Business procurement
Procurement Strategy for North Devon
This Strategy is written in the context of the Council’s commitments to its community.
These are –
Procurement Strategy for North Devon
This Strategy is written in the context of the Council’s commitments to its community.
These are –
- To provide community leadership by speaking for our communities and engaging with our public, private and community sector partners, to promote local economic well being, social justice and social inclusion.
- To secure value in the provision of services and to provide redress where our published standards are not met.
- To engage with local people and our partners in broadening and deepening democracy.
- To continue to review the way we conduct our business in order to make it more accessible, responsive, effective and attractive.
- To maintain the highest standards of probity in the conduct of our business.
Current Position
The Council has already demonstrated a commitment to working with public and private sector partners to deliver services.
A number of the most significant services are provided directly by the private sector, including –
- Grounds Maintenance
- Dog Warden Service
- Internal Audit Services
- Building Maintenance
- Building Cleaning (part)
- Facilities Management for North Devon Leisure Centre and Ilfracombe Pool
In addition, there are active partnerships designed to delivery focussed cost effective services to local communities. These include –
- North Devon Theatres’ Trust – private Trust charged with the direct management of the Queens Theatre, Barnstaple and The Landmark, Ilfracombe together with significant input to the North Devon Festival and the North Devon Cultural Strategy.
- North Devon Marketing Bureau – a private Trust charged with tourism marketing and development for Northern Devon.
- Ilfracombe Community Alliance – a local community steering group designed to work up and lead an action plan for Ilfracombe community regeneration.
- South Molton Community Alliance – a steering group to manage and co-ordinate opportunities for South Molton.
- Lyn Community Development Trust – a steering group developing projects to protect and enhance economic stability.
- Lynton Agency – management of District services at community level via the Town Council.
Smaller contracts are often let for specific assistance to services
to bring in new ideas as well as supplementing resource levels. Both the Legal service and Personnel
service have benefited from this recently.
Even those services currently run ‘in house’ are subject to assessment to ensure value for money for local ratepayers. Three major areas, Revenues collection, Benefits services and Refuse collection have all be subject to competitive tendering exercises to ensure cost effective service provision.
Of the estimated General Revenue Account budget of £14.5m (2003/2004) the following items can be identified which demonstrate the commitments to cost effective, community based services supplied by external providers –
Even those services currently run ‘in house’ are subject to assessment to ensure value for money for local ratepayers. Three major areas, Revenues collection, Benefits services and Refuse collection have all be subject to competitive tendering exercises to ensure cost effective service provision.
Of the estimated General Revenue Account budget of £14.5m (2003/2004) the following items can be identified which demonstrate the commitments to cost effective, community based services supplied by external providers –
- £2m worth of buildings and land related costs.
- £1.6m of transport related costs.
- Supplies and services brought in on the basis of best prices and local availability represent £5.4m of the total and £2m on third party and contracted payments.
Aims and Objectives of the Procurement Strategy
The Strategy addresses the basic principles of best value, enshrined in the four ‘C’s –
The Strategy addresses the basic principles of best value, enshrined in the four ‘C’s –
- Challenge
- Compare
- Consult
- Compete
It is designed to encourage wider thinking for all forms of service delivery and to ensure that procurement decisions are evidenced and logical in the context of the Council’s overall strategy.
Best Value Procurement
The basic principles to be adopted for supplies and services of all kinds are the four ‘C’s –
- Challenge – challenge whether the goods/services are needed and, if so, whether current practice is the only/best way.
- Compare – compare the service/product with other suppliers’ products or (for services) with other suppliers. Is it the best price/best service? How does it compare to what other authorities/businesses are getting?
- Consult – consult with customers and users to identify whether changes are needed.
- Compete – look to get competitive prices/proposals for all forms of procurement – don’t just assume that the current supplier is best.
Links
to Corporate Strategies
All procurement needs to be undertaken in such a way that it links clearly with other existing corporate strategies.
Sustainability and Local Agenda 21
All purchasing decisions should include consideration of the environmental impact. Where environmental standards or recognised environmental benefits are available, these should be quoted in any specification.
Tendering processes should always be run on the basis of economically most advantageous bid, rather than the lowest priced bid. This allows consideration of sustainability issues in evaluating tenders and may lead to a recommendation to accept other than the lowest price.
