Contract Procedure Rules

Contract Procedure Rules February 2014

A Brief Guide to the Contract Procedure Rules Contract Procedure Rules promote good purchasing practice, public accountability and deter corruption. Following the rules is the best defence against allegations that a purchase has been made incorrectly or fraudulently. For the purposes of these Rules, where there is a requirement for communication to be in writing, this shall be deemed to include e-mail and fax transmissions as well as hard-copy. Officers responsible for purchasing or disposal must comply with Contract Procedure Rules. Contract Procedure Rules lay down minimum requirements. A more thorough procedure may be appropriate for a particular contract. Follow the rules set out in Contract Procedure Rules if you purchase goods or services or commission building work. Take all necessary legal, financial and professional advice. Declare any personal financial interest in a contract. Corruption is a criminal offence. Conduct any Efficiencies and Value for Money review and appraise the purchasing need. Check whether there is an existing Corporate Contract or Framework contract you can make use of before undergoing a competitive process. Keep bids confidential. Complete a written contract or Council order before the supply or works begin. Identify a Contract Manager with responsibility for ensuring the contract delivers as intended. Keep records of dealings with suppliers. Revisit each contract at regular intervals through the delivery to see how well it met the purchasing need and value for money requirements. 2

Contents Section 1 Scope of Contract Procedure Rules 1. BASIC PRINCIPLES 2. OFFICER RESPONSIBILITIES 3. EXEMPTIONS 4. RELEVANT CONTRACTS Section 2 Common Requirements 5. STEPS PRIOR TO PURCHASE 6. RECORDS AND DEBRIEFING CANDIDATES 7. ADVERTISING 8. APPROVED LISTS Section 3 Conducting a Purchase and Disposal 9. COMPETITION REQUIREMENTS FOR PURCHASE & DISPOSAL OF ASSETS, PARTNERSHIP ARRANGEMENTS AND APPOINTMENT OF CONSULTANTS 10. PRE-TENDER MARKET RESEARCH AND CONSULTATION 11. SHORTLISTING 12. STANDARDS AND AWARD CRITERIA 13. INVITATIONS TO TENDER/QUOTATIONS 14. SUBMISSION, RECEIPT AND OPENING OF TENDERS 15. CLARIFICATION PROCEDURES 16. POST TENDER NEGOTIATION 17. EVALUATION AND AWARD OF CONTRACT Section 4 Contract and Other Formalities 18. CONTRACT DOCUMENTS 19. BONDS AND PARENT COMPANY GUARANTEES 20. PREVENTION OF CORRUPTION Section 5 Contract Management 21. MANAGING CONTRACTS 22. RISK ASSESSMENT & CONTINGENCY PLANNING 23. CONTRACT MONITORING, EVALUATION& REVIEW Section 6 General 24. TECHNICAL AMENDMENTS Section 7 Definitions Appendix Whenever DEFINED TERMS are used they are in italics, begin with a capital letter and are in the Definitions Appendix 3

Contract Regulations - Summary Flow Chart Analyse existing procurement processes / options Total Value < 1k Estimate total Contract value, including options CPR 5 refers Develop Business Case CPR 5 refers Exempt Contract? CPR 3 refers If Yes, not subject to CPR, but EU Treaty and Financial Regulations etc apply. Identify Evaluation and Award Criteria Sub-Procurement (Buying) Low Value Procurement Intermediate Value Procurement Contracts Subject to Regulations Up to 1k One verbal or written quote required and Purchase Order issued 1k - 10k (Services) 1k - 10k (Supplies) 1k - 20k (Works) At least 3 written quotes 10k 172,514 (Services) 10k - 172,514 (Supplies) 20k 4,322,013 (Works) Open advertisement using RFQ or ITT, Tenders from at least three Suppliers Above 172,514 (Services) Above 172,514 (Supplies) Above 4,322,013(Works) Use appropriate process e.g. Open or Restricted Prepare Specification Receive Quotations Assess risk in contract delivery Low Risk High Risk Prepare Request for Quotation (RFQ) to include - Form of Quotation - Specification - Terms and Conditions - Instructions to Suppliers Prepare Invitation to Tender to include - Form of Tender - Instructions to Suppliers and relevant information - Specification - Contract Terms and Conditions - Bonds and Guarantees (if applicable) CPR 13 refers Advertise Tender Opportunity CPR 7 refer Evaluate Quotations Advertise Quotation Opportunity CPR 7 refers Despatch RFQ documents to requesting suppliers Shortlist Suppliers (if applicable) CPR 11 refers Despatch Invitation to Tender CPR 13 refers Submission, receipt and opening of tenders CPR 14 refers Receive Quotations Evaluate Quotations Evaluate Tenders CPR 17 refers Award of Contract CPR 17 refers Debrief Suppliers CPR 17 refers Contract Formalities CPR 18 refer Prepare for Future Arrangement Contract Management and Review CPR 21 refers This Flow Chart is explanatory only, refer to the Contract Procedure Rules, Directives and Regulations for detailed information 4

