Procurement Policy & Procedures

Transcription

1 Procurement Policy & Procedures 1 Introduction 2 Objectives 3 Organisation 4 Authority 5 Procurement Procedures 6 EU Procurement Regulations 7 General Principles of Procurement 8 Reporting & Information 9 Purchasing Cards 10 Stock 11 Disposal of Goods 12 Ethics 1 Introduction 1.1. The purchase of goods and services represents a significant portion of Westward's total expenditure. Effective purchasing provides Westward with opportunities for achieving value for money and reducing operating costs through lower prices for the goods and services it uses. It is recognised by the Executive Team (ET) as an important contributor to the achievement of the Westward's corporate objectives This document sets out the procedures for ensuring that Westward Housing Group achieves the best value for money in the purchase of all its goods and services. All staff are required to follow these procedures This Policy should be read as forming part of Westward's Financial Regulations; giving more detail of their interpretation for purchasing activities. Reference to Departments in this document shall mean any unit within Westward with the authority to conduct purchasing on behalf of Westward All monetary values within this document are net of VAT All procurement documents are available on Westie. 2 Objectives 2.1. The policy of Westward is that goods and services are to be acquired by competition and that all purchasing will be based on best practice and in accordance with the following major objectives: To supply Westward with the goods and services that it needs, at the time they are required. To buy efficiently and wisely to obtain the best value for money. To develop effective relationships between departments and suppliers for the overall benefit of the business.

2 3 Organisation 3.1. Westward recognises that effective and efficient purchasing in a devolved budgeting environment will be achieved through a combination of centralised and departmental arrangements Authority to purchase is devolved to budget holders, all ET and SMT members have a duty of implementing this Policy within their departments. 4 Authority 4.1. Budget Holders have authority to purchase goods and services only within the budget allocated and within any rules related to the funds concerned Although authority to authorise orders may be delegated to other named responsible staff by the budget holder, such named staff must be on the list of authorised signatories maintained by the Finance Department and overall responsibility remains with the budget holder. The authority to sign orders is also differentiated by grade and a ceiling is placed on authorisation limits. The limits are set out in Financial Regulations Appendix A. 5 Procurement Procedures 5.1. Where a framework agreement/select supplier list is used, the procurement procedure is as detailed by that agreement All orders must be placed in writing. A Director/Assistant Director may mail/ an official Westward order to the supplier in their chosen format. Repair orders are generated automatically through Open Housing. For other purchases a Purchase Order should be used, which gives a level of protection by the inclusion of a set of terms and conditions of purchase. The Purchase Order template can be found on Westie for completion on the computer. To generate a unique PO number use the date format ddmmyy followed by the first two letters of your first and last name e.g. on the 9 th September 2016 John Smith creates a purchase order with the number JOSM. If the same person processes two orders in one day, the subsequent order can be suffixed with an additional number, e.g JOSM2. The use of a unique order number will greatly help the finance department in the event of a query. When the document is completed, choose File > Save As, then choose a location such as Desktop. Name the document with its PO number and then click on the down arrow for Save as type: choose PDF and then click Save. The PDF document can now be ed to the supplier from the of a budget authorised person. If a new supplier is chosen that is not currently on the finance system they should be ed the New Supplier Application Form.

