South London Commissioning Support Unit
PROCUREMENT
POLICY
April 2013 – March 2014
CONTENTS PAGE
SECTION 1 – OVERVIEW 3
Aims of the SLCSU Procurement
SECTION 2 – COMPLIANCE 4
Why Good Procurement Matters
Procurement Practice
The European Procurement Directives
Contracts Outside the Scope of the Directives
Legislation
The Bribery Act
Confidentiality
Code of Professional ethics
SLCSU Procurement Contact
SECTION 3 – GENERAL PRINCIPLES OF GOOD PROCUREMENT PRACTICE 6
Tendering & Contracts
Procurement Process Outline
The general principles for effective public sector procurement
The EC treaty procurement principles
Procurement Plans
Collaboration
Sustainable Procurement
SECTION 1 – OVERVIEW
Aims of the South London Commissioning Support Unit (SLCSU) Procurement
The SLCSU Procurement will reflect and support the aims of the clinical commissioning groups (CCGs) by working with its staff and procurement providers to optimise the procurement of works, goods and services.
It will provide professional support to CCGs in obtaining the Works, Goods and Services best suited to their requirements. This will be underpinned by consideration of:
- Value for Money
- Whole Life Costs
- The Environment
The SLCSU have appointed 2 procurement providers to help deliver procurements on behalf of the CSU and CCGs. The CCGs,in the first instance, should contact the following for their clinical and non-clinical procurements requirements:
- Clinical Procurement will be undertaken by Solent Supplies
Daniel Tagg
Head of Procurement
Solent Supplies Team
Tel:01489 779731
Mobile: 07984 526097
Email:
Web:
- Non-Clinical Procurement will be undertaken by Essentia
Nigel Lake
Head of Procurement
Essentia
Tel: 020 8687 4510
Mob: 07717 158726
Email:
Web:
The CSU aims to ensure that all procurements comply with EC procurement rules, after having made a decision on the most appropriate sourcing option. The aim is to balance efficiency against risk factors in achieving value for money. The SLCSUencourages all CCGs to read in detail the following “Procurement Guide for Commissioners of NHS-Funded Services, SFIs and SO. To access these guides, please cut and paste the link into your browser.
The CSU Procurement Policy document and all relating documents will be reviewed on an annual basis and is endorsed by the SLCSU Senior Management Board.
SECTION 2 –COMPLIANCE
Why Good Procurement Matters
Public procurement is the process whereby public sector organisations acquire goods, services and works. Effective public procurement is essential for good public services. The procurement process spans a life cycle from identification of the need, through the selection of suppliers, to post contract award management, including disposal. There is a duty on procurers to apply key principles of public procurement. These require the delivery of value for money, appropriate quality and services to meet business needs, and appropriate governance.
Procurement Practice
All procurement shall be carried out in accordance with Legal Requirements, Financial Regulations, Procurement Policy and Procurement Procedural Notes. Specific CCG procurement policy, Standing Financial Instructions, Standing Orders and other relevant documentation is to be provided to Solent Supplies and Essentia.
The European Procurement Directives
As a member of the EU the United Kingdom and consequently as a public body, the NHS and its affiliated bodies, is subject to the European Procurement Directive. The purpose of the European Procurement Directive, covering Supplies, Works and Services, is to encourage and stimulate an open market place for public procurement throughout the EU.
The European Procurement Directives set out the legal framework for public procurement. They apply when public authorities and utilities seek to acquire supplies, services or works. They set out procedures, which must be followed before awarding a contract when its value exceeds set thresholds.
All CCGs and SLCSU must comply with the Directives. European Procurement Directives tendering timescales are lengthy and employees with an order or contract expenditure of levels approaching the European Procurement Directives tender threshold must consult with the Procurement Providers at least nine months in advance of the requirement. EU and UK authorities are becoming increasingly concerned at breaches of the Directives by many public organisations and the Heads of Procurement are responsible for ensuring that the SLCSU and CCGs complies with its legal obligations concerning the European Procurement Directives.
