Procurement Policy

Introduction

Background

In January 2015, the OISC registered with the Crown Commercial Services (CCS)
previously Government Procurement Service (GPS) for procuring through the
Government eMarketplace and Dynamic Marketplace (for common goods or services)
and CCS (for others).

The CCS consolidates and updates on all previous procurement policies including
Procurement Policy Note (PPN) on the new threshold levels that applies with effect from
01 January, 2016 having due regard to propriety and regularity.

The OISC’s Unique DUNS Number - 213957122 is required for all procurements, where
purchases are made through the Government eMarketplace. The Head of Finance (HoF)
is the Procurement Officer for the OISC. OISC username and password are required for
login and should be requested from the HoF.

Value for Money

 All public procurement of goods and services, including works is to be based on

Value for Money (VfM) on every pound spent with external suppliers, whilst
complying with EU Directives that govern Public Sector procurement.

 VfM is defined as the optimum combination of whole-life cost and quality (fitness for
purpose) to meet the user's requirement. Whole life cost means the total cost of the
acquisition over the life of the contract including maintenance, operations and
disposal. It's not just about the lowest price.

 The aim is to achieve VfM whilst having due regard to propriety and regularity.
Contracts are not awarded solely on the basis of the lowest price but on the basis of
the most economically advantageous tender. In other words, on the basis of the best
price/quality achieved by a supplier.

 In tendering procedures which involve the selection of suppliers to be invited to

tender or negotiate, the selection should be made on the basis of objective and
relevant criteria, taking account of the evidence permitted under the CCS/EU
directives where they apply. Criteria and evidence to apply should be requested from
the CCS.

 The purpose of procurement is to meet the user’s requirement. The requirement

including any specific level of quality or standard of service must, however be tested
critically for need, cost-effectiveness and affordability under whatever arrangements
are in place for financial approval and separation of functions.

 Goods, works or services should be acquired by competition unless there are

convincing and compelling reasons to the contrary. Subject to legal obligations, the
form of competition should be appropriate to the value, complexity and novelty of
the goods or services to be acquired.
 For common goods or services the Government eMarketplace from the CCS Service
gives you access to a range of buying options.

 Whether or not there is any legal requirement for it, the advertisement of proposed
contracts is a useful means of ensuring that the potential of the market is fully tested
and the OISC policy is to encourage this through use of the e-Marketplace (CCS).

Legal Framework

The OISC is responsible for ensuring it complies appropriately with legal obligations
including those under the EU procurement rules, health and safety, equality and diversity
and other international agreements. In cases of contractual dispute, or threat of legal
action by suppliers, the Crown Commercial Service must be informed.

The legal framework for public procurement includes:

 the Treaty of Rome EU Directive 2004/18/EC (known in the UK as the

Consolidated Directive)
 UK Statutory Instrument 2006 No 5
 The Public Contracts Regulations 2015
 The Equality Act 2010 relating to corporate and social responsibility

The full text of UK public contracts regulations can be found on the CCS website.
www.gov.uk/guidance/transposing-eu-procurement-directives

EU rules that apply to the provision of goods, works and services, require set procedures
and timescales to be applied to certain categories of procurement where the value
exceeds prescribed thresholds. These are reviewed periodically by the CCS. Current
thresholds can be found below under Procedures on page 9 (2) “Summary of Threshold
Levels from 01 January, 2016”.

Even, when a tender process is not subject to the directives, for example because
estimated value of a contract falls below the relevant threshold, EU Treaty-based
principles of non-discrimination, equal treatment, transparency and proportionality apply
and some degree of advertising, appropriate to the scale of the contract, is likely to be
necessary to demonstrate transparency. This is in line with the objective of achieving
VfM in all public procurement, not just those covered by the procurement directives.

For purchases below the EU threshold consideration must be given to the extent of
competition required and the most appropriate procurement route or methodology to
follow.

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Processes
In all dealings with suppliers, and potential suppliers, OISC staff should do their best to
preserve the highest standards of honesty, integrity, impartiality and objectivity.

