Procurement team

Managers’ guide to procurement a desktop guide to undertaking a procurement exercise

Procurement Team 3rd Floor Lewisham Town Hall Catford London SE6 4RU 020 8314 8548 procurement@lewisham.gov.uk January 2012

Managers’ guide to procurement January 2012 1

Contents

Introduction ................................................................................................................. 5

Oracle.......................................................................................................................... 5

Key events in the Procurement Cycle ......................................................................... 5

Initial considerations.................................................................................................... 6

Value for money ("vfm") .............................................................................................. 6

Categories of contract under Standing Orders............................................................ 7

Competition: "going out to tender" .............................................................................. 7

Single Tender Actions - can approaching just one supplier be justified?.................... 7

Is competition necessary for low value purchases?.................................................... 8

Propriety and the separation of duties ........................................................................ 8

Business cases ........................................................................................................... 8

Specifying the requirement ......................................................................................... 9

Establishing a procurement strategy........................................................................... 9

EU Public Procurement Directives ............................................................................ 10

Restricted Procedure ................................................................................................ 11

Open Procedure........................................................................................................ 12

Competitive Dialogue................................................................................................ 12

Negotiated Procedure ............................................................................................... 13

Legal aspects of contracting ..................................................................................... 13

Social Considerations ............................................................................................... 13

Forms of Contract ..................................................................................................... 14

Evaluation Criteria..................................................................................................... 14

Inviting tenders (proposals to do the work) ............................................................... 15

How long should I allow for responses to ITTs? ....................................................... 16

Is a briefing meeting necessary? .............................................................................. 16

Site Visits to the Council’s & Tenderer’s Premises ................................................... 16

What happens when I receive the tenders?.............................................................. 16

How do I evaluate the tenders? ................................................................................ 17

Am I getting good value for money? ......................................................................... 17

How many suppliers should be invited to present their proposal? ............................ 18

Managing the presentations...................................................................................... 18

Post tender clarification............................................................................................. 19

The Tender Report.................................................................................................... 19

Awarding the contract ............................................................................................... 19

Advising and debriefing unsuccessful tenderers....................................................... 20

Contract management and monitoring...................................................................... 21

Managers’ guide to procurement January 2012 2

Contract variations .................................................................................................... 22

Contract extensions and renewals ............................................................................ 22

Reviewing the process.............................................................................................. 23

List of Appendices

Appendix A - The Procurement Cycle 23

Appendix B - Procurement levels of action 24

Appendix C - EU Directives apply 25

Appendix D - Non EU Directives 26

Appendix E - Contract Procedure Rules Summary 27

List of Key Documents & Templates

Timetable Calculator

Expressions of Interest spreadsheet - 1 Stage

Expressions of Interest spreadsheet - 2 Stage

Expressions of Interest spreadsheet - 2 Stage (with Lots)

Model Business Questionnaire - 1 Stage

Model Business Questionnaire - 2 Stage

Pre-tender Letter

Shortlist and Contract Award Reports

Unsuccessful BQ Letter

Invitation to Tender Letter - 1-Stage

Invitation to Tender Letter - 2-Stage

Invitation to Tender (ITT)

Form of Tender

Form of Parent Company Guarantee

Form of Performance Bond

Specification

Pricing Schedule

Method Statements

Tender Evaluation Matrix

Tender Receipt

Interview Invitation

Tender Report

Unsuccessful Tender Letter (EU)

Unsuccessful Tender Letter (Non-EU)

Contract Award Letter (EU)

Contract Award Letter (Non-EU)

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Standstill Period Ended Letter (EU)

Scrutiny Period Ended (Non-EU)

Letter re Contract Extension - Extension Clause in contract

Letter re Contract Variation - Variation Clause in contract

List of Procurement Practice Notes (in alphabetical order) Approved List of Contractors – frequently asked questions

Awarding the Contract

Consultants – Approval Process for Engagement

Defining the Approach

Developing the Brief

EU Consolidated Directive on Public Supply, Service & Works Contracts

EU Remedies Directive

Evaluation of Bids at Tender Stage

Evaluation of Business Questionnaires at Pre-tender Stage

Framework Arrangements & Call-off Contracts

Identifying the Need

Inviting, Receiving and Opening Tenders

Managing the Contract

Ratio of Quality to Cost

Reviewing the process

Scoring Ranges

Shortlist and Contract Award Reports

Soft Market Testing

Standards for Environment and Sustainability

Standards for Equalities and Diversity

Standards for Financial Risk and Capacity

Standards for Health and Safety

Managers’ guide to procurement January 2012 4

Introduction 1. This guide outlines the main considerations and processes involved in making

a purchase on behalf of Lewisham Council. The Procurement Team (PT), which is part of the Resources Directorate, is responsible for maintenance of this guide and can give advice on its implementation.

2. The Procurement Team is also able to assist at key stages in the procurement process. It is worth noting that the Procurement Team has access to a number of Supplier Databases, which contain comprehensive and searchable details of many organisations who may be able to fulfil the Council’s requirements.

3. The contract procedure elements of Standing Orders, Financial Regulations and Financial procedures have been reviewed to bring them into line with current procurement requirements.

Oracle 4. The Council has introduced an Oracle finance system and has implemented

aspects of its Oracle i functionality, which has an eProcurement facility which can link to the eMarketplace system used by the Council for some purchases. The system will provide the Council with an opportunity not only to improve the way it monitors its finances, but also to improve upon its overall procurement and commercial performance. Some purchases (e.g. stationery, paper) can be made directly via the eMarketplace, whilst certain low value purchases (i.e. below £350) can often be made using the Council’s Procurement Card.

Key events in the Procurement Cycle 5. Whatever causes a procurement to be initiated, the process to be followed will

typically involve the following stages:

(a) Identify the need and develop the business case;

(b) Develop the specification and obtain financial approval/authority to proceed;

(c) Define the approach to be used;

(d) Approach the market to Identify prospective contractors/suppliers/service providers;

(e) Issue ITTs, handle enquiries and evaluate tenders;

(f) Award the contract;

(g) Manage the contract, monitoring against pre-determined performance criteria;

(h) Review the process during the life of the contract.

6. The basic stages are outlined in the Procurement Cycle shown at Appendix A, which also highlights how each tendering process completed should inform the next one.

7. Typically in the past, the Procurement Team have only become involved after stages (a) and (b) in paragraph 5 above, and thereafter, as required, to provide advice and support, but it is best that initial discussions are held with the Team at the earliest stage possible.

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Initial considerations 8. Once you have identified a requirement to purchase, and considered the

value of that purchase, you should try to find out if the Council has an existing contract or agreement that you may be able to use – the Procurement Team will be able to advise you. If the Council does already have a contract, you will need to contact the owner to verify eligibility to use it, e.g. is it possible to vary the contract to incorporate your requirements? If it is possible to use an existing contract, you will save both the time and cost of running a procurement exercise, and may be able to go straight to the purchase order process (see paragraph 4). If you raise an order against this contract, the contract name must be quoted in the description area of the Purchase Order.

