Collaborative Procurement Program for Newfoundland and Labrador

Topics: Procurement, Higher education in Newfoundland and Labrador, Cost Pages: 10 (1683 words) Published: April 18, 2015


Collaborative Procurement Program for Newfoundland and Labrador

Table of Contents
Executive Summary -------------------------------------------------------------------------------------------------- 3 Issues Identification ------------------------------------------------------------------------------------------------- 4 Environmental and Root Cause Analysis ----------------------------------------------------------------------- 5 Alternatives ------------------------------------------------------------------------------------------------------------ 6 Recommendations --------------------------------------------------------------------------------------------------- 7 Implementation Plan ------------------------------------------------------------------------------------------------ 8 Monitor and Control ------------------------------------------------------------------------------------------------ 9 Reference ------------------------------------------------------------------------------------------------------------- 10 Appendix 1 ----------------------------------------------------------------------------------------------------------- 10

Executive Summary
The Ministry of Education has requested to develop a collaborative procurement process for the post-secondary education partners in Newfoundland and Labrador. There are two post-secondary education partners in Newfoundland and Labrador: Memorial University of Newfoundland (MUN) and The College of the North Atlantic (CNA). MUN has 3 campuses across the province and CNA has 17 campus locations throughout Newfoundland and Labrador. The Ministry expects budget cuts in government grants and is considering develop a collaborative procurement program to reduce costs (Appendix 1). However, there are several issues: both institutions’ procurement teams do not have experience in collaborative procurement, longer lead time due to distance can increase the lead time and cost, lack of measurements in collaborative procurement, and limited products/service from vendors. With these possible issues, 4 alternatives have been proposed: focus on the improvement of the current process without proceeding a collaborative procurement program; use a collaborative model for cooperative purchases, hire a third party and use a ‘piggybacking’ model for the collaborative procurement program. After reviewing pros and cons of each alternative, the recommendations are to use a collaborative model for low value products which can be implemented in a short-term and can reduce operating costs through volume leverage. If the collaborative model successful, expand the collaborative procurement program by hiring a third party to buy capital intensive products.

Issues Identifications
There are several issues when consider to develop a collaborative procurement process. Lack of knowledge in collaborative procurement: both institutions do not have experience in cooperative procurement. The process to build a collaborative strategy and policy that reflect both institutions’ interests will be very time consuming. Distance between campuses and vendors (warehouse locations): MUN’s and CNA’s campuses are spread out across the province. The longer distance can increase the delivery cost and lead time for some campuses as they will receive products from vendors that are located far from their locations. Setting a focal location for a collaborative procurement team: there are only two public post-secondary education partners in Newfoundland and Labrador. However, MUN’s and CNA's campus are located in across the province, they have Corner Brook as common location for their sub-campuses. Limited choices on products/service for larger volumes: the collaborative procurement program can lower the unit cost by getting volume discounts with larger volumes. However, having a larger volume puts a limit on choice of materials/services, because vendors may not offer customization...
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