Council Constitution

Part 4c - Procurement Standing Orders

Adopted by the Council on 31st December 1974 (and as subsequently amended up to May 2008)

1. Purpose and Scope of Procurement Standing Orders
2. Requirements for all Procurement and Contracts
3. Procurement Procedures
4. Requirements Relating to Tenders
5. Additional Requirements for all Contracts
6. Council Tenders for Work for Other Outside Bodies
7. Glossary Of Terms

A. Purpose and Scope of Procurement Standing Orders

A1. Legal Basis

1. The Council is obliged to make standing orders in respect of contracts by Section 135 of the Local Government Act 1972. Such Procurement Standing Orders must include provision for securing competition in the award of contracts and for regulating the manner in which tenders are invited.
   
   
2. These Procurement Standing Orders are part of the Council’s Constitution and must be complied with, together with the Council’s Financial Regulations. They should be read in conjunction with the Council’s Procurement Code of Practice which sets out guidance on the application of these principles and compliance with these Procurement Standing Orders. They take precedence over the delegated powers of Members and officers. Non-compliance may result in disciplinary action.

A2. Application

1. These Procurement Standing Orders apply to contracts awarded by the Council for works, services or supplies, regardless of the source of funding for the contract. They apply equally to contracts awarded by any person, firm or body on the Council’s behalf, and (apart from paragraphs D1 and D6) to contracts awarded by schools.
   
   
2. These Procurement Standing Orders do not apply to contracts of employment, contracts for the purchase or sale of land or securities, or contracts for the taking or granting of any interest in land, unless such contracts also involve the procurement of works, services or supplies.
   
   
3. Sections C and D of these Procurement Standing Orders do not apply to contracts that have been procured in accordance with Public Contract Rules by another local authority, local authority consortium, or other public body, provided that the Council has the legal power to participate in such a contract.
   
   
4. The responsibility for compliance with these Procurement Standing Orders, the Council’s Financial Regulations and the Council’s Procurement Code of Practice rests with the appropriate Officer of the Senior Management Team, Service Unit Manager and Lead Officer unless specified otherwise. Where “the Senior Management Team” means all those officers more senior than Service Unit Manager. In the case of schools, responsibility rests with the governing body.
   
   
5. All decisions, documents, quotations, tenders and contracts under these Procurement Standing Orders are open to inspection and monitoring by the Borough Treasurer and Borough Solicitor.
   
   
6. The officer of the Senior Management Team whose service has sole responsibility for a contract or proposed contract must nominate a Lead Officer for that contract.  Where the contract or proposed contract will be used by more than one service unit, all relevant members of Senior Management Team must ensure that a single Lead Officer is appointed.  The Lead Officer may be replaced at any time.
   
   
7. The role of the Lead Officer is to undertake the procurement process and to ensure that the procurement is co-ordinated and meets the Council's overall requirements.  After the contract is let, the Lead Officer will be responsible for the day to day management of the contract.

A3. Exceptions

1. The The Borough Solicitor, in consultation with the Cabinet Deputy (or in the case of the Greater Manchester Pension Fund, the Chair of the Working Group), may, following consideration of a written report from the appropriate Officer of the Senior Management Team, allow such exceptions to these Procurement Standing Orders as s/he considers appropriate, subject to paragraph A3.2 below. Although compliance with EU Procurement Rules cannot in any circumstances be waived.
   
   
2. No exception to these Procurement Standing Orders may be permitted unless the Borough Solicitor is satisfied that:
   
   
   1. there are exceptional circumstances justifying departure from these Procurement Standing Orders;
   2. the exception will not contravene any legal requirement, including the Public Contract Rules;
   3. the report from the appropriate Officer of the Senior Management Team is comprehensive and in the format required by the Borough Solicitor from time to time, and
   4. the report from the appropriate Officer of the Senior Management Team provides evidence that the exception is necessary to achieve the Council’s objectives and will achieve Best Value for the Council.
   
   
3. The report to the Borough Solicitor must be presented to the Borough Solicitor before the consultation with the Cabinet Deputy.
   
