INTRODUCTION TO PROCUREMENT AT THE LSE 1
THE LSE PROCUREMENT TEAM The LSE has four full time Procurement professionals based in the Finance Division on the 5th Floor of the Library. We are here to assist you, so please come and see us, phone us, or email us if you need help! Glen Humbles Head of Procurement Sarah Hadland Deputy Head of Procurement e-mail: g.humbles@lse.ac.uk Ext: 5346 e-mail: s.l.hadland@lse.ac.uk Ext: 6635 Daniel Bullimore Senior Procurement Advisor Dee Cordwell Procurement Advisor e-mail: d.c.bullimore@lse.ac.uk Ext: 3616 e-mail: d.cordwell@lse.ac.uk Ext: 5347 2
PURCHASING GOODS AND SERVICES First things first... do you need to buy? Any items brought into the School s premises will at some stage have to be disposed of thereby adding to the tonnes of waste that LSE sends to landfill. Please consider whether you could repair or refurbish the old item instead of purchasing a new one, loan, and lease or buy it from someone else/another department at LSE. Secondly and rather importantly... Before making a purchase you need to address the following: Do you have approved funds? The authority to do so for example you need to be a budget controller or have delegated authority and the proposed expenditure is suitable for that budget code. If you need further help, budget queries should be raised with the Finance Divisions Management Accounting team. If the expenditure is related to a research contract, please contact the Research finance team as additional contractual conditions may apply. Make sure that the item or service you are about to buy is appropriate expenditure for the School to make for example, LSE will not pay travel costs from home to work. Do you have a clear specification of what you want to buy? Pay heed to the LSE s Environmental Policy 3
WHO TO BUY FROM? Our database of registered and approved suppliers can be searched by name or product. It can be used to identify suitable suppliers, but all new requirements should follow the competition guidelines (detailed on page 5). It is not appropriate to award a contract on a sole source basis unless your requirement is covered by an existing framework agreement, or under 8k. For further information on preferred suppliers, contact the procurement team. o Approved Suppliers Search This is a live up to date database and you can search by name or product to find a suitable supplier. The list also contains the LSE s advantageous supplier agreements of which there is a wide ranging list. LSE is a member of the London Universities Purchasing Consortium, who work not only on our behalf, but also for the other major Universities in London in getting good deals for common goods and services such as IT, travel, furniture, stationery, water coolers, telephony. LSE can also utilise the advantageous UK Government agreements. You are obliged under the School s Regulations to use these agreements and the list of approved suppliers will show where there is a relevant framework agreement. 4
How do I decide on the level of competition required? The level of competition required is based on the contract value (contract life, not annual cost). A single source purchase is acceptable for a contract below the threshold of 8K excluding VAT. The following thresholds apply to all contracts with a value of 8k or over: From 8k up to 49,999 at least 3 quotes 50k and over at least 4 tenders Request quotes (include LSE terms and conditions with request) and keep copies for audit purposes. Will need to go through a more formal sealed bid tender process and must be referred to the Procurement Team. The tendering process will be via the LSE s e-tendering system (Bravo) If for any reason you cannot obtain the required number of quotations (i.e. there is only one company that can provide it), you will need to discuss this with the Procurement Team. You will need to request approval from the Finance Director before contract award. For contracts of 50k and over, you should contact Procurement as soon as the requirement is identified, so that advice on the procurement process, timescales, LSE documentation, and terms and conditions can be provided. Using new suppliers If you cannot find an already approved supplier to meet your needs and you wish to use a new unapproved company not set up on APTOS, you must complete a new supplier set up form. You should also ask the supplier to provide their BACS details on headed paper or via email and supply this along with the form. When you are going to spend less than 8k with a supplier, you can send the new supplier set-up form directly to payment.queries@lse.ac.uk. If you are going to spend 8k or more, you must send the form to procurement@lse.ac.uk. If you use an unapproved supplier without prior approval, any subsequent invoices sent to Finance for payment will be held back and not be paid until this new supplier set up form is completed and returned which the budget holder needs to sign. If the spend is over 8k, evidence of alternative quotations sought must be stated. 5
Checking bona fides If you use a new supplier not set up on APTOS, you must assure yourself that any prospective company is legitimate and fit to do business with LSE. As part of the final approval process before the supplier is set up on APTOS, the Procurement Team will verify: Their company registration number you can check their Companies House record yourself online at their Web Check service. Their VAT number Payment terms we pay 30 days nett, if the company is asking for an advance and/or immediate payment, this may indicate that they are in financial difficulties. A full company financial report can be undertaken by the Procurement Team which is free of charge please request this by contacting procurement@lse.ac.uk Contract award Normally a contract would be awarded to the tenderer submitting the lowest price, although quality criteria will also be significant. Tenders or quotes other than the lowest price are to be accepted only on the written authority of the School Secretary via Procurement. LSE standard terms and conditions should be issued with all requests for quotes. They can be downloaded from the Procurement website. If other Terms and Conditions are put forward by the supplier, please contact the Procurement Team. Please ensure that the supplier is aware and accepts that they will only be paid within 30 days nett. 6