9. If there is no existing contract you will need to consider undertaking a procurement exercise. Once the decision has been taken to commence a procurement exercise, it is in your best interests to contact the Procurement Team as early as possible. In any event, for all purchases over £40,000 you should contact the Procurement Team for advice on the course of action.

10. Additionally, procurements with a total value throughout the life of the contract in excess of, approximately, £156,000 for supplies and services, or £3.9m for works, will be governed by European Union regulations on public expenditure. In that case, the tender must be advertised in the Official Journal of the European Union (OJEU). The Procurement Team will normally be able to place that advertisement for you.

11. It may be that the need was identified as part of a Service or Best Value Review, in which case a number of elements of the procurement process will already have been identified and considered. You will also need to consider any clienting and monitoring arrangements, or potential staffing issues that may arise from the process.

12. You may also be considering joint or collaborative working. The practice of collaborative tendering between local authorities and/or other public bodies is increasing, however, this should only be considered if there is a clear business case for doing so. This process has additional factors to be resolved by the partner authorities during the planning stages and should be covered by a comprehensive partnering mandate.

13. Lewisham is currently developing a Gateway Process, which will link in with the general procurement process. The principle behind the Gateway Review Process is the examination of the critical stages in a project’s lifecycle to provide assurance that the project can successfully progress to the next stage. For advice and support on the Gateway Process, contact the Programme Management Team.

Value for money ("vfm") 14. Public sector purchases are not judged on obtaining goods, works or services

for the lowest possible price, but on Best Value or value for money. This includes the quality and other attributes of the resulting goods, works or services. It is a judgement based on the best combination of the cost of a product or service, spread over its whole lifetime, and its ability to meet, but not necessarily exceed, user requirements. This is normally achieved through comparing suppliers' prepared bids, and by ‘testing the market’.

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Categories of contract under Standing Orders 15. Under the revised Standing orders, there are three categories of contracts:-

Category A - Building construction and engineering works contracts (‘works contracts’) with an estimated value of over £1m;

other contracts with an estimated value of over £500,000.

Category B - Works contracts with an estimated value of between £40,000 and £1m;

all other contracts with an estimated value of between £40,000 and £500,000.

Category C - All other contracts or arrangements with an estimated value of less than £40,000.

Competition: "going out to tender" 16. All goods, works or services should be purchased by competition, unless they

are of low value (typically less than £5,000), or there are convincing reasons to the contrary. Competition avoids suggestions of favouritism, discourages monopolies and demonstrates that value for money has been sought.

17. Typically, a competition is carried out through seeking quotes or tenders from several suppliers, by inviting them to make an offer to supply specified goods, works or services at a given cost or rate. The prerequisites are described in the Procurement Process section of this Guide, which starts at Establishing a Procurement Strategy.

Single Tender Actions - can approaching just one supplier be justified? 18. Usually not - because it is contrary to achieving value for money through open

and fair competition. Therefore, single tender action should normally be avoided. However, exceptionally and subject to the approval Executive Director for Resources or Mayor & Cabinet (Contracts) (depending on the value), single tendering might be justified where:

(a) the work concerns a new contract that is directly related to a recently completed contract, and the added value gained from the additional work being given to the same contractor outweighs any potential reduction in price that may be derived through competitive tendering.

(b) the expertise required is only available from one source. This may be due to ownership of exclusive design rights or patents but, nonetheless, the specification should be reviewed to ensure that no other product / service would meet user requirements.

19. If you believe that you have convincing reasons for inviting only one supplier to tender, you should fully document the case, justifying the decision, and obtain approval to use single tender action as follows.

Category A - from Mayor & Cabinet (Contracts)

Category B - from the Executive Director for Resources

Category C - from the Directorate Head of Resources (or whoever has been delegated to make that decision).

20. Please note that single tendering still requires a set of Invitation to Tender (ITT) documents to be drafted (see Invitation to Tender Pack), and your course of action still needs to be auditable.

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Is competition necessary for low value purchases? 21. Finding suitable suppliers depends on the value, complexity and size of your

requirement. For Category C contracts, Standing Orders require the following thresholds to be applied when seeking quotes/tenders:

Up to £10,000 1 written quote

£10,001 - £25,000 3 written quotes

£25,001 - £40,000 4 written quotes

£40,000+ 5 formal tenders invited

22. Formal tenders are very different from quotes. This is because the formal Invitation to Tender (ITT) includes a written explanation of the Council’s requirements, legal terms & conditions, etc and, additionally, it requests information which will allow the evaluators to assess information other than price (such as CVs) before awarding the work.

23. The time, effort and methods used to identify potential suppliers will vary according to the complexity and value of the contract. For simple, low value requirements the Yellow Pages, Kelly's Guide, Thompson Local, the Internet, or local knowledge and experience (including that of the Procurement Team) may be sufficient. It is good practice to make preliminary telephone calls to establish if the company is likely to be interested in the work.

24. For more complex, higher value contracts you should consider:-

(a) consulting the Procurement Team to see if any existing corporate contracts or framework arrangements cover the type of goods, works or services you propose;

(b) checking the suitability of Office of Government Commerce (OGC) Buying Solutions or London Contracts & Supplies Group (LCSG) framework agreements, which require limited competition between a selection of approved suppliers and the use of OGC or LCSG framework terms & conditions – again, the Procurement Team can advise you further. OGC suppliers are listed at: http://www.buyingsolutions.gov.uk/

(c) advertising locally or nationally in appropriate publications or, where EU thresholds are exceeded, in the Official Journal of the European Union (OJEU – see paras 32 to 39). Note: depending on the nature of the procurement, advertising in OJEU may be mandatory, in which case it must be undertaken before any other form of advertising.

Click here for Practice Note: Frameworks & Call-offs

Propriety and the separation of duties 25. Public procurement ethics must be observed to avoid accusations of

impropriety and it is, therefore, essential to maintain a complete audit trail. The basic test is "..could I defend this action in public?". The Council is committed to the highest standards of behaviour in public life, and to promote this commitment, it has adopted two Codes of Conduct, one applying to Members of the Council and one applying to its staff. These Codes are available on the Council’s website.

Business cases 26. For more complex procurements, a business case should be drafted, and

submitted to your line manager or Head of Service/Resources for approval,

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before conducting any procurement exercise. The business case should address, as an absolute minimum, the following considerations:

(a) why the work needs to be done

(b) what the consequences are of not doing the work

(c) what the various options are for doing it

(d) why the work cannot be done in-house

(e) how much it is likely to cost (include supporting financial analysis)

(f) what resources may be required (financial, possibly requiring budgetary approval, and physical, possibly having staffing implications)

27. At this stage you will need to put together the ‘brief’ or specification of requirements, which will flow from the business case. This need not be in its final form, as requirements may need to be modified before going out to tender later.