   
4. Where exceptions are sought in relation to any matter concerning the Greater Manchester Pension Fund, the Greater Manchester Pension Management/Advisory Panel shall also be authorised to grant waivers subject to, a report being considered, prepared by the Director of Pensions in the format set out in A3.2, including comments from the Borough Solicitor and the Borough Treasurer. This is in addition to the delegated power of the Borough Solicitor under these Procurement Standing Orders.
   
   
5. All exceptions must be recorded in writing and retained by the appropriate Officer of the Senior Management Team. In addition, the Borough Solicitor will maintain a central register of all requests for exceptions for audit purposes.

B. Requirements for all Procurement and Contracts

B1. Principles

1. The principles underpinning these Procurement Standing Orders are:-
   
   
   1. the need to ensure that competition and propriety are present in Council’s procurement and the award of contracts;
   2. need to secure Best Value from procurement;
   3. the need to maintain fairness, transparency, equality and integrity in the Council’s procurement activity; and
   4. the need to comply with applicable legal requirements.
   
   
2. Guidance on the application of these principles and compliance with these Procurement Standing Orders is contained in the Council’s Procurement Code of Practice.

B2. Estimating Value

1. Before entering into any contract the appropriate Officer of the Senior Management Team must estimate its value. Its estimated value will determine the appropriate procedure to be followed under these Procurement Standing Orders and the Public Contract Rules.
   
   
2. Estimates of value and methods of valuation must be genuine and not designed to avoid exceeding any threshold contained in these Procurement Standing Orders or under the Public Contract Rules.
   
   
3. For the purpose of these Procurement Standing Orders, the value of a contract is the expected amount of consideration (in money or money’s worth) that will be received by the person or organisation that carries out the works or provides the services or supplies, over the expected lifetime of the contract. Where some or all of the contract price is funded by a third party (e.g. government agency) this funding must be included in the estimated value.
   
   
4. For “one-off” orders the estimated value will be the order value.
   
   
5. For recurrent purchases of the same type of services or supplies, the estimated value for the purposes of compliance with the Public Procurement Rules threshold will be the sum of all recurrent spending within a year.
   
   
6. Contracts or orders must not be divided to avoid exceeding any threshold contained in these Procurement Standing Orders or under the Public Contract Rules.
   
   
7. The appropriate Officer of the Senior Management Team and Lead Officer must ensure that they are aware of relevant threshold values under the Public Contract Rules, as set out in the Procurement Code of Practice.
   
   
8. Where the preferred contractor contract price is at least 5% in excess of the estimated value, the appropriate Officer of the Senior Management Team must first obtain the written approval of the Borough Solicitor and the Borough Treasurer, in consultation with the Cabinet Deputy, to accept the tender by submitting a written report detailing the justification for the proposal, including details of the evaluation procedure, in the form required by the Borough Solicitor from time to time. The Borough Solicitor cannot authorise acceptance where the tender return is in excess of Public Procurement Rules threshold and therefore any estimates near the threshold should undertake a Public Procurement compliant tender exercise.

B3. Achieving Best Value

1. Every procurement process and contract must be designed to achieve Best Value for the Council.
   
   
2. In these Procurement Standing Orders, Best Value means the optimum combination of whole-life costs and benefits to meet the Council’s requirement, as further defined in the Council’s Procurement Code of Practice.
   
   
3. Before undertaking a new procurement process or awarding a new contract the appropriate Officer of the Senior Management Team or Lead Officer must establish whether the Council’s requirement can be met through any existing contract, and ensure that the estimated value can be met from the appropriate budget (capital and revenue).

B4. Use of Specifications

1. Every procurement process must specify the Council’s requirement in a clear and precise manner, using outcome performance measures. The Specification must be fully prepared before the contract opportunity is advertised.
   
   
2. Specifications must not include requirements that are discriminatory or may distort competition or consist of non-commercial matters.
   
   
3. Specific products, sources or processes must not be specified unless this is essential for meeting the Council’s requirement and the Specification permits the use or provision of an equivalent product, source or process. Wherever appropriate, a non-discriminatory quality standard should be specified.
   
