Group Procurement Policy. Policy Owner: Executive Director Finance and Resources

Transcription

1 Group Procurement Policy Policy Owner: Executive Director Finance and Resources 0

2 Control Date Policy level Regulatory / Strategic Policy Reference FR/001/2012 Link to Strategy Procurement Strategy Version Control Effective from January 2013 Effective to January 2016 (This Policy replaces Pre Tender Policy 2007, Tender Policy 2007, Post Tender Policy 2007) Approved by Dominic Lynch Executive Director Finance & Resources Consultation Consulted with Equality lead July 2012 Equality analysis Full Equality Analysis to be undertaken by December 2012 Next review date January

3 Contents 1. Policy Statement Scope, Roles and Responsibilities Procurement principles Procurement application Measurement of procurement success Value for money implications Equality and Diversity implications... 7 Group Financial Regulations: Annex B - Procurement Deviations Pre-tender Authorisation Tendering Thresholds... 2 Table 1: Tendering Thresholds Procurement Processes Procurement Milestone Authorities Submissions and Opening of Tenders Tender Evaluation Bonds, Guarantees and Insurance Contract Form Awarding Contracts Contract Management... 8 Appendix 1 Quick reference guide to minimum requirements

4 1. Policy Statement Curo undertakes to set a framework for the procurement of goods, works and services which reflects the Group s mission, vision and values and supports the strategic objectives. The procurement policy supports the procurement strategy, which links directly to Curo s strategic plan for 2012 to The policy provides for procurement to be undertaken by colleagues throughout the Curo Group in an efficient, common manner with probity, transparency and equality, and ensuring that the standing orders and financial regulations are complied with. Aims The primary aim is to award contracts that reflect our customers aspirations, whilst achieving a target reduction in cost without compromising quality, encouraging competition and delivering value for money. In addition our aims are: To ensure that the procurement process is clear, proportional and focussed on achieving the overall strategy and outcomes for the contract To encourage stakeholder involvement throughout the procurement process through communication and consultation To ensure that the procurement options are chosen on the basis of the degree to which they fulfil Curo s business objectives and customers requirements To ensure that goods, works and services are delivered to the required standard and in a cost effective manner To enable the impact of investing in existing and new stock and the contribution to local neighbourhoods to be maximised To ensure that procurement activities are completed in accordance with current legislation and best practice 2. Scope, Roles and Responsibilities Scope This policy applies to all Curo colleagues and residents who are involved with the procurement of goods, works or services. Roles and responsibilities Procurement Board The Procurement Board will meet every two months to review the progress of procurement activities against the procurement plan and to monitor the outcomes in terms of the procurement performance targets. The Board will be chaired by the Executive Director Finance and Resources and attended by: the Procurement Officer (Administrator), the Executive Director Customer Services, the Director of Neighbourhoods, the Director of Asset Management and Development, the Head of Curo Response and the Head of Procurement & 3

5 Facilities (HoPF) as well as the sponsors undertaking procurement activity at the time. Procurement sponsor Each work package will be sponsored by an Executive or Senior Leadership Team member, who will have primary responsibility for adhering to the policy. The sponsor may delegate to an officer the responsibility for leading the procurement and managing the contract. Procurement lead The officer responsible for day to day contract management will also be responsible for the procurement activity, will own the budget for the expenditure and manage the relationships and performance with the suppliers. Procurement function The procurement team will provide a procurement framework, training and support to enable the sponsor and lead to undertake effective procurement activities. 3. Procurement principles The following procurement principles have been established that support the above aims. Customer focus Specifications of works, goods and services will focus on service delivery and clearly define the goals or outcomes required for customers. Customers will be fully consulted in this process and continue to be involved during the procurement process as appropriate. For this purpose a Resident Procurement Panel will be recruited for which the procurement function will provide advice and training. When planning procurement, due consideration will be given to accommodating innovation and flexibility within the operational and procurement arrangements so that we are able to fulfil our customers aspirations. Forming the strategy for the procurement Curo is committed to ensuring that a thorough pre-tender process is followed to ensure that the optimum strategy is followed. Where appropriate the following apply: Each work package will be sponsored by an Executive or Senior Leadership Team member, who will determine the officer responsible for leading the procurement and managing the contract Where appropriate a cross functional user group will be formed at the outset of the procurement to ensure that individuals representing customers and all departments who will be utilising the works, goods or services under review, are included The budget and objectives will be clearly defined and supported by the business before the market is approached 4

