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Case Helsinki City Education Department - purchasing process

Susanna Sarvanto

Training Manager

HAUS,

Finnish Institute of Public Management Ltd

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Presentation

Education Department Procurement organisation – City of Helsinki Procurement organisation – Education Department Rules and regulations Decision making Purchasing process in the Education Department Challenges – purchasing of services Local governments (municipalities) and appeal procedure

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The City of Helsinki Education Department -tasks

The Education Department is responsible for general education and for some morning and afternoon

care activities for schoolchildren Finnish-language vocational education and training,

workshop activities intended to unemployed young people and adult education and training

Education means not only teaching but also books, materials, equipment, school transport and healthy and safe education environment including for example renovation of school buildings, cleaning of schools and school lunches

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The Education Department – some statistics

The Education Department provides Services for a total of about 70 000 pupils and students

The City of Helsinki maintains 161 schools and 3 vocational institutions

In 2003, the net expenditure from the City of Helsinki Education Department’s operational finances amounted to EUR 385,3 million

In addition, a total of EUR 54.6 million was spent on school construction and renovation projects and for purchases of movables

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Procurement organisation – City of Helsinki

Purchases are partly centralized The City Board of Helsinki decides products (goods) and

services to be purchased centralized. CB also decides which department ”collective procurement unit” takes care of the purchasing of these products and services including competitive tendering and framework agreements

Collective procurement units: for example Supplies Department, Helsinki Energy

Other purchases: by the concerned Department itself or partly in cooperation with the Supplies Department on the bases of separate assignment

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Rules and regulations

All Departments have to follow: EU-directives and national legislation on public

procurement City´s own rules, regulations and instructions

Procurement rules and regulationsGeneral terms and conditions for procurementTerms and conditions for the procurement of

information technology Departments have also made more specified instructions,

contract models, models for procurement proposals and decisions etc. for their own special needs

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Procurement organisation in the Education Department (1)

Partly centralized purchases Procurement Team has the overall responsibility of

the Department´s competitive tendering processes, procurement instructions, training on procurement issues, development of the procurement process, supervision of the purchases

Purchases can made made by the different sections of the Department but can also be taken care by the Procurement Team

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Procurement organisation (2)

The Procurement Team also has the responsibility to purchase (incl. competitive tendering) and

order certain items assists Department´s various sections in the different stages of the

procurement process (planning the purchases, drafting invitations to tenders, planning the award criteria and evaluations of tenders etc.)

gives assistance in contractual isusses Role of the assested section is -as an expert of the subject

matter -especially to define the product or service to be purchased as well as its expected quantitative and qualitative criteria

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Decision making - purchasing

City Education Committee Highest decision making authority It has delegated parts of its decision making powers to

the officials of the Educuation Department based on procurement value

Official has within the limits of the budget and delegated purchasing power to make procurement decisions of the products and services of which the collective procurement unit has not made purchasing agreement

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Decision making - orders

Head of the Education Department Has authorized certain persons in the Education

Department to enforce procurement decisions Right to order

from the suppliers and service providers which have been selected in the competitive tendering

within the limits of the authorization in accordance with the terms and references of the

purchasing agreement/contract

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Purchasing process

Stages of the purchasing process have been defined: ”check –list” for a due process

In addition, for every stage of the process the preparation and decision making responsibilities, rules and regultions to be followed and model documents to be used have been defined

Also the final document which should be as a result of each stage has been defined

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Main stages of the process (1)

1. Planning of the purchase budget, need, objective, estimated value, preliminary

description of the product/service to be purchased knowledge of the products and services is needed but

brings challenges to the procurement personnel chosing the right method for the purchase:

EU-competition, national competetion, order from a City´s other Department/unit, order based on the framework agreement, exceptionally direct assignment?

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Main stages of the process (2)

2. Realization of the purchasing method if tender process is needed, chosing the right purchasing

procedure in accordance with EU-directives and/or national legislation

crucial: invitation to tender, award criteria, eligibility of tenders and tenderers, evaluation of the tenders

preparation by the Procurement Team and/or by the section concerned, authority to sign invitation to tender linked to the decision making powers

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Main stages of the process (3)

3. Decision making and remedies proposal by the expert on subject matter, decision

making powers as delegated crucial: reasoning of the decision, service of decision,

appeal instructions

4. Contract/order

5. Invoicing process

6. Monitoring the contract, delivery of products and the quality of services

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Some important factors

equal and non-discriminating treatment ethics –both officials´ and tenderers´ impartiality and disqualification

main rule is that the official concerned makes him/herself the decision concerning the question of his/her impartiality and disqualification

publicity Act on the Openness of Government Activities

documentation and document management registration and archives

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Challenges – purchasing services (1)

Municipality is responsible for arranging services for its memebers

Municipality can arrange services by producing services itself in cooperation with other municipals purchasing (tendering process) all or partly the

needed services

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Challenges – purchasing services (2)

Decisions on these arrengements have impacts on markets, municipalities personnel and its members

Purchasing of services is demanding definding the contents and qualitative objectives,

normally better service cannot be negotiated afterwards right balance between the technical (quality) and

economical award criteria evaluation of tenders quality control and contract monitoring is essential

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Local goverments and appeal procedure

Municipal appeal process differes from that in the ministries and central government

Ministries, central government: appeal to the Market Court, possibility also to sue for damages in the lower court

Municipal procurement decisions have to be noticed according to the Act on Public Procurement and the Finnish Local Government Act to all tenderers and also to the members of the municipality according to the FLGA.

Appeal: in addition possibility to claim for correction of the decision from a municipal organ (for example City Education Committee)

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It is important to realize that local governments often have to make

procurement decisions which have impacts on individuals´ lives, for example in the social, health and education sector

economy plays also an important role when making purchases

succesfull purchasing requires a wide range of professional skills