Small and local suppliers policy. SMALL and LOCAL SUPPLIERS PROCUREMENT POLICY

Transcription

1 SMALL and LOCAL SUPPLIERS PROCUREMENT POLICY

2 1. SUMMARY 3 2. WHAT IS A SMALL AND LOCAL SUPPLIER? SMALL LOCAL 3 3. THE POLICY EQUAL OPPORTUNITY LARGER CONTRACTS ABOVE 172, PURCHASES AND CONTRACTS OF UP TO 172, APPENDIX 1: SUPPLEMENTARY NOTES BENEFITS OF USING SMALL AND LOCAL SUPPLIERS POTENTIAL BARRIERS AND HOW TO OVERCOME THEM DEPENDENCIES APPENDIX 2: LIST OF BBC BUILDINGS AND ASSOCIATED UK AREA/REGION 11 1 New EU thresholds for supplies and services that came into effect on 1 January 2014 for the next two years Page 2 of 11

3 1. SUMMARY This document sets the BBC s policy for buying specifically from small and local suppliers, and sets an approach that sits alongside the wider objectives of the BBC s procurement activity, which are to optimise the way in which we engage with our suppliers in order to deliver value for money; simplify processes; raise service levels; reduce risks; and develop successful relationships. The BBC is a national organisation with major centres across the United Kingdom. We buy a range of goods and services from a broad and varied mix of suppliers see Small and local suppliers can be a valuable and flexible source of supply for the BBC, offering not just value for money but sometimes a more tailored service catering for niche or discrete business/local needs. The BBC is also keen as a point of principle to support small and local businesses, and help organisations looking to grow and expand their client base. However, we need a policy to: Align buying from small and local suppliers to the objectives of the BBC s national deals; Comply with our obligations under the Public Contracts Regulations 2006 (the Purchasing Regulations ) which govern contracts above 172,000 in value; Ensure our arrangements with small and local suppliers meet our longer term business goals for example: maximising economies of scale where appropriate; reducing the number of suppliers we work with; reducing supply risk to the BBC and engaging with organisations that support our corporate and social objectives; and Maintain fairness in, and transparency of, our buying decisions. Section 2 defines a small and local supplier for the purpose of this policy and Section 3 outlines the policy for buying from these organisations. Appendix 1 consists of supplementary notes covering benefits of contracting with small and local suppliers, potential barriers for small and local suppliers and how to overcome them and the risk of dependencies between the BBC and small and local suppliers. Appendix 2 includes a list of all BBC offices and associated UK areas/regions. The policy will be reviewed on a regular basis to ensure it remains complete, current, and aligned to the BBC s procurement activity. 2. WHAT IS A SMALL AND LOCAL SUPPLIER? 2.1 SMALL Where the organisation has fewer than 50 employees and has an annual turnover (or balance sheet value), which is equal to or less than 10m (EU definition). 2.2 LOCAL Where the organisation s operations are carried out within the same UK area/region as the procuring BBC office (a list of BBC offices and corresponding UK area/regions is attached at Appendix 2). In the case of a production on location, a local organisation will be one which operates in the UK area/region in which that production (or production office) is based. Page 3 of 11

4 3. THE POLICY This policy sets the parameters and circumstances through which small and local organisations can work with the BBC. As an overriding principle, all suppliers are required to contract on the basis of the BBC s terms of trade ( which set out the BBC s expectations in terms of working with its suppliers and ensure the parties are appropriately protected from a legal perspective. 3.1 EQUAL OPPORTUNITY The BBC does not discriminate in favour of, or against, any particular group or type of suppliers, regardless of their location, size, or position in the market. We encourage new sources of supply and innovation from all suppliers capable of and wishing to supply the BBC, and select suppliers on the basis of their ability to demonstrably provide on-going value for money. We support small organisations that may have potential to become key suppliers of the future and local suppliers where we have a local presence in the community. While the BBC operates an open and non-discriminatory supply policy, it can sometimes be challenging for small and local suppliers to engage because: as a national organisation, we often buy on a national basis to maximise savings through economies of scale, which can lead to contracting with larger suppliers with national networks; and we are subject to legislation in the way we buy through the Public Contracts Regulations, which means we must aggregate spend where feasible into larger contracts that can be a barrier for smaller and local suppliers. A number of potential barriers to entry for small and local suppliers and ways to navigate these are outlined in the Supplementary notes section (Appendix 2). 3.2 LARGER CONTRACTS ABOVE 172,000 Contracts above a value of 172,000 are usually covered by the Purchasing Regulations and advertised in the OJEU (Official Journal of the European Union). Details regarding compliance to these Regulations are available here: Also see for some recent amendments. The buying strategy for these contracts will consider: a) whether the BBC will set a turnover threshold for prospective suppliers, so that the BBC contract is no more than a third (or similar) of the annual turnover of the supplier. A threshold will not be set where this could have a negative impact on choice and the quality of the supply market; however this threshold will be set where: there could be a business continuity risk if the BBC contracts with a supplier with a potential high dependency on the BBC; or the market is mature with many established suppliers and a financial threshold may assist in de-risking the procurement. Page 4 of 11

