Procurement Policy 2009

Transcription

1 Procurement Policy 2009 Introduction Valid From: December 2009 Valid To: December 2011 Version 1.0 Our regulators define procurement in the context of property development, regeneration and maintenance services as: The activity by which a Registered Social Landlord obtains its buildings and properties taking account of price, quality, time and sustainability to deliver overall best value. Within their guidance on procurement they also include Probity as one of the key issues and the avoidance of fraud and corruption. The definition used for this is: Probity is the concept of fairness, transparency, and accountability, which ensures that an organisation obtains (and can be seen to obtain) the maximum benefits for its declared objectives, operating within the law and within the rules of its legal constitution. The current Regulatory Code in relation to procurement states that all RSLs must maintain the highest standards of probity in their dealings and that they must: Act to maintain the good reputation of the sector, and not bring it into disrepute. Foster positive relations with stakeholders. Conduct their business so that it is accessible and accountable and transparent to residents and other stakeholders. Only enter into relationships with other organisations when the rights and obligations are clear to all. In undertaking construction activity, the RSL must ensure that it is operating in accordance with the law and its constitution. All activity must be carried out in an honest, open and accountable manner, and these processes must be shown to be open and accountable to stakeholders. In recommending a procurement method, officers should consider whether it is appropriate for the type and scope of work of services to be undertaken and should take into account the overall value for money to be obtained and the risks to be carried by the Company compared to alternative methods of procurement. Now that it has been accepted that housing associations are contracting authorities for the purposes of the European Procurement Regime we must at all times consider what effect this has on the procurement of works, services and supplies doc 1

2 Aims of the Policy The main aims of the policy are to: Help achieve best value. Ensure due process and accountability, in a clear and transparent manner. Help prevent fraud or suspicion of fraud. Ensure proper financial control. Policy Statement It is intended that through this Procurement Policy the Company will have a set framework within which the procurement of its contract works, services and goods can be properly managed in order to achieve best value whilst maintaining high standards of probity at all times. The Policy Contractors, Consultants and Other Suppliers The Management Team will consider the mix of skills, knowledge and experience, etc, needed by the Company to fulfil its requirements, together with the overall competence of the contractor, consultant or supplier and make recommendations to the Board for approval. With regards to contractors, the Company will vet the financial viability of firms through information from Constructionline, or by obtaining information from the firm sufficient for the Director of Finance and Resources to determine whether the firm s financial standing is appropriate to deliver the contract. Before engaging any Consultant, up to date copies of their Professional Indemnity Insurance will need to be obtained. Other considerations before appointing any consultant will be: The value for money to be obtained from the consultant s appointment. Their current workload with the Company, avoiding too much work being given to any one firm. The Company s previous experience of the firm. Their current overall workload and ability to properly staff the job. Where possible a reference and policies in respect of Health and Safety and equal opportunities should be sought. With regards to other suppliers, since the nature of this type of supplier is such that the Company s finances are not at risk to any great extent no formal checks have to be undertaken other than the supplier must complete the standard New Supplier Form. European Union Procurement Regime Outline In 2004 the Communities and Local Government finally accepted that housing associations are (and always had been) contracting authorities for the purposes of the EU Procurement Regime. We must therefore procure our works, services and supplies within the rules and procedures set out by the regime where applicable. In brief the rationale behind the regime is that contractors, anywhere in the EU who are able to perform a public sector contract should be given the opportunity to bid for that particular contract doc 2

