LCFT High Value Orders (Including Breach and Waiver) Procedure. Issued: November 2011

Transcription

1 LCFT High Value Orders (Including Breach and Waiver) Procedure Issued: November 2011 Document revision control LCFT High Value Orders (Including Breach and Waiver) Procedure Version Author/editor Notes Date published 1? LCFT Breach and Waiver Procedure 09/ Stephen McGarry LCFT High Value Orders New Statement of Need to Purchase form 04/11/2011 1

2 LCFT HIGH VALUE ORDER (INCLUDING BREACH AND WAIVER) PROCEDURES 1 HIGH VALUE ORDERS INTRODUCTION SCOPE CONTACTS STATEMENT OF NEED TO PURCHASE APPROVAL PROCESS WAIVERS WAIVER PROCEDURE BREACHES BREACH PROCEDURE... 5 APPENDIX 1: CONTACTS... 7 APPENDIX 2: HIGH VALUE ORDERS AND WAIVER CIRCUMSTANCES

3 1 HIGH VALUE ORDERS 1.1 Introduction This procedure is issued in accordance with and is subsidiary to the Trust s Standing Financial Instructions. The purpose of this procedure is to ensure that: All orders over the threshold required for Tendering or written Quotations are accompanied by evidence of such process and/or a business justification for the award decision; That such business justification is recorded in a Statement of Need to Purchase and that these records are maintained and available for audit purposes; All breaches to SFI s, SO s and the Scheme of Delegation identified by the Finance Department are reported to the Audit Committee; All waivers to SFI s, SO s and the Scheme of Delegation identified by the Finance Department are reported to the Audit Committee. 1.2 Scope This procedure is to be followed where any budget holder is committing trusts funds over a value of 25,000 for Goods and/or Services. This procedure replaces the previous LCFT Breach and Waiver procedure (Sept 2008) and is to be used when any member of the Finance Department is made aware of a breach or waiver of SFI s, SO s and the Scheme of Delegation. Where SFI s SO s and the Scheme of Delegation have not been followed but the breach has been intercepted, although this does not constitute a breach, the rationale or persistency of the incident/s should be considered before exclusion from this procedure. 1.3 Contacts All contacts are listed in the appendix Statement of Need to Purchase The new Statement of Need form can be found at the end of this procedure. This form incorporates many of the elements of the previous Breach and Waiver form, and indeed is still for use as such however it is now to be used to record business justification for contract award decisions even when not obviously breaching UK Public procurement directives. 3

4 Use of this procedure is now required for any contract over 25,000 including those which are placed against local, regional or national framework agreements or contracts. As such, the user is asked to populate information such as the contract details, and in the case of a framework, whether the award was via a mini-competition or by direct call-off from a single source and justification for any decision not to utilise a mini-competition of approved suppliers. This form can also be utilised for the purpose of justifying award decisions when quotes or tenders have been received, and the cheapest offer is not accepted, such as when better quality or overall value is offered by a higher cost offer. 1.5 Approval Process Sections 2, 3, 4 and 5 of the Statement of Need form must be filled in by the requisitioning officer and accompanied by any additional evidence of quotations or contract awards. Section 5 must then be approved and countersigned by the Trust Procurement Manager to indicate that the business case is valid and does not represent a risk either legally or fiscally to the Trust. Directors are not required to approve the Statement of Need (except in the case of Waivers) as they will already be countersigning the accompanying requisition form. 1.6 Waivers Waivers relate primarily to the purchase of goods and services, where the requirement to obtain quotes or to go out to tender is to be set aside. Details of the circumstances and required authorisation levels are explicit within SFI s SO s and the Scheme of Delegation. See appendix 2. Supplies will not process a requisition requiring a waiver of Trust SFI s or SO s without a fully completed form, including appropriate signatures at Section 6. Supplies will report details and provide copy documentation on request. 1.7 Waiver Procedure A form is to be completed in all circumstances where the competitive tendering procedures or ordering procedures required under the Trust s Standing Financial Instructions are to be waived. All sections of the form must be completed in full as per 1.5 above and include at section 6, the reason for waiver (see Appendix 2). Following the TPM approval at section 5, the requisitioning officer must then seek 4

5 approval from two Directors, at least one of whom must be a nonexecutive Director. The authorised waiver form should then be forwarded with the Requisition to the Procurement Department to enable the order to be raised All waivers will be consolidated and reported to the Audit Committee on a quarterly basis. A file will be made maintained by the Assistant Director of Finance Financial Services. 1.8 Breaches Where SFI s SO s and the Scheme of Delegation have not been followed, this constitutes a breach, but even where the breach has been intercepted, there are circumstances under which the incident/s should be considered for inclusion in this procedure: Breaches Breaches generally relate to any instance identified by the Finance Department where SFI s SO s or the Scheme of Delegation have not been followed and the breach has not been intercepted. Attempted Breaches Where the breach has been intercepted, although this does not constitute a breach, the intention may have been to undermine or circumvent the SFI s SO s or the Scheme of Delegation, under these circumstances the intention should be considered a breach and this should be treated exactly as if a breach had been made. Persistent Failure to Follow SFI s SO s or the Scheme of Delegation Where there is a persistent failure to follow SFI s SO s or the Scheme of Delegation, regardless of intention and whether breaches are made or not, this should be considered as a breach and this should be treated exactly as if a breach had been made. 1.9 Breach Procedure All breaches should be reported on a monthly basis to the Assistant Director of Finance Financial Services. Details will include: Name of the Person Responsible for the breach Date/Timing of the breach Nature of the breach (Inc Goods/Services involved) Name of the Reporting officer 5