In particular, OISC staff should do their best:

 To be fair, efficient, firm and courteous;

 To achieve the highest professional standards in the award of contracts;
 To make available as much information as suppliers need to respond to any bidding
process;
 To notify the outcome of bids promptly and, within the bounds of commercial
confidentiality, to debrief winners and losers on request on the outcome of the bidding
process to facilitate better performance on future occasions;
 To achieve the highest professional standards in the management of contracts; and
 To achieve respond promptly, courteously and efficiently to suggestions, enquiries
and complaints.

1. Bids

Selection of bidders:

In selection of suppliers to be invited to tender or negotiate, the selection should be made

on the basis of objective criteria as stated by CCS, which includes:

 selection is made of those who respond to the advertisement only and, only they are
invited to submit a tender for the contract;
 selection of the successful bidder will follow standard procurement policy i.e. most
economically advantageous tender (MEAT), taking into account whole life costs;
 In all cases, the selection of tenderers may only be made by the business units who
hold the necessary level of procurement authority and agreed by the Procurement
Officer (HoF);
 Further guidance, may be requested from the CCS to ensure that sourcing is not
unnecessarily restricted.

Award criteria:

In determining the criteria for the award of contracts, purchasers should rarely rely on
price alone. In most cases, VfM will involve other factors such as the whole-life cost,
quality and delivery against price. Guidance may be requested from the CCS.

Evaluation of bids:

Appropriate investment appraisal techniques should be used in assessing which

compliant bid offers best value for money. The investment appraisal may include:

 On the cost side, the relevant factor is whole –life cost, not lowest short-term price.
Whole –life cost takes into account all aspects of cost over time, including for
example, capital, maintenance, management, operating and disposal costs whenever
they fall.

 On quality, higher expenditure on better quality might well be offset on a whole-life

costing basis, for example by lower maintenance costs, longer life or higher residual
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 value and therefore justified on cost grounds alone. However a better quality solution
to the requirement, for example in terms of service standards, might add to whole-life
cost. In all cases it is for the purchaser to consider carefully whether increased
benefits justify higher cost, providing better value for money in meeting the
requirement.

2. Contracts

Staff must never make any procurement commitments on behalf of the OISC unless
they have sufficient delegated procurement authority and financial approval to do so.

It is imperative that only staff with financial authority place orders and award contracts.
This is because anyone is capable of unwittingly entering into a contractual
commitment in law if a supplier reasonably believes that they are acting on behalf of
the OISC.

3. Procurement Cards

The Government Procurement Card (GPC) is used in the OISC to complement its
finance and procurement systems.

The GPC (previously Barclaycard Credit Card) is a corporate charge card for use by
staff who are authorised to make ad hoc low value purchases of goods or services e.g.
travel booking, training etc. The current limit as set by the Procurement Officer (HoF) is
£100 per expenditure. Purchases over this value must be authorised by the budget
holder who hold the delegated authority for the budget line. All cards are issued and
financial limits set by the HoF. Procurement Cards may be withdrawn at any time.

Fraudulent use of Procurement Cards:

All staff must be aware of the potential for fraudulent use being made of charge cards,
particularly where the transaction is made over the telephone, internet or if a
transaction is suspected to have been carried out fraudulently by a member of staff.

The OISC has a zero tolerance policy on fraud. Any suspicion of irregularities will be
fully investigated by the OISC and action will be pursued in any instances of fraud or
theft in accordance with the OISC Fraud Policy and OISC Disciplinary Procedures.

4. Records

Retention period of records:

Procurement records may be required for reference, audit, public interest or Freedom of
Information, or parliamentary questions.

Contract documents should therefore, be retained for at least six years after the
contract has expired. The period of six years, is consistent with the Limitations Act 1980
(which requires claims for breaches of contract to be brought within this period).

The contract documents should include all communications and correspondences in

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writing and as approved by the awarding group. All signed contracts must be kept in a
secure environment. These are centrally held on behalf of Finance by HR. Other
communications and correspondences are held individually by the awarding members.

