Procurement means to acquire or obtain and is a term used as a general description for traditional purchasing, such as for goods, as well as for securing receipt of services and works. The Council currently spends around £300 million p.a. (over one third of its total budget) on procuring goods, services, utility supplies and works. In addition to this extensive procurement activity, the Council is now faced with a major programme of Best Value reviews, some of which may result in further procurement from external suppliers. The Government expects all authorities to deliver continuous improvement and as part of its Best Value work to achieve 2% efficiency improvements each year.
The policy will be available to all members of staff via Information Devon and will help develop a broad understanding of the Council's procurement arrangements. It will be supported the Minimum Standards and Procedures for Tenders and Contracts, the CIPFA code of practice on commissioning local authority works and services and by other supplementary detailed guidance which will be issued from time to time as necessary.
The Council relies heavily on procurement for the delivery of its various services and responsibilities. It is committed to setting high quality standards and achieving value for money in whatever it procures. The Council requires all of its Directorates to adhere to and promote the following principles of Best Value procurement.
(i) Procurement Generally
The Council requires all Directorates to:
(ii) In-House Services
The Council believes that in-house services can provide a high quality flexible and value for money framework for developing and delivering services, whilst acknowledging that there are other methods of service delivery. It expects in-house providers to demonstrate an appropriate balance between being best on quality, value for money, sustainability, service and employment practices. The Council will support in-house providers only where they offer value for money and operate in the best interest of service users, or where it is in the Council's strategic interest to do so.
(iii) Partnerships
The Council acknowledges the importance of partnerships in delivering Best Value with the private and voluntary sectors, other public bodies acting locally and with central Government itself. The Council will encourage the development of such new methods and approaches to procurement to secure the delivery of services more efficiently, effectively and economically.
The four Cs of Best Value — Challenge, Consult, Compare and Compete — are considered an integral part of this procurement policy.
(iv) Competition
Competition may often provide the desired solution to procurement unless issues of risk, long term disadvantage or strategic importance make it inappropriate. The Council will make this decision by reference to a set of published criteria available from the Director of Finance, IT & Trading.
The objective of the Council’s procurement policy is to provide a means to drive performance by harnessing competition. This policy aims to use competitive forces to achieve Best Value:
Through indirect Competition (i.e. benchmarking) the Council will assess the competitiveness of different functions by reference to other bodies including best value authorities and private and voluntary sector providers. Services provided in-house will be supported and encouraged to achieve equivalent levels of performance or better.
Through direct competition (i.e. alternative means of procurement). The Council will consider, having regard to current performance and suitability whether an alternative means of procurement is appropriate. Contracts will be awarded to the provider offering the most economically advantageous balance of quality and cost.
Where direct competition is deemed appropriate and the in-house provider is competing, the in-house provider will be given the opportunity to compete on equal terms with external providers.
The following will be considered essential elements of competition irrespective of whether indirect or direct:
Services already subject to direct competition will be continually reviewed against the requirements of this policy, to ensure that the manner in which the service is provided remains the most appropriate to deliver Best Value.
(v) Procurement as a Strategic Enabler
(vi) Procurement Planning
The Council requires Directorates to develop forward looking and innovative procurement plans, consistent with the Medium Term Financial Planning Framework. These shall be translated into annual Procurement Plans consistent with the Revenue Budget and Capital Programme.
Where The Procurement Policy fits in
An illustration of the hierarchy of guidance on procurement activity is shown below:
| Standing Orders | State that officers & members to comply with code of business conduct. |
|---|---|
| Code of Business Conduct | The banner under which various codes exist e.g. Financial Regulations. |
| The Procurement Policy | The policy set out in this document. |
| Minimum Standards and Procedures for Tenders and Contracts and other supplementary guidance | Detailed procedures to underpin the procurement process. |
| CIPFA Code of Practice | External code of practice adopted by DCC |
Role of the Plan
The Annual Procurement Plan will serve as a statement of purchasing intentions for the County Council and is intended to allow a holistic view to be taken on procurement activity. The overall plan will be constructed from Directorate Procurement Plans and will enable the Council to identify packaging and aggregation opportunities in order to benefit from economies of scale, reduce the costs of competition and, where appropriate, to develop markets. It will also enable the Council to identify opportunities for using innovative procurement methods.
The plan is not intended to facilitate central control but will instead be used to share knowledge on procurement activities to ensure the Council achieves maximum benefit from its considerable purchasing power. The plan will be used to advise elected members on procurement matters and will also enable the Council to manage risks associated with large scale purchasing.
The plan will be prepared annually at the start of the financial year but will need to be updated regularly as changes to procurement intentions become known e.g. as a result of Best Value reviews. Whilst predominantly focusing on the year ahead the plan will also have a "rolling" element and will show the continuing contracts from previous years and, as far as possible, look ahead to the following two years to facilitate planning.
Goods/Services/Works/Utilities to be procured:
Distinguish between:
Date when procurement will take place
In addition to this content Directorates will be required to indicate expected major variations from the plan in the following two years. This outline of the medium term will facilitate planning beyond the coming year and may be viewed alongside the Councils longer-term budget strategy. The plan will need to be revised in the light of the outcome of Best Value reviews.
Terms of Reference
Within the context of the Council's regulatory procedures in respect of procurement:
These reviews to include consideration of the use of these methods of procurement where Directorates consider open competition to be inappropriate:
In addition to considering the use of these particular methods, the group will have an ongoing interest in the use of open competition:
Composition of the Group
Membership of the Procurement Group will comprise a Member and a representative from each Directorate with expert knowledge in the procurement area and appropriate members of the Strategy Units. In this way, the Group will be the catalyst for networking our expertise.
Frequency of meetings
It is envisaged that the group may meet bimonthly and be convened by the Strategic Procurement Officer in the Finance, IT & Trading Directorate.
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