Who can sign contracts? Budget controllers should sign standard (LSE or approved framework terms) contracts with a value below 100k. All non-standard or supplier generated contracts should be, in the first instance referred to the Purchasing Section and must be signed by the School Secretary. All contracts of 100k and above must be signed by the School Secretary. Invoice Payment The authorisation and payment of invoices is covered in the Accounts Payable User Guide. Please note that the School s payment terms are Net Monthly, i.e. LSE shall pay the invoiced amounts no later than the end of the calendar month following the calendar month in which delivery was made and receipt of a correct invoice submitted by the Supplier whichever shall happen last. Examples: Goods Delivered or Services Rendered Invoice Submitted Payment Due by (latest date) 3 April 27 April 31 May 28 April 30 April 31 May 28 April 2 May 30 June 7
SPECIALIST CONTRACTS This is a list of pre-tendered contracts you should draw upon. TRAVEL LSE s preferred Travel Management Company is Diversity Travel. For more details on travel and hotels please see the Travel page on the Procurement website. IT PURCHASES All IT purchases must be made in accordance with Procedure PR12 of the Financial Regulations: IT Purchases. An IT purchase is defined as being any piece of IT equipment forming part of the School s infrastructure, including equipment installed into lecture theatres and teaching classrooms; all desktop and laptop PCs; printers; scanners; all mobile devices, including fixed and mobile telephones; all software, and any other device or peripheral costing more than 200. IMT Services (or your local support team in the Library or Research Labs) will help you (and must be contacted) in order to procure anything IT related. You should contact your IMT support team in the first instance. Some purchases might require a business case to be approved before a purchase order can be raised. If you attempt to purchase anything IMT-related outside of this procedure then you risk having the expense claim or invoice being rejected by Finance. Any IT equipment purchased must be asset tagged in order to comply with the Financial Regulations. IT Services would normally do this as part of the procurement process. All equipment will also be subject to an annual check. Software Computer software differs from the procurement of other goods and services in that the purchase typically only results in a right to use the software rather than outright ownership. There is further advice available in the Software Guide on the Procurement website. Mobile Devices IT Services has published policy and guidance on the use of mobile devices at the School. When procuring a mobile device, IT Services will now show the total cost of ownership of the device over the duration of any mobile telephony contract (for voice and/or data) that might apply. Budget holder approval must be sought before any device is ordered. You should not attempt to buy a mobile device or a mobile voice/data plan yourself, as this may be in breach of the terms of use, and render you liable for income tax as a benefit in kind. 8
FACILITIES MANAGEMENT Stationery The School s approved stationery supplier is Office Depot. There should be an approved person within your department who is authorised to raise orders on Office Depot. Please contact Estates at: ( Estates-Help-Desk@lse.ac.uk ) if there is no authorised person in your area. Building and decorating services Refer to Estates Division via Estates-Help-Desk@lse.ac.uk Cleaning The Estates Division manages the School s cleaning contracts. Please contact Estates.FM@lse.ac.uk Drinking Water LSE has a water cooler contract with Cooleraid. For more information, please contact procurement@lse.ac.uk. If you wish to install a plumbed in water purifying system, please discuss with the Estates Division first via Estates-Help-Desk@lse.ac.uk Office furniture Furniture is provided by the Supplies Section of the Estates Division but may need to be paid for from within your own budget. Please contact email Estates-Help-Desk@lse.ac.uk White Goods & Electrical items LSE has a contract with Stearn Electric. For quotations, please contact london.south@stearn.co.uk. If you are buying new white goods and electrical items, please advise Estates (Estates-Help-Desk@lse.ac.uk) as they may require PAT testing. LEGAL SERVICES The School s main legal service provider is Pinsent Masons. A request for legal advice may only be made by Authorised Heads of Division and a few other key School Officers on behalf of the School. Please use the link below for further advice: Legal Services BANKING AND ONLINE PAYMENT SERVICES All arrangements with the School s bankers concerning the School s bank accounts and the issue of cheques are the responsibilities of the Finance Division. No other department or section can operate a bank account for activities related to the School/Department and no cheques or financial instruments made payable to the School can be endorsed and credited to any other account. The opening of any new bank accounts for the School or its subsidiaries requires the authorisation of Council on the recommendation of the Chief Financial Officer. 9
INSURANCE Please use the following link for advice on Insurance Services at the LSE CATERING Organisational Units of the School may choose to have informal hospitality provided by: the School s LSE Catering Services (LSECS), the Student Union s catering service (SU) or Sands (or other external caterers as revised from time to time), who have been formally appointed by the School to provide services where/when LSECS are unable to do so. The following link provides further advice on LSE Catering TEMPORARY STAFF The approved supplier for recruiting temporary office staff is Adecco (formerly Spring) (other than certain specialist areas). All temporary staff bookings must be made through HR recruitment. Please use the following link for advice on the Temporary Recruitment process PRINTING Please ask the LSE s Reprographics Department for a quote for work to ensure you obtain value for money. Repro.Admin@lse.ac.uk LSE DESIGN UNIT The Design Unit are able to work on a wide variety of materials from Annual Reports and the School s prospectus to detailed cartographic work and the design of exhibitions/displays. Please contact them at designunit@lse.ac.uk for quotations. 10
