Joint Procurement Strategy
Recommendations
(a) That cabinet approves the Joint Procurement Strategy and the
actions within it, as set out in Appendix 1 to this
report
(b) That cabinet approves the Procurement Action Plan and the
actions within it, as set out in Appendix 2 to this
report
(c) That cabinet approves the Ethical Procurement Statement and the
actions within it, as set out in Appendix 3 to this
report
|
Purpose of report
1. For South
Cabinet and Vale Cabinet to separately approve the Joint
Procurement Strategy.
Corporate objectives
2. The
proposed Joint Procurement Strategy directly supports all of both
councils’ corporate priorities and strategic themes
Background
3. Best
practice dictates that organisations should have an overarching
Procurement Strategy in place to offer clear guidance for officers
when procuring goods and services, whilst at the same time
supporting the organisations’ priorities and strategic
themes.
4. The risk
to the council in not having a Procurement Strategy is that
officers do not have guidelines to follow to ensure that the
council is not open to challenge because of their procurement
activities. It is difficult to know whether there are any
increased risks at this current time due to contracts already in
place.
5. The
Strategy should also offer clear guidance to ensure procurements
comply with both statutory requirements and the councils’ own
constitutional requirements.
6. Sitting
alongside the Strategy, organisations require an accompanying
Procurement Action Plan to set out a program of activities that
will help achieve the objectives of the Strategy.
The proposed
Procurement Strategy and proposed Procurement Action Plan and
Ethical Procurement Statement are attached to this report as
Appendix 1, Appendix 2, and Appendix 3
respectively. Also attached, for information at Appendix
4 is the application of contract procedure rules requirement
from the Constitution.
Options
7. The
recommended course of action is for the Strategy and Action Plan to
be agreed and adopted by Cabinet. This will give the
councils, and importantly individual service teams, clear
direction, and guidance of matters to be considered and procedures
to followed when purchasing goods, services and works. In
turn, this will ensure resources are focussed on delivering the
councils’ priorities and strategic themes.
Additionally, and not to be underestimated, is by having a clear
Strategy and Action Plan it will minimise the risk of non-compliant
procurements which could be subject to challenge.
8. An
alternative option, which is not recommended, is to not have a
defined Strategy and Action Plan. This option might be
considered as giving service teams more freedom and flexibility in
their work without the constraints of a defined framework to
operate within. However, this option would increase the risk
of procurements being undertaken that do not support the
councils’ priorities and strategic themes and/or procurements
being non-compliant and opening the councils up to challenge, and
the associated costs that can bring.
Climate and ecological impact implications
9. Climate
change commitments are included within the Strategy at
Section 2 (Objectives). As mentioned above, it
is highly important for the councils to have a clear procurement
strategy that supports their priorities and strategic themes.
This will help ensure climate and ecological impacts are considered
when buying goods, services, and works and therefore support the
councils’ priority to tackle the climate emergency.
Financial implications
10. There are no direct financial implications arising from the
adoption of a Joint Procurement Strategy.
11. However, by having a clear Strategy and Action Plan the
councils will be better placed to ensure value for money is
achieved. Additionally, as mentioned above, this course of
action will reduce the likelihood of subsequent (costly) challenges
to non-compliant procurements.
Legal implications
12. There are no direct legal
implications arising from the adoption of a Joint Procurement
Strategy.
13. However, as previously mentioned, by
having a clear Strategy and Action Plan the councils will be better
placed to reduce the likelihood of subsequent (costly) challenges
to non-compliant procurements.
Risks
14. If the councils do not adopt the
Procurement Strategy and Procurement Action Plan it will increase
the risk of procurements not supporting their priorities and
strategic themes and/or leaving themselves open to challenge to
non-compliant procurements.
Conclusion
15. As set out in the main body report,
it is best practice to have a Procurement Strategy and Procurement
Action Plan. This course of action will not only increase the
likelihood that the buying of goods, services and works will
support the councils’ priorities and strategic themes, it
should also improve compliance.
Background papers
·
None
Procurement Strategy
2021/22 – 2025/26
Contents
1.
Introduction
3
2.
Objectives
3
3.
Governance,
structure and Corporate responsibility
4
4.
Procurement
policy, procedures, best practice and management
Information
5
4.1 Procurement
Policies & Procedures.
5
4.2 Countering
fraud..
5
4.3 Management of
risk.
6
5.
Ethical
Procurement
6
6.
Climate
Change
6
7.
Standard of
conduct
6
8.
Social
Value
6
1.
Introduction
1.1. This procurement strategy is a high-level
document which sets out the approach to show how procurement will
support the councils’ corporate plans and their priorities
and strategic themes for the next five years
1.2. The aim of the strategy and its underlying
procedures is to bring value for money to the forefront of any
expenditure when procuring services, goods and works. The strategy
will help to ensure efficient and economic contracts are in place,
that are managed well, and help to reduce costs and risk within the
supply chain. The strategy will also help to ensure procurements
contribute to the economic, social, and environmental benefits for
our communities.
1.3. The strategy establishes the rules to be
followed in the procurement of works, goods, and
services.