   
4. Specifications (and subsequent contracts) must incorporate any approved contract conditions reflecting legal requirements or the policies of the Council issued by the Borough Solicitor from time to time. In addition, the minimum levels of insurance cover set out in the Procurement Code of Practice must be incorporated.
   
   
5. To consult with Cabinet Deputies on Contract Specifications prior to the invitation of tenders.

B5. Selection of Procurement Procedure

1. Before selecting a procurement procedure the appropriate Officer of the Senior Management Team or Lead Officer must consult the Procurement Code of Practice, establish whether the Public Contracts Rules apply and, where appropriate, seek the advice of the Head of Procurement and the advice or authorisation of the Borough Solicitor.
   
   
2. Procurement under a contract referred to in paragraph A2.3 may not take place unless the Borough Solicitor has advised in writing that the Council has the legal power to participate in the contract.
   
   
3. Subject to paragraphs B5.1 and B5.2, the appropriate Officer of the Senior Management Team or the Lead Officer may select the procedure that appears to him/her to be most likely to secure Best Value for the Council.

C. Procurement Procedures

C1. Contracts with an Estimated Value of Less Than £20,000

1. Procurement under this paragraph must:-
   
   
   1. comply with Section 8 of the Council’s Financial Regulations and Procedures; and
   2. comply with Section B above.
   
   
2. Subject to paragraph C1.1, the appropriate Officer of the Senior Management Team or the Lead Officer must determine the procurement procedure using their professional judgement and keep a record of their decision.

C2. Contracts with an Estimated Value of £20,000 or More but Less Than £60,000

1. Procurement under this paragraph must:
   
   
   1. comply with Section 8 of the Council’s Financial Regulations;
   2. comply with Section B above; and
   3. result in the receipt of at least three written quotations from suitably experienced firms able to meet the Council’s requirement.
   
   
2. The appropriate Officer of the Senior Management Team or the Lead Officer may accept the Best Value quotation, as defined in the Procurement Code of Practice.
   
   
3. Where the requirements of paragraphs C2.1 and C2.2 are not satisfied, the appropriate Officer of the Senior Management Team or the Lead Officer may not accept a quotation without the Senior Management Team Officer first obtaining the written authority of the Borough Solicitor and the Borough Treasurer, in consultation with the Cabinet Deputy, by submitting a written report in accordance with the format required by the Borough Solicitor from time to time.
   
   
4. The appropriate Officer of the Senior Management Team must ensure that a system exists for the receipt, opening, registration and evaluation of quotations in accordance with the Procurement Code of Practice.

C3. Contracts with an Estimated Value of £60,000 or More but Below the Public Contract Rules Thresholds

1. Procurement under this paragraph must comply with Section B above and be undertaken in accordance with one of the following procedures, as set out in the Procurement Code of Practice:-
   
   
   1. Open Tendering Procedure;
   2. Restricted Tendering Procedure;
   3. Negotiated Tendering Procedure;
   4. Selective Tendering from Standing List.
   
   
2. Use of the Negotiated Tendering Procedure must be authorised in advance by the Borough Solicitor in consultation with the Cabinet Deputy, following a written report from the appropriate Officer of the Senior Management Team, in the format required by the Borough Solicitor from time to time.

C4. Contracts with an Estimated Value of or In Excess of the Public Contract Rules Thresholds

1. Before undertaking procurement under this paragraph the appropriate Officer of the Senior Management Team or the Lead Officer must consult the Procurement Code of Practice and establish whether the contract will involve the procurement of works, supplies or services as defined in the Public Contract Rules and, in the case of services, whether the Public Contract Rules will apply in full or in part.
   
   
2. Where the appropriate Officer of the Senior Management Team or the Lead Officer considers that the Public Contract Rules do not apply to the procurement, confirmatory written advice must be obtained from the Borough Solicitor before proceeding. The advice must be placed on the procurement file.
   
3. Where the Public Contract Rules do not apply to the procurement, it must be undertaken in accordance with paragraph C3.
   