3 The regime s rules only apply to major contracts defined by the following current limits which are in Euros and exclude VAT: Works - 5,150,000 Services - 206,000 Supplies - 206,000 In the event that we need to procure contracts in excess of these limits EU Procurement rules must be followed. The basis of which are that: Contracts for works, services or supplies must be openly advertised in the Official Journal of European Union (OJEU). Anyone interested should be given a set period in which to notify their interest. Tenders requested must be submitted within a set timescale. Evaluation of tenders must be made against pre-advertised criteria. After a contract is awarded, a notice must be issued publicising the placing of the contract. Anyone who believes that they have been unfairly excluded from the tender process or whose bid has been unreasonably overlooked will be able to challenge the award of the contracts. Use of a Catalist The Government has set up an organisation called OGC Buying Solutions that has various frameworks for procurement; one of these is for purchasing IT goods and services and is called a Catalist. A Catalist approves pre-selected suppliers (pre-selected in accordance with OJEU compliant procedure) to provide goods and services on the OGC Buying Solutions Website. The rules that apply to a Catalist mean that we can take business directly to a Catalist supplier without having to tender the requirement via a full-blown OJEU compliant process that could take months to complete. Although this route can be faster, it can be more expensive and be restrictive. Tendering Procedure Tender Documentation It is important when developing the tender brief, the contractors, consultants and suppliers are given a clear understanding of the Company s expectations. The Audit Commission has produced guidance on tendering (Assessing Procurement and Competitive Procurement). A list of potential names needs to be complied and approval sought by the Management Team before any documentation is sent. This list should contain at least three suitable names. All documentation for tenders in excess of 10,000 (including VAT) must follow the spirit of this guidance. Any tender documentation therefore needs to include the following, some of which will be standard wording and is contained in the Company s standard tender document template, which can be found at N/Templates/Corporate/Invitation to Tender.doc (please see Appendix B): 1. A brief introduction to EPIC. 2. Details of the works being commissioned. 3. The overall objectives of the tendered commission doc 3

4 4. Any specific terms and conditions that need to be adhered to. 5. Our expectations and required outcomes along with target dates for delivery. 6. Details of what we expect the tender documentation to include i.e. costs (broken down at the lowest level), qualifications to tender, personnel involved, references, copies of their Health and Safety policies, Equality and Diversity policies, various insurance policies etc. 7. Tender evaluation criteria. Before completing any tender documentation reference must be made to the Additional Tender Information Questions list in order to ensure that any relevant additional information concerning the contract in question is obtained. Please see Appendix A. Tender Opening Where applicable tenders will follow the procedures set out in the appropriate Chartered Institute of Builders (CIOB) Code of Practice and in addition the following procedures should be followed: 1. Tenders must be returned in the envelope provided (marked 'tender for scheme x' to be returned to x ) to the main office of the Company, to arrive no later than the time marked. The tender envelope should bear no markings that may identify the tendering company. The Management Team dependant on the number of responses received and circumstances surrounding the late arrival of the documentation may consider any late tenders. 2. Envelopes will be endorsed upon arrival with the date and where possible the time of arrival. The envelope must then be given to a member of the Finance Team to be held in a secure place until the Tender Opening Meeting. 3. Tenders must be opened at the Tender Opening Meeting which must consist of at least one member of the Management Team and one member of staff from the Finance Department please also note the following: Contracts expected to cost more than 25,000 must have either the Chief Executive or the Director of Finance and Resources witness the opening of the sealed tenders. For contracts over 50,000 a member of the Board must also be present at the opening of the sealed tenders. 4. Tenders should be recorded in a bound book. The results of the tender should be recorded as they are opened and the result underlined immediately under the final entry. A note should be made of any qualifications made by the tenderers and a note made of the proposed action as a result of the tender (e.g. J Sharp to submit his tender for scrutiny). The name of each witness should be noted and they should sign the completed record. 5. Before a tender is accepted a tender report must be completed and approved by the Management Team in writing. The template for this can be found at N/Templates/Corporate/Tender Analysis.doc (please see Appendix C). 6. Tenders costing over 50,000 must be approved by the Board prior to seeking tenders; this approval can be in the form of the Company s annual budget document doc 4

