Page 1

Acquisition and Management of Commercial Vehicles London local authori es spend £70M each year on commercial vehicles and associated parts. With the addi on of maintenance and repairs, the total business is valued at about £100M. The report, Acquisi on and Management of Commercial Vehicles – A New Approach for London published in May 2009, iden fied that cashable savings of around 10% could be made from taking a more joined up approach with London authori es: • agreeing core specifica ons for vehicle ranges • introducing three year forward planning schedules for vehicle replacement • brigading their future requirement • deploying collabora ve purchasing arrangements which support a complete range of acquisi on methods (e.g. outright purchase /leasing)

News for the project March 2011

Will Tuckley Chief Execu ve London Borough of Bexley Project Sponsor “… those responsible for fleet management or vehicle opera ons in your borough should pursue the opportuni es for savings by par cipa ng fully in the efforts to agree common specificaons and resource sharing.”

Part 1 of 2 in March for More news and dates

What is this project? Commercial fleet represents a significant expenditure for many local authorities whether run in-house or part of an outsourcing arrangement. It covers the acquisition, management, and disposal of vehicles such as refuse freighters, panel vans and derivatives, sweepers, mini buses and the running of workshops and fleet management. Full details [here] What are the benefits?               

Introduce London-wide procurement for commercial vehicles Core specifications for vehicle types Ability to standardise in product ranges Use of e-Auctions from next generation framework contracts to acquire new fleet More viable units for private sector involvement or the use of shared services Shared workshop facilities and sale of surplus capacity, releasing capital resource Potential for double shifts Vehicle sharing Shared higher standard transport management Help eliminate widespread waste by establishing excellent transport policy Route planning and reduction of dead leg mileage Develop and drive through better data standards to optimise vehicle utilisation Collaboration on fleet associated skills training Options to work cross sector with NHS and Police / Fire and Rescue Draw back revenue and cost from external transport-using contractors

London Local Authorities Commercial Vehicle Survey Transtech Consultancy Services

This report was commissioned by Capital Ambition’s project board for the Acquisition and Management of Commercial Vehicles. Its findings and conclusions are helping to drive the project forward. Here’s some info: All bar two London local authorities took part with over 90% participating fully, showing their commitment to the Project and belief in the outcomes. As a consequence the interpretations which have now been possible have considerable authority. The report contains details of over 5,100 commercial vehicles in the fleets of the 31 London boroughs which responded (an exceptional return). It was estimated that the capital value of directly operated vehicles at current replacement costs is over £200 million. However, if all 33 boroughs took into account the vehicles which are in use on their behalf and over which they have influence then this would mean a total population of over 16,000 vehicles, and the capital value would be in the order of £600 million. The report predicts that each year, based on the very modest savings of 5% that could be expected by standardising and combining purchases of replacement vehicles, on the directly operated vehicles there would be savings of £1 million and on the full 16,000 vehicle fleet this would reduce prices by £3 million. 9 named Boroughs identified as having an imminent replacement demand of 717 vehicles within the next 12 months would spend up to £15.8m. 5% saving on this figure would be almost £800,000. Some of the key findings that emerged from this report were: ● Some councils appear to decide on their own fleet needs without having knowledge of, or taking account of, the most cost-effective methods of acquisition or continuing management. This seems to have resulted in a number of boroughs being unable to identify exactly what they operate, or when or how they either acquired or will replace vehicles. As well as being a probable cause of wasted money, it exposes the council potential significant risk with respect to its statutory obligations for the operation of vehicles and duty of care to its employees. ● There appears to be little evidence for shared fleets or resources across London, even though the scope for this has long been recognised. The close proximity of expensive workshop facilities in the boroughs was demonstrated, and by detailing capacities it was possible to speculate on the viability and benefits for sharing. Much work is presently underway with the boroughs for sharing workshops, operating centres, routes, fleet operation computer systems, etc. These efforts must be supported and encouraged so that the greatest benefit can be obtained from collaboration. ● London local authorities would be replacing up to 600 vehicles including commercial vans, mini-buses and sweepers in 2011/12. These and other vehicles such as refuse freighters lend themselves to standardisation and purchase via e-Auctions. The benefits of this approach are significant and the professional advice that we are receiving suggests that an e-Auction on that scale, as well as offering other forms of efficiency, would reduce unit costs to a level that no individual authority or fleet outsourcing provider would be able to match.

