Agenda item

The Board considered an update report advising of theprocurement methods available to the Council and the current route to market trends used by officers.  The report also informed the Board of the proposals for improvements to the procurement function at the Council and the future opportunities arising from the changes.

The report followed a presentation to the Board in February 2017 by officers who summarised the recommendations in their report, developments in legislation, training issues and the long-term goals of the Corporate Procurement Advisory Panel (CPAP).  The Board had requested an update on the cost savings to be made by procurement 6-9 months later.  However, as the Procurement Officer and Procurement Assistant had left the Council’s employment, the Principal Solicitor overseeing the procurement function had prepared this report as an interim measure whilst recruitment to a newly created Procurement Manager post was being carried out.  This report explored the tender procedures available under relevant Regulations and looked at the Council’s current approach to procurement and areas of opportunity.  A further report would be brought to the Board to deal with cost savings from procurement in due course when the Procurement Manager was in post and had the opportunity to review costs.

The Council was legally obliged to ensure that it achieved best value and continuous improvement when exercising its functions including when it was purchasing goods, services and works.  It carried a fiduciary duty to local tax payers to spend money lawfully and efficiently and was obliged by law to adopt standing orders which regulated its approach to contracting.  Further, the Council was obliged to access the market in legally compliant ways; to meet various transparency obligations in relation to expenditure; and to meet a range of obligations under Data Protection legislation in respect of data controlling and processing.

The Council’s duties were threefold, namely, compliance with relevant Regulations when procuring contracts valued above a threshold set by the Official Journal of the European Union (OJEU); producing Procurement Procedure Rules (PPRs) which complied with Regulations and other legal requirements; and ensuring that the PPRs were followed by procuring officers.  The latest rules that the Council need to comply with, the Public Contract Regulations 2015, came into force in February 2015.  They modified the previous Regulations and codified the case law in this area particularly in relation to contract variations and exemptions.  The 2015 Regulations created a framework by which public bodies must procure their goods, works and service contracts.

The report outlined the procurement routes to market for new tenders for goods, works and services contracts valued above the OJEU threshold which were Open Procedure, Restricted Procedure, Competitive Procedure with Negotiation, Competitive Dialogue, Innovation Partnership, Negotiated Procedure without Prior Publication and Light Touch Regime.  For contracts below the OJEU threshold, a less formal tender or quote procedure could be followed which could either be an Invitation to Tender or a Request for Quote process following the procedures detailed in the PPRs.  Framework agreements, a contract between the party who had set up the framework and a supplier or group of suppliers, could also be used in certain circumstances.

As with all procurements, the process undertaken to award the contract must be fair, open and provide for equal treatment.  In all cases a detailed specification of the goods, services or works being procured was required prior to the tender going out to the market.

There was currently a devolved model of procurement at the Council with procuring managers in individual services undertaking all of the procurement activity.  The Procurement Officer’s role, acting with the Procurement Assistant, had been one of advice and assistance which procuring officers utilised at will.  The Procurement Manager being recruited would strengthen this function, lead on improvements to the service and provide commercial input and route to market advice.  The Procurement Manager would be tasked early on to provide comprehensive training across the services on procurement issues and to work closely with procuring managers to improve procurement outcomes, ensure effective contract management and demonstrate how procurement could assist with service planning and delivering cost savings.  The PPRs would be re-written to ensure they were fully up to date with the law and the current requirements of the Council.  In future, procuring managers would seek guidance from the internal procurement team prior to seeking external advice, and instructions to external consultants in relation to procurement advice and instructions would be issued via the procurement team.

The CPAP provided strategic advice on procurement activity across the Council and its role would be enhanced to provide a gateway function, approving the route to market and contract award for contracts over a certain level. The CPAP could also approve exceptions/waivers as well as oversee contract management issues.  It would be chaired by the Director of Finance and include senior representatives from Procurement, Legal and Finance. Procuring managers would seek approval by the Panel following which the next stage of authority would be sought.

The Council undertook significant procurement activity for goods and services.  The changes put in place would improve its performance in this area by strengthening the procurement function, ensuring procuring managers had the necessary knowledge and skills and ensuring appropriate strategic control via the CPAP.

The following points arose from subsequent discussion:

·             The reference in the report to the first procurement officer joining the Council in 2015 was intended to show that it was a relatively new resource.

·             There would be merit in waiting for the newly appointed Procurement Manager to commence employment with the Council before making significant changes to procurement procedures as he or she may bring other experiences and ideas to the fore.

·             The majority of the Council’s procurement exercises required open (a one stage process with the Council proceeding directly to Invitation to Tender through open advertisement) or restricted (a two stage process including selection stage where suppliers were shortlisted against specific relevant criteria followed by an Invitation to Tender being sent to a minimum of 5 shortlisted suppliers) procedures usually involving more than two stages.  The field would be narrowed in the event of much market interest or to give the Council flexibility.