Procurement User Guide

PROCUREMENT USER GUIDE

Version 6.0 May 2014

CONTENTS

INTRODUCTION:

Procurement Customer Charter……………………………………………………..….. 5

The Procurement Mission, Vision & Objectives

1.PROCURING GOODS AND SERVICES

1.5Main categories of purchase

1.6The purchase of goods

1.7The purchase of services

1.8The purchase of consultancy services or temporary staff

1.9Internally based Consultants or Temporary Staff

1.10Externally based Consultants and Organisations

1.11Purchase of Information Technology (IT) related goods and consultancy services

2.SPECIFYING THE REQUIREMENT

3.COMPETITION AND SINGLE TENDER ACTIONS

3.1Establishing a planned procurement strategy

3.2The need for competition and going out to tender

3.3Single tender actions

3.4Contract extension

4.OBTAINING THE FINANCIAL APPROVAL AND AUTHORITY TO PROCEED

5.IDENTIFYING PROSPECTIVE CONTRACTORS OR CONSULTANTS

6.TENDERING

6.1Procurement routes

6.2Inviting tenders

6.3Communications with Tenderers during the tender period

6.4Time allowed for responses to ITTs

6.5OJEU restricted procedure

6.6Legal Obligations & EU Public Procurement Directives

What Is Public Procurement Law?

How Many Candidates Should Be Invited To Tender?

7.1On What Basis Can A Contract Be Awarded?

7.2.1Use of Email in the Tender Process

7.3The 'Alcatel' Standstill Period

7.4Frameworks

7.5Risks of Not Complying With the Regulations

7.6Guidance Section Summary

7.7Legal Aspects of Contracting

7.8Project Briefing Meetings

7.9Site Visits

7.10Receipt of Tenders

7.11Evaluation of tenders

7.12Propriety and the Separation of Duties

8EVALUATING TENDERS

8.1Evaluation criteria

8.2Obtaining Good Value for Money

8.3Supplier Presentations

8.4Managing Supplier Presentations (Optional Stage)

8.5Post-Tender Clarification

8.6The Tender Report

8.7Tender Notification

9AWARDING THE CONTRACT

9.2Variations to Contract

9.2.2Raising and Authorising a Commitment Within the ‘Agresso’ Purchase-To-Pay System

9.3Letters of Intent

9.4Advising and Debriefing Unsuccessful Tenderers

10CONTRACT MANAGEMENT AND CONFIDENTIALITY

10.1Contract Management and Review

10.2Contract Monitoring and Feedback on Supplier Performance

10.3Documentation

10.4Confidentiality and copyright

10.5Freedom of information

7.101. EQUALITY IMPACT ASSESSMENT FORM – INITIAL SCREENING

Procurement Department: Customer Charter

This charter is our statement of intent. It sets out what you, our customers can expect from us as well as what support we need from you to best help you .

We aim to continue developing the procurement function to become world class at St Georges Healthcare NHS Trust and support provision of a wide range of products and services that meet our customers’ and patients’ needs at all times. To achieve this professionally qualified procurement staff have been recruited to a new departmental structure (see Appendix 2)

Putting our customers at the centre of everything we do

We will seek to understand our customers and their needs.

We will ensure the service you receive is professional, positive and respectful.

What you can expect from us

We aim to provide you with the right information, legal advice and project support in a timely and constructive manner.

Everyone will be treated fairly and with respect and courtesy.

Our staff and services will be easy to access and will, wherever possible, provide you with choice.

We strive for continuous improvement.

We will keep you informed and explain any decisions.

Our services will be delivered in a way that ensures we add value and make a difference.

We will adhere to the Trust’svalues, vision, policy and strategy.

If we do something wrong, we will put it right as quickly as possible. We accept our responsibility and the need to be held accountable. We will provide reasons for any failure and seek to prevent any repetitions or repercussions.

What we need from you

You accept your responsibility in aligning your intentions to the Trust’s vision, values, policies, annual business plan and overarching strategy.

