’s unique operating environment and both guide the delivery of your strategy, and provide assurance that it’s being delivered.
It’s a good idea to align your governance approach with related organisational structures where they exist.
Make sure you’re clear on the roles and responsibilities of different people and teams in your agency who need to be involved with your broader outcomes procurement strategy. You may wish to do this using a RASCI model, which can help you to identify the roles that are responsible and accountable, can offer support, or need to be consulted or informed.
Some options that agencies may wish to consider in governance are:
Appointing a project sponsor in your Senior Leadership Team to champion delivery of broader outcomes. Having senior leadership support and buy-in will help ensure that your agency delivers tangible change, including outcomes under designated contract areas where immediate change is required to meet the government’s expectations.
Establishing a working group to deliver broader outcomes. Implementing broader outcomes will require strategic planning and change management across the organisation’s activities, balancing competing organisational prioritises. Your working group should include senior advisors as well as procurement officers, contract managers, and budget holders. This working group should identify clear milestones for implementation and support accountability for delivering the programme.
Establishing cross agency working groups or communities of practice, to share lessons learnt and address shared areas of priority. This may include where agencies have a shared interest in achieving broader outcomes for categories of goods or services and want to increase collective influence on their supply chains.
Develop a monitoring and reporting framework
New Zealand Government Procurement and Property (NZGPP) is developing a government-wide reporting framework to help implement broader outcomes, which agencies will be required to contribute to over time. NZGPP will update to agencies as the framework progresses.
While the framework is still under development, your agency should have systems and processes in place to:
monitor your procurement activities
measure your progress against each of the broader outcomes you have prioritised, and
make sure the right people receive reporting about the results.
This could mean providing regular progress reports to a governance board or the senior leadership team. This can be done in standalone reporting, or built into existing reports. This will give them oversight of broader outcomes, identify risks and opportunities as they develop, and help them to make informed decisions about the direction of the strategy.
At a minimum, your agency should have a central register of contracts that can be used to provide a view of your spend.
Putting an action plan in place
When you know what your priorities are, and have a clear idea about what can be done differently, the next step is to put in place an action plan to make sure you can deliver on broader outcomes.
A good action plan should:
include tasks that are Specific, Measureable, Achievable, Realistic, and Timely (SMART)
deliver on your broader outcomes priorities
assign tasks to the relevant roles at your agency
meet minimum requirements for each of the designated contracts areas.
You may also wish to think about having different action plans for the different levels of strategic procurement at your agency. These include:
Agency level – all agencies should have an action plan to help them implement their broader outcomes procurement strategy. The plan should be aligned to your agency's purpose and priorities, and support a consistent approach across all of your programmes and projects. Because agencies must include minimum requirements for incorporating broader outcomes into specific designated contract areas, you’ll need to make sure your action plan ensures these are delivered on.
Category level – if your agency has one or more category strategy, you’re encouraged to develop action plans to implement broader outcomes into them. Action plans should be tailored for the category strategy and align with and contribute to your agency level strategy too.
Programme and project level – depending on the size, length and type of projects and programmes, you may have procurement strategies for these. If so, consider creating action plans to incorporate broader outcomes into these. Action plans should align and contribute to agency and category level strategies.
Contract level – having an action plan at a contract level can help you to set clear performance indicators, and milestones with your suppliers to deliver outcomes. This can be especially important when the supplier’s priorities don’t align with your agency’s, for example if your agency’s plan is to buy and use less to reduce ‘waste,’ it can reduce profit for suppliers. Contractual terms should require suppliers to report on the broader outcomes they have agreed to deliver. This will also make it easier for your agency to track its progress against broader outcomes at an agency level.
Where appropriate, your plans may include working with other agencies. This can increase your influence on the market and encourage innovation through procurement. To make it easier to work together, you may wish to consider setting up working groups with other agencies in your region. You can then use these groups to share lessons learned, good practice, and opportunities to deliver broader outcomes through collaborative procurement.
Monitor and report against your strategy
Agencies should have in place sound procurement practices that enable the agency to monitor implementation of the strategy down to the contract level and identify risks and opportunities as they develop. Reporting should enable governance structures to have appropriate oversight of Broader Outcomes, and make informed decisions about the direction of the strategy.
From time to time, you’ll need to review your strategy and consider if you need to update it to keep up-to-date with emerging risks and opportunities.