Click here for Practice Note: Identifying the Need

Specifying the requirement 28 The specification should be phrased in terms of the operational expectations,

outputs, or outcomes required, rather than how they should be achieved. Method statements should be requested in order to ensure the tenderers show how they intend to achieve the outputs. Basically a "performance" specification is one which focuses on the function of the product or service required: the specification is built around a description of what is to be achieved rather than a fixed description of how it should be done.

29. The Specification or Scope of Work should be clear and concise, with enough information to enable tenderers to decide what goods and services to offer, and at what cost. Also, the Specification should be unbiased (so that all tenderers have an equal opportunity to offer the goods/services they regard as capable of meeting it), yet flexible enough to allow innovative solutions.

30. The Specification needs to be drafted by the end users/customers, for they will be the ultimate beneficiaries of the tender exercise. You are, however, welcome to discuss what to include in it with the Procurement Team, who can also help you to establish if the final product is unambiguous and credible. Remember that there may be several items to redraft or add so, if you need assistance, it is best to send the document for comments as soon as possible.

Establishing a procurement strategy 31. The Procurement Team will help you to assemble a timetable and programme

of events, and will also agree with you the level of assistance that they can give to help you achieve a successful outcome. For example, decisions will need to be taken on:

(a) Whether to use an existing contract/agreement (as arranged elsewhere in the Council or by another organisation, e.g. OGC, LCSG);

(b) The need to consider safety, sustainability and equalities issues;

(c) Whether EU Directives apply;

(d) whether or not TUPE applies (where the contract may involve transfer of staff you must liaise with HR Advisory Services. The current TUPE guidelines can be found at: http://ls/C8/ManagingChange/default.aspx);

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(e) The type and form of contract;

(f) Sourcing potential suppliers;

(g) Duration of contract; and opportunity to review/extend;

(h) Payment schedules;

(i) How to minimise any risks with the chosen strategy, including supplier appraisal, and evaluation / clarification of suppliers' bids;

(j) client/contract monitoring arrangements.

Click here for Practice Note: Defining the Approach

EU Public Procurement Directives 32. If your procurement of goods or services is likely to be worth approximately

more than £156,000 or works more than £3.9m over the whole life of the contract, one or other of the EU Public Procurement Directives is likely to apply. The Directives specify detailed procedures, adherence to strict timetables, requirements for advertising, invitations to tender, and the award of contracts.

33. Compliance with EU Directives governing public procurement is a mandatory legal requirement. It should, however, also be appreciated that compliance can enable sourcing on a wider European scale, thereby increasing competition and the scope for getting best value for money. Also, the timetables can be used as a framework to help with project management.

34. Where applicable, the Council must place Notices advertising the procurement in the Official Journal of the European Union (OJEU). The Notices detail requirements, prequalification criteria, and the procurement timetable, etc, for all purchases over the following current thresholds:

Supplies £173,934

Services £173,934 [as at 1st January 2012)

Works £4,348,350

35. You may also need to consider the value of aggregated spend, where it is likely that similar activity is being undertaken elsewhere in the Council If in doubt, you should consult the Procurement Team. You should also make sure that you do not artificially disaggregate the value of your procurement in an attempt to get under the EU thresholds.

36. EU procurements usually take around 6 months to complete, and this needs to be taken into account when business planning. Although the EU timetable can sometimes lengthen the overall time taken, the process is very similar to any other procurement – the majority of the work (and therefore time) is spent in specifying the requirement and evaluating the bids. The best way to speed up the process is to be clear about what goods/services you need and what information you want tenderers to provide.

37. The Procurement Team will advise you on the effect of the EU Public Procurement Directives on individual procurements. The Team can also:

(a) assist you in compiling the project timetable and advise on its use – an Example EU Procurement Plan/Timetable is available;

(b) submit Notices (for advertisement & subsequent award) to OJEU on your behalf; and

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(c) arrange for Notices to be posted on the ‘Current Tenders’ part of the Lewisham website, for immediate access by suppliers.

Click here for an example Timetable Calculator38. Paragraph 35 above particularly relates to the commonly recommended

"restricted" EU procedure - a two stage process whereby the capacity of applicants to do the work is initially assessed via questionnaire, and then only shortlisted organisations are invited to tender.

39. In addition to OJEU, work can be advertised in the national press or trade journals, but it must not be submitted to these publications before the Notice has been sent to OJEU, nor must it contain information over and above that in the Notice. The client directorate will have to bear the cost of any non-OJEU advertisements. The Procurement Team can advise on the most appropriate procedure to use and on advertising in national press or trade journals.

Click here for Practice Note: EU Consolidated Directive

Restricted Procedure 40. If EU Directives are likely to apply, you must contact the Procurement Team,

who will advise on the particular process & timetable to follow, and use the SIMAP system to submit any notices. For procurements where there is a large and well-established market, it is likely that the commonly recommended “restricted” EU procedure will be appropriate. Under this procedure, potential suppliers are invited, via a published OJEU Notice, to complete a customised Business Questionnaire (also known as a Pre-Qualification Questionnaire or PQQ), which must be returned by a pre-specified deadline (a minimum of 37 calendar days from the submission date of the OJEU Notice). You may also consider advertising in the trade press, but must ensure that it contains no more information than is in the OJEU notice. However, other approaches, including “open”, negotiated and competitive dialogue are allowable.

Click here for an example Model Business Questionnaire (1 Stage) or Model Business Questionnaire (2 Stage) and Pre-tender Letter

41. The completed Questionnaires should be appraised, using customised EOI appraisal sheets, in order to shortlist those applicants who are to be invited to tender. Careful consideration needs to be given to the issues appraised at this stage, as the Council may not have the opportunity to consider a number of these issues again during the tender process. The number shortlisted should normally be within a pre-specified range, but at least 5 is usually sufficient to promote value for money. It must be noted that ‘Selection Criteria’ (i.e. backward-looking criteria about a potential supplier’s past performance and suitability to tender) are distinct from ‘Award Criteria’ (i.e. specific forward-looking criteria measuring a supplier’s tender proposals and ability to undertake a specific contract).

Click here for an example Expressions of Interest (2 Stage) spreadsheet or Expressions of Interest (2 Stage with Lots) spreadsheet

42. Depending on the value, the shortlist will need to be approved by the relevant Executive Director or Mayor & Cabinet (Contracts). Before proceeding to invite tenders, an internal ‘scrutiny’ period (as required by the Council’s Standing Orders) must elapse. This is to allow time for Overview & Scrutiny Committee (OSC) to challenge the decision; if there is no such challenge by the following OSC, then you can proceed to go out to tender.