Section 1 Scope of the Contract Procedure Rules 1. BASIC PRINCIPLES All purchasing and disposal procedures must: Achieve Efficiencies and Value for Money for public money spent Be consistent with the highest standards of integrity Ensure fairness in allocating public contracts Comply with all legal requirements Ensure that Non-Commercial Considerations do not influence any Contracting Decision Support the Council s corporate and directorate aims and policies Comply with the Council s Procurement Strategy Promote good Responsible Procurement At all times during the procurement process and contract management, the Council shall consider and implement the principles of nondiscrimination, equality of treatment and openness. 2. OFFICER RESPONSIBILITIES 2.1 Officers 2.1.1 The Officer responsible for purchasing or disposal must comply with these Contract Procedure Rules, Financial Regulations and with all UK and European Union legal requirements. 2.1.2 The Officer must have regard to the principles of the Council s Procurement Strategy. 2.1.3 The Officer must check whether a suitable Corporate Contract exists before seeking to let another contract. Where a suitable Corporate Contract exists, these must be used unless there is an auditable reason not to do so. 2.1.4 The Officer must have the required authority and budget to undertake the Procurement 2.1.5 The Officer must keep the records required by Rule 6. 2.1.6 The Officer must advise the Corporate Procurement Team (CPT) of their intention to let or to re-let all contracts, for contracts with a value over 100k this must be a minimum of six months in advance of the intended date for placing an advertisement to invite tenders. If the contract is not to be advertised, the Officer must inform the CPT a minimum of six months in advance of issuing Invitations to Tender or seeking an Exemption as outlined in Rule 3. 2.1.7 Officers must also ensure that Agents acting on their behalf also comply with these Contract Procedure Rules. 5

2.1.8 Officers must take all necessary legal, financial and professional advice e.g. Health and Safety, Safeguarding 2.1.9 When any employee either of the Council or of a service provider may be affected by any transfer arrangement, Officers must ensure that the Transfer of Undertaking (Protection of Employment) (TUPE) and pensions issues are considered and obtain legal advice before proceeding with inviting tenders or quotations. 2.1.10 Contract Procedure Rules must be complied with strictly. They are minimum requirements. A more thorough procedure may be appropriate for any individual contract. 2.2 Heads of Service Heads of Service must: 2.2.1 ensure that their staff comply with Rule 2.1. 2.2.2 ensure all staff complete a New Contract Form to record all contracts and exemptions as identified in Rule 2.2.3 2.2.3 keep a register of, - contracts completed by signature (rather than by the Council's seal see Rule 18.4.3) and arrange their safekeeping on Council premises and for their upload on the ERP Contracts Module. - exemptions recorded under Rule 3 and ensure that the Head of Legal, Democratic and Procurement monitors the use of exemptions. 3. EXEMPTIONS 3.1 Exemptions are subject to the detailed requirements set out in this Rule 3. An exemption under this Rule allows a contract to be placed by direct negotiation with one or more suppliers rather than in accordance with Rule 9. 3.2 No exemption can be used if the EU procedure applies excepting with prior consent from an appropriate Corporate Director. In these cases Rule 3.3 still applies. 3.3 All exemptions, and the reasons for them, must be recorded using the form on the Procurement Intranet Page. Exemptions shall be signed by the Officer, the Head of Service and countersigned by the relevant Portfolio Holder and the Strategic Procurement Manager. 3.4 In addition to the signature of the Officer and the Strategic Procurement Manager: 3.4.1 the Head of Legal, Democratic and Procurement Services must be consulted where the purchase is to be made using collaborative procurement arrangements with another local authority, government department, statutory undertaker or public service purchasing consortium (see Rule 3.9) and 6

3.4.2 an appropriate Corporate Director must agree and confirm that the exemption process has been duly completed where the contract is an extension to an existing contract and where a change of supplier would cause: disproportionate technical difficulties diseconomies or significant disruption to the delivery of Council services. 3.5 If an exemption is necessary because of an unforeseen emergency involving immediate risk to persons, property or serious disruption to Council services only the signature of either of the following persons is required; the Officer and any Head of Service/Corporate Director the Head of Emergency Management 3.6 In exceptional circumstances, the Council and its Cabinet have power to dispense with any provision of these Contract Procedure Rules. Any such decision may be a Key Decision. (There is no Exemption available for Priority Services, above the EU Thresholds.) 3.7 Exemptions to the Contract Procedure Rules can be granted for a maximum of one year and then must be either reconfirmed or amended using the same process. 3.8 Head of Legal, Democratic and Procurement must monitor and keep a log of the use of all exemptions. 3.9 In order to secure value for money the Council may enter into collaborative procurement arrangements. 3.9.1 Any contracts entered into through collaboration with other Local Authorities or other public bodies, where a competitive process has been followed that complies with the Contract Procedure Rules of the leading organisation (but does not necessarily comply with these Contract Procedure Rules), will be deemed to comply with our Contract Procedure Rules and no exemption is required. However, advice must be sought from the Corporate Procurement Team. 3.10 The use of e-procurement technology does not negate the requirement to comply with all elements of Contract Procedure Rules. 4. RELEVANT CONTRACTS 4.1 All Relevant Contracts must comply with these Contract Procedure Rules. A Relevant Contract is any arrangement made by, or on behalf of, the Council for the appointment of a contractor to carry out of works or for the purchase of the supply of goods, materials or services. These include arrangements for: The supply or disposal of goods (see also Financial Regulations); 7