5 7. Tenders should not be opened by the person who has sought the tenders, although that person should where possible be present at the tender opening. 8. All tenders in excess of 2,000 should be recorded in the tender register and reported annually to the Board of Management. 9. Once a tender has been accepted a Letter of Intent must be sent as confirmation. The template for this can be found at N/Templates/Corporate/Letter of Intent.doc (please see Appendix D). 10. The value of work awarded to all external contractors whether by tender or otherwise must be reviewed by the Board on an annual basis. Contractual Arrangements Through its Procurement Policy the Company will endeavour to use the most effective way to procure its requirements to ensure that best value and quality is achieved. Selection and Appointment of Consultants, Contractors and Suppliers In the selection and commissioning of consultants, contractors and suppliers, the aim should be to match the skills, expertise and experience of the firm with the needs of the project, and for the appointment to be on a contractually sound, justifiable and fair basis. All tender documentation should be approved by the Management Team or Board if appropriate. The Company s Financial Regulations must be adhered to at all times. Appointment of Consultants The officer concerned will propose the appointment of a consultant at project approval stage. A note identifying the reasons for an appointment will be included in the project approval report. All appointments must be made in writing clearly setting out the brief, consultant's role and appointment terms. If Board approval has not been sought via either, the annual budget, an ad-hoc report or a project approval report, then any appointment will normally be at risk until the Board has confirmed it, and this should be made clear and be agreed in writing by the consultant. Following Board approval appointments should be confirmed in writing, where applicable using an industry-recognised contract (e.g. RIBA standard terms of appointment, as appropriate). The value of work awarded to all external consultants whether by tender or otherwise must be reviewed by the Board on an annual basis as part of the annual budgeting process. Depending on the value and terms of the contract, all consultants should have in place an appropriate level of Professional Indemnity insurance and where applicable Public Liability insurance. Copies of the certificates must be provided. Appointment of Contractors Under Tender Arrangements Where works have been tendered and further works are then required, provided that the European Union Procurement limits are not breached then these contracts maybe extended for a period of not more than 12-months, by the Management Team if they conform to the principals of best value. Any contracts 2009.doc 5

6 extended under these arrangements must be reported to the Board a soon as possible. Appointment of Suppliers The Management Team will consider the mix of skills, knowledge, experience and products offered as required by the Company. Building Procurement Routes For all works in excess of 10,000 (including VAT), a formal written contract must be used as advised by the Company s lead consultant or the Asset Manager. Since there are a number of different procurement options available, it is important to ensure that the procurement method selected is the most appropriate one for that particular project, and that any risks associated with it are understood. The following methods are considered appropriate for procuring work but the list is not exhaustive and other routes may be considered. The Company s Management Team will regularly review the merits of each method of procurement in terms of competitiveness and accountability. a. Traditional Competitive Tendering The Company commissions consultants to design the scheme or draw up a brief and work through to working layouts including specifying all of the components to be used. This route enables the Company to exercise greater control over the design and components but can attract greater risks for the Company in that all contractual arrangements are then with the Company, which will require more intensive management and any changes in cost and specification will usually be left with the Company to resolve. A minimum of 5 tenders per contract must be sought. b. Design and Build Competitive Tendering Usually a two-stage process with the objective of maximising design control but minimising risk. A designer is normally appointed by the Company to detailed planning stage and the project is then tendered with the design and a number of components specified. The builder completes the working detail design and offers suitable components not otherwise specified. Suitable for most housing including newbuild houses and flats, general needs, special needs, and sheltered accommodation. The risks involved in undertaking the work are reduced due to the builder undertaking the detailed working design but a premium is usually charged for this type of tender. A whole life costing approach (including lifetime maintenance costs) is preferred for all contracts, this must be taken into account when competitive tenders are sought for this type of project as there will be differences in the solutions offered. The Company s lead consultant should advise on this doc 6

