UNIVERSITY OF SUNDERLAND STANDING ORDERS TENDERING AND CONTRACT PROCEDURES

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1 UNIVERSITY OF SUNDERLAND STANDING ORDERS TENDERING AND CONTRACT PROCEDURES Finance and Development Committee Revised February 2010

2 UNIVERSITY OF SUNDERLAND STANDING ORDERS ON TENDERING AND CONTRACT PROCEDURES GENERAL HEADINGS SO 1 SO 2 SO 3 SO 4 SO 5 SO 6 SO 7 SO 8 SO 9 SO 10 SO 11 SO 12 SO 13 SO 14 SO 15 SO 16 Duty to comply with Standing Orders and Financial Regulations Interest of employees in contracts Directives of the European Union Competitive tendering and quotations Invitation to tender or quote Open tendering Selective tendering Receipt and safe custody of tenders and quotations Opening of tenders Admissibility of tenders Evaluation of tenders Acceptance of tenders Nominated sub-contractors and suppliers Appointment of consultants Contract conditions Record of formal contracts 2

3 SO 1 DUTY TO COMPLY WITH STANDING ORDERS AND FINANCIAL REGULATIONS The procedure for making all contracts by or on behalf of the University shall comply with these Standing Orders, University Financial Regulations and take account of University Approved Procurement Guidelines. No exceptions other than those specified in Standing Order 4 shall be allowed otherwise than by direction of the appropriate committee of the Board of Governors or by the Vice-Chancellor & Chief Executive under delegated authority. SO 2 INTEREST OF EMPLOYEES IN CONTRACTS If it comes to the knowledge of an employee of the University or a member of the Board of Governors that a contract in which he or she has a significant shareholding in a company or pecuniary interest, whether direct or indirect, has been or is proposed to be entered into by the University, then he or she as soon as practicable shall give notice in writing to the University Secretary of the fact that a conflict of interest exists. In relation to contracts an employee of the University or a member of the Board of Governors shall not, by virtue of his/her office or employment, accept any fee or reward whatsoever other than his/her proper remuneration. For the purpose of this order, a person shall be deemed to have a pecuniary interest if: - (a) (b) (c) (d) he/she is a partner, or is in the employment of a person with whom the contract was or will be made, or he/she or any nominee is a member of a University or other body with which the contract was or will be made and has a beneficial interest in any securities of that University or body. he/she has any material interest in the contract either directly, or indirectly though a spouse, partner or close relation. he/she has any material interest in the contract as a trustee. In the case of persons living together the interest of one person shall, if known to the other, be deemed to be also an interest of the other. Any questions arising out of the application of these requirements should be raised with the University Secretary. 3

4 SO 3 DIRECTIVES OF THE EUROPEAN UNION Every contract made by the University or by a committee or officer acting on its behalf shall comply with any relevant directives of the EU for the time being in force in the United Kingdom. SO 4 COMPETITIVE TENDERING AND QUOTATIONS A Quotation is a price stated by a supplier in response to an inquiry. A Tender is an offer made by a supplier to enter into a contract of goods and services at a specialised price. Competitive tenders or quotations shall be invited for the supply of goods, materials and manufactured articles, for the rendering of services (including consultancy), for building and engineering works of construction and maintenance, and for disposals. (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) EXCEPT: - orders placed within existing approved contracts. purchases under contracts negotiated on behalf of the University by purchasing consortia and similar organisations authorised to represent the University. purchase by auction. Work to be executed or goods or materials to be purchased which are required in an emergency. the works to be executed or the goods or materials to be supplied are obtainable only from a limited number of contractors or suppliers but in such case a reasonable number of contractors or suppliers shall be invited to submit tenders. patented or proprietary articles sold only at a fixed price. the works to be executed or materials to be supplied are such that effective competition is prevented by government control. miscellaneous services, supplies and disposals below the financial limits laid down by the University under Financial Regulations. contracts with professional persons in which the specialist professional knowledge and personal skill of those persons is of the primary importance. Where written authority of the Vice-Chancellor & Chief Executive in the case of tenders and the Director of Planning & Finance in respect of quotations has been obtained. Where the suppliers have been excluded from further quotations because of the type of activity they are engaged in. This list of suppliers will be reviewed on a yearly basis and held by the Director of Planning & Finance A minimum of three tenders shall be invited for engineering and building work and for the provision of services and supply of goods and materials estimated to cost not less than 50,000. A minimum of three quotations shall be invited for engineering and building works and for the provision of services and supply of goods and materials estimated to cost not less than 5,000 and not more than 50,000. A tender/quotation may be accepted if less than the prescribed number of tender/quotations is received in respect of any proposed contract subject to the approval by the Director of Planning & Finance or his nominee. 4