The hire, rental or lease of goods or equipment; Concession contracts The delivery of services 4.2 Relevant Contracts do not include: Contracts of employment which make an individual a direct employee of the Council; or Agreements regarding the acquisition, disposal, or transfer of land (for which Financial Regulations shall apply); or Section151 Officer dealing in the money market or obtaining finance for the Council; or Contracts made pursuant to Sections 75 and 257 NHS Act 2006 Contracts entered into in settling litigation or alternative dispute resolution. Section 2 Common Requirements 5. STEPS PRIOR TO PROCUREMENT 5.1 Before beginning a procurement, the Officer responsible for it must appraise the proposed procurement and confirm certain matters set out in this Rule 5. 5.2. The Officer must appraise the purchase by, taking into account the requirements from any relevant Best Value review proportionate to the Total Value appraising the need for the expenditure and its priority; defining the objectives of the procurement; assessing the risks associated with the purchase and how to manage them using the Procurement Risk Assessment Template on the Procurement Intranet; Considering what procurement method is most likely to achieve the purchasing objectives, including internal or external sourcing, partnering, packaging strategy and collaborative procurement arrangements with another local authority, government department, statutory undertaker or public service purchasing consortium; consulting users as appropriate about the proposed procurement method, contract standards, and also performance and user satisfaction monitoring; and 5.3 The Officer must set the appraisal out in writing if the Total Value exceeds 10,000 which must be forwarded to the Corporate Procurement Team for further consultation with Legal Services. 5.4 The Officer's approach to the appraisal tasks must be proportionate to the complexity and value of the procurement and take into account any guidance given by the Corporate Procurement Team. 5.5 The Officer must appraise the possibility of passporting the detailed requirements to any of the Council s Teckal Companies subject to value for money and competency assessment. This must be 8

considered before any procurement process is commenced. The passporting process can be found on the Council s intranet. 5.6 The Officer must confirm that the purchase accords with the approved policy framework and scheme of delegation as set out in the Constitution; if the purchase is a Key Decision, that all appropriate steps have been taken; and that Prior Information Notices, required for the EU Procedure, have been placed in the Official Journal of the European Union by the Corporate Procurement Team 5.7 All purchases made by staff must include an order number which will be generated through the ERP i-procurement system so that payment can be made. If there is no Purchase Order, then the supplier will not be paid. All orders for goods or services, unless there are special reasons which must be agreed by the Corporate Procurement Team, must go through the Council s ERP i- procurement system. 6. RECORDS AND DEBRIEFING CANDIDATES 6.1 Where the Total Value is less than 50,000, the following documents must be kept: invitations to quote and Quotations a written record of any exemption and reasons for it of the reasons if the lowest price is not accepted written or electronic records of any communications with the successful contractor 6.2 Where the Total Value exceeds 50,000 the Officer must keep the following records together in a tender file: the method used for obtaining bids (see Rule 9.1) any Contracting Decision and the reasons for it any exemption under Rule 3 together with the reasons for it the Award Criteria in descending order of importance tender documents sent to and received from Candidates pre-tender market research clarification and post-tender negotiation (to include minutes of meetings) the contract documents post-contract evaluation and monitoring 9

written records of communications with Candidates and with the successful contractor throughout the period of the contract. 6.3 Records required by this Rule (6.2 above) must be kept for six years after the end of the relevant contract; this is extended to 15 years when a contract is under seal. Documents which relate to unsuccessful Candidates must be retained for 12 months and then may be destroyed, provided there is no dispute about the award. Documents which relate to unsuccessful Candidates may be electronically scanned. (See Rule 18) 6.4 Candidates must be notified simultaneously and as soon as possible of any Contracting Decision in accordance with Rule 17. The notification must be in writing where the Total Value exceeds 10,000. If a Candidate requests in writing the reasons for a Contracting Decision, the Officer must give the reasons in writing within 15 days of the request (see further Rule 17.7) 7. ADVERTISING 7.1 Officers shall ensure that where proposed contracts, irrespective of their Total Value, are likely to be of interest to potential Candidates located in other member states of the EU appropriate accessible advertising must take place. Generally, the greater the interest of the contract to such potential Candidates the wider should be the coverage of the advertisement. 7.2 Where the Total Value exceeds 10,000 advertisements must always be placed on Tenders in Cornwall 7.3 In addition, at the discretion of the CPT, adverts may also be placed on: portal websites specifically created for contract advertisements and/or; National official journals; and/or the Official Journal of the European Union (OJEU)/Tenders Electronic Daily (TED) [Even if there is no requirement within the EU Procedure] 8. APPROVED LISTS 8.1 With the exception of Approved Lists established before the 01/01/13 Approved Lists will not be maintained due to the costs of proper administration and the need to ensure that competition is maximised. 8.2 The Council will seek to replace all of these Approved Lists with more formal procurement arrangements by the end of financial year 2015/16. 10