6 The timetable and resources for the procurement will be adequate to ensure adequate consultation before, during and after the tender and a full implementation schedule for the new contract The risks associated with the procurement will be assessed and mitigated accordingly Early and effective market engagement will be included in the process to ensure that the specification and service level requirements are appropriate and clearly communicated Social and environmental considerations Consideration will be given to including social or environmental conditions in contracts, including: Provision for work placements, apprenticeships, employment and skills opportunities for local people including our own residents Environmental issues forming part of the decision making process Measurement of these benefits by key performance indicators Aggregation and packaging of contracts Curo will comply with EU Procurement rules regarding the aggregation of contracts, so that where separate contracts exist for the same works or service, their value is added together to determine the procurement process that will be followed. In addition Curo is committed to the packaging of contracts and procuring them together to encourage the best value to be delivered by our suppliers for our customers. This means that the cost to Curo of our procurement activity is minimised and the number of applications to which suppliers are invited to respond is reduced. Term of contracts, partnering and frameworks Wherever possible and appropriate, Curo will strive to establish longer term contracts and partnering arrangements, in order to give suppliers the opportunity to submit proposals that include efficiencies and added value gained from long term commitment, and that promote continuous improvement by using their initiatives over the life of the contract. The use of consortia or Purchasing Club frameworks and contracts will be considered as an efficient means to procure and to access better value through greater buying power. Advertising requirements Curo will follow the EU Procurement directives that require the public advertising of all tender opportunities above the reigning thresholds. Contract opportunities below this threshold will be advertised sufficiently wide to ensure open and fair competition. To ensure transparency, all opportunities falling into the parameters as stated in the Standing Orders will be advertised on Curo s supplier portal and Contract Finder, the Cabinet Office sponsored national web portal. Approved supplier lists Curo will operate approved supplier lists, whereby key suppliers are pre-qualified to work with Curo. Shortlists of approved suppliers who can fulfil each category of works, goods or services will be maintained and refreshed every two years. Approved suppliers will be guaranteed to be invited to tender for opportunities. 5

7 When the lists are refreshed this will be advertised so that we ensure new suppliers in the market place have the chance to gain access. Evaluation and award criteria Contracts will be awarded on the basis of which tender is the most economically advantageous, taking into account the optimum combination of cost and quality to meet our requirements. When considering our specifications and evaluating proposals, the total cost over the whole life of the works, goods and services will be used. Post tender requirements Curo will document all competitive tendering decisions in a value for money report citing the justifications and authorisations at each stage of the process. The report will include all procurement savings and benefits that have been agreed with the suppliers and will be approved prior to contract award in accordance with the standing orders. In the interests of a well functioning market, feedback to bidders concerning their performance will be offered. Management and monitoring of Contracts Contracts will be adequately managed and monitored using the Curo contract management toolkit with a view to achieving excellent customer service and consistent service delivery to specification and to budget. Curo will work closely with suppliers to ensure that all projected savings and benefits are realised. Regular performance review meetings will be held, with key stakeholders invited to attend. Professional standards and best practice All procurement activities will be operated in a professional manner and Curo will commit appropriate resources to achieve this, thereby ensuring high standards of transparency, probity and accountability. 3. Procurement application This policy applies to all procurement, but the value, nature and risk associated with the contract will determine the procedure undertaken to procure. The standing orders detail the four procurement processes, which vary in respect of the level of consultation, competition, and authorisation required. The procurement lead must comply with the standing orders, financial regulations, and all relevant UK and European Union legislative requirements. The standing orders stipulate the minimum requirements and in some cases a more thorough procedure may be appropriate for a particular contract. Deviations The Executive may waive the requirement of a standing order in exceptional circumstances on receipt of a Deviation Report that details a reasoned request. However, no deviation can be granted if it permits a breach of the EU Procurement Regulations or relevant UK Regulations. 6

8 4. Measurement of procurement success Performance will be monitored in respect of: Compliance with all relevant laws and policies and procedures Appropriate involvement of relevant stakeholders, especially customers, in the development of specifications, service levels and in the selection of suppliers Achievement of target procurement savings and non cashable benefits Contracts that ensure excellent customer care, equality of opportunity, recognise diversity, achieve value for money, improve social well being, increase employment training and opportunities and reduce environmental impact Clear and consistent communication with suppliers before, during and after tendering Timely planning, start and completion of procurement activities Planning, monitoring and review The Head of Procurement and Facilities will be responsible for the co-ordination and maintenance of the rolling 3 year procurement plan. The procurement work packages and targets for next year will be agreed as part of the business planning process and encapsulated within team plans and individual personal development reviews. The implementation of the policy and procedures will be supported, monitored and reported by the procurement function through the e-procurement system. Procurement outcomes and tender initiation and evaluation documents will be reviewed by the Procurement Board to ensure that all procurement activity reflects best practice and serves the changing needs of the business. 5. Value for money implications By applying this policy we will ensure that Curo makes the most of its limited resources by utilising cost effective and best practice procurement processes. The policy and associated standing orders are designed to ensure that we procure contracts that reflect our customers requirements and which secure and sustain optimal value in terms of cost, efficiency and risk. The policy supports the procurement strategy where colleagues are empowered to manage their procurement activities by the most efficient means within a policy framework that provides guidance, support and direction. 6. Equality and Diversity implications By applying this policy and ethical procurement practices we will; ensure that our contracts are compliant with our legal obligations to protected groups under the Equality Act

9 manage competitions fairly and be objective and transparent when making decisions seek evidence about contractors employment practices and their demonstrable ethical way of working embedded within their business strive towards equality and diversity outcomes through our purchasing power and procurement function 8

10 Group Financial Regulations: Annex B - Procurement 1

11 The Group Financial Regulations: Annex B - Procurement stipulates the minimum requirements for the procurement of goods, works and services and are part of the Financial Regulations. This Annex should be used in conjunction with the procurement policy, which provides the framework of principles to be followed 1. Deviations The Executive may waive the requirement of the Group s Financial Regulations: Annex B - Procurement in exceptional circumstances and upon receipt of a Deviation Report that details a reasoned request. Deviations from standing orders or financial regulations are required to be approved by the Head of Procurement and Facilities, the relevant Executive Director and the Executive Director Finance and Resources before they can be implemented. 2. Pre-tender Authorisation Before commencing a procurement activity, it is essential that the nominated Procurement Sponsor ensures that the following steps are completed: appointing the Project Lead responsible for managing the procurement and the ensuing contract defining the need in terms of the scope, value and key stakeholders forming a user group to ensure that customers and other stakeholders are represented (only applicable to Category Review and EU tendering processes) defining the budget and procurement objectives evaluating the market, including an assessment of supply options forming a strategy and/or business case for the procurement summarising the above in a Procurement Stage 1 Report (only applicable to Category Review and EU Tendering) In all cases the availability of an appropriate framework agreement should be considered prior to undertaking a new procurement activity. 3. Tendering Thresholds The Table 1 sets out the contract value and risk parameters used to determine the process that must be followed. 2

