Sponsors' goods and services must add value

5 October 2012

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5 October 2012 | Adam Leach

Procurement should ensure deals where goods and services are exchanged for sponsorship rights deliver good value against what could have been procured, according to the head of procurement for the Glasgow 2014 Commonwealth Games.

Speaking at the 2012 CIPS Annual Conference yesterday, David Brown explained that as the man in charge of sourcing all goods and services for the Games, it is important for him to get procurement and sales to work together. He suggested while both professions might sometimes view one another with an air of suspicion, they must work together to deliver a deal that fits both their objectives.

In particular, he highlighted the need to measure what might be provided as part of a sponsorship deal against what would have been purchased through a standard procurement process. “We can't and we shouldn't recognise something if we didn't already have a need for it,” he said.

Using an a deal to provide computers as an example, he said: “If I need a normal business computer to do my work and [a sponsor] wants to up-spec that to a state-of-the-art computer, when I can get one for £250, I can only recognise the value [of that deal, to procurement] at £250. I may take his £1,500 computer if that's how he wants to activate his sponsorship by us using them then that's all fine, but it must be ‘value-added’. So our job is to work with the sales guys and focus their minds.”

The procurement budget of £350 million accounts for more than half of the total budget for the games, so Brown and his team have a big responsibility to deliver good value on a cost basis. But the nature of the games also demands that procurement delivers broader benefits, particularly in the area of sustainability. Brown explained one of the key aims is to ensure local businesses - while not being given an unfair advantage over other EU competitors - are encouraged to compete and made fully aware of the opportunities provided by the games.

He explained it is important his team pick the right contracts to stimulate local engagement with the Games. For example, he said while the contract for precision timing at the Games, will only ever go to a company with the international certification for delivering it, for less specialised items local businesses will be actively encouraged to participate, through online procurement portals.

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