1. Procurement in Utrecht Social return on investment Olaf Verschoor – tactical buyer 13 November 2013

4. Organization City of Utrecht 4000 employees in multiple organisations Major reorganisation in progress, More focus on Utrecht as 1 council / organisation instead of different organisations Cost saving is important. Reducing number of employees. Library, museum, concert hall, theatre no longer part of municipality Impact on procurement department and procurement function. Procurement function is moving from a decentralized function to an organisation with integrated management Installation of TenderBoard Implementation of procurement ICT (electronic tendering, transactional buying).

5. In numbers Procurement spend ~€ 550.000.000 Total budget Utrecht ~ € 1.500.000.000 Approx. 12.000 different suppliers Top 500 suppliers spend € 400.000.000 Bottom 10.000 suppliers € 14.000.000 Approx. 175.000 invoices Via Procurement department Approx. 100 European tenders per year 50/50 public works / supply & services

6. Timeline Start ‘Tender bureau Utrecht’ 1999 Erected in order to comply with EU regulations Only involved for projects above threshold Reactive, following demands and input internal client Not have an eye for Corporate Social Responsibility (CSR) aspects.

7. Timeline Start ‘Tender bureau Utrecht’ 1999 Erected in order to comply with EU regulations Only involved for projects above threshold Reactive, following demands and input internal client Not have an eye for Corporate Social Responsibility (CSR) aspects. 2007 ‘Tender bureau Utrecht’ Compliance to EU regulations no longer seen as an big issue Only involved for projects above threshold Mainly following internal customers demand. Moving towards a roll based on equality, providing procurement advise. CSR aspects become relevant because of increased political and social awareness

8. Timeline Start ‘Tender bureau Utrecht’ 1999 Erected in order to comply with EU regulations Only involved for projects above threshold Reactive, following demands and input internal client Not have an eye for Corporate Social Responsibility (CSR) aspects. 2007 ‘Tender bureau Utrecht’ Compliance to EU regulations no longer seen as an big issue Only involved for projects above threshold Mainly following internal customers demand. Moving towards a roll based on equality, providing procurement advise. CSR aspects become relevant because of increased political and social awareness 2008 Concerninkoop (corporate procurement) Contract management becomes integrated part of procurement department Only involved for projects above threshold Moving to a more pro-active role. Identifying similar needs across the organisation Standard CSR aspects integrated in processes and tender templates

9. Timeline Start ‘Tender bureau Utrecht’ 1999 Erected in order to comply with EU regulations Only involved for projects above threshold Reactive, following demands and input internal client Not have an eye for Corporate Social Responsibility (CSR) aspects. 2007 ‘Tender bureau Utrecht’ Compliance to EU regulations no longer seen as an big issue Only involved for projects above threshold Mainly following internal customers demand. Moving towards a roll based on equality, providing procurement advise. CSR aspects become relevant because of increased political and social awareness 2008 Concerninkoop (corporate procurement) Contract management becomes integrated part of procurement department Only involved for projects above threshold Moving to a more pro-active role. Identifying similar needs across the organisation Standard CSR aspects integrated in processes and tender templates Concerninkoop Procurement is fully integrated in organisation Provide guidelines, processes and templates for all purchases (also below threshold) Standard CSR aspects integrated in processes and tender templates. ‘Better than the market’ if possible Expert advise on sustainability, social return and stimulating local economy is integrated in processes. Functioning Tender Board and insight via procurement calendar 2013

10. Strategic role Development procurement policy Focus on achieving political goals (sustainability, stimulating local economy, social return on investment). Efficiency, cost reduction Aligned with new Dutch National Procurement Act ‘Creating Social Value’ Introduction of Product Groups (e.g. Facilities, Public works, Building of public utilities) Introduction of Product Group Owners (PGE) Product groups owners are in charge of ‘their’ product / service, even if they are not the budget owner. Development of specific Product Group (PG) procurement strategy PG’s are divided in segments (~50 segments, e.g: catering, cleaning, security). Segment plans are joined together in PG plans -> PG strategy Developed with procurement, specialists and finance. PG strategy can deviate from Utrecht procurement strategy, approval must be given by Tenderboard. All future tenders in a PG and underlying segments are in line with general and PG procurement strategy All strategies follows yearly ‘plan, do, check, act circle’ -> providing insight in procurement needs in the future

11. Product group organization Tender Board CT Product group owner Main Expert Strategic / tactical buyer Opdracht Reporting ST Buyers Specialists Segmentmanagers

12. Strategic role Development procurement policy Efficiency, cost reduction. Focus on achieving political goals (sustainability, stimulating local economy, social return on investment) Aligned with new Dutch National Procurement Act ‘Creating Social Value’ Introduction of product groups (e.g. Facilities, Public works, Building of public utilities) Introduction of Product Group Owners (PGE) Product groups owners are in charge of ‘their’ product / service, even if they are not the budget owner. Development of specific Product Group (PG) procurement strategy PG’s are divided in segments (~50 segments, for example: catering, cleaning, security). Segment plans are joined together in PG plans -> PG strategy Developed with procurement, specialists and finance. PG strategy can deviate from Utrecht procurement strategy, approval must be given by Tenderboard. All future tenders in a PG and underlying segments are in line with general and PG procurement strategy All strategies follows yearly ‘plan, do, check, act circle’ -> providing insight in procurement needs in the future

13. The process Tenders Other: - Fairtrade - Open source software - Etc. Green procurementPG Business requirements Social return opportunities Stimulating local economy

14. Office cleaning Focus on Social Return, weight 40% Price weight for 20% Construction / infra / green Standard 5% or 7% social return on labour costs Office furniture Collected ideas during tender process. Detailed program made after contract was awarded Textile collection (recycling) Number of SR hours Social return is always tailor made. Good insight in skills is required to fulfil demands of the market E.g. certification -> municipality offers course Close co-operation between social services and procurement Experiment! Examples and key-learning's

15. Results Sector20122013 Infrastructure1088 Construction8835 Green9349 Medical / Social support 131202 Cleaning761 Business services 016 Security113 TOTAL328464