12 Table 1: Tendering Thresholds Procurement Process Risk/ impact Band Works Supplies And Services EU Tendering High 4,348,350* 173,934* Category Review High 100,000 to EU threshold 100,000 to EU threshold Localised Purchasing Med 10,000 to 99,999 50,000 to 99,999 Written Quotations from approved Supplier List Low 10,000 to 99,999 10,000 to 49,999 Quotation - minimum 2 written quotes Low 3,000 to 9,999 3,000 to 9,999 Quotation - minimum 2 verbal quotes Low Less than 3,000 Less than 3,000 * These are the current EU thresholds, which are reviewed every 2 years in January. The next review is in January Changes to the Tendering Thresholds to reflect updated EU Financial Thresholds do not require Board approval. Estimating the contract value and risk/impact The procurement process form should be used to arrive at the contract value and risk/impact assessment for each project and this should be signed off by the procurement sponsor. The electronic form automatically determines the correct process based on the user s assessment of contract value and risk/impact. Curo will make best use of its purchasing power and resources by aggregating purchases wherever possible. Contracts should not be split in order to avoid the applicability of the standing orders. The contract value is the aggregate value payable exclusive of VAT over the entire contract period, including possible extensions. Where the contract is being procured to fulfil an on-going requirement, then the term of the contract is deemed to be 4 years. 3

13 Procurements will be regarded as high risk/impact if: the goods, works or services are subject to the European Procurement Directives the goods, works or services are to be recharged via variable service charges and therefore subject to consultation under Section 20 of the Landlord and Tenant Act (this is only applicable to Works exceeding 250 per Leaseholder and Services exceeding 100 per Leaseholder in any one year for an agreement of more than 12 months) the procurement requires consultation with residents throughout the process including the selection and evaluation of potential providers the criticality of the service delivery to Curo is higher than normal due to high business dependency or strategic risk, e.g. IT infrastructure, strategic consultancy the risk involved in the contract delivery is higher than normal, e.g. due to the use of previously untested cutting edge technology, new business ventures or innovative practices in which Curo have no experience Under one or more of the above circumstances the category review process will be deemed most appropriate even if the value if below 100,000. Procurements will be regarded as medium risk/impact if: the goods, works or services are being procured to fulfil part or all of a service contracted to Curo by a third party, e.g. a Curo Choice service the contract requires the provider to possess essential qualifications or accreditations and we do not already have the required approved suppliers or an appropriate framework to fulfil the requirement Under one or more of these circumstances the localised purchasing process will be the minimum process to be used, thereby including requirements for advertising and a full quality evaluation. All other procurements will be regarded as low risk/impact including those which require no consultation or limited consultation with residents pre-tender (e.g. regarding scope and specification). In these cases the procedure to be followed will be determined by the contract value alone. 4. Procurement Processes The minimum requirements for each process are set out in the Appendix. Detailed guidance documents are provided for each procedure and additional support from the procurement function should be sought if required. Verbal and written quotations Where available, Approved Suppliers must be used for these requirements. 2 quotes must be obtained for contracts below 10,000 and these can be obtained orally if the contract value is less than 3,000, provided that it is subsequently confirmed in writing. quotations are acceptable. Written quotations minimum 3 quotes from approved suppliers 4