You understand that the Procurement Department will sometimes challenge the status quo in the interests of organizational improvement and business need. This will include ensuring compliance with the Trust Standing Financial Instructions and our wider Public Sector and legal obligations. As such, you will understand and support the team when such situations arise.

You will work with us, at the point of identifying the business need and in a timely manner, to develop a mutual understanding of requirements and responsibilities. You will also keep us updated in relation to any changes in requirements.

You will help design specifications based on your product or service quality requirements and will then help evaluate the supplier offers so that the best value offer is accepted.

You will then ensure change to the democratically decided best value new product or service

You will provide us with as much relevant information as possible in a timely manner.

You will conduct purchases in line with EU Public Procurement Law, the Trust’sgovernance arrangements and Standing Financial Instructions.

You will inform us as soon as possible when problems occur.

Provider feedback

The Central Procurement Unit welcomes provider suggestions and feedback and will add any good ideas to the project work-plan.

Customers are encouraged to formalize such feedback by e-mailing their designated Procurement Manager.

If you are not happy with the service you have received, you should first contact the person you have been dealing with.

If the issue is not resolved to your satisfaction then the complaint should be escalated to the designated Divisional Procurement Manager.

The relevant Divisional Procurement Manager will arrange to investigate the matter and aim to provide a full response within 5 working days of receiving your complaint. If the investigation takes longer than this, you will be kept informed of the progress and as to when you can expect to receive a reply.

If your complaint is not satisfactorily resolved or relates directly to the Procurement Manager, you should contact the Assistant Director of Finance-Procurement.

About us

The Central Procurement Department aims to be an internal business partner which collaborates with Trust customers to deliver value for money and enhanced service delivery and performance within St Georges Healthcare NHS Trust.

We provide strategic procurement advice and support on the acquisition of all goods, works and services in line with Public Procurement EU Law, the Trust’s Standing Orders, Standing Financial Instructions and the St Georges Healthcare NHS Trust Procurement Strategy.

The team also provides broader commercial advice and legal support to help manage risk, develop commercial behaviour and organizational opportunities and to support Divisions to generate savings.

The Procurement Department aims to provide you with a high quality professional service, ensuring we satisfy your requirements by listening to you and engaging with you at all times during the procurement process. We support the Trust by contracting with you with Suppliers of Goods and Services to obtain what you need to conduct your business and treat patients.

The Procurement Mission, Vision & Objectives

1)Introduction

Having heard what you, our Customers have said following interviews, Questionnaires (April 2014) and workshops, the positive ideas are being acted upon. Thank you for your feedback This paper sets out the high-level steps to be taken to improve the Procurement Function at this Trust.

The next part of this document is a reference guide; It is intended to be used when you have a specific area of Procurement where you would like a better understanding of the process, timescales and mutual obligations to make a positive outcome.

Procurement is defined by the Chartered Institute of Procurement & Supply (CIPS) as follows:

“Procurement exists to explore supply market opportunities and to implement resourcing strategies that deliver the best possible supply outcome to the organisation, its stakeholders and customers.”

It aims to legally and safely achieve this and seeks to work with stakeholders to achieve optimisation of quality and cost: Best Value.

2) The Procurement Mission

We seek to:

Provide a best practice, modern procurement service to support the Trust Mission and assist internal and external customers to accomplish their goals. We shall achieve this by helping you our Customers to manage your spend for goods and services to achieve best value in a timely, safe and efficient manner.

3) The Procurement Vision

By 2016 we will become a world class Procurement function which optimises modern efficiency techniques to support the Trust vision of clinical and commercial excellence in a thriving Foundation Trust. We aim to:

Create value and protect the Trust
Maintain compliance with government strategy & regulations
Improve service delivery to our Customers

4) Organisational Values

We fully support the Trust Values which are as follows;

We will at all times, be:

Excellent
Kind
Responsible
Respectful

Procurement at all times works within these to improve efficiency and service delivery to all our Customers.