5 b) whether the requirements can be split into smaller lots (i.e. chunks of spend / type of purchase that reflect a local area, or region, or niche requirement) so that small and local organisations can bid. The BBC s website (via Bravo): is available to alert suppliers to current opportunities. 3.3 PURCHASES AND CONTRACTS OF UP TO 172,000 Ad hoc buying and contracts up to 172,000 are subject to various buying routes, depending on the requirements. Typically local organisations tend to serve only the relevant BBC offices by virtue of their proximity to these offices, although this does not limit their ability to serve the wider BBC, simply because they are classed as local. For this type of spend small and local suppliers are able to engage with the BBC in three ways: 1. IN SUPPLYING A ONE-OFF PURCHASE OF UP TO 5,000 These are incidental, low value purchases where a negotiated framework agreement, national or regional contract is not always available or necessary. These purchases do not typically affect business continuity. In such cases, if spend with one supplier becomes more regular and of higher value, e.g. expected or retrospective spend with a single supplier exceeds or is anticipated to exceed 50,000 per annum, the Procurement team may consider the benefits of running a light-touch competitive exercise to ensure fairness within the locality and establish more formal arrangements with a small number of small and local suppliers. The Procurement team will determine the approach and process for such arrangements. 2. IN SUPPLYING LOW TO MEDIUM VALUE PURCHASES ( 5,000 TO 50,000) ON A REGULAR BASIS This spend is deemed regular in that suppliers are fulfilling an on-going requirement (daily, weekly, monthly, etc.), for example consumable items, or niche services, that cumulatively could reach a total spend of up to 50,000. Given the regularity of this spend; it is possible that the type of goods or services being purchased may affect business continuity if they are not fit for purpose, or delivered to the BBC s required standards. This may also create for the BBC a dependency on a small and /or local supplier, or conversely the supplier may come to rely heavily on BBC business. The risk of such dependencies will be monitored and managed by the Procurement team. In these circumstances, the BBC may choose to run a light-touch procurement process to ensure best value for money is being delivered and that potential competing small and /or local suppliers see equal opportunity to be given a chance to bid. The Procurement team will identify the appropriate approach and process for such light touch arrangements, including the minimum contractual provisions that need to be in place. Page 5 of 11

6 3. IN SUPPLYING GOODS AND SERVICES ABOVE 50,000 AND BELOW 172,000 This spend is most likely of a regular nature, longer term. It may cover goods or services which affect business continuity if not fit for purpose or delivered to the BBC s requirements. A longer term contract or the setting up of an appropriate framework contract may be required. In this case, a full procurement process will most likely be run by the BBC). For these requirements a small and local supplier may supply to the BBC in a number of ways: directly with the BBC where the type of services are appropriate to their organisation and skill set; bidding as sub-contractors to a larger prime contractor or as a part of a consortia arrangement particularly where the requirement forms a part of a larger national contract; or by getting involved as a sub-contractor post the procurement process, where a national supplier is seeking to expand their local presence. Page 6 of 11

7 4. APPENDIX 1: SUPPLEMENTARY NOTES 4.1 BENEFITS OF USING SMALL AND LOCAL SUPPLIERS Small and local suppliers may be better placed to offer benefits such as a more responsive service; reduced need for transportation (and associated reduced carbon emissions); and more tailored solutions and supply arrangements. The use of small and local suppliers and the empowerment of these organisations to develop and expand their businesses could potentially result in a stronger small and local supplier sector in the regions the BBC operates leading to potentially increased competitiveness in the longer term. BETTER VALUE Because of their size or flexibility of location/type of premises, small and local suppliers can have lower administrative costs when compared with a larger competitor, reducing the cost of overheads and consequently the overall cost of supply. BETTER AND SPECIALISED SERVICES Local suppliers may specialise in a particular product or service, for example local catering. Because of their emphasis on specialisms or excellence in a certain area they will often be better placed to supply a higher quality product or service and to tailor their service to meet the BBC s specific needs. INNOVATION Small and local suppliers could bring more innovation (e.g. technological) to the products or services delivered, or to be able to move more quickly to embrace new developments in the market, especially where they are a niche provider of these products or services. CONTRIBUTING TO THE DEVELOPMENT OF LOCAL ECONOMIES Small and local suppliers consistently contribute to development of local economies and have been identified by the Government as being key to the development of well-being within the regions in the UK. By placing business with these types of suppliers, the BBC will also indirectly contribute to development of local communities and their economies. 4.2 POTENTIAL BARRIERS AND HOW TO OVERCOME THEM Many potential small and local suppliers may be discouraged from tendering for BBC opportunities because of a number of perceived or real barriers. Some of these barriers as well as guidance on how to overcome them are outlined below. The BBC will seek to reduce the impact of such barriers, where it is appropriate and it can do so legally, without discrimination and without taking unnecessary risk. FINDING OPPORTUNITIES Small and local suppliers may not know about or have the resources to search the OJEU (Official Journal of the European Union, where contracts above 172,000 in value are advertised unless exempt) on a regular basis. Additionally, they may not know where to look for or who to talk to about lower value procurements (below EU thresholds). Page 7 of 11