3 5.3. Zero - < 25,000 Procurement at this level of spend has no requirement for a set procedure to be followed. The Director of the department has the authority to decide on the most advantageous route to purchase. To obtain Value for Money from each purchase it is recommended that consideration is given to obtaining three like-for-like quotes ,000 - < 50,000 This level of procurement requires three auditable quotes by using the Quick Quote function of the Due-North portal. The pricing request must be sufficiently open and transparent to enable full supplier participation. Advice can be obtained from the Procurement Officer if required. On completion there is a requirement to submit an Award of Contract notice to Contracts Finder. The minimum information required is: The full company name of the winning contractor The date on which the contract was entered into The total value of the contract Whether the contractor is a Small or Medium-sized Enterprise (SME) 1 or a Voluntary Community and Social Enterprise (VCSE) All procurement activities above 50,000 are to use the standardised document set ,000 <EU Tender The Procedure for this level of Procurement is as follows and requires consultation with the Procurement Officer at an early stage. It is important to remember that as this is below EU tender level, there is only the One Stage (no PQQ) Tender option available. There is no requirement to advertise the procurement opportunity, yet the option to advertise is there if required. The options for supplier engagement are: Advertise Use this option if there are insufficient suppliers known, to guarantee a fair and transparent process. The tender will run as a completely open procedure (like EU Open) with the advert being placed on Due North and Contracts Finder. All tenders received must be accepted and scored. Do Not Advertise No Advert is to be placed on Due North or Contracts Finder. This option is suitable if there are plenty of suppliers in the market. Known contractors can be invited to the project on the Due North portal; it is recommended and expected that at least one untried contractor (of a size equitable to the contract) will be invited to tender to ensure market testing. The procedure is: Completion and sign-off of a Project Initiation Document (PID) Creation of specification documents Creation of scoring methodology / document Place the 1 stage tender on the Due-North portal using the Non OJEU Tender workflow Score the Tender responses 1 The EU definition of an SME requires that a company employs less than 250 staff and that they either have an annual turnover of less than UER 50M, or a balance sheet not exceeding EUR 43M 2 VCSE organisations range from small community groups and charities to large-scale community interest companies and not-for-profit organisations.

4 Completion of procurement sign off form Contract Award notice on Contracts Finder (as 5.4) 5.7. EU Tender There are three main procedures that will provide Westward Housing Group with its route to a compliant EU Tender, all of which must be advertised on Contracts Finder and the EU Tender Electronic Daily (TED). At the end of the exercise the contract award must be announced on Contracts Finder and a Regulation 84 Report is to be written and saved by the contracting authority. Open Procedure This is a one stage process, suitable for simple procurements where the requirement is straightforward and can be clearly defined with an unambiguous specification and the buyer is seeking the least expensive supplier. There is no pre-qualification stage so anyone can submit a tender and it is likely there will be a large number of tenders received. The minimum timescale for this procedure is: o 30 days from publishing contract notice to receipt of Tenders o 10 day standstill period Restricted Procedure This is a two stage process. In stage one the opportunity to tender is advertised and any supplier is able to submit an expression of interest and complete a Pre-Qualification Questionnaire (PQQ). The suppliers that successfully pass scrutiny of their financial standing, technical and professional capability are then put through to the second stage, the Invitation To Tender (ITT). The specification should again be clear and unambiguous to enable suppliers to provide a fully costed bid, without the need for further negotiation following receipt of Tender. The minimum timescale for this procedure is: o 30 days from publishing contract notice to receipt of PQQ o 10 day minimum from ITT to receipt of Tenders o 10 day standstill period Competitive Procedure with Negotiation This is suitable if the project cannot be met by readily available solutions, or there is a requirement for design or innovation. It should be stated in the OJEU advert that Westward reserve the right not to negotiate. This gives the option of closing the process should one of the bids provide the required solution at the first submission, otherwise the process will run: o Stage 1 PQQ o Stage 2 ITT o Stage 3 Negotiation o Stage 4 Re-Tender o Repeat 3 & 4 until desired outcome achieved o Final Tender scored on the last published criteria. The minimum timescale for this procedure is: o 30 days from publishing contract notice to receipt of PQQ o 10 day minimum from ITT to receipt of Tenders o? days for negotiations and re-tender o 10 day standstill period