14 For contracts above 10,000, all eligible suppliers from the relevant approved supplier list should be invited to quote and, as a minimum, quotations from 3 suppliers should be obtained. If it is not possible to obtain 3 written quotations advertising should be considered or a deviation from these standing orders must be obtained. The 3 quotation procedure is a straight forward process for seeking price and delivery times for easily specified goods, works or services. The evaluation may be based on lowest priced bid or the highest scoring bid where quality criteria are used. In general the use of quality assessment is recommended in preference to price only awards. This process is applicable for contracts within the stated value parameters and which are deemed as low risk/impact. Localised purchasing This process is applicable for contracts within the stated value parameters and/or which are deemed as medium risk/impact. The localised purchasing procedure is the process of seeking a price for closely specified works, goods and/or service whilst ensuring value for money through a competitive bidding process, and ensuring quality and capability via reasonable assurance checks. The opportunity will be advertised on the Curo supplier portal and Contract Finder, and all tenders will be subject to the opening procedure. Category review The category review procedure is a rigorous process incorporating all aspects of competitive tendering and designed to ensure that the key principles of probity, transparency and equality are followed. This process is applicable for contracts within the stated value parameters and/or which are deemed as high risk/impact. EU Tendering The EU Directives set out the principles for the procurement of goods, works and services that are above specified financial threshold levels. The rules are mandatory and specify procedures for advertising, tendering and awarding depending on the type of contract. Where the estimated contract value exceeds the EU thresholds the contract must be tendered in accordance with the EU Regulations. The contract will usually be tendered under the open or restricted procedures, but in exceptional circumstances, the accelerated, negotiated or competitive dialogue procedures may be considered. Contracts eligible for this procedure will be guided by procurement to ensure compliance with EU regulations. Call off from a third party framework A framework agreement sets out the terms that will apply if the parties conclude a contract, but does not itself constitute a public contract obliging either party to do anything. The procurement process to be followed will depend on value and risk/impact assessment and the nature of the framework agreement: Initially the pretender process should be followed as determined by the contract value and risk/impact assessment above. This will establish whether a user group and resident consultation is required and whether a suitable framework is available. 5

15 Buying club or consortia framework agreements generally provide a choice of potential providers from which a call off or mini-competition is used to award a contract. The terms of the framework will determine the tender procedure and evaluation process to be followed. The acceptance of the winning tender and award of the contract will be subject to the authorities outlined below. Call off from a framework that has been previously tendered by Curo Where Curo have tendered and awarded a framework that specifies the terms of contracts to be called off without the need for competition, then the procurement procedures do not apply. These contracts may be called off in line with the delegated authorities of the contract manager. 5. Procurement Milestone Authorities Each work package shall be sponsored by an Executive or Senior Leadership Team member. The sponsor may delegate to another colleague the responsibility for leading the procurement. Process and/or value of Contract Less than 10,000 3 written quotations from approved suppliers Up to 100,000 Up to 500,000 Above 500,000 Opening of Tenders Not required Procurement Lead and Sponsor or appointed representative Authorisation of Tender Evaluation report Not required Authorisation of Evaluation Document by sponsor * Authorisation of Evaluation Document by Sponsor and Executive Director Authorisation of Evaluation Document by Chief Executive *Evaluation documents may also be reviewed by the Executive Team and/or the Procurement Review Board on request. Procurement by consultants Where Curo uses Consultants to act on its behalf in relation to any procurement, then the sponsor shall ensure that the Consultants carry out any procurement in accordance with these standing orders. No Consultant shall make any decision on whether to award a contract or whom a contract should be awarded to. 6. Submissions and Opening of Tenders 6

16 All tenders shall be received via the e-procurement system and opened in line with the milestone authorities. In exceptional circumstances (for example in the case of the system not being available) tenders may be received in hard copy format, such exceptions to be approved by procurement. Any tenders submitted in hard copy must be received in accordance with the hard copy tender opening procedure. Late tenders No tenders received after the specified date and time for receipt of tenders should be accepted unless there is sufficient evidence for the tender having been dispatched in sufficient time for it to have arrived on time. 7. Tender Evaluation All tenders should be awarded on the basis of the most economically advantageous offer in terms of the evaluation criteria notified to the tenderers. Evaluation documents In order for the recommended Provider to be appointed Tender Acceptance must be granted in accordance with the milestone authorities. This permission will only be granted upon approval of the required Evaluation Documents, which are as follows: Process Written quotations minimum 3 quotes Localised Purchasing Category Review EU Tendering Evaluation Document Value for Money Report Procurement Stage Report In all cases the evaluation document should state the affordability position, and detail any efficiency savings and/or non-cashable benefits gained from the preferred tender. 8. Bonds, Guarantees and Insurance The sponsor shall consider whether a performance bond and/or parent company guarantee (if applicable) shall be required from the preferred supplier. The procurement lead should ensure that the appropriate type and level of insurance is in place for each contract. If there is any doubt advice should be sought from the Head of Treasury and Revenues. 9. Contract Form As a minimum it is essential that Terms and Conditions are agreed. In the case of contracts with value below 10,000 the Terms and Conditions are contained on the reverse of the Purchase Order. 7