5 SO 5 INVITATIONS TO TENDER OR QUOTE Invitations to tender or to submit competitive quotations shall be issued by an officer designated by the Vice-Chancellor & Chief Executive. Wherever possible the firms invited to tender/quote should be among those on the approved list of suppliers/contractors. A record shall be kept of all persons invited to tender or quote. Where tender documentation is involved, all invitations to tender on a competitive basis shall state that no tender will be accepted unless submitted as follows: - In a plain sealed package, bearing a pre-printed label or special envelope provided by the University to prospective tenderers which shall show the tender reference number at the top left-hand corner. Tender envelopes/packages shall not bear any name or marks indicating the name of the tenderer. Tenders may not be submitted by fax or other electronic means. All invitations to tender shall include a warning against the consequences of engaging in any corrupt practices involving employees. Every tender quotation shall embody such of the University s contract conditions as are applicable. All invitations to tender shall instruct tenderers to submit tenders directly to the University Secretary and notice of invitation and a list of contractors invited to tender shall be forwarded to that officer. SO 6 OPEN TENDERING This Standing Order shall apply where formal tenders for a contract are to be obtained by open competition. At least ten days public notice shall be given in one or more local newspapers/journals/internet together with invitations to appropriate contractors and suppliers and also, whenever the estimated value or amount of the contract exceeds 100,000 in one or more newspapers or journals circulated amongst such persons or bodies as undertake such contracts. This shall express the nature and purpose or the contract; state where further details may be obtained; invite tenders for its execution, and state the last date and time when tenders are to be received. In the relevant cases, the procedures required to comply with EU Directives shall be followed. 5

6 SO 7 SELECTIVE TENDERING This Standing Order shall apply where invitations to tender for a contract are to be made to some or all of those persons or bodies who are included in a list of approved contractors/suppliers, under arrangements approved by the Vice-Chancellor & Chief Executive. The Director of Planning & Finance shall be responsible for establishing and maintaining lists of approved contractors/suppliers. Suppliers will be assessed by the criteria addressed in the University s Pre-Qualification Questionnaire. Separate lists may be maintained for different categories of works or supplies, but in each case, lists shall be reviewed at intervals of not more than 5 years. Persons or bodies may apply to be included in a list of approved contractors/suppliers between reviews. No person or body shall be included in a list of approved contractors/suppliers unless: - appropriate technical and financial references have been provided - the appropriate technical officer is satisfied that the person or body has the capacity and technical competence to undertake the contracts envisaged; - the Director of Planning & Finance is satisfied that the person or body is financially sound. SO 8 RECEIPT AND SAFE CUSTODY OF TENDERS/QUOTATIONS The University Secretary shall be responsible for the receipt, endorsement and safe custody of tenders until the time appointed for their opening. The date and time of receipt of each tender shall be endorsed on the unopened tender envelope or package. SO 9 OPENING OF TENDERS As soon as possible after the date and time stated as being the latest time for receipt of tenders they shall be opened in the presence of an officer designated by the University Secretary or nominee and an officer designated by the Director of Planning & Finance who are impartial, of approved status and who are not in any way involved or associated with the tenders in question. Every tender shall be stamped with the date of opening and signed by the designated officers. A tender register shall be maintained by the University Secretary to show the following for each set of competitive tender invitations despatched and subsequently returned: (a) (b) (c) (d) (e) (f) pre-tender estimate where applicable; date on which tenders are due to be received; names of and the number of firms invited; names of firms from which tenders have been received, the date of receipt and the tender price; the date on which the tenders were opened; the person(s) present at the opening and their signature. Records shall be made, as appropriate, of tenders received late or incomplete. 6