5 6 EU Procurement Regulations 6.1. Westward Housing Group is classed as a Sub-Central Contracting Authority and as such is subject to The Public Contracts Regulations The procedures outlined in 5.6 comply with these regulations and the Procurement Officer must be involved in any procurement project There are three different types of procurement project and each has a threshold above which the regulations apply. For the period 1 st January 2016 to 31 st December 2017 the thresholds are: Works 4,104,394 Supplies & Services 164,176 Utilities 328, Works contracts are invariably single events and unless over the limit the aggregation rules do not apply The value of a contract is the estimated value of the price to be paid over the life of the contract, it is this figure you must compare with the thresholds and not the annual value. For example a 4 year service contract for gas testing at an estimate of 50,000 per annum, would equate to an aggregate spend of 200,000 and would need to be procured via OJEU. If the estimate was 30,000 per year, equating to 120,000 it would not need to be procured via OJEU In the case of a supply or service contract where you have a single requirement for services and supplies of the same type, the value of the contract being let is the combined value of all other contracts to be entered into of a similar nature. The value of each contract is calculated as either: The total price paid under all of the contracts of the same type during the previous financial year or the 12 months leading up to the date of the contract notice The estimated total price to be paid under such contracts over the next 12 months e.g. architectural services to the group would be considered the same type of service and would be considered under the aggregation rules to be a single requirement, even though the projects may be unrelated. Therefore if our architectural services for a 12 month period were over the Supplies & Services threshold stated in 6.2 we would need to undertake an EU compliant tender Whilst it is recognised that it may be difficult to aggregate all orders in every situation, deliberate disaggregation is not allowed Westward is a member of several Procurement Associations through which it has access to fully EU compliant framework agreements. Regardless of whether a framework is accessed by direct award, or via a mini-competition a Contract Award Notice must be published on Contracts Finder.

6 7 General Principles of Procurement 7.1. All procurement undertaken at/or in the name of Westward Housing Group (or its subsidiaries) is for the sole use and benefit of the business. Unauthorised use or distribution may lead to disciplinary procedure If any member of staff is involved in any form of procurement it is deemed that they comply with the following statement: Neither myself, nor any family member or close friend will benefit financially or in kind, now or at any time in the future from this procurement All staff involved in a formal procurement exercise must submit a declaration of interests, specific for that project. This includes the requirement to submit a nil return The guidance given in sections 5 and 6 are Westward s primary route to market. In exceptional circumstances a waiver from following the correct procurement protocol may be sought, by applying in writing with the reason to the Chief Executive or Director of Finance. This waiver must be signed as agreed prior to any order being placed Westward Property Services (WPS) is a department of Westward Housing Group. When functioning as Sharewest it is a separate company with Westward Housing Group as the majority shareholder, the remaining shares being owned by other housing associations. As per Section 12 of The Public Contract Regulations 2015, this means that when Westward require their services, the contract may be awarded with no further competition At the outset of a procurement project the following should be considered: Does this already exist within Westward Housing Group or its contracts? Does someone else / another department need the same thing? Is there a framework agreement available? 7.7. Value for Money is a key concept for Westward Housing Group and is defined as: Securing the best mix of quantity and effectiveness for the least outlay over the period of use of the goods or service bought. The cheapest is not necessarily the best value! 7.8. When creating a specification document, brand names/products should always be avoided. Where the use of a brand name is unavoidable the term or equivalent must be used When procuring equipment consideration must be given to the cost over its lifetime, as running costs may sometimes exceed the initial purchase price. Factors to be considered in any tender evaluation are: purchase price terms of payment financial stability of the tenderer assured delivery times

