Corporate report

LLWR SME Action Plan March 2019

Published 1 April 2019

1. Introduction

LLW Repository Ltd (LLWR) operates under contract with the Nuclear Decommissioning Authority (NDA) to manage and operate the National Low Level Waste Repository site and also implement and manage the National LLW Programme to deliver the National LLW Strategy.

As a publicly funded organisation, LLWR shares the NDA, Department for Business, Energy & Industrial Strategy and UK Government mission to promote spend with Small and Medium-sized Enterprises (SMEs). Most SMEs are private sector businesses, but the definition also includes many voluntary, community and social enterprise (VCSE) organisations. LLWR and the NDA apply the European Commission’s definition of an SME, which defines it as an entity engaged in economic activity that:

• employs fewer than 250 people; and
• has annual turnover less than or equal to 50 million euros (£39 million); or
• has a balance sheet total of less than or equal to 43 million euros (£33 million).

LLWR believes that SMEs are a vital part of the supply chain network, offering flexibility, innovative approaches, and value for money through lower overheads. As a result of our previous efforts and actions described within this plan, we hope that more SMEs will bid for our contracts, thus increasing competition for work and leading to better value for public money. LLWR also believes that increasing opportunities for SMEs will improve the overall capability and capacity of our supply chain.

In order to support the Government SME agenda, the NDA has committed to a goal of 33% of direct and indirect supply chain spend being with SMEs by the year 2020. This SME Action Plan details the actions LLWR is taking, to help achieve this goal. It includes target dates, status and expected outcomes for each action. This plan has been updated to include the progress already made against our plan, including those objectives already embedded into Business as Usual (BaU) activities.

2. Status Update on Previous versions of the SME Action Plan

This latest update of the LLWR SME Action Plan builds on the 2016 plan. Previous actions completed have provided us with the following benefits:

• Stronger links with SMEs evidenced in the number of ‘Operational’ level contracts being won.
• Supply chain contact and dialogue maintained via regular interaction with British Energy Coast Business Cluster and wider SME community.
• A more robust method of reporting on SME spend to capture a greater percentage.
• An increase in SME spend, on average over the previous three years of business.

Many of these actions delivered previously aligned with the NDA Supply Chain SME Procurement Action Plan 2014 and are now part of ‘business as usual’ activities within LLWR. Our plan identifies more targeted actions that aim to deliver the increased targets over the next contract period.

3. Actions from Previous SME Plans Embedded into Business as Usual

The following list summarises the activities now performed as a matter of course and which we will continue to do whilst beneficial.

• Participation in regular dialogue with the SME community through the British Energy Coast Business Cluster member meetings (monthly) and British Energy Coast Business Cluster sector group meetings (quarterly). In the latter, we provide an update to the members on the latest commercial opportunities within the LLWR;
• We have completed an Overarching Acquisition Strategy showing how we intended to structure our supply chain arrangements and will be updating this over the forthcoming year.
• Outward facing communications have been improved, with the publication of a standardised Procurement Pipeline (consistent with the rest of the NDA Site Licence Companies).
• Tracking of SME involvement in LLWR procurement opportunities has been embedded as BaU.
• The monitoring and reporting of LLWR’s supplier payment performance is completed monthly.
• Supplier engagement prior to a tender process has been strengthened, with a Lean Sourcing approach becoming the standard. This allows SMEs to be better informed and to provide informal feedback to LLWR prior to the finalisation of the procurement strategy.
• The use of Contracts Finder is now mandatory.
• SME targets and the delivery of an SME action plan are now cascaded through our formal contracting arrangement with Tier 2 suppliers.
• Direct communications with local SMEs on upcoming tender opportunities is carried out on LLWR’s behalf by the Britain’s Energy Coast Business Cluster.
• LLWR attendance at ‘Meet the buyer’ events to advertise opportunities and to engage with SMEs has been formally included as part of our contracted scope.
• A ‘Meet the supplier’ event was been held as part of our Engineering, Design and Construction Framework supplier mobilisation, and we plan to include this in any future relevant contract mobilisations.
• We have embedded the requirement within our procurement process to consider lotting structures, to take consideration of the extent to which they could support SME targets.
• Our Contract Management procedures require SME spend as a specific item on contract review meeting agendas with our major Tier 1 suppliers.
• LLWR are actively engaged with the NDA Shared Services Alliance improvement programmes which aim to simplify and streamline a number of the supplier engagement processes. These include:
• The use of the eTendering software ‘Complete Tender Management’ consistently across the NDA Site Licence Companies to reduce tendering costs for SMEs.
• Standardisation of contract terms to reduce the amount of time required to review requirements.
• Standardisation of tender documentation to reduce the amount of time required to respond to an invitation to tender.
• The use of proportionate and consistent insurance requirements.