7 Off the shelf purchase of new dwellings by negotiation with developers/contractors and of existing satisfactory dwellings from the open market by negotiation with vendor or vendor s agent. Usually for completed houses or on a site where a house builder has standard units they wish to sell. The floor arrangement, material specification and quality will normally be pre-determined although some scope for change may be available. Particularly suitable for planning gain sites or purchasing stock for specific needs. Normally it is a case of what you see is what you get and so materials, workmanship and price should be well understood. Collateral Warranty Agreements maybe required between the Company and any designer of Design and Build projects. The purpose of this Agreement is to create a contractual relationship between the Company and the designer or sub-contractor that might not otherwise exist. The National Housing Federation s Form of Collateral Warranty or the Joint Contracts Tribunal Form should be used. c. Negotiation This shall normally only be undertaken with a firm that has previously carried out work for the Company so that a test of value for money can be carried out. However, best value initiatives offer opportunities to negotiate procurement that may provide added value in areas not directly related to the project. Off the shelf purchases are also by negotiation. Suitable for most housing including newbuild houses and flats, general needs, special needs, and sheltered accommodation, as well as refurbishment and reinvestment work. Detailed drawings for the project may be prepared by one of the Company s consultants or by the contractor and so the risk and cost to the Company will vary depending on how much each party specifies. Officers of the Company should be clear on the benefits of choosing this method of procurement to ensure that best value is being obtained and should provide a full report on all the benefits, including clear tests of value for money, in the Project Approval Report. It is likely that negotiation is needed when one, or more, of the following circumstances occur: (this is not exhaustive) o There are a limited number of contractors or suppliers; o Where the performance of the contractor is such that continuity would prove to be the best value for the Company; o It is prudent given time constraints to negotiate so as to ensure a continuity of work. o The work is of a specialist nature. A formal written report must be presented to the Management Team, prior to seeking to negotiate a contract, detailing the following: 2009.doc 7

8 o o o o o o o Reason/justification for the negotiation; Options/alternatives available; Whether the work will create a precedent and what that precedent is; The effect the work will have on the contract cost; The effect the work will have on the contract time; Whether the tenant knows the effect the work will have; The cost of the variation and the effect the work will have on expenditure levels. The Management Team will then make a formal decision as to whether it can authorise a negotiated contract and make arrangements for seeking Board approval. d. Performance Bond Contractors may be required to take out a contract performance bond for certain contracts. Acceptable guarantors include Banks, The National Housing Building Council (NHBC) and insurance companies doc 8

9 Delegated Authority Purchase of land or buildings and entering into contractual commitments In accordance with the approved Budget, Business Plan and Strategy, the Board delegates to the Senior Management Team authority for the procurement and development of the Company's dwellings. In detail the Board of Management delegates as follows: Agreement to purchase, sell, build upon, lease or exchange any land and to enter into contracts, ensuring that the project cost does not exceed the approved scheme cost. Project costs are inclusive of all purchase costs, building contracts, professional fees, on costs, administration costs due to the Company and VAT. If appropriate approval of the regulator or appropriate local authority or other grants giving corporate body, must be obtained prior to entering into any contracts. Purchase of land must be subject to the price being at or below a price authorised by a suitably qualified valuer, good title having been obtained by the Company's solicitors, terms which will be acceptable to potential lenders of private finance in respect of property security and generally in accordance with our regulators guidelines or other good practice guidelines as appropriate to the particular project and the condition of the site having been appropriately investigated. Purchase of individual properties is subject to an analysis of local house price trends, sales of similar properties in the vicinity and the cost of refurbishment to a lettable social housing standard. Approval of a project must be the unanimous view of the Senior Management Team including the Chief Executive and the Director of Finance and Resources. Delegation does not include anything that has not been previously approved by the Board. The Senior Management Team will scrutinise all such projects prior to their being placed as recommendations before the Board of Management. Authority to sign contracts for the purchase of land or buildings and JCT building contracts is given under signature of the Chief Executive and either the Director of Finance and Resources or the Head of Department and is subject to the approved authorisation limits. Orders for Goods, Works, Services and Consultancy Under 10,000 The Company expects that at all times the principles of Best Value are upheld and that the person commissioning the works ensures that appropriate records are kept and are available for inspection, if expenditure is to exceed more than 10,000 (including VAT) during the financial year, with any one supplier doc 9