   
4. Where the Public Contract Rules apply to the procurement, it must be undertaken in accordance with the Open Procedure, the Restricted Procedure or the Negotiated Procedure as defined by the Public Contract Rules and set out in the Procurement Code of Practice, provided that use of the Public Contract Rules Negotiated Procedure (or any other award procedure permitted by the Public Contract Rules but not listed above) must be authorised in advance by the Borough Solicitor in consultation with the Cabinet Deputy, following a written report from the appropriate Officer of the Senior Management Team, in the format required by the Borough Solicitor from time to time.

D. Requirements Relating to Tenders

1. The appropriate Officer of the Senior Management Team or Lead Officer must inform the Head of Democratic Services of every invitation to tender, specifying the title of the tender and the return date and time.
   
   
2. Tenders must be returnable in accordance with instructions in the invitation to tender which must require tenders to be returned in one or either of the following ways:
   
   
   1. in a sealed envelope clearly marked with the word 'Tender' and the subject of the tender, and addressed to the Head of Democratic Services, Tameside Metropolitan Borough Council, Council Offices, Room 1.3 (Level One), Wellington Road, Ashton under Lyne, Tameside, OL6 6DL. All tenders returned by hand must be brought to the Staff Entrance on Wellington Road;
   2. by submission of an electronic tender in accordance with instructions in the invitation to tender and which relate to use of a system approved from time by the Borough Treasurer as a system offering appropriate security for the receipt of tenders.
      
      
3. Upon receipt in Room 1.5, the Head of Democratic Services must record the date and time of receipt of each tender on the envelope and in the tender book. All tenders will be kept unopened in a secure place until the time and date specified for their opening.
   
   
4. Any tender received after the specified time and date must not be considered. Faxed copies or e-mailed versions of tender documents must not be considered. The Head of Democratic Services will inform firms submitting late, e-mailed or faxed tenders that their tender could not be considered and the reason why.
   
   
5. Tenders must be opened in the presence of a Democratic Services Officer and a representative of the Borough Treasurer. At the time the tenders are opened, the electronic tenders are to be accessed and recorded first, followed by the conventional paper tenders, and the following information must be recorded in the Tender Register:-
   
   
   
   1. the title of the tender invitation;
   2. the name of the tenderer;
   3. the date and time of receipt of each tender;
   4. the amount/value of each tender;
   5. the date and time of the opening of the tenders;
   6. the names of all persons present at the opening of the tenders.
      
      
6. On completion of this process the Democratic Services Officer will notify the appropriate Officer of the Senior Management Team or the Lead Officer that the tenders may be collected.
   
   
7. The appropriate Officer of the Senior Management Team of the Lead Officer will conduct the evaluation of tenders in accordance with the Procurement Code of Practice.
   
   
8. Tenders may not be altered during evaluation, except where the analysis of tenders reveals obvious arithmetical errors or discrepancies that would affect the tender value in an otherwise compliant tender. In such circumstances the appropriate Officer of the Senior Management Team or the Lead Officer may (subject to paragraph B1) communicate the details of such errors or discrepancies to the firm that submitted the tender and allow them to submit a written response which:
   
   
   
   1. confirms their tender;
   2. withdraws their tender; or
   3. corrects the arithmetical error or discrepancy.
      
      
9. The appropriate Officer of the Senior Management Team or Lead Officer must retain a written record of all corrections permitted under this paragraph.
   
   
10. Negotiation of any aspect of a tender is prohibited unless the tender has been invited pursuant to a negotiated tender procedure.
    
    
11. The appropriate Officer of the Senior Management Team or the Lead Officer may accept the Best Value tender, as defined in the Procurement Code of Practice, subject to paragraph D12.
    
    
12. Where the appropriate Officer of the Senior Management Team or the Lead Officer proposes to accept a tender in circumstances where:-
    
    
    the appropriate Officer of the Senior Management Team must obtain the written approval of the Borough Solicitor and the Borough Treasurer, in consultation with the Cabinet Deputy, to accept the tender by submitting a written report detailing the justification for the proposal, including details of the evaluation procedure, in the form required by the Borough Solicitor from time to time.
    
