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NDS Procurement Reform Project Strategic Pricing Discussion Forum in Partnership with Curtin University Not-for-Profit Initiative March 2013. Opening Comments. Welcome and acknowledgements Objective of the discussion: - PowerPoint PPT Presentation
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NDS Procurement Reform Project
Strategic Pricing Discussion Forum
in Partnership with Curtin University Not-for-Profit Initiative
March 2013
Opening Comments• Welcome and acknowledgements• Objective of the discussion:
– As the price-setter, a service provider can no longer look to Government for all the answers, but must make decisions to come up with accurate and sustainable prices for their services.
– This discussion forum is an opportunity for finance representatives and senior management from the disability sector to have a facilitated discussion on some of these key issues and try to reach agreement on the sector's approach to pricing.
Agenda10.10 am Introduction - Professor David Gilchrist, Curtin
University
10.40 am Presentation on Experience of Responding to Professional Services Tender - Brian Chapman, Therapy Focus
10.50 am Questions and Answers
11.00 am Group Discussions - Facilitated by Prof David Gilchrist, Curtin University
11.50 am Summary & Close - Fiona McGaughey
12 noon Finish
Strategic Pricing Discussion Forum
Professor David Gilchrist, Director, Curtin Not-for-profit Initiative
National Disability ServicesWA
Agenda
• Contextual Overview• Issues Thrown Up• Practical, Proportionate Responses
Contextual Overview
1. Individualised Funding Arrangements
2. Attempting to develop a market mechanism for ensuring quality and responsiveness of NFPs providing services
3. NDIS and ongoing uncertainty as to arrangements
4. New Environment – Accounting Consistency
5. What is going to change about your services & client recruitment?
Issues Thrown Up1. Financial Risk
› Costing and Pricing
› Margin Development
› Immature Market Operation
› Lack of skills and experience
› Difficulty in communicating the offer outside of costs for services (e.g. experience, sustainability, track record)
2. Costing Issues
› Relevant Range – Decision Points
› High Risk Clients
› Activity Requirements
Strategic Responses
1. Proportionate Response – Objects and Strategy Priorities
2. Board Reporting Requirements – Re-evaluate the types of information, format and priorities in board reporting
3. Activity delineation – cost recovery and key alarm trigger points
4. Board Engagement – getting to know your business
Strategic Responses - Examples
1. Give some thought to the organisation’s relevant range
2. Ongoing Sustainability – client contribution & high risk clients
3. Client Mix – keeping a lid on service diversity
4. Establish monthly minimum activity levels and report to board
5. Evaluate cost-recovery and likely outturn for financial year
6. Respond quickly when risks show themselves
Decision Making Principals
• Always seek to be consistent in calculations• Start with history and move forward• Seek to establish true cost within the bounds of
usefulness and benefit• Identify your assumptions and let board members know
what they are• Always check for reasonableness and errors / omissions• Always get a second opinion• Focus on the material costs and programs• Get outside advice if you feel uncomfortable about what
you are doing
Decision Making Principals
It is important to remember that we are costing for the future and not the past and that we are costing in order to recover costs based on the expected level of activity
NOT CAPACITY!!
Keys:- Good Information
- Identify key decision points- Respond quickly
- Drive information to board
Experience of Responding to Professional Services Tender -
Brian Chapman– Sustainable organisations– Pricing experience– Include all expenses to provide quality services– Examples
1. Training
2. Superannuation increases
3. Property lease increases
4. Depreciation– Sustainability – Negotiation with funders
Next Steps• Follow-up teleconference with people outside of Perth.• Key discussion points documented and disseminated to
the sector.• Questions within the remit of Disability Services
Commission (DSC) will be forwarded to DSC.
Contact DetailsDavid Gilchrist, Curtin University
Email: [email protected]
Brian Chapman, Therapy Focus
Ph: 9478 9500
Email: [email protected]
Fiona McGaughey, NDS
Ph: 9208 9820
Email: [email protected]