FREQUENTLY ASKED QUESTIONS 1. LSE Company registration number and VAT The LSE s UK company registration number is 00070527 The LSE s VAT registration no. is GB 629 5880 94 For contracts the styling should be: LONDON SCHOOL OF ECONOMICS AND POLITICAL SCIENCE (company number 00070527) whose principal place of business is at Houghton Street, London WC2A 2AE ( LSE ). 2. Self-employed (Schedule D) The HR Division are responsible for determining employment status and giving approval for selfemployed contractors (also known as Schedule D ). The decision to be treated as self-employed is not a matter of choice and HR will ascertain whether a contractor can legitimately be paid as selfemployed in accordance with the HMRC rules. The following link provides additional advice Schedule D 3. The supplier is asking me for a purchase order number The supplier s quotation can be accepted on LSE headed paper. A suggested response letter is provided in this response link. 4. What s the difference between a quote and tender? A quote or quotation is a simple and quick request for pricing from a supplier used for contracts with a value below 50k. You should always retain copies of quotes as an audit trail of the decision making process. Tendering is more complex and a longer process, with suppliers being invited to provide sealed bids, which are opened at a specified time. This process is compulsory for all contracts of 50k and above and must be undertaken by the Procurement Team via the LSE s e-tendering system (Bravo). 5. Can I accept gifts/hospitality from suppliers? Only items of low intrinsic value such as pens, mugs, calendars, diaries etc. All offers from suppliers must be noted and these records open to inspection by the internal Auditor if requested. Further advice is provided under the following link: Gifts & Hospitality 6. What are EU Tendering regulations (OJEU)? More properly they are the Public Contracts Regulations 2006 an EU wide Directive about the spending of large sums of public money. Public sector organisations are required to follow specific procurement routes for certain goods and services which exceed 172,514k ex VAT (or 4.3m for building work) with requirements advertised and tendered through the Official Journal of the European Union (OJEU). 11
Fortunately, due to the way the LSE is funded, we can choose whether we wish to follow the OJEU process and the preferred route would be a procurement outside of the OJEU process. However, it could be used to source suppliers for an unknown supply market, but the requirement should be discussed with the Head of Procurement in advance. There are risks in using the OJEU process, such as: longer timescales and a greater risk of legal challenge from suppliers on the procurement process. 7. Why can t I buy store shop furniture? We already have supply arrangements for office furniture with specialist companies which come with better warranty terms than high street stores, deliver to site, and are designed and made to more stringent standards suitable to the office environment. 8. Can I have a School provided Mobile phone? The School can provide a range of mobile devices including mobile telephones to suit most requirements. You should contact either your IT support team or the Telecoms team in IT Services (telecoms@lse.ac.uk) for help and advice. 9. The supplier wants payment upfront before they will start work/despatch the goods we need We do not pay suppliers for work that has not been done or goods that have not been delivered. If we do make a pre-payment and the company subsequently goes into liquidation, the School cannot get that money back. If suppliers need to buy a large amount of materials for the work or pay their sub-contractors significant sums of money, we would insist on certain precautions being undertaken. Please consult the Procurement Team in these instances before any commitments are made. 10. The supplier won t invoice us but wants a cheque instead We prefer invoices to be sent to us for payment; however, in certain cases cheques can be raised. Please contact Stuart Sharkey in Accounts Payable s.sharkey@lse.ac.uk 11. A supplier has asked the LSE to provide trade references Instead of this, we can send them a copy of our latest Annual Accounts to prove we are financially stable. A copy of the Accounts can be found on the Finance Division web pages. 12
APPENDIX A Checklist for Green Procurement Consideration Could I repair or refurbish the old item instead of purchasing a new one? Can I loan, lease or buy it from someone else/another department at LSE? Does the product make efficient use of resources? Does the product use energy, fuel or water more efficiently or uses less paper, ink, light or other resources? Does the product have minimal content and use of toxic substances in production and final product? Is the product reusable or durable, have a long economically useful life and/or can be economically repaired or upgraded, compared to alternatives? Is the product recyclable (and do local facilities exist that are capable of recycling the product at the end of its useful life)? Is the product biodegradable (will it take a long time to decompose in landfill)? Does the product contain recycled material? Do we really need to buy a virgin product when the recycled version is of the same quality? Is the product purchased from local supplier, which minimizes the ecological footprint, such as transportation and packaging cost? Can the additional cost accounted for improved quality be reimbursed in lower operating costs over five years? Does the supplier have ISO 14001, another Environmental Management Standard or other Eco-Label that meets certain standards? 13