Click here for Practice Note: Shortlist & Award Reports

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43. It will be important to maintain careful records of the appraisal process in order to be able to demonstrate impartiality. Unsuccessful applicants should be sent an “unsuccessful” letter, which offers due opportunity for debriefing. If debriefing is requested, it should be given following the process at ‘Advising and debriefing unsuccessful contractors’ in paragraph 96.

Click here for an example Unsuccessful BQ Letter

Open Procedure 44. For procurements where there is a small or immature market, then the “open”

EU procedure may be appropriate. Under this procedure, potential suppliers are invited, via a published OJEU Notice, to complete the full tender documentation (which may include the Business Questionnaire), which must be returned by a pre-specified deadline (a minimum of 52 calendar days from the submission date of the OJEU Notice). Again, you may also consider advertising in the trade press, but must ensure that it contains no more information than is in the OJEU notice, and is not published before the OJEU notice.

45. All evaluation criteria, their relative weightings and the scoring mechanism for evaluating the tenders must be listed within the OJEU notice and the tender documentation.

46. Using the “open” process requires all of the documentation listed in paragraph 62 to be available at the time of placing the notice/advertisement, as delays in sending out the documentation may lead to requests for extensions of time in submitting tenders, and changes to the project timetable.

Click here for an example Expressions of Interest (1 Stage) spreadsheet

Competitive Dialogue 47. Competitive Dialogue is a relatively new procedure only introduced in the last

version of the EU Procurement Directive. It is used for the award of complex contracts where the procurer needs to discuss all aspects of the proposed contract with providers. Roughly, it may be used where the procurer is not able to:

• Define the technical means of satisfying their needs or objectives and/or

• Specify the legal and/or financial make up of a project.

48. Under the Competitive Dialogue procedure, Contracting Authorities undertake a pre-qualification process and then invite shortlisted candidates to participate in a dialogue process during which any aspects of the project may be discussed and solutions developed. The Contracting Authority can continue the dialogue until it identifies one or more solutions that are capable of satisfying its requirements. It then closes the dialogue and invites final tenders. Only limited discussion and clarification is permitted once the dialogue stage has closed which does not amount to ‘negotiation’.

49. Government guidance notes that, overall the procurement costs under the Competitive Dialogue procedure are likely to be higher for both Contracting Authorities and for bidders than under the negotiated procedure, as more bidders will usually be involved in detailed discussions and the submission of detailed bids

50. When considering this procurement route, advice should be sought from Legal Services and the Procurement Team.

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Negotiated Procedure 51. The Negotiated Procedure is only permitted in the strictly defined, exceptional

circumstances at Part 3 of the Public Contracts Regulations Statutory Instrument 2006 No. 5. Unlike the other procedures, negotiation is allowed with providers. In some, very rare, cases it is also possible to use the negotiated procedure without advertising.

52. Under the Competitive Negotiated Procedure, Contracting Authorities undertake a pre-qualification process and then issue an invitation to negotiate. There are no detailed rules as to how the negotiations should take place and, unlike the Competitive Dialogue Procedure there is no formal end to the negotiation phase before contract signature. In practice, there has often been substantial negotiation following the appointment of a ‘preferred bidder’ when competitive tension is no longer present.

53. When considering this procurement route, advice should be sought from Legal Services and the Procurement Team.

Legal aspects of contracting 54. This can be a complicated area, mostly because it is all too easy to

unintentionally create a legally binding contract by word, action or in writing (even if the document does not refer to itself as a contract), which could, of course, commit the Council to unfavourable terms & conditions. For instance, many companies print their own terms & conditions on the reverse side of all correspondence and invoices, so unless the Council’s standard terms are already in place, the contractor's terms will apply by default.

55. If in doubt, or if you are unsure about the contractual impact of any correspondence received, please contact Legal Services or the Procurement Team for advice before communicating with the proposed supplier.

Social Considerations 56. Lewisham is committed to ensuring that all services are delivered fairly,

equitably, safely and sustainably to our community. It is therefore essential that any potential contractor, supplier or service provider is able to demonstrate its commitment to the principles of such social considerations as equality, diversity, safety and sustainability. At a number of stages through the procurement cycle, these social considerations must be addressed. The Business Questionnaire includes key questions on these aspects and the ability of the potential supplier to respond to these questions is very important and of greatest significance when the service being procured has a high relevance to one or more of the equality groups (gender, race, disability, age, sexual orientation, religion/belief) or a specific impact on our vulnerable communities.

57. When developing tender documentation, it is essential to ask the potential supplier to detail how they will deliver a fair, equitable, safe and sustainable service through their method statements. The following elements could be included in the specification or referred to in method statements, proportionate to the size and nature of the contract.

• The supplier must demonstrate its commitment to Lewisham’s Comprehensive Equality Scheme 2008-11 - the promotion of equality across the 6 key equality groups: race; gender; disability; age; faith; and, sexual orientation.

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• The supplier must demonstrate its understanding of Lewisham’s diverse communities and the impact their services may have on these communities.

• The supplier must detail the actions they will take to mitigate potential adverse impacts on equalities groups and set out the positive impacts they will be taking to promote equality and ensure that services are accessible.

• The supplier will adhere to LB Lewisham’s principles and standards with regards to ensuring the diversity of its workforce; the supplier will provide monitoring information on the make up of its workforce and will set out actions to improve diversity where appropriate. This will be monitored by the client.

• The supplier will be expected to demonstrate its commitment to environmental sustainability, and to support the Council’s aims as set out in its ‘Guide to Green Procurement’.

• The supplier should detail the actions they will take to minimise the environmental impacts of their operations.

• The supplier will be expected to demonstrate its commitment to health and safety, and, where applicable, its plans for fulfilling its role under the Construction (Design and Management) Regulations 2007 (also known as ‘CDM’).

Click here for Practice Note: Evaluation of Business Questionnaires at Pre-tender Stage

Click here for Practice Note: Standards for Evaluating Equality & Diversity

Click here for Practice Note: Standards for Evaluating Environment & Sustainability

Click here for Practice Note: Standards for Evaluating Financial Risk and Capacity

Click here for Practice Note: Standards for Evaluating Health & Safety

Forms of Contract 58. The Council’s standard terms and conditions have been updated to reflect the

Council’s duties and responsibilities under various pieces of legislation on equalities, health and safety, and environment and sustainability.

59. As well as the Council’s standard terms and conditions, there are a number of nationally recognised Standard Forms of Contract available. These should be considered wherever possible, as they will have been agreed by employers’ and trade organisations, and will be known and readily accepted by potential contractors. An example of such a Standard Form is the JCT Forms of Contract available within the construction industry. Any standard form can still be amended (within reason) to suit local requirements and Legal Services should be approached if this is being considered. The Council’s Property Services Team can also give advice on the relevance and use of the JCT Standard Forms.