7 compliance with tender specification terms and conditions of contract past performance of the tenderer running costs including energy consumption service and maintenance anticipated residual value of the equipment on disposal or disposal cost On completion of each tender ( 50K upwards) the Procurement Officer is to have copies of: Project Initiation Document All scoring undertaken Procurement Sign Off form Purchase Order / Contract document Contract Award Notification placed on Contracts Finder Regulation 84 Report This is so that these documents can be entered into the Tender Register and together with the documentation held on the portal, form an auditable trail of the entire process. 8 Reporting & Information 8.1. To ensure compliance with Westward Housing Group s Procurement Procedures the Procurement Officer will undertake a biannual supplier spend analysis at the end of September and at the end of each financial year, to analyse commodity spend in excess of 50K The Procurement Officer will submit a biannual procurement report to the Executive Team The Procurement Officer will submit an annual report to the Board. 9 Purchasing Cards 9.1. Executive Director of Finance is responsible for the operation and control of Westward s Purchasing Card Scheme Holders of purchasing cards must use them only for the purposes for which they have been issued and within the authorised purchase limits. Cards must not be loaned to another person, nor used for personal or private purchases. Cardholders must obtain approval to purchase from the relevant budget holder and ensure that there is sufficient budget available to meet the costs Cardholders may process individual orders using purchasing cards subject to the limit approved by their Director or the Executive Director of Finance Any changes to the single or monthly transaction limits with the card provider should be approved first in writing by the Executive Director of Finance.

8 10 Stock Stock required for essential/immediate use should be kept to a practical minimum and regularly examined to maximise efficiency and avoid obsolescence Westward Property Services will maintain a record of stock where the value is material All staff responsible for maintaining/holding stock shall act cooperatively to ensure efficient use of resource. 11 Disposal of Goods Departments are responsible for ensuring that all serviceable equipment no longer required, is disposed of in a controlled manner, having regard to its possible use by another department and to all laws governing disposals Departments should advertise their surplus goods internally on the Westie Web Page via the Communications Team Contact Details page before seeking external offers Disposal shall be executed in a manner that will accrue maximum financial or service advantage to Westward and shall be conducted in such a way as to rebut any possible allegations of waste of customer funds or of showing undue preferences to any party. Written competitive offers must be obtained wherever possible and be retained for audit check if required Any computer or communications equipment that is no longer required should be disposed of in accordance with Westward s Data Protection Policy and in consultation with the IT department. 12 Ethics It is the policy of Westward to conduct its business and operations in accordance with the highest ethical standards. Every effort must be made to preserve the reputation of Westward with all who do business with it by adopting a professional and correct approach at all times In accordance with Westward s Financial Regulations all staff involved in financial transactions must guard against fraud and malpractice. If a member of staff detects a suspected fraud he/she must report it to the Executive Director of Finance. The attention of all staff is drawn to Westward s Fraud & Corruption Policy All staff should ensure that they do not authorise financial transactions (including the placing of orders and the certification of invoices) with organisations in which they, their partners or close relatives have a significant financial interest other than as

9 minority shareholders in a publicly quoted company. It is a Westward requirement that all members of staff complete a Register of Staff Interests as part of their annual appraisal process Westward's code of ethics shall be based on that adopted by the Chartered Institute of Procurement and Supply and on Westward's Guidelines on Gifts and Hospitality. In particular, staff involved in the procurement of goods and services must follow the guidelines set out below: Treat all suppliers and potential suppliers fairly and equally before a contract is awarded. Declare to the Director of Finance any personal interest which may impinge upon, or might reasonably be deemed by others to impinge upon, their impartiality in any matter relevant to their purchasing duties. Respect the confidentiality of information received in the course of duty and ensure that information given to suppliers is true and fair and not designed to mislead. While bearing in mind the advantages to Westward of maintaining a continuing relationship with a supplier, avoid any arrangement which might in the long term, prevent the effective operation of fair competition Westward Housing Group is committed to working towards a more inclusive society, and we recognise that through our spending power, we can actively promote fairness amongst our communities and partners with whom we work. Some of the points to consider about Equality and Diversity in the procurement are: Whether the purchase or engagement of consultants or contractors has any equality impact. For example, will a group of people be indirectly excluded or disadvantaged by continuing. When engaging suppliers look for companies who can demonstrate that they understand their responsibilities and operate with due regard to equality legislation. Ensure the company can provide details of their own equality and diversity policy or that they are willing to adopt the Group policy. Document title Procurement Policy & Procedures Author Procurement Officer Document date 10/10/2016 Last amended 10/10/2016 Review date October 2017 Effective until October 2018 Approval by Executive Team Approval date December 2016