Speakers: Sarah Thompson and Samantha PritchardJune 26th 2014

Procurement Compliance and Governance - What you need to know to protect you and your school

Introduction

• Sarah Thompson - Associate, Education and Procurement

• Samantha Pritchard - Associate, Charities

Agenda

• Procurement and Governance the basics• Case studies• Questions

Procurement – the basics

• Public procurement itself can be described as the process whereby public sector organisations acquire goods, services and works from third parties.

• School’s procurement requirements: - School’s financial regulations; - Academies Financial Handbook; - DfE’s Buying Goods and Services – Schools; - TFEU principles; and - EU Procurement Rules/Public Contracts Regulations 2006

Procurement – the basics

• Getting it right is important• Best value for school• Value for money statement• Audit perspective• Consequences of getting it wrong

Governance – the basics

• Nolan 7 standards of public life• Selflessness • Integrity• Objectivity• Accountability• Openness• Honesty• Leadership

• Trustee duties and responsibilities

Case Study 1 - Financial policy and EU procurement

• School’s financial policy – General principles- expenditure should reflect best value principles- fair competition through quotations and tenders- ensure contracts are procured in the most economic,

efficient and effective way

- School’s financial policy – Typical values- Less than £10k- £10k - £40k 3 written quotations- £40k+ (but below EU thresholds) 3 competitive tenders

Case Study 1 - Financial policy and EU procurement

• ICT contract value £80,000• Write a specification to include as part of tender

• Clearly state what you want quantity/quality/other requirements

• Does the supplier have to meet any legal criteria? (h&s)

• Outline standards of performance expected• Advertise

• Local/national newspapers/trade journals• School’s/Council’s website

Case Study 1 - Financial policy and EU procurement

• ICT Contract annual value £40,000 – total value?• (£40k x 4) + (£40k x 1) = £200,000

• EU procurement financial thresholds for schools• Services and Supplies

• £172,514 (excl VAT)• Works

• £4,322,012 (excl VAT)

• Above threshold purchases must be undertaken in accordance Public Contracts Regulations 2006

• Prescribe detailed rules (supplemented with case law) on how the competition must be undertaken

Case Study 1 - Financial policy and EU procurement

• Can you extend the existing contract?• What do the terms of the contract state?• Is there a clear/unequivocal variation clause permitting an

extension?• Yes• No

• Careful not to exceed the EU procurement thresholds

• Can you award a new contract to supplier recommended to you?• Comply with school’s financial policy• Avoid direct award as difficult to demonstrate best value

Case Study 1 - Financial policy and EU procurement

• Other procurement options• Framework Agreements

• LA• PSBO – Crown Commercial Services, Crescent

Purchasing Consortium• Collaboration with other schools

Case Study 2 – Maximising income

• Trading limit • All sources• Look at other sources of income

• Maximising use of facilities – not trading if just ‘hand over the keys’

• Further charitable purposes

Case Study 3 – Ratifying an appointment

• Check the relevant procedure

• Notify the Board immediately

• Consider whether the appointment can be deferred to the next Board meeting

• Board ratify the appointment

Case Study 4 – Procurement challenge

• What to do when faced with a potential challenge• If it’s a below threshold procurement and followed school’s

policy – tell them• If it is above threshold and should have been advertised in

the OJEU seek legal assistance• Most complaints are settled out of court –a formal

challenge is very costly and can damage a supplier’s reputation

Case Study 4 – Conflict of interest

• Academies• “Connected Person”• Duty to declare interest in a transaction• Abstain from voting, not count towards the quorum, leave

the room• Is there a Trustee benefit - are extra steps necessary?• Adequate training? Declarations of Interests?

• Ask about conflicts in quote/tender documents

Questions?

Contact:

Sarah ThompsonAssociateProjects & Procurement TeamTel: 0191 279 9636Email: sarah.thompson@bonddickinson.com

Samantha PritchardAssociateCharities TeamTel: 0191 279 8391Email: samantha.pritchard@bonddickinson.com