Contracts Outside the Scope of the Directives
Even when a tender process is not subject to the European Procurement Directives (for example because the estimated value of a contract falls below the relevant threshold), EU Treaty Based principles of non-discrimination, equal treatment, transparency, mutual recognition and proportionality apply. Some degree of advertising, which is appropriate to the scale of the contract, is necessary to demonstrate transparency. This is in line with the UK objective of achieving value for money in all public procurement.
Legislation
The procurement providers shall be your first point of contact in ensuring that the SLCSU and CCGs comply with all necessary legislation.
The Bribery Act
The Bribery Act 2010 (the Act) was passed in April 2010 and came into force on 1 July 2011. The four key principle points to note in relation to offences under the Act are:
- The Act extends the crime of bribery to cover all private and public sector transactions (previously bribery offences were confined to transactions involving public officials and agents). These offences cover all legal persons (which includes companies and individuals).
- The Act creates a new offence of failing to prevent bribery, which applies to commercial organisations. A commercial organisation is stated as being a company, corporate body or partnership but not a sole trader. Section 7 provides that a relevant commercial organisation, (‘C’), commits an offence if a person, (‘A’), associated with it, bribes another person intending either to obtain or retain business for C or an advantage in the conduct of business for C. An offence is committed if the conduct complained of would constitute the commission by A of an offence contrary to two other sections of the Act (which cover the general offence of bribery and the more specific offence of bribing a foreign public official). The Act defines A as a person who performs services for or on behalf of C. A may therefore be a service provider, subsidiary, contractor, agent or employee and they may be based in or outside of England and Wales. An organisation will only have a defence to this offence if it can show it had ‘adequate procedures’ in place to prevent bribery.
- The scope of the Act is extensive – the offences are very broadly defined and it has significant extra-territorial reach.
- The offences contained in the Act carry criminal penalties for individuals and organisations. For individuals, a maximum prison sentence of ten years and/or an unlimited fine can be imposed; for companies, an unlimited fine can be imposed.
All SLCSU and CCG employees and contractors/bidders are covered by the Act.
Confidentiality
The Freedom of Information Act (FOIA) gives the general public (including successful and unsuccessful bidders) rights to certain information, which would previously have been deemed confidential.
Code of Professional ethics
The Government Procurement Code of Good Practice for Customers and Suppliers sets out the core values and behaviour for all public sector and bidding organisations. To access this Code, please cut and paste the link into your browser.
SLCSU Procurement Contact
Richard Bates
Interim Finance Director
NHS South London Commissioning Support Unit
Mobile: 07818232516
E-mail:
SECTION 3 – GENERAL PRINCIPLES OF GOOD PROCUREMENT PRACTICE
Tendering & Contracts
In the majority of cases the contracts that have been put into place are done so following comprehensive tender exercises. When deciding to go to tender, it is imperative that appropriate criteria is selected that reflects the service on offer. Some example headings, which you may wish to consider during tender exercises, are:
•Experience
•Insurances
•Financial Stability
•Forward Planning
•Market Share
•Competitiveness
•Value for Money
•Health & Safety
•Sustainability/Environmental planning and practices
•References
•Technical Ability
•Quality & Quality Assurance
•Delivery
•Other service aspects
•Equal Opportunities
•Ethical trading
•Inspection visit to supplier’s premises
Procurement Process Outline
As a general guide the following are the stages contained within a procurement process
Service Specification:Defines the requirement and informs the Memorandum of
Information. Key to the success of the procurement together with
the Business Case (completed by the CCG/CSU - contracting organisation)
Business Case:Including value for money and affordability assessments
(completed by the CCG/CSU - contracting organisation)
Project Plan:Including resource plan, responsibilities and timetable (completed by procurement)
Consultation:Consultation with stakeholders on service specification (completed by procurement)
Procurement Procurement and evaluation methodology, taking into account
Strategy:procurement principles and EU regulations (completed by procurement)