The report is available now [here]

ALTO has been established for more than thirty years as the forum for the senior transport officers from the Boroughs. Transport Officers from the thirty-two London Boroughs and the Corporation of London, together with the GLC and ILEA, created ALTO as a body to share experiences and problems and to pursue common aims. It exercises significant influence over the future of transport in London. The Fleet and Transport managers in the 33 Boroughs have enormously wide responsibilities to ensure that vehicles are available to deliver the essential services, and every service requiring mobility. Depots, fuel, maintenance, repairs, legality, buses, cleansing, congestion‌ These, and more, all come under the purview of ALTO members. No Borough could operate without their professional expertise. ALTO is partnering the project for Acquisition and Management for Commercial Vehicles, its members playing key roles in the support of its development and success. It was ALTO members who provided the extensive data for the exploration and analysis for the fleets of the London Boroughs.

Benefits of using e-auctions

When managed well, e-auctions help to deliver very competitive contracts, which are both commercially sustainable and provide high quality goods and services. Additional benefits from using e-auctions are: Transparency to all parties It is a legally compliant process The process discipline supports high quality procurement execution Suppliers have clear visibility of selection criteria and competitive pricing levels The potential to condition and shape the marketplace.

Can e-auctions work when there are multiple organisations? Yes. E-auctions are being used within government to bring together multiple participants, or stakeholders, who wish to buy similar goods or services. By grouping together they are able to benefit from each other’s skills and experience, go to market with more business and ultimately get a better deal. To cater for specific differences of requirements within a particular category, eauctions will divide goods or services into ‘lots’, allowing the bespoke requirements to be met, whilst still benefiting from being in a grouped e-auction.

Can I withdraw from an e-auction once the procurement has started? Participants can withdraw from the eauction, and in some cases right up to 48 hours before the e-auction is held. The period of time when withdrawals can happen should be agreed by the e-auction team and is the time required to inform the suppliers of any changes in the volumes - as this may have an impact on their bid. Conversely, additional participants can join the eauction. Again, the particular e-auction will determine the time period for ‘late joiners’, often up to 48hrs before the eauction event to allow for suppliers to be fully informed. Joining an e-auction at this late stage means there is no opportunity for the additional participants to alter the specification of what is being procured.

eAuctions for this project are being prepared

Are you joining in?

and all about them

How eAuctions work eAuctions are also referred to as reverse auctions in which suppliers offer progressively lower bids in order to win a contract; these have been used by procurement specialists since 1995. Eauctions are different from conventional tendering processes as they are conducted online and allow bidders to see the most competitive bid, and to re-bid in response. Bidders are all prequalified and quality scores are typically built into the auction process as bid weightings. Bidding may last a few minutes, or many hours.

What does "committed" volume mean? Committed volume is the best estimated forecast of the volume of the good or service that a participant requires. It is important that it is as accurate as possible so that the market has good visibility of likely demand; however during the procurement it is made clear to suppliers that it is a forecast, and so may change.

Phil Keymer – Project Manager  01872 580238     07528 230955  

Best PracƟce Guide on Vehicle AcquisiƟon


Fleet Audits Ltd was appointed by the Project Board to produce this guide as advice and guidance mainly for decision-makers who do not have specific exper se in transport or fleet management. This Guide was developed to support and assist a wide range of public sector/ Local Authority decision-makers in respect of vehicle acquisi on. Vehicles form an important part of the expenditure and func onality of most organisa ons and the range of vehicle types and acquisi on op ons must be considered carefully to op mise expenditure, efficiency and flexibility of opera on. Vehicle use is also an important part of the environmental footprint of an organisa on and careful vehicle selec on is an essen al part of mee ng green and emissions targets. The full guide will be available shortly.

Needy customers for best prac ce acquisi on

A large propor on of London Boroughs have already commi ed their full support to this enterprise. If you haven’t confirmed your par cipa on yet, our Customer Services Representa ves would like to hear from you. Soon.

Phil has extensive transport experience as a senior manager in London Local Authori es and in a range of other industries. His crossover working with partner authori es, legislators and contractors is very broad. For 15 years as Secretary of the Associaon of London Transport Officers he influenced legisla on on CCT and co-wrote the main guidance for the London Boroughs group on vehicle maintenance. He was twice a Council Member for the interna onally renowned Ins tute of Road Transport Engineers. He maintains an extensive network of colleagues in Local Government and in the contrac ng world.

Commercial Vehicles Acquisition and Management - March Pt1  

Newsletter for March 2011 part 1