    
    1. it is not the Best Value tender;
    2. it has been negotiated, or
    3. fewer than three tenders have been received,
       
       
13. The appropriate Officer of the Senior Management Team must notify each firm of the outcome of their tender in accordance with the Procurement Code of Practice.
    

E. Additional Requirements for all Contracts

E1. Restrictions on Contracts with Certain Persons

1. No Contract will be placed with a Member of the Council, nor any firm in which any Member of the Council, employer, sponsor or relative has an interest, unless competitive tenders have first been invited and the contract awarded to the Best Value tender. Where “relative” means a partner (someone who the Member of the Council is married to or lives with as if they were married), a parent, a parent-in-law, a son or daughter, a stepchild, the child of a partner, and/or a sibling. This must be recorded in the Register maintained by the Head of Democratic Services.

E2. Execution of Contracts

1. Contracts with an estimated value of £60,000 or more must be in writing and executed under the Council’s common seal.
   
   
2. The seal must be attested by the Borough Solicitor, Service Unit Manager (Legal Services), Assistant Borough Solicitor, Strategic Procurement Solicitor or Head of Pension Fund (Legal).
   
   
3. All other contracts with a value including and between £20,000 and £60,000 must be in writing and signed by two officers, one of whom must be from the following list:-
   
   
   • Chief Executive
   • Borough Solicitor
   • Member of the Senior Management Team
   • Head of Procurement
   • Service Unit Manager, Legal Services
   • Assistant Borough Solicitor
   • Strategic Procurement Solicitor
   • Head of Pension Fund (Legal)
   
   
4. All contracts with a value less than £20,000 shall comply with the Financial Regulations and Procedures set out in Part 4(b) of the Constitution.

E3. Commencement of Contract

1. No contract shall commence until a formal agreement has been entered into or a letter of acceptance or official order for the procurement has been issued.

E4. Payments

1. Payments under contracts may only be made in the format agreed in the contract.

E5. Monitoring of Contracts

1. The appropriate Officer of the Senior Management Team or Lead Officer must ensure that all contracts are monitored throughout the period of the contract, and the performance of contractors is reviewed regularly, in accordance with the Procurement Code of Practice.

E6. Extension and Variation of Contracts

1. Contracts may not be extended beyond the period for which they were awarded unless provision for extension was included in the contract documents.
   
   
2. In all other circumstances an extension of contracts will require the written approval of the Borough Solicitor and the Borough Treasurer following consideration of a written report from the appropriate Officer of the Senior Management Team, in the format required by the Borough Solicitor from time to time. They shall only grant such an extension if it can be demonstrated that this will achieve Best Value for the Council and will not contravene any legal requirement.
   
   
3. Where extensions are sought in relation to any matter concerning the Greater Manchester Pension Fund, the Greater Manchester Pension Management/Advisory Panel shall also be authorised to extend contracts subject to a report being considered prepared by the Director of Pensions in the format required by the Borough Solicitor from time to time, demonstrating how best value will be achieved, including comments from the Borough Solicitor and the Borough Treasurer. This is in addition to the delegated power of the Borough Solicitor and the Borough Treasurer under these Procurement Standing Orders.
   
   
4. All additions or variations to a contract must be authorised in writing by the appropriate Officer of the Senior Management Team.
   
   
5. If the appropriate Officer of the Senior Management Team and/or the Lead Officer has reason to believe that the estimated final cost of any contract will exceed the permitted variation below s/he shall submit a written report to the relevant member of the Executive Team, appropriate Cabinet Deputy, and the Borough Treasurer.
   
   Contract value:-
   
   

   Exceeding	Not Exceeding	Permitted Variation
   £20,000	£60,000	10% max
   £60,000	£500,000	7.5%
   £500,000	£1M	5%
   £1M -	2.5%

E7. Claims Arising from Contracts

1. Claims arising from contracts in respect of matters not clearly within the terms of any existing contract shall be determined by the appropriate Officer of the Senior Management Team after having taken the advice of the Borough Solicitor on the Council’s legal liability and the Borough Treasurer on the financial considerations.
   
