Procurement Strategy

Once you have developed your fleet management strategy, the second stage of the lifecycle involves procuring your fleet.

Procurement processes must consider more than just the vehicles. They must also include tyres, fuel, insurance, chassis and parts as well as support services such as maintenance provision, breakdown, recovery and vehicle hire.

Before procuring anything, you should carry out an evaluation of the items you intend to procure to ensure you end up with the appropriate vehicles, parts and services. This evaluation is an ideal opportunity to involve users whose knowledge and views will contribute to more effective procurement.

It is critical to consider all options when financing your fleet. You need to know exactly what the fleet will cost your organisation throughout the vehicle’s life and you should look into jointly procuring with other organisations to secure economies of scale and more favourable terms.

User involvement in procurement

Why should vehicle evaluation take place based on the views of drivers and users?
You should evaluate vehicles to ensure that they are fit for purpose. This may include testing demonstrator vehicles or visiting suppliers to see mock ups of vehicle interiors. The views of users can also be used in a cost-benefit analysis which may form part of a business case for new vehicles. Vehicle evaluation forms can provide important feedback and the wider views of users may be obtained from user groups.

Benchmarking against other organisations provides useful information on the types of vehicles being used or particular manufacturers. The internet is also a useful place to find information on vehicle reviews.

What problems may arise if users are not involved?
If users are not involved and vehicles are selected in isolation, the vehicles may be over specified and cost more to operate. Alternatively the vehicles may be underspecified and not adequate for the service need or laid out incorrectly and require expensive modifications.

Users will be more accepting of new vehicles if they have been consulted and involved in the procurement process.

Staff Development and Engagement

How can you ensure procurement is carried out by the right team?
Procurement should be a team effort between the fleet manager and procurement staff and should include the views of the staff that use the fleet.

Finance staff with specific accountancy skills should also be involved and for significant procurement exercises a project manager should be appointed.

For specialist fleets such as ambulances, the procurement of vehicles and equipment should be managed by a single project team.

Efficiencies

What procurement and financing arrangements should be considered?
You should consider all options when financing your fleet including lease, purchase and hire. There is a danger that some organisations will base their financing on historical arrangements but previous arrangements may no longer be the best option.

It is important that budgets are calculated and challenged rather than just incrementally adjusted each year.

What factors need to be considered in a robust cost calculation?
Whole-life costings should be calculated to ensure you understand the true total cost of a vehicle throughout its operational life. These costs include things like maintenance, fuel and tyres which can vary considerably between different types of vehicles. Up-front discounts from suppliers may look attractive but they do not provide an indication of future vehicle costs.

It is also important to consider what the residual value of the vehicle is likely to be at the end of its life.

What sort of tendering arrangements should be used?
The tendering process should be in line with contract standing orders and EU Regulations. Value Wales contracts comply with EU Regulations and aim to ensure maximum value for money.

Partnerships

Why should central contracts be considered?
Procuring through the use of central contracts can save time and money. This process involves one organisation leading negotiations to procure a certain item or service on behalf of a group of organisations.

Procurement efficiencies may also be obtained by volume negotiated agreements.

What sort of central contracts are in place?
Contracts are in place via the Value Wales framework for leased vehicles, tyres, fuel, chassis and parts.

Other bodies which may be useful are:
•National Police Improvement Agency (NPIA);
•Office of Government Commerce (OGC); and
•Blue Light – Emergency Services e-tendering.

How can professional organisations help with partnership working?
Professional organisations may have their own resources such as a website where good practice ideas and case studies can be shared.

Such professional organisations include the Freight Transport Association (FTA), Road Haulage Association (RHA) and Institute of Road Transport Engineers (IRTE).

See Fleet Strategy
See Procurement Strategy and our Funding and Leasing section
See Maintenance Strategy
See Strategy for Running your Fleet and Running Costs Calculator
See Disposal Strategy and Auctions and Disposals in our Remarketing Section