10 The following applies to all supplies except for utilities and business rates. Any request for goods, maintenance works, services or consultancy must be made on an official order form. The person authorising the request for goods, works or services must not be the same person as the one requesting the goods, works or services. Orders must be approved by the appropriate authorised signatory, or by an officer acting under their delegated authority. Please see the Authorisation Limits table for a list of officers and approved authority limits. If any goods, works or services are expected to cost in excess of 5,000 (including VAT), but no more than 10,000 (including VAT), written quotations shall be requested from at least three suppliers (except in cases where there is only a single or two suppliers). All quotations must either be returned in a sealed envelope, which must be given to the Finance Team to put in to the safe or e- mailed directly to a member of the Finance Team. If it is felt appropriate that a quotation other than the lowest is to be accepted, a written report explaining the circumstances must be presented to the Management Team, and a written resolution sought before the works are commissioned. This must be entered in the Company s Tender Register, which will be checked before any payment is made and reported to the Board on an annual basis. Orders for Goods, Works, Services and Consultancy Over 10,000 The following applies to all supplies except for utilities, business rates and contracts where there is only one supplier and expenditure has previously been approved by the Board as part of the annual budget process. The Management Team must agree all tender lists, prior to the tender documentation being sent. The tender award assessment criteria must be established and agreed by the Management Team prior to the tender opening with all tenders being awarded in accordance with those criteria. Once the tender has been awarded, formal documentation must be in place in the form of either a contract or a letter of intent. Contracts for all goods, works and services, which are expected to cost in excess of 10,000 (including VAT), must be subject to three competitive quotations, which are to be obtained under the sealed tender conditions as stated in this policy. All tenders must be entered in the Company s Tender Register, which will be checked before payment is made and reported to the Board on a quarterly basis. The employment of any consultant is subject to the following procedures: - Any consultancy work costing more than 10,000 (including VAT) must be carried out by a consultant who has been approved by the Board and be subject to three competitive tenders doc 10

11 No consultancy work may be commissioned without prior approval of the Board, which can be via the approved annual budgeting process. In the case of an emergency the Chair and Vice Chair can approve expenditure for costs of up to 10,000 (including VAT), provided that the Director of Finance and Resources has confirmed that the funds are available. For expenditure of more than 10,000 (including VAT), the majority of the Board i.e. 75% of the members must be contacted for approval, and must give their approval before any advice can be obtained. A full written report in both instances must be presented to the Board at the next meeting. Any Board member wishing to seek professional advice must ensure that the funds are available and obtain approval from either the Chair or Vice Chair and at least a further 50% of members of the Board, before obtaining any advice. All consultancy commissions must be made in writing, for an example of a letter of intent see Appendix B. The Board delegates to the Management Team authority to engage professional consultants for the provision of legal, technical and professional advice to the benefit of the Company. Partnering Arrangements Partnerships between EPIC and other third party organisations, in the public, private and voluntary sectors, are key to providing excellent value for money services whilst delivering community strategies. A partner can be defined as an organisation either undertaking, part funding or acting as a beneficiary, to provide a more flexible and cost effective service. By having in place partnering arrangements it can negate the necessity to tender for every contract or piece of work. The Regulatory Code states that RSLs must aim to deliver continuous improvements and value for money in the services that they provide. The following Best Value techniques should therefore be used: i. Challenge what they do and how they do it. ii. Make comparisons with others. iii. Consult people affected by their services. iv. Establish that value for money is obtained. The Regulatory Guidance also states that new developments should comply with the principles set out in the Construction Task Force report Rethinking Construction. The principles embodied in this report require a commitment to continuous improvement. The advent of the Egan Report Rethinking Construction has changed attitudes to the Company having long-term relationships with a small number of firms. The thrust of the report is to encourage a management approach to maximise the effectiveness of each participant s resources. It is based on mutual objectives, an agreed method of problem resolution and an active search for continuous improvements, to provide both quality improvements and cost reductions in the finished product. The report encourages an open approach to procurement based on project specific or long term partnering. Arrangements can be adopted following most of 2009.doc 11