Advertisement:Form of advert and decision on where to advertise (completed by procurement)
MOI:Memorandum of Information issued to potential bidders who
respond to the advertisement (completed by procurement)
PQQ:Pre-qualification Questionnaire issued to bidders expressing an
interest based on the information in the MOI (completed by procurement)
ITT:Invitation to Tender issued to shortlisted bidders including form of
Contract (completed by procurement)
Evaluation:Evaluation of tender responses (completed by the CCG/CSU - contracting organisation)
Decision:Ratification of decision by appropriate “Boards”
(completed by the CCG/CSU - contracting organisation)
Contract Award:Form of contract issued with ITT. Note EU “stand still‟period
(completed by procurement)
Debriefing:Requirement to debrief unsuccessful bidders
(completed by procurement)
Implementation:Mobilisation / transition to Service Commencement
(completed by the CCG/CSU - contracting organisation)
ContractPlan for contract management in service specification, business case
Management: and procurement strategy. Ensure contract management fully taken
into account in the contract
(completed by the CCG/CSU - contracting organisation)
Project Close:Review procurement project and capture lessons learnt
(completed by procurement)
The general principles for effective public sector procurement are:
•Procurement should be fair, open and transparent
•Procurement should be subject to competition
•Procurement should be conducted on a value for money basis, taking into account whole life costs and quality
•Sustainability issues should be taken into account
The EC treaty procurement principles are:
•Non-discrimination
•Equal treatment
•Transparency
•Mutual recognition
•Proportionality
Procurement Plans
The CSU and CCG Procurement Plans are to be set out annually so that the Procurement providers are aware of what needs to be delivered and can resource accordingly. A template will be provided for each CCG to complete and return on an annual basis, detailing clearly all of their respective clinical and non-clinical procurement requirements for the forthcoming year. The plan will include the use of the contract list to plan the requirement for future tenders ongoing reviews of contracts, strategic areas of development, and any policy and procedural developments that are required. Requirements from the CCG and CSU are:
- Developing annual non-clinical purchasing programme and related annual savings targets;
- Open up their non-clinical spending to procurement hub so that target areas for saving can be identified;
- Meet with procurement hub to discuss annual purchasing programme and agree on annual savings targets;
- Require staff to use the purchasing frameworks established.
Collaboration
The collaborative opportunity for the CCGs and CSU to work together should always be considered in the drive to become efficient and effective in delivering their services. Clear benefits may be derived from such an approach:
•Cohesive Strategy - a strategic approach considering the needs of all stakeholders
•Savings - significant savings achieved by leveraging volumes
•Improved Service Levels - greater attention to service levels from the supply base
•Return on Investment - aim to deliver ROI on procurement project in 1 year or less
•Resource Optimisation - employ existing procurement resources at maximum potential
•Collaborative Approach - a platform on which further collaboration can be built
Sustainable Procurement
Procurement is called sustainable when it integrates requirements, specifications and criteria that are compatible and in favour of the protection of the environment, of social progress and in support of economic development, namely by seeking resource efficiency, improving the quality of products and services and ultimately optimising costs.Through sustainable procurement, organisations use their own buying power to give a signal to the market in favour of sustainability and base their choice of goods and services on:
•Economic considerations: best value for money, price, quality, availability, functionality;
•Environmental aspects, i.e. green procurement: impacts on the environment that the product and/or service has
over its whole life-cycle, from cradle to grave; and
•Social aspects: effects of purchasing decisions on issues such as poverty eradication, international equity in the
distribution of resources, labour conditions, human rights.
For further details regarding this policy or any other procurement matter please contact Richard Bates on the details provided below.
SLCSU Procurement Contact
Richard Bates
Interim Finance Director
NHS South London Commissioning Support Unit
Mobile: 07818232516
E-mail:
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