8 In order to have the maximum visibility, the BBC will endeavour to: ensure that opportunities are published on (a login is not required in order to view opportunities) in addition to the OJEU website (where subject to the Purchasing Regulations); provide information for potential tenderers on the website where suppliers will have access to view and register an interest in existing opportunities or just register for future opportunities; where appropriate, in addition to the BBC/Bravo website above, opportunities will also be listed in specific trade press or contact lists for local supply markets, as well as procurement portals (e.g. Procurement Scotland); in addition, the BBC Procurement team will also work to better understand the local supply market by, for example, identifying and mapping existing and potential local suppliers, their products, services and capabilities; and hold regional and local procurement road-shows in order to meet and understand the local supplier market and manage expectations regarding BBC opportunities. PROCUREMENT PROCESS Small and local suppliers may perceive the procurement process as long, overly complex and costly and have difficulties in competing with larger organisations. From the very start of the procurement process, the BBC will endeavour to: ensure that it has clearly formulated its requirements prior to engaging with the market on any procurement which is subject to the Purchasing Regulations; ensure that the procurement process proposed to be used is suitable for the size and complexity of the requirement; provide information within the tender documentation that explains the procurement process and what is required from the suppliers; include a timetable within the tender documentation, including information relating to deadlines and other key dates (such as dates for clarification questions) and make sure suppliers are kept up to date with any changes; provide clarification upon request on the evaluation criteria being used, and ensure that as much detail as possible is available; provide a single contact point for suppliers, and ensure that point of contact is available to respond to all queries; run procurements in a timely fashion in order to keep procurement costs to a minimum; and ensure that all tender debriefs provide useful information on the advantages of their own tenders and the relative advantages of the successful tender to ensure lessons are learned for tendering in the future. PREQUALIFICATION CRITERIA Small and local suppliers may be relatively recently established and not have an extensive track record, therefore may have difficulty providing the required evidence of financial standing or not have a large enough turnover to qualify for certain types of procurements. Page 8 of 11

9 The BBC will consider the nature, size and specific risks of every procurement and will ensure that the requirements for demonstrating financial standing are appropriate and relative to the risks of the individual procurement. UNDERSTANDING THE REQUIREMENTS Small and local suppliers that have not bid in a public sector environment previously may have concerns about the process. The BBC will provide specific information about exactly what it expects to receive as a part of a tender, by providing as much information as possible within the documentation released as a part of the tender, including: making requirements clear and focused on outputs and outcomes and avoiding over or under-specification; being clear regarding what the supplier will need to do to respond to the requirements, e.g. the type of information necessary and the format in which this information will need to be provided; and ensuring clarity regarding how questions can be raised by suppliers in the event that they have any queries on the requirement. SUBCONTRACTING In some cases, small and local suppliers may prefer to act as sub-contractors to a prime contractor, particularly where they can provide innovative and specialist products and services. The decision to employ a certain subcontractor is mostly of a commercial nature and will therefore ultimately lie with the prime contractor. Whilst taking care not to intervene and unduly influence decisions which should lie solely with the prime contractor, the BBC will help in making the supply chain more visible, by: advertising sub-contracting opportunities on the BBC s supplier websites; organising open supplier meetings that allow prime contractors and small and local suppliers as potential sub-contractors to meet and network; where appropriate, ensure that prime suppliers adopt supply chain management practices that integrate, incentivise and reward good performance in the supply chain; be open to consortia bids from prime, larger suppliers and small and local suppliers; and develop appropriate information databases regarding the performance of small and local suppliers as a part of the supply chain. LARGER AND LONGER CONTRACTS One of the current trends in public sector procurement is for larger and longer contracts. This may deter small and local suppliers from bidding. Page 9 of 11

10 In ensuring that the procurement is packaged to deliver the best value for money, the BBC will: consider the scope of its procurements on a case by case basis. In doing so, the BBC will consider if it is appropriate to package requirements separately, in lots of services or as one service; and where commercially appropriate, endeavour to structure its contracts to allow for additional demand to be supplied from other sources, if this is considered to be the best option at a particular moment in time. CASH FLOW The BBC will always ensure it pays its suppliers on previously agreed contractual terms (for the most up to date version, please see and where appropriate may consider variations of its standard terms to facilitate prompter payment. 4.3 DEPENDENCIES The BBC will evaluate the risks of purchasing from /partnering with small and local suppliers on a case by case basis in order to ensure that it does not become unacceptably dependent on a small and local supplier. To this end, the BBC may carry out annual reviews of existing contracts with small and local suppliers in order to evaluate the relationships. This will include potentially reviewing the on-going financial health of a supplier, the levels of insurance and liability required, and the amount of work being requested from individual suppliers. Page 10 of 11

11 5. APPENDIX 2: LIST OF BBC BUILDINGS AND ASSOCIATED UK AREA/REGION Page 11 of 11