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FPA provided a specialism and an insight that the Council could not resource internally, and provided a useful tool for moving the procurement of energy forward in line with strategic objectives. Their service was professional and efficient.

 

Chris Damri, Interim Asset Manager

ENERGY PROCUREMENT REVIEW

Basildon borough is located in the South of Essex, just 30 miles east of London. It covers an area of some 42.5 square miles and is home to a resident population of approximately 174,500 people.

The local economy has a business base that focuses on manufactured exports, provides 70,000 jobs and represents about 25% of the Essex economy.

 

Review Objectives

  • A comprehensive and cohesive independent picture of their current energy procurement practices
  • Recommendations for procurement process improvements
  • Highlight any potential areas to minimise their energy spend

 

Detailed Requirements

Basildon Borough Council (BBC) engaged FPA Consulting Ltd (FPA) to undertake a review of its current processes and practices for the procurement of its Electricity and Gas supply arrangements. The aim of the review being to determine whether its current contracting strategy was achieving best value for money through the existing service provision with the Government Procurement Service (GPS).  Dependent upon the outcome of the review FPA were then required to make recommendations as to the way forward.

 

Adopted Approach

Following discussions with BBC the following 4 stage approach was adopted:

Stage 1

FPA undertook a number of discussions with relevant staff, identified by BBC, who have a direct involvement with both the procurement of and ongoing management of Electricity and Gas in order to:

-        Determine the “as-is” position;

-        Obtain a detailed understanding of the internal procedures and departmental interfaces currently being adopted;

-        Understand the role of GPS within the current procurement process;

-        Obtain requisite information, documentation and data to review.

 

Stage 2

An extensive Gap Analysis, on the information, documentation and data received, was then undertaken to determine, and fill, any gaps.

 

Stage 3

A detailed and in-depth analysis was then undertaken of historical contract rates paid for both electricity and gas during the period April 2010 to April 2013. The outputs from this exercise were then used to undertake a comparison of the prices paid against historical wholesale price movements for the same period to highlight any potential lost opportunities resulting from the strategy currently being adopted.

The validation processes currently being adopted for Electricity and Gas invoices were also reviewed in-order to determine both its robustness and the interfaces between the relevant internal departments that are directly involved in the authorisation process and the collation of site data i.e. Consumptions, Meter Reads etc.

 

Stage 4

Production of a detailed report of findings and conclusions together with recommended opportunities for improvements.

 

Benefits to BBC

The key benefit to BBC through the adoption of this review was that it now had a report providing a comprehensive and cohesive picture of the current practices and procedures being adopted, both internally and externally, with respect to the management of its Electricity and Gas supply portfolio.

 

The outputs from the review provided BBC with an excellent platform to consider its future direction for both the procurement strategy and the management of its Electricity and Gas supplies.

 

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