The impact of procurement departments on university’s spending is well-known. But as Tony Newjem of Heriot-Watt University explains, as well as saving money they can also add value through their work across the university.
How are you as chief procurement officer able to influence the efficiency agenda at Heriot-Watt?
Procurement naturally occupies a central position vis-à-vis the supply market, external funding bodies such as research councils and funding councils, and our internal academic and professional service colleagues, so it is in a position to drive the efficiency agenda.
Procurement services at Heriot-Watt are involved in every aspect of non-pay spend, which does stretch our resources a lot of the time, but does mean there aren’t any significant areas where we don’t add value in terms of cashable savings or non-cash efficiencies, for example, we can take the burden of compliant procurement processes off academics and fellow professional services clients.
We operate as part of the Governance and Legal Services Directorate, which may be less common within the sector but works well for us in terms of positioning for maximum influence and minimum potential for conflicting interests. We enjoy the mutual support of the Project Support Office, Information Governance and Health and Safety within the same directorate.
In recent years I have been responsible for completing the university’s Efficient Government return to the Scottish Funding Council; as well as populating the financial return I have taken the opportunity to include a compendium of case studies of efficiencies across the university, derived from one to one meetings with the directors of administration in the various schools and professional services. This aimed to illustrate a broad range of institutional efficiencies from capital construction, human resources, ICT, finance, for example. I think it was effective as parts of these case histories found their way in successive years into the Universities Scotland Working Smarter reports and updates, which certainly didn’t do the university any harm in terms of reputation as a good steward of public funds.
Finally, my participation in the Procurement Scotland Best Practice Forum and the HEPA Management Board are also very useful in ensuring I keep the wider picture in sight and avoid becoming too introspective.
What are the biggest efficiency challenges at Heriot-Watt?
In terms of challenge I think there is a balance to be struck in terms of delivering on the one hand the increasing demands of government socio-economic policy objectives, for which procurement is seen as a key enabler along with the hard commercial savings required by the institution, especially in times of increased competition for student fee income and reducing central funding. At a national level the current debate over the steel industry illustrates this, where a ‘buy local’ approach is seen as a means of supporting the domestic steel industry, whilst commercially it makes more sense to buy cheaper imports.
The burden of legislation is a huge challenge too. As well as the 2014 EU Procurement Directive and underlying Treaty obligations, we now have:
- The Procurement Reform (Scotland) Act 2014
- Public Contracts (Scotland) Regulations 2015
- Concession Contracts (Scotland) Regulations 2016
- Procurement (Scotland) Regulations 2016
- EU Commission Implementing Regulation 2016/7 (ESPD)
- Various ‘statutory guidance’ notices
All of the greatly increases our workload and detracts from our ability to conduct hard-nosed negotiations with the supply market. And of course, keeping good procurement staff who are in high demand is a constant challenge.
Any successes you’d like to talk about?
Yes, the most obvious recent one for me is our response to an unprecedented capital construction programme which Heriot-Watt embarked on two to three years back. This includes our successful bid to host Oriam, the National Performance Centre for Sport for Scotland, our joint venture with NERC to relocate the British Geological Survey HQ onto our Edinburgh campus, construction of new student residences on-site, plus a space-optimisation programme and other projects potentially worth some £100m.
These projects are all being executed simultaneously and we are involved with appointments for design teams, main contractors, relocation services, sports pitches, elite athlete conditioning equipment, outsourced catering, marketing and PR etc. Oriam alone has generated at least 16 tenders.
From what was a relatively marginal involvement in estates projects we are now fully engaged with the Campus Services Projects Office, and the procurement officers have really stepped up to the plate and built up an expertise with estates-related procurement to allow them to execute these procurements.
Collaborative procurement has been a big driver of savings in universities. Can you talk about what you are doing at Heriot-Watt?
Much of our collaborative effort is handled through our membership of APUC Limited, our sectoral centre of procurement expertise. APUC works very effectively with the Scottish HEIs and Colleges to not only put in place and validate framework agreements for our use, but also act as our link to the wider sector consortia and with the Scottish Government, including the Ministerial Strategy Group – Procurement.
There is some residual inter-institutional collaborative activity on subject matter not worth a full APUC contract, but much less so than previously. We also work with other institutions on collaborative research programmes such as the recent Quantum Hubs and EPSRC 8 Great Technologies programmes, however I feel that there is a missed opportunity to aggregate and co-ordinate the procurement of high-value research equipment associated with such programmes.
In years gone by, when the Research Equipment Affinity Group was in-being, there were cohorts formed to deal with large formulaic funding tranches such as the Strategic Equipment Initiative. These worked well, even though dependent upon individuals taking on additional work.
One piece of work that I enjoyed particularly was the High Performance Computing framework agreement I put in place in 2005 through which a lot of business was pushed: some 30-odd lots for nearly as many institutions, and with great involvement from Martyn Spence’s team at Daresbury Laboratory and also from Paul Calleja at Cambridge.
How do you balance the ‘business as usual’ with planning for the future?
We are constrained in how much we can plan for the future, and tend to be more reactive when dealing with the many short-notice projects that arrive, for example procurements stemming from research grant awards. However, we do work closely with the Campus Projects Office on the known pipeline of projects and try to ensure procurement resource is built into the business cases.
What do you like to do outside your role?
When I get the time, reading and hill-walking. I’m an Elder and Depute Session Clerk in the Parish Church of St. Cuthbert in Edinburgh, and that takes up a lot of my time too.
Tony Newjem is the chief procurement officer at the Heriot-Watt University Group.
