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Procurement Procedures and Regulations
As a public authority, responsible for spending public money, we have a duty to operate in an open and transparent way. Our procedures for purchasing are known as Contract Procurement Rules. (Full details of the Council’s current Contract Procurement Rules are contained within the Council Constitution pp. 117-140). These procedures are important for the following reasons:
- They give a legal and auditable framework to our procurement activities
- To help us obtain value for money so that we may in turn provide value for money services to the public
- To ensure that we comply with the laws governing the spending of public money
- To protect our staff and members from undue criticisms or allegation of wrong doing.
A summary of our main procurement procedures is set out below:
| Estimated Aggregate Value of Procurement | Requirement |
| Up to £5,000 | At least one estimate or offer must be obtained and best value must be demonstrated |
| £5,001 to £50,000 | A minimum of three competitive written quotations shall be invited |
| £50,001 to £139,893 | A minimum of three formal competitive tenders must be obtained |
| Above £139,893 | The appropriate EU directive shall be complied with |
We have a legal requirement to comply with the EU Procurement Directives. These are enforced in UK law through the Public Supply, Works and Service Regulations. This legislation governs the way in which the public sector procurement process must be conducted for contracts over certain specified thresholds.
As at January 2006, these thresholds stood at £139,893 for supplies and services and £3,497,313 for works.
The EU regulations are based on the following principles:
- All potential contracts, the values of which singularly or cumulatively exceed specified financial thresholds must be advertised in the Official Journal of the European Union (OJEC) so that all interested parties in member states have an equal opportunity to submit tenders
- All enquiries must receive equal treatment in order to eliminate discrimination on the grounds of nationality of the contractor or the origin of the supplies, services or works.
- All supplier selection, tendering and award procedures must involve the application of objective and transparent criteria.
EU Tender Procedures
There are four tender procurement procedures the Council may use:
- Open: - All suppliers who request tender documentation will be invited to submit a tender by a set date. These are evaluated; the contract will be awarded to the successful bidder.
The open tender procedure is normally only used where the known market place is limited, and the Council needs to seek out extra interest, or where the timescale does not allow the two stage restricted tender procedure to be followed. - Restricted: - This is a two stage process. The first stage often involves a pre-qualification questionnaire where a short list of suppliers is identified. In the second stage, suppliers are invited to respond to an Invitation to Tender (ITT). The contracts are awarded to the successful supplier following the analysis of the ITT.
- Competitive Dialogue: - This is used for more complex procurements. Following the OJEU Contract Notice and a selection process, the authority negotiates with companies to develop suitable solutions and on which chosen companies will be invited to tender. After the ITT is issued no further negotiation is allowed, only discussion about clarifying or fine-tuning the tender. An award is subsequently made.
- Negotiated: - there are two types of negotiated procedure. Under the negotiated procedure without prior advertisement, the contracting authority is not required to issue an OJEU notice and may negotiate directly with the supplier of its choice. Under the negotiated procedure with prior advertisement, however, an OJEU notice must be published, inviting expressions of interest. From those meeting its selection criteria, the contracting authority may select a minimum number to be invited to negotiate.
The negotiated procedure is only used in exceptional circumstances, for example when a supplier is the sole source of the goods or service required, in cases of extreme urgency, or when the precise specification can only be determined by negotiation.
Framework Contracts
Framework agreements are set up by public sector bodies with suppliers to provide goods, works or services according to certain requirements – e.g. price, quality, quantity. Frameworks can be arranged centrally by one public body for itself and/or for a number of other public bodies.
The bodies party to the framework can then “call-off” (order) if they need to. If there is more than one supplier, then a mini-competition is held to identify the best supplier.
A contract is only formed when an order is placed for a specific requirement. The public sector body is not committed to using the framework. Framework agreements are subject to safeguards and are normally for no more than four years.