There may be cases where a contract should be retained for a longer period for
example, if the contract has been made as a deed, the limitation period will be
extended to 12 years. If you are in any doubt, you should consult the Procurement
Officer (HoF) or CCS as per contact details at the end of this document.

Confidentiality:

Access to all procurement records (including emails and correspondences) relating to

the contract, must be restricted to those persons who are authorised to or have a
need to see them. Account must be taken at all times of the data protection
legislation.

Freedom of Information (FoI):

The Freedom of Information (FOI) Act (2000) came into force in 2005, establishing a
general right of access to all types of information held by public authorities.

The OISC is to ensure all enquiries made under the Act are answered factually and
within prescribed timescales. Where information is not available to provide a full answer
this should be made clear but replies must be as helpful as possible and provide
whatever information is available, except that to which exemptions apply.
Information will only be provided from existing records. No new records will be
created in order to respond to requests.

5. Prompt Payment

Where there is no agreed contractual provision or other written understanding,

suppliers’ invoices must be paid within 30 days of receipt of the goods or services, or
the presentation of a valid invoice or similar demand for payment (e.g. GPC
Statement), whichever is later . This must be in accordance with the terms and
conditions of the contract.

Where there is a contractual provision or other written understanding, suppliers must

be paid within the terms of such contract.

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Procedures

1. Guidance on Authorisation of Expenditures

 Staff must never make any procurement commitments on behalf of the OISC
unless they have sufficient delegated procurement authority and prior financial
approval has been obtained.

 It is imperative that only staff with procurement authority place orders and award
contracts. This is because anyone is capable of unwittingly entering into a
contractual commitment in law if a supplier reasonably believes that they are acting
on behalf of the OISC.

 Staff should be aware that financial commitments may arise from any promise or
commitment to take action and no such commitment should be given at any time
without appropriate financial authority.

 Authority to purchase within set limits is also given to those staff who hold
procurement cards.

 The budgetary authorisation of expenditure is a critical control in managing OISC

expenditure. It is essential that, before giving authority, the budget holder confirms
that sufficient uncommitted budget provision is available to fund the estimated
expenditure and the expenditure is a proper charge to the budget.

 To ensure the OISC obtains the right quality of supply or service at the best
practically obtainable price appropriate to the level of expenditure involved, the
following procedures to identify the best supplier should be followed:

Value Extent of Method

Competition
Up to £1,000 Degree of Procurement methodology is for purchaser
competition is for decision but use must be made of framework
purchaser to agreements where they exist. Procurement cards
decide maybe used within authorised limits.

£1,001 to £20,000 Minimum of three Use of existing frameworks. Procurement cards

written quotes may be used within authorised limits. Otherwise
limited competition (3 suppliers). Can use e-
Sourcing to obtain quotes. Government terms
and conditions must apply.

Over £20,000 up to Minimum of three Use of existing frameworks. If no framework,

locally held formal tenders tender competition (3 or more suppliers), or
delegation Official Journal of the European Community
(OJEU0 procedures for over EU threshold
requirements. Can use e- sourcing to obtain
tenders. Government terms and conditions must
apply.

Over locally held Procurement unit Refer to an appropriate procurement unit

delegation limits* at the CCS to holding the necessary authority. Government
determine terms and conditions
must apply.

*Over locally held delegation limits:

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Procurement Unit at the CCS must be contacted where procurement is over £20,000. A
revised Procurement Policy Note (PPN) threshold level was introduced in December
2015. The PPN provides advanced notification of the new threshold levels to apply for
the purposes of the Procurement Regulations with effect from 01 January 2016.

The PPN applies to all contracting authorities, as defined by the Public Contracts
Regulations and includes all Central Government Departments, their Executive
Agencies, Non-Departmental Public Bodies, Executive Agencies and the wider public
sector.

2. Summary of Threshold Levels from 01 January 2016:

The Public Contracts Regulations (as applies to the OISC)

 Small lots: Supplies and Services - £62,842

 Supplies & Services: £106,047

The values set above, are net of Value Added Tax (VAT). That is, total value excluding
VAT.