Procurement brings these into our Procurement context and in addition to the Corporate Objectives Procurement also has the following functional and professional values:

Delight Customers
Fair
Open
Transparent
Best Value

5) KeyProcurement Performance Topics

To help assist delivery of the Trust Mission and values the direction of travel must be towards being a supportive strategic partner that protects the Trust and creates value. Please see Figure1 (below) which summarises the procurement functional journey envisaged.

The Procurement department shall support Stakeholders in the following broad areas:

5.1 Savings Contribution & Collaboration

A detailed savings project work-plan and contract renewal programme will be designed, agreed with Stakeholders and safely delivered. This will ensure supply, reduce patient risk and create value. To achieve better value collaboration with other Trusts is key. This Trust actively works with the London Procurement Programme to achieve scale economies and will continue to share expertise and smaller scale collaboration with our neighbouring Trusts.

5.2 Customer Service Improvement

Service standards will be discussed, agreed with you and then actioned to ensure the Procurement service meets Customer need and is fit for purpose. Regular meetings and feedback meetings will be held to ensure an appropriate service quality is maintained.

5.3 Information Standards & Reporting

Integrated sourcing and contract management systems (due July 2014) will enable end to end visibility and reporting capability of spend. A bespoke designed ‘Basket of Goods’ report built in conjunction with Customer representatives will assist Budget holders by providing meaningful spend analysis to support business decisions. The coding and electronic catalogue structure will also support the required external Department of Health Transparency agenda.

5.4 ECommerce Modernization & Development

End-to-end integrated electronic processes are sought to increase efficiency and smooth transactions. Esourcing refers to the tendering process and once fully implemented will enable faster project delivery and will support this. The first stage will be as an add-on to the existing Aggresso system (October 2014) and this will be reviewed strategically going forwards. The new web ‘punch-out’ functionality will improve the purchase order (PO) transmission safety and also enable two-way feedback regarding PO supplier receipt, stock availability and planned delivery date. Electronic Automated Payments and Reverse Auction functionality for tactical savings will then follow.

5.5 Customer Communication & Stakeholder Engagement Improvement

Procurement aims to reach out to our Customers to understand and better meet their needs. To support this the existing Procurement Intranet Page will be advertised and developed to help Customers keep aware of policies, procedures and guidance. This page will have a simple updated Procurement User Guide that explains processes and how early Procurement involvement assist the Customer best. This guide and intranet page will include Frequently Asked Questions and will help Customers now when and how to contact the right person in Procurement to assist them.

Procurement will also have more face-to-face contact with Key Stakeholders to help Customers understand how we can help them and also address any concerns or issues. Interactive work-shops will also assist improved two-way communication. An ELearning package is also being developed.

5.6 Policy ComplianceLegal Support to Customers

Procurement will ensure we help you, our Customers have protection of your legal rightsand be compliant with the trust policy. We will guide you through the tendering process the standard NHS terms contracts we create having negotiated on your behalf.

We will also give helpful advice to Customer about legal risks before contracts are signed, so that informed decisions may be taken by Stakeholders. This support also extends to Contractual disputes and Contract Management of existing Contracts. Please contact us if you feel you are not getting the service you wanted or paid for from your Supplier.

6 The Way Forward

Please review appendix 1 (below) which summarises Vision and the key strategic areas outlined in this paper with the relevant steps or procurement contribution to achieving the desired results.

1.HOW TO PROCUREGOODS AND SERVICES

How to Get Best Value and Stay Within the Rules

The safest way to proceed when you realize you have a need to spend funds is to speak to Procurement before speaking to a supplier. In this way we may discuss and help you decide how best to meet your business needs, before you influenced by an external source.

Please help us to protect you and the Trust.. The Law around tendering is complex, and you may compromise the Trust’s position without even realising it. You can even put yourself in a position of being wrongly accused of fraudulent activity.