8.3 A register of pre-qualified contractors and Consultants maintained by or on behalf of central government (e.g. Constructionline, Accredit) will not be deemed to be an Approved List for the purpose of these Contract Procedure Rules. Section 3 Conducting a Purchase and Disposal 9. COMPETITION REQUIREMENTS FOR PURCHASE & DISPOSAL OF ASSETS, PARTNERSHIP ARRANGEMENTS AND APPOINTMENT OF CONSULTANTS The Officer must calculate the Total Value. The following procedures apply where there are no other procedures, which take precedence. Other procedures may include agency agreements with central government. If in doubt, Officers must seek the advice of the Corporate Procurement Team and Legal Services. 9.1 Purchasing Competition Requirements Where the Total Value for a purchase is within the values in the first column below, the Award Procedure in the second column must be followed. Shortlisting shall be done by the person(s) specified in the third column Total Value Award Procedure Shortlisting Up to 1,000 One oral or written quotation Officer 1,000 10,000 Three written Quotations Officer and Line Manager 10,000 - EU Threshold above EU threshold Request for Quotation or Invitation to Tender following a risk assessment. See Rule 7 regarding requirements for advertising EU Procedure or, where this does not apply: Invitation to Tender by Open Advertisement using Tenders in Cornwall and the OJEU Officer, Supervising Officer & Corporate Procurement Team consult the Corporate Procurement Team see Rule 11 Where it can be demonstrated that there are insufficient suitably qualified Candidates to meet the requirement for adequate competition, all suitably qualified Candidates must be invited. 9.2 In addition, other steps must be taken as necessary to obtain adequate competition and Efficiency and Value for Money. 11

9.3 An Officer must not enter into separate contracts nor select a method of calculating the Total Value in order to minimise the application of these Contract Procedure Rules. 9.4 Where an EU Procedure is required the Officer shall consult the Corporate Procurement Team to determine the method of conducting the purchase. 9.5 Assets for disposal must be sent to public auction except where better value for money is likely to be obtained in accordance with the Code of Practice for Land and Property Transactions in the Constitution. 9.6 Providing services to external purchasers: The Corporate Procurement Team must be consulted where contracts to work for organisations other than the Council are contemplated. 9.7 Collaborative and partnership arrangements are subject to all UK and EU Procurement legislation and should follow the usual principles in the Contract Procedure Rules. The advice of the Corporate Procurement Team must be taken. 9.8 The Appointment of Consultants to Commission Services 9.8.1 Where the Council uses consultants to act on its behalf in relation to any procurement, the Officer shall ensure that the consultants carry out any procurement in accordance with these Contract Procedure Rules. No consultant shall make any decision on whether to award a Contract or to whom a Contract should be awarded. The Officer shall ensure that the consultant s performance is monitored. 9.8.2 Consultants shall be required to provide evidence of, and maintain professional indemnity insurance policies to the satisfaction of the relevant Corporate Director and the Risk Management and Insurance Section for the period specified in the respective agreement. 9.8.3 Where the Council uses consultants to act on its behalf in relation to any procurement, the consultant must declare any conflict of interest that may arise to the Authorised Officer prior to completing any Tender evaluations on behalf of the Council. Where the Officer considers that such a conflict of interest is significant the consultant shall not be allowed to evaluate Tenders on behalf of the Council. When drafting a consultancy agreement, consideration should always be given to inserting an anti completion /restraint of trade clause and a clause protecting the Councils confidential information. 10. PRE-TENDER MARKET RESEARCH AND CONSULTATION 10.1 The Corporate Procurement Team in collaboration with the Officer responsible for the procurement: 12

may consult potential suppliers prior to the issue of the Invitation to Tender in general terms about the nature, level and standard of the supply, contract packaging and other relevant matters provided this does not prejudice any potential Candidate, but must not seek or accept technical advice on the preparation of an Invitation to Tender or Request for Quotation from anyone who may have a commercial interest in them, if this may prejudice the equal treatment of all potential Candidates or distort competition. 11. SHORTLISTING 11.1 Any Shortlisting must have regard to the financial and technical standards relevant to the contract and the Award Criteria. Special rules apply in respect of the EU Procedure which the CPT can advise on. 11.2 Award criteria must be transparent and any sub-criteria clearly specified. Shortlisting records must be kept and held for the period outlined in Rule 6.3. 11.3 The officers responsible for Shortlisting are specified in Rule 9.1. 12. STANDARDS AND AWARD CRITERIA 12.1 The Officer must ascertain which relevant British, European or International standards apply to the subject matter of the contract. The Officer must include those standards which are necessary properly to describe the required quality. The Corporate Procurement Team must be consulted if the Officer proposes to use standards other than European standards. 12.2 The Officer must define Award Criteria appropriate to the purchase. Award Criteria must be designed to secure an outcome giving Efficiency and Value for Money for the Council. The basic criterion shall be: "most economically advantageous" offer (where considerations other than price also apply) to be used unless justified otherwise in writing to the Corporate Procurement Team "lowest price" where payment is to be made by the Council "highest price" if payment is to be received, or If the first criterion is adopted, it must be further defined by reference to sub-criteria for which weightings must be established and published with any advertisement so that they are brought to the attention of potential tenderers. Sub-criteria may refer only to relevant considerations and advice on this must be sought from the Corporate Procurement Team. 13

12.3 Award Criteria must not include: Non-Commercial Considerations matters which discriminate against suppliers from the European Economic Area or signatories to the Government Procurement Agreement. 13. INVITATIONS TO TENDER/QUOTATIONS 13.1 The Invitation to Tender must be based on the Corporate Template, unless otherwise advised by the Corporate Procurement Team. 13.2 Except where the Open Procedure applies, all Candidates invited to tender or quote must be issued with the same information at the same time and subject to the same conditions. Any supplementary information must be given on the same basis. 13.3 The Officer must ensure that all potential suppliers are given an adequate period in which to prepare and submit a Tender, guidance must be sought from the Corporate Procurement Team. 14. SUBMISSION, RECEIPT AND OPENING OF TENDERS 14.1 Tenders shall be submitted in accordance with the requirements set out in the Invitation to Tender. 14.2 No tenders received after the specified date and time for the receipt of tenders shall be accepted or considered by the Council unless the Monitoring Officer or his/her deputy is satisfied that there are exceptional circumstances which justify its acceptance or consideration. 14.3 Tenders shall be kept in a safe place by the Officer and remain unopened until the time and date specified for their opening. Marking of the sealed envelope by the courier will not disqualify the tender. 14.4 Tenders shall be opened in the presence of at least one officer who is independent of the directorate which is tendering the contract. An immediate record using the designated forms shall be made of the tenders received including the name of the tenderer, a check that all documents in the Invitation to Tender Checklist have been received and the date and time of opening. The value of the tender must not be shared with the Officer or evaluation panel at this stage. 14