The EU procurement threshold varies according to the supplies, services and works.
Details are available on the CCS website.

Where a contract is to be entered for the purchase of goods or services over a

period or where the volume to be purchased cannot be accurately assessed, then a
total value for each budget year should be agreed and the procedure followed should
be in line with this. No payments should be made in excess of this amount without
the approval of the HoF as approval may be required from the CCS.

Care must be taken to ensure that the limits noted above, are not avoided by means of a
series of small orders and cut off levels must be noted.

3. Booking Travel & Hotels, Vehicle Hire and Room Booking

Travel & Hotel:

If you need to make travel arrangements, you must use the OISC travel service provided
by Clarity Travel Management. The process involves simple online booking for UK rail
tickets and worldwide flight tickets and hotel accommodation. All bookings are made
internally through the Operational Services & Support Team, and in conjunction with the
OISC Travel and Subsistence (T & S) Policy. Monthly expenditure and booking reports
are available on the CTM/CCS website - https://ccs.go2insight.co.uk/login.php. OISC
username and password are required for login and should be requested from the HoF

Vehicle Hire:

All requirements for vehicle hire must be met through the use of the appropriate
nominated booking contract, currently Enterprise Car Rental and in conjunction with
the OISC T & S Policy.

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Room Booking:

Current T & S Policy must be adhered to. All bookings for external conference
accommodation must be made through the OISC nominated booking person in the
Operational Services & Support Team who will book with Calder Conferences. Calder
were awarded the national contract and OISC as an NDPB are included in the
contract.

4. Purchases outside Procurement Limits and Units

Budget holders may approve requisitions in their part of the budget expenditure. The
maximum level of authority for such purchases is set on an individual basis in the
budget delegation letter.

Delegated limit must be escalated to the next person in the hierarchy, who holds the
appropriate level of authority e.g. The Deputy Commissioner, will delegate to Senior
Management Team (SMT) and SMT may sub-delegate to Managers. Both delegation
and sub-delegation will have a maximum authority for individual purchases up to a set
amount.

There are some occasions when purchases may be regarded to fall outside the scope
of procurement units for example, property deals for rent and leasing. These are
generally regarded as being outside the scope of procurement rules and are handled
by the Home Office Property General (HOPG).

5. Procurement Centre of Excellence - Crown Commercial Service (CCS)

On 1 October 2012, the Home Office procurement centre of excellence transferred from
the Home Office and moved into the Crown Commercial Service (CCS), an Executive
Agency of the Cabinet Office. This structural change is to offer an end-to-end
transactional procurement service.

Commercial and procurement activity in the OISC is devolved by the Home Office as an
Arms Length Bodies (ALBs) of the organisation.

For straightforward low value procurements it will usually be possible for delegated
authority to procure goods and services direct from catalogues or existing framework
agreements.

Where quotes or formal tenders are necessary there must be a clearly defined
specification or terms of reference for the goods or services required. The full scope of
the requirement must be spelled out in sufficient detail so there is no doubt over what is
required. This will ensure that suppliers can price their bids accurately. The Head of
Finance or CCS must be contacted for guidance.

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6. Contacts:

1. Clarity Travel Management (travel and hotels)*

Helpdesk: Telephone 0333 014 6073
Email: [email protected]
Website: www.claritytm.co.uk

2. Enterprises (vehicle hire)*

Helpdesk: Telephone 0844 335 0134
Website: www.enterprise.co.uk

3. Calder (room booking)*

Helpdesk: Telephone 0844 375 3288
Website: www.calders.org.uk

4. Government eMarketplace (common goods or services)

Helpdesk: Telephone 0345 410 2222
Email: [email protected]
Website: www.gov.uk/guidance/emarketplace-a-guide-for-public-sector-buyers

5. Crown Commercial Service (others)

Helpdesk - Telephone 0345 410 2222
Email [email protected]
Website: www.gov.uk/ccs
(Enquiries about the PPN should be directed to the Crown Commercial Service)

*Bookings should be made internally through the Operational Services & Support Team
(currently Gina McCalla).