17 With all contracts above 10,000 one of the following contract forms should be used: Curo short form contracts JCT / NEC contracts Appointment letter (in conjunction with a framework agreement containing the terms of the contract) In some cases, the supplier s contract may be used e.g. IT contracts. Advice should be sought from procurement in the first instance. 10. Awarding Contracts With the exception of verbal quotations, current financial checks and other references should be completed to ensure the supplier is suitable for the contract. All contracts over 10,000 must be signed by an authorised signatory of both parties and a scanned copy filed in the Intend contract register. Each procurement lead shall enter the contract details onto the Intend contract register. Authorised Contract signatories Value of Contract Up to 10,000 10,001 to 50,000 50,001 to 100, ,001 to 500,000 Above 500,000 Curo Group Curo Enterprises Curo Places Curo Choices Not required covered by Delegated Authority for Expenditure 2 x Executive Sponsor & 1 x SLT Or 2 x Executive Chief Executive & 1 x Executive or 1 x Board Member Notes 1. In the absence of an available authorised signatory then refer to the Signing and Sealing Procedure for guidance. Contract extensions Contracts may be extended in accordance with their original contract provisions. By exception contracts may be extended by negotiation provided the relevant Executive Director is satisfied that the extension will achieve best value for money, excellent customer service, and does not contravene the rules set out in the EU Procurement Directives. 11. Contract Management 8

18 For each contract the procurement lead should use the Intend Contract management system to store and maintain a contracts file that shall include as a minimum the following: Milestone Approvals and any authorised deviations Evaluation documents Acceptance by successful supplier Signed contract (if contract value is over 10,000) Key performance indicator 9

19 Appendix 1 Quick reference guide to minimum requirements Requirement Verbal quotations (min 2) Written Quotations (min 2) Approved supplier Quotations Localised purchasing Category review Milestone authorities Procurement process form authorised by sponsor x x x x x Sign off strategy, timetable and metrics for the procurement via authorisation of Procurement Stage 1 Report x x Electronic tender opening ceremony x x x Acceptance of tender via authorisation of Procurement Stage 2 Report x x x x Contract signing x x x x Pre tender Consider if suitable framework prior to procuring x x x x x Form an evaluation group with responsibility for evaluating the tenders x x x Form a user group with responsibility for the procurement, including representatives of all the key stakeholders x x Tendering and documentation Use Intend e-procurement system x x x x x Provide a specification for goods, works or services x x x x x Provide a pricing schedule from which the tendered pricing can be calculated x x x x x Provide quality assessment and detailed evaluation criteria x x x Provide Tender return form and declaration, which includes the Bribery Act certification x x x x x Invite all eligible suppliers from the approved supplier list x Advertise on Curo supplier portal and Contract Finder x x x EU tenders 1

20 Requirement Publish OJEU notices, timetable, standstill period and award procedures in accordance with EU regulations Verbal quotations (min 2) Written Quotations (min 2) Approved supplier Quotations Localised purchasing Category review EU tenders x Evaluation and award Qualification required in terms of eligibility, financial standing and technical capacity x x x x Award based on lowest priced bid, or the highest scoring bid where evaluated against price and/or quality criteria x Award based the highest scoring bid evaluated against price and quality criteria x x x Credit check at evaluation stage x x Credit check prior to contract award x x x x Give debriefs to suppliers x x x x Contract management Use Intend Contract Management system x x x x x Purchase Order with Terms and Conditions and specifying the goods, works or services to be issued x x Contract signed by an authorised signatory of all parties x x x x Copy of contract to be scanned and filed in the electronic contracts register x x x x Key - colour indicates the process from which the requirement applies Quotations & above Localised purchasing & above Category review & above EU tenders only 2