14.5 The relevant Portfolio Holder shall be invited to the opening of all tenders which constitute a Key Decision. 14.6 If there appears to be an obvious error in a Tender or supporting information, the Candidate must be invited to confirm or withdraw the Tender. Where the error relates to the Tender total as calculated from tendered rates and variable quantities, the Tender will be regarded as the tender total Tender and the rate adjusted accordingly. The tenderer will be invited to confirm or withdraw the Tender and resulting rate 14.8 E-tendering 14.8.1 Unless otherwise stipulated by the Council Request for Quotations, Prequalification Questionnaires (PQQ) and Invitations to Tender must be transmitted by electronic means through the Council s E-Sourcing provided that: (a) the tenderer making the submission shall be responsible for ensuring that evidence that the transmission was successfully completed is obtained and recorded; (b) each Tender, Quotation or Prequalification Questionnaire submitted electronically is supplemented by an identical, signed hard copy original submitted by the tenderer in the manner prescribed in the documentation, before the specified return date and time. 14.8.2 Where the Council determines that E-Tendering is not appropriate for a particular procurement, RFQs, PQQs and ITTs may be exempt from using the Council s E-Tendering system but only following prior written approval by the Strategic Procurement Manager. 15. CLARIFICATION PROCEDURES 15.1 Providing clarification of an Invitation to Tender to potential or actual Candidates or seeking clarification of a Tender, whether in writing or by way of a meeting, is permitted. However, discussions with tenderers after submission of a Tender and before the award of a contract with a view to obtaining adjustments in price, delivery or content (i.e. post-tender negotiations) must be carried out in accordance with Rule 16. 16. POST TENDER NEGOTIATION 15

16.1 If post-tender negotiations are necessary after a Tender, then such negotiations shall only be undertaken with the tenderer who is identified as having submitted the best Tender and after all unsuccessful Candidates have been informed. 16.2 Post-tender negotiation must only be conducted in collaboration with the Corporate Procurement Team and Legal Services. 16.3 Where post-tender negotiation results in a fundamental change to the specification (or contract terms) the contract must not be awarded but retendered. 17. EVALUATION AND AWARD OF CONTRACT 17.1 Subject to the approval under the Council s Procurement Assurance Scheme, Financial Regulations and in accordance with the stated evaluation criteria, quotes, tenders or Framework Agreements for: a) Up to 250,000 may be accepted by the Supervising Officer or Head of Service; b) 250,000 to 1 million may be accepted by the Corporate Director or Head of Service; c) above 1 million may be accepted by the Corporate Director following consultation with the relevant Portfolio Holder; and d) where the Corporate Director considers the award of a Contract carries a high risk or sensitivity or represents a Key Decision the Corporate Director, or the Corporate Leadership Team, shall determine whether the matter should be referred to Cabinet. 17.2 Contracts must be evaluated and awarded in accordance with the Award Criteria. 17.3 The Officer shall compare submitted tender prices from the preferred tenderer with any project appraisal or pre-tender estimates and any discrepancies from the project appraisal or pretender estimate for High Value Procurements or Contracts Subject to the Regulations of up to 10% shall be resolved to his/her satisfaction. Any discrepancies in excess of 10% shall be reported to the Corporate Director (who will consult with the Strategic Procurement Manager) for resolution. The Authorised Officer shall report any discrepancies in excess of 50% to the Corporate Leadership Team which shall determine the action to be taken. All actions and resolutions shall be recorded in writing. 17.4 Abnormally Low Tenders: If a tender appears to be abnormally low, the Council may reject the tender but only if it has: (a) requested in writing from the Supplier details of the constituent elements of the tender which the Council considers contribute to the tender being abnormally low; (b) taken account of the evidence supplied by the Supplier; and 16