Please note that a verbal agreement or statement of intent carries the same legal weight as a written contract so please be careful not to verbally agree to a supplier offer or informal plan to take a project forward.

1.1The procurement process will typically involve several stages:

Establish the need; Identify the requirement.

Develop the specification or scope of work. Draft evaluation criteria and response scoring matrix

Establish a procurement plan or strategy. For example using a ‘mini-competition’ within an existing Framework, a Europe-wide tender or a Local tender

Obtain financial approval and authority to proceed.

Identify prospective suppliers, contractors or consultants.

Finalise the specifications and response scoring matrix prepare the PQQ/ITT documents.

Issue the PQQ/ITT documents and handle the resulting enquiries.

Evaluate PQQ/tenders.

Award the contract and raise a purchase order.

Manage the contract.

1.2Please discuss your requirement with the procurement team as soon as possible. This will enable a procurement strategy to be agreed. In broad terms the key stages are as follows (Table 1):

Table 1

Savings/Procurement Projects Roles & Responsibilities
Action Stage / Responsibility for Action
1 / Process Analysis & Waste Reduction Ideas / Stakeholder/Budget Holder
2 / Savings Ideas / Shared
3 / Spend Analysis / Procurement
4 / Draft Tender Specification creation: items & volumes / Procurement
5 / Draft Tender Specification creation: required quality defined / Stakeholder/Budget Holder
6 / Tender Evaluation criteria created / Stakeholder/Budget Holder
7 / Tender Advertisement / Procurement
8 / Tender response analysis / Procurement
9 / Negotiation & legal clarifications / Procurement
10 / Award recommendation / Procurement
11 / Award decision / Trust Board/ Budget Holder
12 / Contract document draft / Procurement
13 / Contract Awarded to Supplier/s / Procurement
14 / Supply chain method/materials management agreed / Shared

1.3All purchases over £10,000 must have the involvement of the procurement team. The procurement team will help determine the best route for achieving the desired purchase. You must consider the complexity of the requirement and develop a specification or scope of work including specific milestones, deliverables, payment terms and any bespoke contractual terms.

1.4Financial thresholds NOT involving single sourcing.

Table 2

£1,000 to £10,000 / One Written Quotation to be obtained by ward or department using Trust Template.
£10,001 to £50,000 / Three Written Quotations to be obtained by The Procurement Dept using Trust Template.
£50,001 to OJEU Threshold / Formal Trust Sealed Bid Tender (minimum; bids received from three suppliers).
To be conducted by the Procurement Department.
Over OJEU Threshold
Non-Works £113,000
Works £4,340,000 / Formal OJEU Tender Process required.
To be completed by the Procurement Department.

The thresholds shown above apply when using a framework agreement except OJEU advertisement does not apply. Please note all suppliers listed on the selected framework agreement must be invited to tender. Further advice and guidance is available from the procurement team.

For Non-Framework contracts over OJEU Threshold you must consider the following:

Check the suitability of OGC Buying Solutions or London Procurement Project (LPP) framework agreements. The procurement team can provide more details and guidance. Also you can find details on

Check the suitability of contracts and framework agreements that government departments have awarded, which we may use. The procurement team can provide more details and guidance.

Check the suitability of NHS Supply Chain framework agreements. The procurement team has access and can undertake the search upon request.

Advertise locally or nationally in appropriate publications. When buying goods or services over the EU thresholds you must advertise in the Official Journal of the European Union (OJEU). Refer to section 6.6 for detailed instructions.

1.5Main categories of purchase

1.5.1In general, the Trust’s procurement can be divided into several main categories:

Goods.
Services.
Professional Services including Consultancy and Temporary Labour.
IT related goods and services.

1.6The purchase of goods

1.6.1Purchase of goods can be divided into two areas; goods that are standard or off the shelf and goods that need manufacturing or adapting to meet the Trusts’ requirements

1.6.2These areas dictate whether the manufacturers’ specification is suitable or whether you will have to draw up your own specification or design before the tender process commences to ensure the requirement you have is fully met.