Supplier management sparks savings at Ofgem

13 August 2010

13 August 2010 | Angeline Albert

The procurement team at gas and electricity watchdog Ofgem has saved over £1 million in the past financial year.

Staff training and supplier management have been central to these savings, according to head of procurement Geoff Hopper. This has included monthly reviews of all supplier contracts under negotiation and an assessment of the team’s skills.

Hopper said he addressed the team’s inability to challenge suppliers over bid submissions and poor communication regarding rates. Frameworks were tendered with only maximum rates and suppliers ended up submitting these rates, he said. “Bidders were submitting more than they needed to. There was an element of naivety and lack of focus on value-for-money savings.”

Under Hopper’s direction, the team began opening up communication channels with the business. Hopper said this prevented the over-specification of requirements which had previously resulted in scope creep of projects.

Instead of allowing suppliers to have a daily rate plus a ceiling cap for expenses, the team now sets suppliers a daily rate that includes all expenses.

Ofgem achieved CIPS certification in March this year. In doing so it became the first UK regulatory body to be awarded the standard.

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