6 Persons to whom the breach has been reported (this will usually include a senior manager) Action taken and whom by All breaches will be consolidated and reported to the Audit Committee on a quarterly basis. Very serious breaches will be escalated to the Director of Finance immediately. A file will be made maintained by the Assistant Director of Finance Financial Services. 6

7 APPENDIX 1: CONTACTS All queries with regard to this procedure should be addressed to: Stephen McGarry Trust Procurement Manager

8 APPENDIX 2: HIGH VALUE ORDERS AND WAIVER CIRCUMSTANCES When goods/services are purchased at a value exceeding 25,000 but less than 50,000 three written competitive quotes are to be obtained. Where the goods/services are purchased at a value exceeding 50,000 but less than 200,000 three formal tenders must be obtained. Where the goods/services are purchased at a value exceeding 200,000 five formal tenders must be obtained. These may be facilitated by the Procurement Department. If a member of staff feels that a purchase does not require a competitive sourcing exercise i.e., that the circumstances of the purchase falls within those described within the Trust s Standing Financial Instructions (see below), then the form attached must be completed. It must be noted that the above values are for FULL CONTRACT value, and not just PER YEAR figures, and that in any case, for contract values over the EU Threshold, a full OJEU compliant tender may be required. The Procurement Department can advise further. Extract from the Trusts Delegated Powers VALUE OF QUOTE OR TENDER MINIMUM NUMBER OF (Inclusive of VAT) QUOTES/TENDERS REQUIRED 25,000 up to 50,000 3 written quotations 50,000 up to 200,000 3 formal tenders Over 200,000 5 formal tenders * All purchases exceeding 101,323 (exc. VAT) are subject to OJEU rules of procurement unless provided for on a nationally agreed contract. Extract From Trusts Standing Orders Exceptions and instances where formal tendering may be waived Formal tendering procedures may be waived by officers to whom powers have been delegated by the Chief Executive without reference to the Chief Executive where: a) the estimated expenditure or income does not, or is not reasonably expected to exceed the levels set out in the Scheme of Delegation b) where the supply is proposed under special arrangements negotiated by the DoH in which event the said special arrangements must be complied with; or 8

9 c) the timescale genuinely precludes competitive tendering. Failure to plan the work properly is not a justification for single tender; or d) specialist expertise is required and is available from only one source; or e) the task is essential to complete the project and arises as a consequence of a recently completed assignment and engaging different consultants for the new task would be inappropriate; or f) there is a clear benefit to be gained from maintaining continuity with an earlier project. However in such cases the benefits of such continuity must outweigh any potential financial advantage to be gained by competitive tendering; or g) where provided for in the Capital Investment Manual. The limited application of the single tender rules should not be used to avoid competition or for administrative convenience or to award further work to a consultant originally appointed through a competitive procedure. Where it is decided that competitive tendering is not applicable and should be waived by virtue of (c) to (f) above the fact of the waiver and the reasons should be documented and reported by the Chief Executive to the Audit Committee in a formal meeting. PLEASE NOTE WAIVERS WILL NOT BE APPROVED SOLELY ON THE GROUNDS OF PREFERRED SUPPLIER STATUS 9

10 Statement of Need to Purchase Goods and/or Services SECTION 1 : NOTES 1.1 This form is to be completed for Audit purposes in all circumstances where the total contract/purchase cost is in excess of 25, All sections of the form must be completed in full by the Procurement Manager and/or the Requisitioning Officer before submitting for approval to an Authorising Officer. 1.3 The authorised form along with an authorised requisition form (SO6) should be forwarded to the Procurement Department to enable the order to be raised. SECTION 2 : DETAILS OF REQUEST Department & Locality Requisition/SO6 no. Requisition Date Requisitioning officer Supplier Description of goods Purchase value VAT Total Value SECTION 3 : INFORMATION TO SUPPORT EXPENDITURE [Insert comments from the Procurement Manager and/or requisitioning officer in support of the request to order and also attach any supporting documentation or additional pages.] SECTION 4 : CONTRACT COMPLIANCE Is this a Waiver? (please also complete Section 6) Framework/Contract ref Call-Off or Mini-Comp [Reasons for not undertaking Tender or Mini-Competition, or for not selecting lowest value quotation/tender.] SECTION 5 : SUBMISSION OF REQUEST Request submitted by: Designation: Signature: Date: Request approved by Trust Procurement Manager YES / NO Signature: Date: SECTION 6 : APPROVAL OF WAIVER REQUEST Please indicate by all boxes which apply below as to which reasons (as detailed on pages 8-9 of the High Value Order (incl Breach and Waiver) Procedure 2011) you are submitting this waiver. A B C D E F G Any two directors, at least one of which must be a non-executive. Request approved by: Designation: Signature: Date: Request approved by: Designation: Signature: Date: