PC Procurement

1) The Legal Position

EU legislation requires at any organisation purchasing items of equipment with a value in excess of £160,000 per annum must undertake such procurement through an EU Tender.

The value at which EU tendering must be undertaken is the aggregated value of each similar item of equipment over the financial year and across the organisation. Aggregation at departmental level to avoid exceeding the EU tender limit is not permitted.

2) LJMU Requirements

LJMU purchases PCs to an annual value well in excess of the EU tender limit. The purchasing patterns are random, ranging each year from several hundreds of systems from Capital funds through to ad hoc purchasing of single systems from revenue budgets. Although there is in general one, or at most two, large Capital procurements in any year, revenue purchases occur throughout the year. It is only by the end of each year that the total number of PC systems purchased over that year is known. Frequently, time-scales between the decision to purchase and the required availability of the PC is very short.

Any form of tendering, no matter how simple, adds several weeks to the procurement process.

EC tendering requires:

  1. the preparation of a formal specification of requirements (tender document)
  2. the placement of an advertisement in the EC Journal
  3. issue of the tender document to potential suppliers, on request
  4. formal receipt of the tenders on the tender closing date
  5. formal evaluation of the tenders against published criteria
  6. award of contract to supply

and typically takes three to four months from start to finish.

The PC procurement process must not only fulfil the legal obligations for open EC tendering but at the same meet the University's requirement for:

  1. indeterminate volumes
  2. ad hoc demands
  3. continuity of supply
  4. variance in specifications
  5. competitive pricing
  6. avoidance of supplier "lock-in"
  7. service and support
  8. invoicing and delivery methods

3) Procurement Methodology

On behalf of the University, CIS, in conjunction with Financial Services, undertake the EC tendering process for the supply of PCs to the University.

The objective of the tendering process is to select a small number of companies, typically three, who will become "Authorised PC Suppliers" to the University. The contract with these suppliers is valid for a maximum period of three years before re-tendering must be undertaken. The first such tender undertaken by LJMU was in 1995, the current contract was awarded early in 2000.

Having selected the authorised suppliers for the University, there are no restrictions or external regulations that govern the orders that are placed with these suppliers. Thus for any purchase

  • there is no limit to the size of the order
  • the order may be placed with any one of the suppliers
  • competitive quotes can be obtained from the suppliers to drive down prices
  • suppliers who have failed to fulfil supply or service agreements can be "suspended"
  • there is no obligation to purchase from a particular supplier just because they are cheapest

4) Supplier Evaluation and Selection

The selection of the University's Authorised Suppliers for PCs is obviously an important and critical process. The tender document does not specify the number of systems that will be purchased, nor does it detail the specification, but focuses on the suppliers ability to provide the overall service required by the University - the actual price of a system is just one of many factors taken into account.

The evaluation covers a number of different areas including:

  1. The financial health, size and stability of the company, e.g.:
    will it still be trading in 18 months?
    does it have sufficient capacity to supply large volumes of PCs in short time-scales?
    what other comparable organisations does it supply?
    what do these organisations feel about the service they are getting?
  2. The reliability, stability, upgrade-ability, compatibility, maintainability and suitability of the suppliers systems.
    A detailed analysis of how the systems are constructed and what components are used is undertaken - approximately 75 different factors are considered to determine this.
  3. The ability / willingness to meet specific delivery requirements, e.g.:
    disks partitioned to LJMU specification
    LJMU software sets pre-installed
    serial number and ethernet address information supplied to PLN prior to delivery
    LJMU specific documentation included with each system

    on-site engineer support for large installations
    removal of packaging for large installations
  4. The ability / willingness to provide technical services, e.g.:
    prior notification of any component or module changes
    full documentation of component level revisions
    provision of evaluation units, on request, throughout contract
  5. The quality and methodology of the maintenance and support services, e.g.:
    warrantee periods
    on-site repair
    response times
    repair times
    call handling procedures
    escalation procedures
    system replacement criteria
  6. System Costs, including:
    Worst case maximum cost for 6 month period of various configurations
    Upgrade costs (memory, processor speed, monitor size, etc.)
    Component costs
    Quantity discounts
    Personal purchases by staff or students available at same cost?
  7. Conformance with all EC & UK Health & Safety and Environmental regulations

On the basis of the above evaluation a short-list of suppliers is drawn up who are then required to provide the University with systems for evaluation. In this final stage, build quality, performance and other factors not apparent from the documentation are considered. A final selection of up to three suppliers is then made.

In the last tendering process:

24 companies requested copies of the tender
16 responded by the tender deadline, and were subsequently evaluated
7 of these suppliers were short-listed
3 suppliers were finally appointed as Authorised LJMU Suppliers

5) On-Going Monitoring and Evaluation

PLN continuously monitors the performance of the suppliers, e.g.:

are systems being delivered on time
what are the "dead-on-arrival" rates
how reliable are the systems
how good is the repair service

When it is felt that a supplier is falling below acceptable levels of performance they are "suspended"; that is, no further orders are placed with that supplier until outstanding issues are satisfactorily rectified.

Whenever the specification of systems is about to be changed (e.g. a different motherboard, or processor specification) machines are obtained, on loan, for evaluation before any purchases are made. Thus we can ensure that when a system is purchased on behalf of a user it will actually work as expected.

By acting as a central agency through which all PC purchases are channelled, PLN is able, through its on-going monitoring and evaluation processes, to avoid a number of problems which would otherwise occur and also ensure that the University's suppliers maintain satisfactory levels of service.

6) Items to Note

  1. EC regulations require that all PC systems purchased by the University have been procured via an appropriate EC tendering process.
  2. The University complies with this regulation by selecting Authorised PC Suppliers via EC tender.
  3. Under EC regulations, PCs may ONLY be purchased from the University's Authorised suppliers.

It is not uncommon for departmental technicians to claim that they can get a better / faster / cheaper PC from elsewhere, rather than from "PLN".

Regardless or not of whether this is true, it is totally irrelevant. The University cannot consider purchasing from other than its appointed suppliers unless it decides to undertake a (lengthy and costly) re-tendering exercise.

It must be remembered that all companies have an equal opportunity under EC tender to be considered as University suppliers. If they are not one of the University's Authorised suppliers then this will be for one or more of the following reasons:

    1. they chose not respond to the University's invitation to tender
    2. they failed to satisfy the University as to their financial stability
    3. they were given unsatisfactory references from companies to whom they have supplied systems
    4. their systems were found to be technically inferior to those of other suppliers
    5. the build quality of their systems was inferior
    6. they did not have adequate technical support services
    7. they were unable or unwilling to comply with the University's delivery requirements
    8. their post-sales maintenance and support services were deficient
    9. the systems or their components were not competitively priced

Note: On those occasions when such claims of "faster / better / cheaper" have been examined, they have not stood up to scrutiny. In general comparisons have been shown not to be "like-for-like".

Kevin Walsh, Planning and Information, Aug 2000

Page last modified by Unknown on 11 August 2011.
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