(c) verified those constituent elements with the Supplier. 17.5 Where the Council establishes that a tender is abnormally low because the Supplier has obtained State Aid, the tender can be rejected on that ground alone only after consultation with the Supplier and only after the Supplier is unable to prove, within a reasonable time limit fixed by the Council that the aid was granted legally. Where the Council rejects a tender in this circumstance, which is subject to the Regulations, it shall send a report justifying the rejection to the European Commission. 17.6 Apart from the debriefing required or permitted by Rule 17.8 or where deemed appropriate under the Freedom of Information Act 2000 or Environmental Information Regulations 2004: confidentiality of Quotations, Tenders and the identity of Candidates must be preserved at all times information about one Candidate's response must not be given to another Candidate. 17.7 Where the Total Contract Value is over the OJEU threshold and where required as part of an EU Procedure, the Officer must inform all Candidates of their Intention to Award the contract to the successful Candidate. The Officer must allow a period of not less than 10 calendar days after announcing their Intention to Award to provide unsuccessful Candidates with a period in which to challenge the decision before the Officer awards the contract. If the decision is challenged by an unsuccessful Candidate then the Officer shall not award the contract and shall immediately seek the advice of the Corporate Procurement Team. 17.8 For tenders subject to the Regulations a letter must be sent to the unsuccessful tenderer(s) informing them of the intent to award following the mandatory standstill period, at the same time as to the successful tenderer. This letter must include: 17.9 For all tenders not subject to the Regulations a letter must be sent to the unsuccessful tenderer(s) informing them who is the preferred tenderer at the same time as to the preferred tenderer. 17.10 Where a Contract has been tendered in line with the Regulations, irrespective of the Total Value the Council shall publish a Contract Award Notice in the OJEU as soon as possible and no later than 48 days (2 months in the case of the Utilities Contracts Regulations 2006) after the date of award of the Contract or when the Framework Agreement has been concluded. Where the Council has awarded a Part B services Contract the Council shall state in the Contract Award Notice whether or not it agrees to its publication. 17

Section 4 Contract and Other Formalities 18. CONTRACT DOCUMENTS 18.1 Every Relevant Contract must be recorded on the ERP Contracts Module. 18.2 Every Relevant Contract 0ver 50,000 must state clearly: what is to be supplied (description and quality) payment provisions (amount and timing) when the Council will have the right to terminate the contract that the contract is subject to the law as to prevention of corruption (Rule 20). that the contractor may not assign or sub-contract without prior written consent any insurance requirements if relevant health and safety requirements if relevant ombudsman requirements data protection requirements if relevant that charter standards are to be met if relevant safeguarding requirements if relevant Equalities Act requirements Freedom of Information Act requirements (where agents are used to let contracts) that agents must comply with the Council s Contract Procedure Rules relating to contracts a right of access to relevant documentation and records of the contractor for monitoring and audit purposes if relevant. The Council's Purchase Order Form or Standard Terms and Conditions must be used unless guidance to the contrary is given by either the Corporate Procurement or Legal Teams. 18.3 The advice of Legal Services must be sought for the following contracts: those involving leasing arrangements where it is proposed to use the supplier's own terms where the Total Value exceeds 50,000 those which are complex in any other way i.e. Safeguarding, reputational or Intellectual Property issues, security, bonds or the transfer of personnel 18

18.4 CONTRACT FORMALITIES 18.4.1 Agreements shall be completed as follows: Total Value Method of By Completion Up to 10,000 Purchase Order Line Manager Above 10,000 and up to Signature Supervising Officer 50,000 Above 50,000 and up to Signature Head of Service 1million Above 1million or key decision Sealing See Rule 18.4.3 All contracts must be concluded formally in writing before the supply, service or construction work begins. 18.4.2 Signature: The Officer responsible for securing signature of the contract must ensure that the person signing for the other contracting party has authority to bind it. 18.4.3 Sealing: Where contracts are completed by each side adding their formal seal, the fixing of the Council's seal must be witnessed by or on behalf of the Head of Legal, Democratic and Procurement Services. This will only be undertaken following the completion of a New Contract Form. Every Council sealing will be consecutively numbered, recorded and signed by the person witnessing the seal. The seal must not be affixed without the authority of the Cabinet, a Committee, a Portfolio Holder, or a Director acting under delegated powers as appropriate. A contract must be sealed where: the Council may wish to enforce the contract more than six years after its end; or the price paid or received under the contract is a nominal price and does not reflect the value of the goods or services; or there is any doubt about the authority of the person signing for the other contracting party; or the Total Value exceeds 100,000. 18.4.4 Archiving & lodgement of records: The original sealed contract must be deposited, by the Officer, in the deed vault with a copy being retained within the relevant service department 19

19. BONDS AND PARENT COMPANY GUARANTEES 19.1 The Officer must consult the Finance Service: 19.1.1 When a Candidate is the subsidiary of a parent company a Parent Company Guarantee (PCG) will be requested if the following conditions are met: The Candidate does not meet the minimum financial requirements of the assessment process. The Parent company has been assessed and meets the minimum financial requirements. 19.1.2 About whether a Bond is needed 20. PREVENTION OF CORRUPTION where it is proposed to make stage or other payments in advance of receiving the whole of the subject matter of the contract. 20.1 The Council s Anti-Fraud and Corruption Policy must be observed at all times when conducting a procurement. 20

Section 5 Contract Management 21. Managing Contracts 21.1 Head of Service in sponsoring departments are to name Contract Managers for all new contracts. All Contracts must have a named Contract Manager for the entirety of the contract. 21.2 Contract Manager must follow the Cornwall Contract Management Standards at all times 21.3 Contract Managers must follow the procedures set out on the Procurement Intranet site. 22. Risk Assessment & Contingency Planning 22.1 Provision for resources for the management of the contract, for its entirety, must be identified in the business case. 22.2 For all contracts with a value of over 50,000, Contract Managers must: Maintain a risk register during the Contract Period and, Undertake appropriate risk assessments and, For identified risks, ensure contingency measures are in place and, Ensure critical support and maintenance arrangements are documented in the Specification in order to avoid any costly post-tender negotiation. 23. Contract Monitoring, Evaluation and Review 23.1 All contracts which have a value above the EU Threshold limits, or which are high-risk, are to be subject to formal review in line with the PAS panel recommendations. For projects under the EU Threshold reviews must be in line with the service requirements taking into consideration complexity and risk. This decision needs to be made by the relevant Supervising Officer. 23.2 A Council developed PAS process must be applied to all contracts deemed either high risk, high value, or, high profile. This process must be applied at key stages of major procurements. 23.3 During the life of the contract the Officer must monitor at least in respect of performance compliance with specification and contract cost any value for money requirements 21