Due consideration should be given to local supply and use of local workforce. Whist price is still a key factor and the Council has a commitment to secure best value for local taxpayers, this must be balanced against the impact of purchasing decision in sustaining the local labour market.
Where relevant, appropriate environmental standards should be included in any tender specification. These should be European or equivalent standards to avoid the risk of legal challenge.
Those contracts which fall within the European procurement regime must be specified and awarded in accordance with the procurement regulations. Care should be taken in any decision which favours a local product or workforce for these contracts, as such acts would be open to challenge.
Any procurement proposal should look at the whole life of the project and aim to minimise energy consumption and conserve natural resources.
Specifications should include consideration of the use of recycled material and, where appropriate, should have regard for the disposal of any waste material.
Where appropriate, specifications should seek suppliers or contractors certified under ISO 14001 or the Eco-Management and Audit Scheme (EMAS) to ensure that they operate to control the environmental impacts of their operations.
Electronic (e) Procurement
Much of the work necessary to obtain goods and services can now be done electronically. The Council has an e-procurement Strategy which includes the principle of seeking efficiency gains e.g. by procuring a significant proportion of goods and services on line (in line with the guidelines in ‘e-Government Local Targets For Electronic Service Delivery).
In particular, the Council will seek to maximise benefits to be gained from emerging local and national procurement markets e.g. IDeA Marketplace, Devon Purchasing etc.
The Council will also investigate use of electronic purchase cards to speed transaction processes and reduce paper consumption.
Social Inclusion
In seeking the provision, amendment or discontinuation of services, due regard should be had for whether decisions will have a negative impact on socially disadvantaged groups.
Any procurement decision should take account of the impact of decisions on the local workforce and marketplace.
Purchasing specifications should take note of the need to cater for a wide variety of disabilities in the design and selection of plans and materials.
Procurement Process
Responsibility for procurement rests with individual Business Units. The Council’s intention is to retain that position. Each Unit must be aware of the procurement framework in which it operates. The main areas are outlined below, but Managers must refer to original documents to ensure they are fully conversant.
Standing Orders
The main relevant detail is contained within the Council’s Contract Procedure Rules (Appendix 14 to NDDC Constitution). These should be referred to in establishing the correct mechanisms to adopt to secure a procurement process.
Particular regard should be had for –
All procurement needs to be undertaken in such a way that it links clearly with other existing corporate strategies.
Sustainability and Local Agenda 21
All purchasing decisions should include consideration of the environmental impact. Where environmental standards or recognised environmental benefits are available, these should be quoted in any specification.
Tendering processes should always be run on the basis of economically most advantageous bid, rather than the lowest priced bid. This allows consideration of sustainability issues in evaluating tenders and may lead to a recommendation to accept other than the lowest price.
Due consideration should be given to local supply and use of local workforce. Whist price is still a key factor and the Council has a commitment to secure best value for local taxpayers, this must be balanced against the impact of purchasing decision in sustaining the local labour market.
Where relevant, appropriate environmental standards should be included in any tender specification. These should be European or equivalent standards to avoid the risk of legal challenge.
Those contracts which fall within the European procurement regime must be specified and awarded in accordance with the procurement regulations. Care should be taken in any decision which favours a local product or workforce for these contracts, as such acts would be open to challenge.
Any procurement proposal should look at the whole life of the project and aim to minimise energy consumption and conserve natural resources.
Specifications should include consideration of the use of recycled material and, where appropriate, should have regard for the disposal of any waste material.
Where appropriate, specifications should seek suppliers or contractors certified under ISO 14001 or the Eco-Management and Audit Scheme (EMAS) to ensure that they operate to control the environmental impacts of their operations.
Electronic (e) Procurement
Much of the work necessary to obtain goods and services can now be done electronically. The Council has an e-procurement Strategy which includes the principle of seeking efficiency gains e.g. by procuring a significant proportion of goods and services on line (in line with the guidelines in ‘e-Government Local Targets For Electronic Service Delivery).
In particular, the Council will seek to maximise benefits to be gained from emerging local and national procurement markets e.g. IDeA Marketplace, Devon Purchasing etc.