4. Future SME Targets and Actions

During 2017/18, LLWR’s direct spend with SMEs was £14.5 million (representing approximately 26% of the overall direct spend) and an indirect SME spend, via our prime contractors, of £5.8 million. In total LLWR achieved an overall figure of 35% of spend through SMEs, which exceeded our FY2017/18 target of 25.5–29%. The targets for the current and next financial years, as set by the NDA are:

• FY2018/19 – 29-31%
• FY2019/20 – 33%

During FY2017/18, LLWR worked with over 250 suppliers, of which 124 were SMEs. We believe that this plan is about much more than achieving numerical targets. We aim to change our culture and sourcing approach to create an environment where SMEs can continue to be a vital part of our supply chain, delivering value, flexibility and innovation. As such, our focus will be on a number of actions that support the following themes, which we have found are mirrored in other Government Departments:

• Increasing ease of SME engagement with LLWR;
• Usage of SME-friendly procurement practices; and,
• Ensuring SME targets are flowed down to Tier 2 contractors.

1. Improve ease of engagement with SMEs

Action detail	Target Date	Expected Outcome
1.1 Undertake more focussed interrogation of the spend data gathered in order to clarify and improve understanding of total supply chain spend, SME spend and the categorisation of spend. Consider developing a SME ‘heat map’ to highlight clusters of SME across the LLWR Supply Network	June 2019	Establish and maintain a greater understanding of the overall supply chain spend, to identify those areas (current and future) that could potentially be delivered by SMEs.
1.2 Within the data collated in 1.1, highlight the SME spend that is likely to be ‘repeat’ spend for the next 3 Financial Years.	September 2019	Identifying ‘repeat’ SME spend, would allow LLWR to understand how potentially volatile the SME spend percentages may be over the medium term.
1.3 Map out the historical SME supply chain and the associated contracting vehicles through which they were engaged.	June 2019	Identifying lower value/transactional spend with SMEs that will allow LLWR the opportunity of planning for ad-hoc repeated requirements. This will also provide SMEs and Micro-enterprises the visibility to know where to engage for subcontracting opportunities.
1.4 Review LLWR 2018-2023 Life Time Plan and update Procurement Pipeline, highlighting those areas which may attract a high degree of supply chain collaboration or subcontracting.	June 2019	Improved accuracy of pipeline and better visibility of opportunities for SMEs.

2. SME - friendly procurement practices

Action detail	Target Date	Expected Outcome
2.1 Review tender guidance relating to contractor insurance requirements and liability provisions to ensure proportionality to their risk and value.	December 2019	More appropriate terms and conditions leading to increased SME participation.
2.2 Trial the use of an SME weighting in sub-OJEU procurements to improve the tender scores of SMEs	December 2019	Increased SME participation and a subsequently more competitive tender.

3. Relationship with Prime Contractors

Action detail	Target Date	Expected Outcome
3.1 Embed the requirement for “Meet the Contractor” events with our major contractors.	March 2020	Improve the focus on SMEs with our major suppliers, and better inform the SME community of future subcontracting opportunities.
3.2 Embed the requirement for SME spend discussion as part of Contract Management Terms of Reference.	June 2019	Ensure focus on the achievements of SME targets or associated improvement action plans.

5. Targeted Procurement Opportunities – FY2019/20

LLWR aim to achieve greater SME involvement on the following procurements listed on the current LLWR Procurement Pipeline:

• Waste Treatment Services
• Business Services Marketplace 2
• Engineering, Design and Construction