Evaluation Criteria 60. The tender documentation needs to cover the various measurables, against

which all of the bids will be evaluated and the contract awarded, in order to

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ensure that the criteria are wholly relevant. It is a requirement under the EU Directives to advise tenderers on what they will be evaluated against and the relative weighting of the award criteria. All evaluation criteria must, therefore, be listed within the Invitation to Tender. The Procurement Team will be able to advise on how this information should be evaluated.

61. The tenderers should be checked for financial stability. Ideally, the estimated annual value of the contract to be awarded should not be greater than 50% of one year’s turnover. However, you should also be sensitive to the difficulties that Small & Medium Sized Enterprises (SME’s) can have when seeking Council work. On request, the Procurement Team can also obtain independent financial reports.

Click here for Practice Note: Ratio of Quality to Cost Click here for Practice Note: Scoring Ranges

Inviting tenders (proposals to do the work) 62. An Invitation to Tender (ITT) is a formal document asking suppliers for a

sealed bid to be submitted by a specific date. The ITT asks suppliers to offer their price, delivery, methodology, etc, to carry out work to the Council’s specification and terms & conditions.

63. The Invitation to Tender pack generally comprises the following:

Instructions to Tenderers(a) for the completion and return of the tender bid; Specification(b) (sometimes referred to as the "scope of works"; "statement of requirements"; “brief”, or "terms of reference");

(c) Conditions of Contract (sometimes referred to as "terms & conditions", they are fairly standard, and need to be provided by Legal Services);

Pricing Schedule(d) (a standard format is helpful for comparative purposes when evaluating bids);

Method Statements(f) (if applicable) where the supplier outlines how they would undertake or operate certain key elements of the service, or how it intends to carry out certain works.

Form of Tender(f) (consisting of a declaration to which the tenderer agrees to be bound);

Form of Parent Company Guarantee Form of Performance (g) and/or Bond (only to be completed if applicable)

TUPE Matrix(h) (only to be completed if applicable - see also paragraph 31(d).

64. Covering papers i.e. The ITT Letter, Instructions to Tenderers and Evaluation Criteria should also be sent out with the Council’s ITT pack. These documents should be customised to suit the requirements of each procurement exercise. e.g. some exercises may require briefing meetings, which will need to be notified.

Click here for an example Invitation to Tender Letter - 1-Stage or 2-Stage Click here for Practice Note: Inviting, Receiving & Opening Tenders

Managers’ guide to procurement January 2012 15

How long should I allow for responses to ITTs? 65. For a relatively straightforward consultancy assignment, which is not above

EU procurement thresholds, for example, a range of ten to fifteen working days might be sufficient. However, it is important for the tenderer to have enough time to submit their best offer. The Procurement Team may be able to advise for specific projects.

66. Additionally, you should note that all OJEU-advertised procurement exercises have prescribed timetables. For instance, under the frequently used Restricted Procedure, a minimum of 40 days should be allowed for the submission of the tender.

Is a briefing meeting necessary? 67. Briefing meetings advise prospective bidders about the work required, so it is

usually advisable to schedule them early in the tender period. It is helpful to announce the date/time and venue in the covering letter of the ITT. Such briefings avoid having to respond repeatedly to individual enquiries or visits from tenderers, which could be laborious, especially as any responses to individual queries must be copied to all tenderers to ensure fairness.

68. The client directorate normally arranges and chairs the briefing meeting, but the Procurement Team can assist if necessary and, if requested, will also chair the meeting. The client directorate should take notes of all questions and answers, which should be copied to all tenderers, whether they attended the meeting or not. The decision not to attend a briefing meeting should never be held against prospective bidders.

Site Visits to the Council’s & Tenderer’s Premises 69. If the contract is to be operated on the Council’s premises (e.g. cleaning,

security, etc), it may be necessary for the tenderers to be shown round the relevant sites prior to bidding for the work. Care should be taken not to allow commercially confidential information, concerning the operating procedures of any current contractors, to be divulged during such visits.

70. Similarly, as an aid to final evaluation before tender award, it may be necessary to visit the tenderers’ premises, especially if the contract is complex or high risk, and if the contractor’s premises will play an important part in its operation. The visits should be undertaken by at least two members of the Team, using a checklist of areas to view and report on.

What happens when I receive the tenders? 71. A suitable evaluation marking system must have been agreed, with a

weighting for the price and quality elements of the bid, and transferred on to the Tender Evaluation Matrix sheets, before the tenders are opened. The evaluation criteria sent to the tenderers should be used to form the basis for scoring and individual criteria weighted to indicate relative importance.

Click here for an example Tender Evaluation Matrix72. To ensure probity, a note should be made on the envelope of the date and

time that each tender is received, and all tenders should then be kept in a secure cabinet until the due date and time of opening (as notified in the ITT). If a tender is received late, it must not be accepted, unless the other tenders have not yet been opened.

73. Tenders should be opened by a minimum of two people; if required, the Procurement Team can assist. Details of bids must be recorded on the

Managers’ guide to procurement January 2012 16

Tender Receipt Sheet, and every page of the original bid document that contains a price figure must be witnessed and initialled by both openers, to demonstrate that the bid has not been altered in any way. Any existing alterations (e.g. type-overs or crossings-out) must be highlighted and initialled by all those opening the tenders. If the bidder has not identified a copy as the original, you should select one and mark it up as such. Once the opening has been recorded, copies of the tenders should be distributed to the tender evaluation team. A template for recording the opening process is to be found below.

Click here for an example Tender Receipt

How do I evaluate the tenders? 74. The client directorate is expected to take the lead on selecting the

membership of the evaluation team. The Procurement Team may provide support, depending on need and availability, but for large/complex contracts it would expect to be included on the panel (unless agreed otherwise). Evaluation teams should comprise at least three people, but generally no more than six. When choosing team members, consideration should be given to any specialist expertise held, such as may be useful for IT / design proposals or for the analysis of complex data and pricing information. The team members must be prepared to set-aside sufficient time to evaluate the written bids and to attend any presentation and consensus meetings. Please note that, if any team members has a connection with any of the tendering organisations, advice should be sought from the Procurement Team on whether they should be excluded from the team, for the sake of propriety.

75. Having agreed the methodology, the evaluations should be undertaken independently by each panel member. To avoid one bid becoming the standard, it is recommended that evaluators are each asked to commence their assessment with a different bid. The evaluators should record their evaluations on the Tender Evaluation Matrix sheets. When doing so, they should make comments to support their scoring, and they should also note if any bid is non-compliant with the ITT.