7 SO 10 ADMISSIBILITY OF TENDERS Late Tenders Tenders received after the due time and date may be considered only if the University Secretary decides that there are exceptional circumstances, e.g. where marked financial, technical or delivery advantages would accrue and is satisfied that there is no reason to doubt the bona fides of the tenders concerned. The University Secretary shall decide whether such tenders are admissible. Technically Late Tenders/Quotations Technically late tenders (i.e. those despatched in good time but delayed through no fault of the tenderer) may be regarded as having arrived in due time. Incomplete and Amended Tenders Incomplete tenders (i.e. those from which information necessary for the adjudication of the tender is missing) and amended tenders (i.e. those amended by the tenderer upon his own initiative either orally or in writing after the due time for receipt) should be dealt with in the same way as late tenders. Tenders Requiring Clarification Necessary discussion with the tenderer in order to clarify technical points and information etc., before the award of a contract, need not disqualify the tender. Re-tendering If for any reason following the receipt, opening and scrutiny of tenders it is deemed desirable to consider re-tendering, this shall only be carried out with the express permission of the University Secretary following justification for the need to re-tender and determination of the extent of companies invited to re-tender. Confidentiality of Tenders While decisions as to the admissibility of late, incomplete or amended tenders are under consideration and whilst re-tenders are being obtained, the tender documents shall be strictly confidential and be held in safe custody by the University Secretary under Standing Order 8. SO 11 EVALUATION OF TENDERS An evaluation and assessment of tenders shall be carried out by the Director of Planning & Finance or his nominee prior to acceptance and provided to the person authorised to accept tenders under Standing Order 12. The evaluation and assessment shall, inter alia: - (a) (b) (c) verify the accuracy of tenders submitted and be able to negotiate further discounts with the chosen supplier where applicable identify and review changes in costs compared with approved or pre-estimated costs identify and review changes in scope, design or specification compared with the approved scheme or project. 7

8 An authorisation process must follow with each tender. There are two types of forms to identify this process and completion will depend upon the tender value. An Under 100K Tender form requires authorisation from the Director of Faculty/Service, the Procurement Manager, the Deputy Vice Chancellor. Tenders which fall below the 50K limit need only be signed by the Director of Faculty/Service and the Procurement Manager. An Over 100K Tender form requires authorisation from the Director of Faculty/Service, the Procurement Manager, the Deputy Vice Chancellor and the Vice Chancellor. Tender values over the value of 500K require further authorisation from the Chairman of the Board of Governers. A copy of the complete form is filed with the Legal Services Department. SO 12 ACCEPTANCE OF TENDERS The lowest tender, if payment is to be made by the University, or the highest, if payment is to be received by the University, shall be accepted unless there is good and sufficient reason to the contrary. Acceptances of other than the lowest (or highest in respect of income) shall be subject to the approval of the next superior person authorised to accept tenders. A record of all such decisions shall be kept by the University Secretary, together with the details of the justification for the decision. Before acceptance, confirmation shall be obtained that the necessary financial provision is available or approved. The appropriate committee as detailed in Standing Orders 12 thereof shall be informed of all tenders accepted where the value exceeds 50,000. Subject to the above requirements, authority for the acceptance of tenders and quotations shall be in accordance with the following table: BUILDING WORKS AND GOODS OR SERVICES Value (Inc. VAT) Procedure Approval for Acceptance by:- Up to 5,000 Official order Dean of Faculty/Director of Service or nominee 5,000-50,000 Minimum of three written Quotations 50, ,000 Select tendering (See SO7) or Open advert 10 days notice local newspapers/trade journals/internet and invitations to appropriate contractors (See SO 6) Procurement Manager Deputy Vice Chancellor (Resources & Business Development) 8

