Agenda item

To consider and decide on the recommendations as set out in the associated report.

Dan Hutchins, Procurement Manager, presented on the Council’s procurement procedures. Topics covered by the presentation included:

·         The structure of the procurement team and its reporting lines.

·         The criteria of the various bands of contracting procedures.

·         Procedures for monitoring contractual terms.

·         Statutory regulations.

·         The commissioning cycle of planning, contracting and review.

·         Responsibilities of contract managers to set the contract specification and manage the operation of the contract.

·         Tendering processes and the various routes to market (Requests For Quotations (RFQ), Invitations To Tender (ITT) and Public Sector Frameworks).

·         Advice to contract managers when setting contract specifications.

·         Different options for tender evaluation (Standard Differential models, Fixed Cost models, Ceiling Cost/Savings models and Cost:Quality ratios).

·         Tender evaluation processes.

·         The presentation also addressed a number of pre-submitted questions.

In answer to questions it was confirmed:

·         Options to extend contracts were often included in contracts at the specification stage without necessarily expecting them to be necessary.

·         Members could influence the terms of forthcoming contract specifications through the relevant contract manager. Agreed evaluation criteria could not be changed after the fact.

·         The Council’s constitution already had a requirement that local suppliers will form part of any tender process, where possible.

·         A tenderer’s contract mobilisation plans could be designated as an evaluation criteria.

·         Contracts were managed through the relevant operational service rather than the procurement team. All contracts would have formal mechanisms for notifying defaults and penalties which could ultimately result in termination.

·         In the event that a contract was terminated, the Council had powers to enter a short-term contract with another supplier in order to ensure continuity of service provided a formal procurement process was commenced at the same time.

·         Procurement procedures in the public sector were largely governed by legislation. New rules hoped for next year may help slimline the process.

·         Redaction of personal details on contract registers was chiefly a data protection issue. There was a presumption for redaction in the case of individuals/sole traders and requests for disclosure were handled on a case-by-case basis in accordance with data protection principles.

·         Current procedure rules came into effect in 2017. These were due to be reviewed in light of expected new legislation.

·         Contract Key Performance Indicators (KPI) and Service Level Agreements (SLA) for each contract were designed by the relevant contract manager.

·         Contract specifications were designed to allow tenderers to showcase the aspects most important to the Council however the Council did not covertly seek references or third-party verification as doing so could open the Council to challenge. It was possible to build this into future procurement.

·         Previous contract holders could not be excluded from re-tendering unless there was formal evidence of default and failure to rectify the situation.

·         Number of complaints would not in itself be evidence of default unless there was a specific KPI on number of complaints and formal action had been taken.

·         There was no formal definition of an ‘abnormally low tender’. However, where it was believed that such a tender was received a notice would be issued requiring the tenderer to confirm their pricing model and/or proposed operation model. If the tender was still suspiciously low they would have a final opportunity to clarify their bid and if, after this final stage, the tender was still unsatisfactory the tenderer could be excluded. If satisfactory explanation could be provided the tender may be accepted.

·         Conformity to established standards when purchasing goods was often made a contractual requirement. Not so often when procuring services.

Debate included:

·         There were matters which would benefit from further exploration:

o   How members can shape the social value and local supplier requirement.

o   The competence of a district to shape KPI and SLA on large contracts.

o   The relationship between the Council and procurement in reviewing contract performance.

o   Dealing with poor performance and the competence of this Council to manage large contracts.

·         Contract mobilisation should also be investigated.

·         There needed to be further investigation of the relationship between a centralised procurement service and the operational services managing contracts.

·         Procurement and contact managers worked closely, closer than they ever have before, but their roles were separate.

·         There was a sense that procurement operated without having to deal with the consequences of bad contracts so members needed to be satisfied that both procurement and operational services were as much integrated as possible.

·         The process of procuring contracts was highly regulated. The key concern to members and residents was how contracts were run and managed.

RESOLVED – That a Task and Finish Group be instructed to examine procurement and contract management with terms of reference to be determined and brought back to the next meeting for agreement.