76. Once the independent assessments have been completed, the evaluation team should hold a consensus meeting, in order to reconcile any wide variations in scoring and to determine the preferred supplier(s). They may either take forward all tenderers achieving a pre-determined score, or perhaps just the most highly ranked 3 or 4. Only affordable suppliers with a realistic chance of being awarded the contract should be invited for interview.

77. During the meeting, the team should establish one agreed Tender Evaluation Matrix sheet for each bid. This record will prove useful if unsuccessful tenderers want debriefing, and it might also provide points for discussion at the suppliers' presentations, or post tender clarification meetings.

Click here for Practice Note: Evaluation of Bids at Tender Stage

Am I getting good value for money? 78. It is the Council’s policy and duty under Best value to seek the best overall

value for money, and this cannot be judged on price alone. Therefore, so far as possible, all the other relevant aspects of suppliers' offers should be evaluated before prices are considered.

79. Where a bid price significantly exceeds budget (by, say, more than 15 – 20%), it is pointless to take the bidder forward, unless there is a realistic prospect of the price being reduced substantially. For instance, a price

Managers’ guide to procurement January 2012 17

reduction may be likely if it appears that the bidder has over-estimated the service or personnel needed, or if inexplicable or extraordinarily high add-on costs are included.

80. If, on the other hand, any prices seem unusually low in comparison to other bids, you should contact the tenderer to make sure that they have not misunderstood the requirements, before taking the tender forward for evaluation.

81. If required, the procurement Team can assist with preparing a comparative analysis of tenderers' prices.

How many suppliers should be invited to present their proposal? 82. If a presentation is required, usually no more than three tenderers should be

seen, unless the difference in score between the third and fourth placed tenders is so small as to be negligible. Furthermore, a significant difference in marks awarded to second and third placed tenderers might justify meeting only the top two rated tenderers. It should be borne in mind that tendering has a cost, both to the Council and the suppliers, and it is, therefore, unreasonable to put tenderers to the expense of attending an interview when they have little prospect of getting the work. The selected presenters should be invited by letter.

Click here for an example Interview Invitation

Managing the presentations 83. Usually, presentations are attended by a sub-set of the tender evaluation

team, with perhaps an added specialist, such as an IT or financial expert (if there are particular perceived weaknesses in the bids, or technical clarification is needed). Presentations should be scored either as a refinement to the scored criteria of the tender evaluation, or as a separate criterion in its own right. Any adjustments to previous scores must be noted on the evaluation sheets.

84. Typically, agendas for presentations will comprise:

(a) a 5 minute introduction by the company

(b) a 15-20 minute explanation of the bid (ideally addressing any areas of perceived weakness and specifying the level of support to be given to the contract by the company); and,

(c) about 15-20 minutes question/answer time.

85. Presentation panels need to test bidders' familiarity with their bid and the ITT. If, during the presentation, a tenderer offers something new, that was not included in their tender, the chair should ask them to confirm the revision to the offer in writing as soon as possible after the presentation. All such written clarification must be received before the contract is awarded. This should be referred to as "bid clarification" in any ensuing correspondence.

86. Scores from presentations can either simply be used on their own to determine the favoured supplier or they can be added to or subtracted from the original evaluation marks (to give a single revised score). Any amendments to the original bid scoring must be noted on the evaluation sheets, with clear reasons given for those amendments; this is required for audit and feedback purposes.

87. The assessment process should now be finalised, so that a preferred supplier can be nominated for award (subject to any post-tender clarifications).

Managers’ guide to procurement January 2012 18

Post tender clarification 88. Sometimes, following tender evaluation and suppliers' presentations, it is not

advisable to accept a supplier's tender without qualification. Equally, care must be taken with any post-tender clarifications to ensure that other tenderers are not disadvantaged, competition is not distorted, or that trust in the tendering process is not adversely affected.

89. While the UK Government views post-tender negotiation as a legitimate exercise (particularly in the case of PFI projects), it is rarely considered appropriate for tenders let under the EU Directives. However, this exception does not prevent clarification of tenders, which is strongly encouraged. A variation of the negotiated process is now available under the new EU directives, which is known as ‘Competitive Dialogue’, which permits discussion of different options before choosing a particular solution; if this route is to be used, this needs to be mentioned in the original OJEU Notice. If in doubt about whether the point at issue is one of negotiation or clarification, please contact the Procurement Team.

90. If negotiation or clarification proves unsuccessful, it may be necessary to abandon the first choice preferred supplier and to select the second choice instead. The first choice must have irreversibly been eliminated from the process before any negotiations can commence with the second.

The Tender Report 91. Once the preferred supplier has been decided, the evaluation team leader

should compile the Tender Report, which will include details of the tender & evaluation process, as well as the final recommendation. Issues of non-compliance or qualifications to the tender, in so far as they affect the recommended supplier, should also be commented upon. Any information that is relevant to the decision making process, but is not obvious from the evaluation records, should also be included. The report will need to be approved, at an appropriate level by the relevant Executive Director or Mayor & Cabinet (Contracts), before the contract can be awarded.

Click here for Practice Note: Shortlist & Award Reports

Awarding the contract 92. Once the contract has been formally approved, a Contract Award letter will

need to be sent to the successful organisation. If the project is one that has involved the Procurement Team, then they will be able to issue the letter, otherwise it will need to be sent by the project officer.

93. However, the contract cannot come into force until a mandatory ‘standstill’ period (as required by EU directives) and an internal ‘scrutiny’ period (as required by the Council’s Standing Orders) have elapsed. The former is to allow unsuccessful tenders the opportunity to suspend the process (by ‘judicial interruption’) if they have a valid case to challenge the decision. The time allowed to cover both of these periods is 13 days from the date of the Contract Award letter.

94. Once the standstill/scrutiny periods have elapsed, and there has been no ‘judicial interruption’, the contract should now be formally issued and executed, and Legal Services should be contacted in order for them to prepare the documentation or give advice. Typically, the components for the actual contract will be the Form of Tender, the contractor's written proposal, plus any modifications (as may have been agreed at the presentation or in the

Managers’ guide to procurement January 2012 19

post tender negotiation), the Specification, any relevant Method Statements and the Contract Agreement itself.

95. The Contract Documents should be issued in duplicate to the supplier for them to sign and, on their return, signed on behalf of the Council (in accordance with the Council’s Scheme of Delegation). Where practical, all contract papers should be bound together in date order, and a duplicate copy issued with the Agreement for the contractor’s retention, so that both parties can be satisfied as to the completeness of contract documentation. Any subsequent contract variations should be attached to the retained Council copy, as and when issued.