9 100, ,000 Select tendering (See SO7) or Open advert as above plus specialist newspapers /journals/internet (See SO 6) Public advert in OJEU where tenders estimated to exceed thresholds (as per Public contracts regulations 2006) (ex VAT) for Supplies and Services Deputy Vice-Chancellor (Resources & Business Development), Vice-Chancellor & Chief Executive Over 500,000 As above plus Public advert in OJEU where tenders estimated to exceed thresholds (as per Public contracts regulations 2006) (ex VAT) for Building Works Vice-Chancellor & Chief Executive, and Finance and Development Committee SO 13 NOMINATED SUB-CONTRACTORS AND SUPPLIERS The University Standing Orders shall apply where a sub-contractor or a supplier is to be nominated to a main contractor and the contract to be awarded by the University. The terms of an invitation to a nominated sub-contractor or supplier shall require an undertaking by the tenderer to enter into a contract with the main contractor on terms which indemnify the main contractor against the sub-contractor s obligations under the main contract in relation to the work and goods included in the sub-contract. SO 14 APPOINTMENT OF CONSULTANTS ETC Where a consultant is engaged to supervise a contract on behalf of the University, it will be a condition of the engagement that the consultant complies with the requirements of Contract Standing Orders as if the consultant were an officer of the University. Letters confirming formal contracts with consultants, etc must clearly set out the terms of reference, the services to be provided, the terms of engagement and the basis of fees and any expenses payable. Except where there is a specific agreement, including arrangements where expenses are included in tendering arrangements where appointments are to be made on a competitive fee basis, expenses should be paid on a standard basis. Details of expenses incurred, dates etc should be submitted to support claims. These should be checked for accuracy before payment is authorised. 9

10 SO 15 CONTRACT CONDITIONS Every contract shall specify the goods, materials or services to be supplied or the work to be executed; the price to be paid or the method of calculation of cost together with a statement as to the amount of any discount(s) or other deduction(s); in appropriate cases the period(s) within which the contract is to be performed; and such other conditions and terms as may be agreed between the parties. In appropriate cases contracts shall provide for the payment of liquidated and ascertained damages by the contractor in the event of the terms of the contract not being duly performed. The University shall also require and take sufficient security for the due performance of any contract. In the case of any such contract for the execution of works, such security shall be provided by requiring the retention of a proportion of the contract sums payable until the work has been satisfactorily completed and maintained. Where it is considered necessary on the basis of information and officers advice relating to a specific contract and contractor in any particular case, additional provision of a bond for due performance shall be required. Each contract shall contain suitable provisions in respect of indemnities, performance bonds, warranties, insurance, protection against fraud and corruption and default on the contract provisions. SO 16 RECORD OF CONTRACTS Following acceptance, the University Secretary and the Director of Planning & Finance shall be notified in writing of the main particulars of each contract awarded under Standing Order 11. All documents required to execute a formal contract in excess of 100k shall also be forward to the University Secretary. Payments to contractors shall be made only on a certificate issued by the appropriate technical officer or consultant. Where a certificate is issued by a consultant it shall be counter-signed by the appropriate technical officer. Where contracts provide for payments by instalments, all payments made including related professional fees shall be entered in a register of contracts maintained by the appropriate technical officer. The approval to any variation to a contract or addition to or omission from a contract shall be given only by the responsible University supervising officer and where the final cost is likely to exceed the financial provision, the Director of Planning and Financial Services shall be informed and approval obtained prior to the issuing of the variation order. Before a final certificate of payment is issued under a contract, the Director of Planning & Finance shall have the opportunity, if required to examine the contractor s final account with such relevant documents as may be required. The contract supervisor shall consult the Director of Planning & Finance and the University Secretary when responding to claims made by a contractor. Appropriate contract details and documentation shall be retained for the statutory period relevant to the type of tender contract. 10