user satisfaction and risk management and in accordance with any guidance on the Procurement Intranet Site. 23.4 Where the Total Value of the contract exceeds the EU Threshold, the Officer must make a written report to a Stage 3 PAS Panel evaluating the extent to which the purchasing need and the contract objectives (as determined in accordance with Rule 6.1) were met by the contract. This should be done normally when the contract is completed. Where the contract is to be re-let, a provisional report should also be available early enough to inform the approach to re-letting of the subsequent contract. Section 6: General 24. TECHNICAL AMENDMENTS 24.1 The Strategic Procurement Manager shall have the power to make amendments from time to time to these Contract Procedure Rules after consultation with the Head of Legal, Democratic and Procurement, and the relevant Portfolio Holder. 22

Definitions Appendix "Approved List" Agent Anti-Fraud and Corruption Policy "Award Criteria" "Award Procedure" Best Value "Bond" Cabinet "Candidate" Head of Service "Code of Conduct" Committee Constitution A list established and maintained by a service of the Council by means not consistent with the European Regulations i.e. Framework Agreement, DPS A person or organisation acting on behalf of the Council or on behalf of another organisation. Cornwall Council s Anti-Fraud and Corruption Policy, available on the Council website. The criteria by which the successful Quotation or Tender is to be selected (see further Rule 12 and 13.5). The procedure for awarding a contract as specified in Rule 9. The duty, which the Part I of the Local Government Act 1999 places on local authorities, to secure continuous improvement in the way in which functions are exercised, having regard to a combination of economy, efficiency and effectiveness as implemented by the Council. This terminology has now in many instances been superseded with the term Value for Money (VfM) A written undertaking by the issuer to be responsible for the fulfilment of a contractual obligation owed by a Supplier to the Council if the Supplier defaults. The Council s Cabinet as defined in the Constitution. Any person who asks or is invited to submit a Quotation or Tender. As defined in the Constitution. The code regulating conduct of Officers issued by the Council A committee, which has power to make decisions for the Council, for example a joint committee with another local authority but not a scrutiny committee. The constitutional document approved by the Council which: allocates powers and responsibility within the Council and between it and others delegates authority to act to the Cabinet, Committees, Portfolio Holders and officers; and regulates the behaviour of individuals and groups through rules of procedure, codes and protocols. Consultant Contract Manager Contracting Authority An independent contractor who is engaged to provide specific expertise for a particular project. The Officer identified to manage any given contract and who holds responsibility for the contract on the ERP Contract Module The organisation which is letting the contract in 23

"Contracting Decision" Corporate Contract Corporate Team Corporate Team Council Director Leadership Procurement Efficiencies and Value for Money ERP Contracts Module E-Tendering "EU Procedure" "EU Threshold" question. Any of the following decisions: withdrawal of Invitation to Tender who to invite to submit a Quotation or Tender Shortlisting award of contract any decision to terminate a contract. A contract let by the Procurement and Contract Management Unit to support the Council s aim of achieving Value for Money. Where a Corporate Contract is in place, the Officer is obliged to use it unless an exemption has been granted under Section 3 of the Contract Procedure Rules. As defined in the Constitution The Council s Corporate Procurement Team which is charged with providing strategic direction and advice to secure value for money in the Council s procurement activities. For the purposes for these Procedure Rules, Council refers to the Cornwall Council (CC). The Officers designated as Executive Director or Corporate Director. The duty, which Part I of the Local Government Act 1999 places on local authorities, to secure continuous improvement in the way in which functions are exercised, having regard to a combination of economy, efficiency and effectiveness as implemented by the Council. This terminology has now in many instances been superseded with the term Value for Money (VfM) A central repository of Council Contracts and Agreements on ERP. Holds all contract information during contract delivery and after expiration. For access to the ERP Contract Module please contact the Corporate Procurement Team. A totally secure means to store and transmit Expressions of Interest (EOI), Invitations to Tender (ITT) and other relevant documentation (e.g. Invitations to Submit Outline and Detailed Proposals and Best and Final Offers) and then to receive and manage responses electronically via the Internet. Any process used must be compliant with HMG Information Security Standards, the requirements of the Manual of Protective Security (MPS) and all UK legislation relevant to the processing of information. The procedure required by the EU where the Total Value exceeds the EU Threshold (guidance required from the Corporate Procurement Team). The contract value at which the EU public procurement regulations must be applied. See the Procurement 24