The Council will also investigate use of electronic purchase cards to speed transaction processes and reduce paper consumption.
Social Inclusion
In seeking the provision, amendment or discontinuation of services, due regard should be had for whether decisions will have a negative impact on socially disadvantaged groups.
Any procurement decision should take account of the impact of decisions on the local workforce and marketplace.
Purchasing specifications should take note of the need to cater for a wide variety of disabilities in the design and selection of plans and materials.
Procurement Process
Responsibility for procurement rests with individual Business Units. The Council’s intention is to retain that position. Each Unit must be aware of the procurement framework in which it operates. The main areas are outlined below, but Managers must refer to original documents to ensure they are fully conversant.
Standing Orders
The main relevant detail is contained within the Council’s Contract Procedure Rules (Appendix 14 to NDDC Constitution). These should be referred to in establishing the correct mechanisms to adopt to secure a procurement process.
Particular regard should be had for –
- The need to seek at least three quotations for purchases above £3,000 and below £25,000.
- The need to seek formal tenders for schemes in excess of £25,000.
- The need to ensure adequate budgetary provision before committing expenditure.
Financial Regulations
The main relevant detail is contained with the Council’s approved Financial Regulations. These should be referred to in establishing the correct mechanisms to adopt to secure a procurement process.
Particular regard should be had for –
- The need for adequate funding for the project lifetime to be identified in advance of commitment.
- The need to seek appropriate approvals for capital schemes in accordance with the Financial Procedure Rules (Appendix 13 to NDDC Constitution).
- The need to document procurement processes using appropriate official orders and invoicing procedures.
European Procurement Regulations
Business Managers should familiarise themselves with the detail of the European Procurement regime. The Council has provided a familiarisation workshop to assist.
The main provisions which should be noted are –
The provisions cover all forms of procurement under the following three headings –
1. Supplies - specifically goods, provisions, materials
2. Services - consultants, agents, provision of contracted out services etc.
3. Works - construction, civil engineering etc.
The directives are not operational below certain thresholds. These
are currently –
- Supplies - £154,477
- Services - £154,477
- Works - £3.86m
These
values are not annual, but apply over the life of the contract.
Above these thresholds, the European regime must be followed. The
regime covers, among other things –
- The type, form and packaging of the contract specification.
- The format, placement and type of advertising.
- The models to be used for tender evaluation.
- Specified minimum time limits for the procurement process.
- A provision that no contract should disadvantage competition from any area of the European market.
For further information, the Council subscribes to the CIPFA European Information Service at TISONLINE (further information can be obtained from Mike Mansell).
Procurement Standards and Aims
The overriding aim, in line with the Corporate Strategy, is –
‘To ensure the delivery of services of a type and quality that local people and communities want and can afford.’
All procurement decisions should have taken due regard of European and UK law, Contract Standing Orders and the Financial Regulations.
Officers should ensure that competitive processes are operated in an open, fair and transparent way in accordance with the officer Code of Conduct (Appendix 18 to the NDDC Constitution).
Evaluation of contract proposals should be completed on the basis of ‘most economically advantageous’ rather than simply lowest price.
The Council will consider the impact on the market of particular forms of packaging so that these are attractive and consistent with the needs of users.
Due regard should be had for the impact of procurement decisions on the local market place and the local economy.
The Council will aim to maximise the use of electronic ordering and payment systems by 2004, including investigating the use of electronic purchasing consortia and payment card systems.
In considering procurement options for service delivery, consideration should always be given to any potential for partnership options to maximise the potential for local delivery and local ownership.
In securing procurement, suppliers will be paid promptly in accordance with local and national targets.
Procurement Responsibilities
Responsibilities for procurement rest with Cabinet and Area Committees in line with their budget responsibilities, except inasmuch as these have been delegated to officers in line with the Scheme of Delegations (Appendix 4, 5, 6, 7 to the NDDC Constitution).
Business Managers are responsible for procurement within their areas of budgetary responsibility, as provided by the Scheme of Delegations.
In all cases, it is the responsibility of the person(s) with the delegated power too ensure they have obtained the appropriate legal, financial, personnel and contractual advice before entering into a contract.
Development
Procurement expertise is lacking within the Council and the Corporate Management Team will identify and provide training and development opportunities to address this deficit.
