Newport City Council operates a fleet of around 400 vehicles. The net cost of the fleet in 2006/2007 was nearly £4.5 million.

Until 2004, the Council’s standing orders dictated that when procuring items or services, the supplier offering the lowest price should be selected. This meant that the procurement process focused on cost rather than quality or value for money.

Changes to the Council’s procurement system were also required to ensure greater openness and transparency to comply with European Union (EU) procurement directives in 2006.

Amendments to the Council’s standing orders in 2004 allowed change to the procurement process so that cost was not the only factor to consider when evaluating tenders.

The Council has now developed a scoring matrix which it uses to evaluate tenders and quotes to ensure value for money is obtained. The matrix is used for all procurement decisions including fleet.

The matrix is a spreadsheet which considers factors including price, quality, delivery, after sales support and whether the product or service is fit for purpose.

Details of all the tenders are entered into the spreadsheet and a formula assigns a detailed score to each supplier. The scoring formula is such that it is weighted 60 per cent in favour of cost and 40% in favour of quality.

The matrix ranks the suppliers with the highest scoring supplier being recommended for approval. If there are circumstances that suggest the highest scoring supplier would not provide the best value for money, then the relevant head of service must provide the Cabinet or appropriate Cabinet member with a written report justifying this decision.

The matrix has contributed to the Council complying with changes to EU procurement directives. It has also provided a clear process that is now used across all of the Council’s services.

This process now focuses on value for money rather than just cost. Another benefit of the matrix is that each supplier is assigned a detailed score. This allows unsuccessful suppliers to be given feedback on where they could improve their tenders should they wish to take part in future tender processes.

A recent Internal Audit report concluded that purchasing arrangements within the Council are now robust.

Source: Welsh Audit Office