European Economic Area Executive Decision "Financial Officer" "Financial Regulations" Framework Agreement Government Procurement Agreement "Head of Legal, Democratic and Procurement Services" High Profile High Risk High Value "Invitation to Tender" Key Decision Legal Services "Line Manager" Internet Page for current values. The members of the European Union, and Norway, Iceland and Liechtenstein. A decision made or to be made by a decision-maker in connection with the discharge of a function which is the responsibility of the Executive of the Council; The most senior officer representing the Corporate Director (Resources) or designated by him to provide financial advice to the Chief Executive Officer. The financial regulations outlining officer responsibilities for financial matters issued by the Head of Finance in accordance with the Constitution. An agreement between one or more contracting authorities and one or more economic operators, the purpose of which is to establish the terms governing contracts to be awarded during a given period, in particular with regard to price and, where appropriate, the quantity envisaged. The successor agreement to the General Agreement on Trade and Tariffs. The main signatories other than those in the European Economic Area are: the USA, Canada, Japan, Israel, South Korea, Switzerland, Norway, Aruba, Hong Kong, China, Liechtenstein and Singapore. As identified in the Constitution. A high-profile purchase is one which could have an impact on functions integral to Council service delivery should it fail or go wrong. A high-risk purchase is one which presents the potential for substantial exposure on the Council s part should it fail or go wrong. A high-value purchase is one where the value is greater than the EU Threshold values. Invitation to tender documents in the form required by the Contract Procedure Rules. An Executive Decision which is likely:- (a) to result in the Council incurring expenditure which is, or the making of savings which are, significant having regard to the Council s budget for the service or function to which the decision relates, or (b) to be significant in terms of its effects on communities living or working in an area comprising two or more electoral divisions within the area of the Council; Cornwall Council s Legal Services Team, primary contact: Team Leader Company Commercial and Employment Team. The Officer's immediate superior or the officer designated by the Head of Service to exercise the role reserved to the Line Manager by these Contract Procedure Rules. 25

Monitoring Officer New Contract Form "Non-Commercial Considerations": The responsible officer as appointed under Section 5 of the Local Government and Housing act 1989 as amended by Schedule 5 paragraph 24 of the Local Government Act 2000. A contract award notification form that must be completed for all Relevant Contracts a copy of which must be e-mailed to The ERP Contracts Module Mailbox. Except as provided below, the following matters are non-commercial considerations: (a) the terms and conditions of employment by contractors of their workers or the composition of, the arrangements for the promotion, transfer or training of or the other opportunities afforded to, their workforces ( workforce matters ); (b) whether the terms on which contractors contract with their sub-contractors constitute, in the case of contracts with individuals, contracts for the provision by them as self-employed persons of their services only; (c) any involvement of the business activities or interests of contractors with irrelevant fields of Government policy; (d) the conduct of contractors or workers in industrial disputes between them or any involvement of the business activities of contractors in industrial disputes between other persons ( industrial disputes ); (e) the country or territory of origin of supplies to, or the location in any country or territory of the business activities or interests of, contractors; (f) any political, industrial or sectarian affiliations or interests of contractors or their directors, partners or employees; (g) financial support or lack of financial support by contractors for any institution to or from which the authority gives or withholds support; (h) use or non-use by contractors of technical or professional services provided by the authority under the Building Act 1984 or the Building (Scotland) Act 1959. Workforce matters and industrial disputes, as defined above in paragraphs (a) and (d) of this definition, cease to be non-commercial considerations for the purpose of s17(5) Local Government Act (LGA)1988 and part 1 of the LGA 1999 (Best Value) where there is a transfer of staff to which the Transfer of undertakings (Protection of Employment) Regulations 2006 ( TUPE ) may apply. "Officer" "Open Procedure" "Parent Guarantee" Company The officer designated by the Head of Service or Line Manager to deal with the contract in question. All Candidates are invited to submit tenders in response to an advertisement. A contract which binds the parent of a subsidiary company as follows: If the subsidiary company fails to do what it has promised under a contract with the Council, the Council can require the parent company to 26

Portfolio Holder Prequalification Questionnaire Priority Services Procurement Assurance Scheme Procurement Risk Assessment Template Procurement Strategy "Quotation" Relevant Contract Request for Quotation "Shortlisting" Supervising Officer Teckal Companies "Tender" Tenders in Cornwall "Total Value" do so instead. A member of the Cabinet to whom political responsibility is allocated in respect of specified functions. It is a questionnaire assessing the suitability of the organisations commercial, technical and financial capabilities and provides a method of shortlisting interested parties meeting the required minimum qualification criteria. This aids the contracting authority in controlling the cost of the tendering process. Shortlisted companies will then be invited to tender. Those services required to be tendered as defined in the EU public procurement directives and Statutory Instrument 2006 No 5 The Public Contracts Regulations 2006. The process by which projects over the OJEU Threshold are approved for a procurement route in the Council. Further information available on the Procurement Intranet Pages. Used to help inform the decision on appropriate Procurement Route. Available on the procurement intranet page. The document setting out the Council s approach to procurement and key priorities for the next few years. A quotation of price and any other relevant matter (without the formal issue of an Invitation to Tender). Contracts to which these Contract Procedure Rules apply (see Rule 4). A simplified tender process for low risk or low value projects. Template available from the Corporate Procurement Team. Where Candidates are selected: to quote or bid or to proceed to final evaluation. The Line Manager s immediate line manager. As defined by the European Commission following the case Teckal s.r.l v the Commune of Viano C-107/98 A Candidate's proposal submitted in response to an Invitation to Tender. The Cornwall Council funded, Cornwall Development Company maintained procurement portal. the whole of the value or estimated value (in money or equivalent value) for a single purchase or disposal whether or not it comprises several lots or stages to be paid or received by the Council or a Discrete Operational Unit within the Council. The Total Value shall be calculated as follows: (a) where the contract is for a fixed period, by taking the total price to be paid or which might be paid during 27