Click here for an example Contract Award Letter (EU) and Contract Award Letter (Non-EU)

Click here for Practice Note: Awarding the Contract

Advising and debriefing unsuccessful tenderers 96. The Council is required for any contract issued under the EU directives to

issue letters to all unsuccessful tenderers stating that they have been unsuccessful; this should also be best practice for all tenders that do not come under the EU regime. The letter should outline the following:

(a) the award criteria;

(b) where appropriate, the score the tenderer obtained against those award criteria;

(c) where appropriate, the score the winning tenderer obtained;

(d) the reasons for the decision, including the characteristics and relative advantages of the successful bid; and

(d) the name of the winning tenderer.

97. The letter includes an offer to give a debriefing session which, if taken up, can be given over the telephone or by face to face meeting (depending on supplier preference). Debriefs should be carefully prepared in advance from the evaluation and presentation records.

Click here for Practice Note: EU Remedies Directive Click here for an example Unsuccessful Tender Letter98. Any debriefing given over the telephone should be read out, with the date,

time and name of the supplier's representative being recorded. If given face-to-face, there should be two departmental representatives present, and as far as possible, the debriefing should be delivered from a prepared "script". The papers for the debriefing should then be put on a registered file. If required, Procurement Team staff can attend face-to-face debriefs and / or assist with their preparation.

99. At this stage, a “Contract Award Notice” for contracts awarded under the EU regime (including Part B/Residual Services) needs to be prepared, which must be submitted to OJEU within 48 days of the official contract award (i.e. once the scrutiny/standstill periods have expired, and there has been no ‘judicial interruption’). The Procurement Team can prepare and submit this if necessary.

Managers’ guide to procurement January 2012 20

Contract management and monitoring 100. The original tenders (unsuccessful as well as successful), and completed

evaluation records, should be kept on a registered file for an appropriate period of time (in accordance with the Council’s Document Retention Policy, to form a proper audit trail. Copy tenders should be discarded as confidential waste or (if unmarked) offered back to the bidders. Other parties may subsequently need to refer to the procurement records, and they should therefore be kept as clear as possible. All relevant issues, including telephone conversations, should have been documented, so that it is easy to follow the trail.

101. The Procurement Team’s involvement usually ends with the debriefings. Thereafter, it is the task of the client directorate to manage and review the contract (including confirming that the contractor has sufficient insurance cover). Nevertheless, if any contractual issues should subsequently arise, the Procurement Team will always be available for advice and support.

102. The main objectives of contract management are relatively simple. They should ensure that:

(a) the user will be satisfied with the end product;

(b) the contract is completed within the stipulated time; and

(c) the contract is completed within the agreed budget.

103. The key to successful contract management is sufficient, timely and accurate information delivered to the right people. The contract itself should set the framework to provide for the required contract management arrangements. With the key elements enshrined in the contract, both parties to the eventual contract will thus have ‘signed-up’ to the arrangements and should be clear about the framework in which they are operating.

104. Effective monitoring requires good communication between you, the supplier and any other related parties, such as a contract manager, other users of the contract, and so on. A named contact in the supplier organisation is essential, and monitoring meetings should be planned in advance, along with the type of management information required on the progress of the contract.

105. Monitoring requirements will vary depending on the nature of the contract and the goods, services, and works being provided. However certain standard practices can be adopted including:

(a) monitoring the supplier’s performance against the specific targets/Key Performance Indicators set out in the contract

(b) inspection of completed work

(c) recording complaints received from customers particularly where the service may be delivered to the public on behalf of the Council; or it may be that the users are other staff, e.g. users of Panels

(d) recording customer satisfaction with the service, usually via questionnaires, e.g. evaluation forms at the end of training courses

(e) obtaining information from the supplier on their opinion of their progress

(f) obtaining any revisions in timescale, quantity/quality of outputs from the supplier at the earliest opportunity.

Click here for Practice Note: Managing the Contract

Managers’ guide to procurement January 2012 21

Contract variations 106. These may or may not arise as a result of contract monitoring and control.

Other factors may cause a change in requirements of the Council requiring a change in the contract to reflect these. The typical changes would include:

• quantity or quality of goods or services being required

• timescales for delivery of goods or services

• new or different locations

• changes to the nature of the service being provided, this may be due to market demand, new technologies, new legislation, etc.

• unforeseen events (e.g. the discovery of asbestos during a building project, not identified for removal in the specification).

107. Contract variations are normally negotiated between the contract manager and the supplier. There should be clear objectives and outputs in relation to the variation. Any change must be done in accordance with the Change Control procedure set out in the contract. If there is a cost implication for the budget, you should contact your finance team to ensure that sufficient budget exists, and to obtain any necessary approvals required under Financial Regulations.

108. On agreement, a variation order must be developed and approved and tied in with the main contract. The variation order should be subject to the securing value for money processes and costed on the basis of the schedule of rates set out in the contract (i.e. enhanced charges should not be agreed).

109. Contract variations should be approved by officers with the appropriate delegated authority. You should seek the advice of the Legal Services or Procurement Team before you agree to vary standard terms in the Council’s contract.

110. Once the terms of the variation has been agreed you should prepare a deed of variation. You should never agree a variation verbally or by letter as this may invalidate the whole agreement or weaken the Council’s right of enforcement Once approved, contract variations should be monitored and controlled in the same way as the original contract.

Contract extensions and renewals 111. A contract extension or the renewal of a contract may arise as a result of:

• the original contract made provision for extensions (this may be due to the exact timescales, or scope, not being known at the outset)

• it is inappropriate to re-tender and let a new contract for a very short period of extra time, or for a small amount of extra supply (the cost of re-tendering may outweigh the cost of the extension)

• the contract has over-run due to unavoidable delays

• the original timescales and expectations were unreasonable

• where the development work leads onto further activity which could not be quality assured by a different supplier.

112. Considerable care should be taken when considering renewing a contract or extending it outside of a competitive framework because:

• relationships may develop with suppliers to the exclusion of others

Managers’ guide to procurement January 2012 22

• there may be claims of unfairness if suppliers continue to get more and more work on continued extensions

• that aggregation of the original contract and extensions exceeds a financial threshold, particularly EU limits

• value for money may cease to be achieved without reference to the market place

113. Before you agree to the possibility of extending a contract you should ensure the EU procurement rules (if applicable) are not breached, and that there was provision in the original notice that an extension to the contract would be permitted.

114. If there is a cost implication for the budget, you should contact your finance team to ensure that sufficient budget exists, and to obtain any necessary approvals required under Financial Regulations. A report will be required to either the Executive Director for Resources or Mayor & Cabinet (Contracts), depending on the value of the extension, which will need to be cleared in the same way as a shortlist or award report.

115. Once the terms of the extension or renewal of the contract have been agreed, you should prepare the variation order. You should never agree an extension verbally as this may invalidate the whole agreement or weaken the Council’s right of enforcement.