   
2. Where completion of a contract is likely to be delayed, resulting in claims under the contract, the appropriate Officer of the Senior Management Team must inform the Cabinet Deputy, Borough Solicitor and Borough Treasurer of the action taken or proposed.

E8. Register of Contracts and Partnering Agreements

1. Senior Management Team Officers shall maintain a Register of Contracts and Partnering Agreements.

F. Council Tenders for Work for Other Outside Bodies

1. No Senior Management Team Officer shall tender on behalf of an outside body for work whose estimated value exceeds £30,000 without first producing a written report for consideration by the Cabinet Deputy, Borough Treasurer and Borough Solicitor.

G. Glossary Of Terms

"Best Value quotation" and "Best Value tender" means the quotation or tender that offers the optimum combination of whole-life costs and benefits to meet the Council's requirement, as further defined in the Council's Procurement Code of Practice.

"Cabinet Deputy" means the Cabinet Deputy whose Warrant of Office covers responsibility for that particular area of Council activity, or in the case of absence or incapacity, the Executive Leader.

"Compliant" means completed and submitted in accordance with Instructions to Tenderers and any other requirements specified in the Invitation to Tender.

"Contract" means an agreement between Council and any firm made by executing a formal Agreement or by issue of a letter of acceptance or official order for the procurement of all supplies, services and the execution of works by the Council, or carrying out of works for the Council.

"Council's requirement" means the outputs, outcomes and the scope and nature of supplies, services or works required by the Council from a procurement process.

"Firm" includes any sole trader, partnership or company (limited or unlimited) or any duly incorporated trade, professional or commercial body.

"Appropriate Officer of the Senior Management Team" means the relevant Officer of the Senior Management Team responsible for the contract, and where the Senior Management Team consists of all officers more senior than Service Unit Manager including any officers nominated by them.

"Member of the Council" does not include a member of the Civic Advisory Panel.

"Negotiated Tender Procedure" means an exceptional procedure under which negotiation is permitted with selected firms before a contract is awarded, as further defined in the Procurement Code of Practice.

"Officer" includes any employee of the Council.

"Open Tender Procedure" means a procedure for inviting tenders without prior shortlisting of firms, as further defined in the Procurement Code of Practice.

"Partnering arrangements" means a long-term contractual arrangement with another firm or body to secure high quality cost-effective service provision and/or support for the in-house service delivery.

"Public Contract Rules" means that the Treaty of Rome, the EU Public Procurement Directives and the Public Services Contracts Regulations 1993, the Public Supply Contracts Regulations 1995 and the Public Works Contracts Regulations 1991 as amended or replaced.

"Quotation" means a formal offer to supply or procure goods or materials, execute works or provide services at a stated price estimated by the appropriate Officer of the Senior Management Team to be of a value of up to £60,000.

"Restricted Tendering Procedure" means a procedure in which firms are invited to tender who have been previously shortlisted, as further defined in the Procurement Code of Practice.

"Selective Tendering from Standing List" means a procedure under which tenders are invited from firms specified on an approved list or database, as further defined in the Procurement Code of Practice.

"Services" includes includes the employment of consultants or temporary employment agencies.

"Supplies" includes the purchase of goods and equipment.

"Supplier/Contractor" shall mean any firm whose tender or quotation is accepted.

"Tender" means a formal offer to supply or procure goods or materials, provide services or execute works at a stated price estimated by the appropriate Officer of the Senior Management Team to be of a value of £60,000 or more.

"Tender Documents" shall mean the Conditions of Tender and Contract, the Form of Tender, the Specification, the Form of Agreement and any other related documents or papers.

"Tenderer" shall mean any firm submitting a tender.

"Works" includes building and engineering work.

"Writing" the requirement that any document should be in writing is satisfied where (apart from the usual meaning of that expression) the text of it is created and transmitted or stored by electronic means, in legible form, and capable of being used for subsequent reference.

Note::
All figures specified in these Procurement Standing Orders are exclusive of VAT.