12 the procurement routes mentioned above, including negotiated projects, in order to acquire best value. Partnering is suitable for all work the Company may undertake although it is vital that the implications of the EU Procurement Regime are considered thoroughly prior to proceeding with any partnering contract. The risks are based on whatever forms the partnership takes, which is presumed to be the sharing of risk and that the chosen partners are appropriate for the type of work or programme. Officers of the Company should be clear on the benefits of choosing this method of procurement to ensure that best value is being obtained and should provide a full report on all the benefits, including clear tests of value for money, in the Project Approval Report. Where appropriate Company partners should be aware of the Company s Financial Regulations. The project officer should ensure that there is a process in place to assess the viability of a project in terms of resources, staffing and expertise and performance reviews undertaken. EPIC has signed up to the Compact, which is an agreed framework to support the relationship between Stoke on Trent City Council, partner organisations and the voluntary services sector. The Codes of Good Practice as set out in the Compact document should be adhered to at all times. Equality and Diversity Statement EPIC is committed to promoting equality and diversity. Every tender undertaken will ask the tenderer for a statement with regards to this Responsibilities The officer in charge of the project will have the ultimate responsibility for the following: Preparation of tender documentation and tendering procedures. Contractual arrangements. Administration of Contracts. The Chief Executive will ensure that the principles of Schedule One are complied with at all times and that the register of interests of staff and Board members is updated on an annual basis. Review Mechanism The Company s Procurement Policy will be subject to a biennial review by the Board and must be read in conjunction with the Company s Financial Regulations doc 12

13 Appendix A Additional Tender Information Questions 1. Type of organisation i.e. Public Limited Company, Private Limited Company, Partnership, Sole Trader etc. 2. Annual Turnover for the last 3 years. 3. Have any of your accounts been qualified in the last 3 years? 4. Details of any outstanding claims or litigation. 5. Is the company registered with Constructionline? 6. Provide details of the last 3 projects that you have been involved in. 7. What is the scope of professional services within the company and how long has the company been providing these services? 8. How many staff does the organisation employ? 9. How do you assess the suitability of employees employed? 10. How do you ensure that your staff are well informed? 11. What trades are normally carried out by your own employees? 12. Does your company usually use contracted out labour? If so, please detail which trades you do this for. 13. Please provide us with details of the steps you take to ensure the health and safety of your staff and visitors. 14. Has your organisation had any Health and Safety Executive (HSE) reportable accidents in the last 12 months, if so please provide details. 15. Do you observe as far as possible the Commission for Racial Equality s Code of Practice for Employment, which gives practical guidance to employers and others on the elimination of racial discrimination and the promotion of equality of opportunity in employment? 16. Has there ever been a complaint of discrimination (either racial, sexual or relating to age or a disability) against the company? If so please provide details. 17. Does your organisation have an environmental policy? If so what does it cover? 18. Can you give an example of innovative working practices which benefit the environment? 19. Briefly explain how you feel your organisation can link to the wider Regeneration initiatives of Empowering People Inspiring Communities Ltd doc 13

14 20. Has your organisation or any of the directors, partners or proprietors: Been made bankrupt, insolvent, subject to a compulsory winding up, put in to receivership etc. Been convicted of a criminal offence related to business or professional conduct. Committed an act of grave misconduct in the course of business. Not fulfilled obligations related to payment of social security contributions. Not fulfilled obligations related to payment of taxes. Is guilty of serious misrepresentation in supplying information. 21. Are you or any of the Senior Management Team or Directors of your organisation relatives of any Board Member or Employee of EPIC? 22. Have you had any contracts terminated for poor performance in the last 3 years or any contracts where damages have been claimed by the contracting body? If so please provide details. 23. Do you permit us to take up a banker s reference? If so please enclose a completed authorisation letter. 24. Give a brief overview of your approach to working in a partnering relationship. 25. Does your company measure customer satisfaction? If so please provide details. 26. Please provide details of the way in which your organisation involves customers in either, the delivery, monitoring or management of your services. 27. Is your organisation registered with any regulatory or accredited bodies? If so please provide details. 28. Does your organisation hold a recognised Quality Management Certificate or have a Quality Management System in place? If so please provide details. 29. Can you give an example of innovative working practices which have improved delivery of services to your customers? 30. Please provide details of previous tenders submitted for similar Housing Association Schemes doc 14