Click here for Letter re Contract Extension - Extension Clause in contract and Letter re Contract Variation - Variation Clause in contract

Reviewing the process 116. This is an often-neglected part of the entire process, but in terms of

continuous improvement and Best Value, it is a key element. You should begin the review once the contract is in operation and for it to be of value to the next procurement exercise, you should continue to review it for the duration of the contract period. You should also keep stakeholders involved in the process and review actively.

117. In essence, the review refers back to the 4 Cs – Challenge, Consult, Compare, Compete - the basic principles behind Best Value: Under these four general headings, the following areas are examined to determine what lessons can be learned for future exercises:

(a) assess contractor performance

(b) assess management effectiveness

(c) determine if the anticipated benefits have been realised

(d) check the business needs

(e) examine competitive options

(f) anticipate changes

(g) reassess the risks

(h) consider renewal strategy

118. If the contract you are managing will need to be retendered in the future then you need to start preparing for the new procurement exercise around 6-8 months before the expiry of the existing contract. All the information gathered, lessons learned and experience gained during the management of

Managers’ guide to procurement January 2012 23

the contract will be invaluable in reviewing and assessing the process for any future exercises on this or other projects.

Click here for Practice Note: Reviewing the Process

Managers’ guide to procurement January 2012 24

Appendix A

THE PROCUREMENT CYCLE (Place cursor on underlined words and press CTRL and click to follow link)

Approach the market

Define the approach

Manage the contract

Identify

the need

Develop the brief

Evaluate the tenders

Award the contract

Review the process

Managers’ guide to procurement January 2012 25

Appendix B

PROCUREMENT LEVELS OF ACTION

Identify requirement

Assess potential value of requirement If YES, consider the following options: • Contract Variation • Purchasing direct from corporate

contract (e.g. paper, stationery, bottled water, etc.)

• Calling-off from a framework agreement (either internal or external)

Does the Council operate a corporate contract or (have access to) a framework arrangement that will meet the requirement?

• Corporate Procurement Card

If NO, is the value:

Up to £10,000 - You should obtain 1 written quote

£10,001 to £25,000 - You should obtain 3 written quotes

£25,001 to £40,000 - You should obtain 4 written quotes

Above £40,000 to EU limit – [Supplies/Services £156k, Works £3.9m] You should invite at least 5 firms to tender

Above EU limits – Seek advice from the Procurement Team

If you are satisfied with the quote, then either: (a) Refer to desktop guide for next steps, or (b) Consider using the Corporate

Procurement Card, or (c) Raise purchase order

Refer to Non-EU Directives flowchart (Appendix D) – seek advice from Procurement Team if necessary

Refer to EU Directives flowchart (Appendix C) – seek advice from Procurement Team if necessary

Managers’ guide to procurement January 2012 26

Appendix C

EU DIRECTIVES APPLY

Identify requirement

Prepare business case/options appraisal, ensuring whole life costs are included. Consider Gateway Review process

Produce timetable in accordance with mandatory EU timescales.

If ‘Restricted’ procedure used, issue business q’aire to firms expressing an interest.

Produce specification and set evaluation criteria to be included in the tender documents.

Choose most appropriate EU procedure. Draft EU advert (contact Procurement Team), and publish.

Issue tender documents, setting return date in accordance with EU procedure used.

Receive, open and record tenders, and pass to project officer for evaluation by evaluation team.

Evaluate tenders in accordance with pre-determined criteria. If necessary, arrange for bidder presentations/interviews.

Finalise decision, and draft report to Executive Director or Mayor & Cabinet (Contracts)

Notify successful and unsuccessful tenderers of decision, allowing time for ‘standstill’ and ‘scrutiny’.

Issue a Contract Award Notice for publication in OJEU within 48 days of contract award.

Debrief as necessary.

Appraise business q’aires and produce shortlist of firms to be invited to tender.

Draft shortlist report to Executive Director or Mayor & Cabinet (Contracts).

Notify unsuccessful firms in writing, offering debrief session. Allow for scrutiny period.

Managers’ guide to procurement January 2012 27

Appendix D

Managers’ guide to procurement January 2012 28

NON-EU DIRECTIVES APPLY

Identify requirement

Prepare business case/options appraisal, ensuring whole life costs are included. Consider Gateway Review process

Produce timetable in accordance with realistic timescales.

Produce specification and set evaluation criteria to be included in the tender documents.

Choose procurement method (approved list, framework, open advert. restricted advert). Publish advert if necessary.

Issue tender documents, setting return date in accordance with timetable.

Receive, open and record tenders, and pass to project officer for evaluation by evaluation team.

Evaluate tenders in accordance with pre-determined criteria. If necessary, arrange for bidder presentations/interviews.

Finalise decision, and draft report to Executive Director or Mayor & Cabinet (Contracts)

Notify successful and unsuccessful tenderers of decision, allowing time for ‘standstill’ and ‘scrutiny’.

If ‘Restricted’ procedure used, issue business q’aire to firms expressing an interest.

Appraise business q’aires and produce shortlist of firms to be invited to tender.

Debrief as necessary.

Draft shortlist report to Executive Director or Mayor & Cabinet (Contracts).

Notify unsuccessful firms in writing, offering debrief session. Allow for scrutiny period.

Appendix E

CONTRACT PROCEDURE RULES SUMMARY Value of Contract Quotation/Tender Process Who Contract Documentation Approval

Review of requirement with CPT prior to proceeding.

Service Area to review with CPT

Written form of contract approved by Legal Services.

Mayor & Cabinet (Contracts) Category A – Building construction and engineering works contracts (‘works contracts’) with an estimated value of over £1m;

from the Directorate Head of Resources (or whoever has been delegated to make that decision).

All EU notices should be published centrally by CPT.

Contracts to be under seal

Contracts which have a significant impact on the local community represent a Key Decision and must be published on the Forward Plan

other contracts with an estimated value of over £500,000.

Follow tender process Service Area

Written form of contract approved by Legal Services.

Executive Director for Resources

Category B – Works contracts with an estimated value of between £40,000 and £1m;

For appointment of consultants where fee value is estimated at above £40,000, approval to appoint a consultant must be obtained from the relevant Executive Director BEFORE undertaking tendering process.

all other contracts with an estimated value of between £40,000 and £500,000.

Up to £10,000 written quote (min) Service Area

Purchase Order or P-Card By officer authorised by relevant Executive Director

Category C – All other contracts or arrangements with an estimated value of less than £40,000

£10,001 - £25,000 3 written quotes (min) Purchase Order £25,001 - £40,000 4 written quotes (min) Purchase Order or Contract

Goods, services and works that can be satisfied from an existing approved contract

Follow call off procedure within contract Service Area

Follow call off procedure within contract

By officer authorised by relevant Executive Director

CPT = Corporate Procurement Team