1.4. DEFINITION: “Procurement is the process of
acquiring goods, services and works. The process spans the
whole cycle from the identification of needs, through to the end of
a service or contract or the end of the useful life of an
asset. It involves options appraisal and the critical
“make or buy” decision which may result in the
provision of services in-house in appropriate
circumstances”. [1]
1.5. The councils’ vision for procurement is
to:
·
challenge the buying decisions of
the councils
o
is the procurement
necessary?
o
is there another way of achieving
the end goal?
·
the councils will only procure
goods, services, or works when it represents best value[2]
to do so
·
actively manage all third-party
spend to support growth and reduce complexity, cost, and risk in
the supply chain
·
actively manage our suppliers to act
in a socially responsible way. (for example, does a supplier
pay their staff the living wage).
Priorities and Strategic
Themes of the
councils
|
Vale
of White Horse District Council
|
|
South
Oxfordshire District Council
|
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Providing the homes people
need
|
|
Homes and Infrastructure that
meet local needs
|
|
Tackling the climate
emergency
|
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Action on the climate
emergency
|
|
Building healthy
communities
|
|
Improved economic and community
well-being
|
|
Building stable
finances
|
|
Investment that rebuilds our
financial viability
|
|
Working in an open and
inclusive way
|
|
Openness and
accountability
|
|
Working in
partnership
|
|
Protect and restore our natural
world
|
2.
Objectives
The councils’ intention is to
procure goods, services and works that:
1.
provide best value whilst meeting
defined and agreed needs for cost and quality and to carry out all
procurement in an environmentally, economically, and socially
responsible manner in line with corporate plans
2.
ensure all financial commitments and
expenditure are managed and controlled in a consistent and
effective manner and are conducted in a fair, objective, and
transparent process
3.
ensure sustainable procurement is
embedded in the councils where the need for goods, services, works,
and utilities are procured in such a way that achieves value for
money on a whole life basis in terms of generating benefit not only
to the councils but also to the local community and the economy,
whilst minimising damage to the local environment and reducing
carbon emissions
4.
ensure ethical procurement is
embedded in the councils by respecting fundamental international
standards against criminal conduct (i.e. bribery, corruption and
fraud) and human rights abuse (i.e. slavery in modern times) and
respond immediately to such matters where they are identified;
contributing to improvement to the lives of people involved in
supply chains and people that are impacted by decisions made by
supply chains
5.
are accessible (through work with
economic development colleagues) to local businesses, especially
SMEs who may be suitable to bid for certain opportunities, keeping
the money in the local economy and reducing the supply chain. In
some instances the councils can reserve below threshold
procurements for suppliers by location and/or SMEs / VCSEs, where
appropriate
6.
ensure opportunities are packaged at
an appropriate size to enable SMEs to bid for smaller parts of
larger contracts/projects
7.
will support South Oxfordshire
District Council’s delivery of its Climate Action Plan and
the council’s commitment to becoming carbon neutral within
its own operations by 2025
8.
will support Vale of White Horse
District Council’s delivery of its Climate Action Plan and
the council’s aim for a 75 per cent reduction in carbon
emission in their own operations by 2025 and to become carbon
neutral by 2030.
3.
Governance, structure and corporate
responsibility
3.1. The councils have a shared Exchequer and
Procurement Service Manager, reporting directly to the Head of
Finance who has overall responsibility for the procurement
function.
3.2. The duties of the procurement function
include:
1.
To challenge service teams with
“do we really need to procure it?” or “can the
outcome be achieved in a different way
2.
supplier analysis and category
management to identify supplier base, spend per supplier (total and
average transactional spend) and spend per commodity as the basis
for co-ordinated and efficient procurement and the implementation
of this strategy and associated processes and procedures
3.
to assist service teams to develop
specifications, qualitative evaluation criteria and contractual
targets
4.
to measure suppliers’ ethical
and environmental performance against established
baselines
5.
to advise and assist contract owners
in the control and management of all contracts
(including facilitation, tendering
and ongoing performance management to bring improvement to current
contracts)
6.
to co-ordinate the actions of
employees carrying out procurement activities across the councils
in compliance with the strategy
7.
using the online portal to provide
alerts for relevant contract opportunities to the market.
Proactively advertising to local suppliers
8.
to use the councils’ websites,
in conjunction with the Economic Development team to advertise
opportunities to local businesses who may not otherwise be aware of
opportunities
9.
to encourage service teams to follow
the wider Corporate Delivery Framework to ensure the correct
approach is taken in regard to governance of a project and the
appropriate approvals are sought.
10. To develop and maintain procurement
documentation and information on intranet for use by staff
undertaking procurements
3.3. The procurement function, itself, will be
subject to regular internal audits to ensure continued compliance
with all policies and procedures.
4.
Procurement policies, procedures, best practice and management
information
3.
4.
4.1. Procurement Policies & Procedures
4.1.1. To
support service teams in ensuring the above principles are
sustained, the councils:
1. have documented procurement
policies
2.
use an online procurement
portal to manage the entire
procurement process from expression of interest to contract
award[4]
and allows the secure publication of contract opportunities and the
entire procurement process to be open, transparent, and compliant
with a full audit trail
3.
have an integrated supplier register
in the online portal which is
used to introduce competition into the procurement
process
4.
have standard quotation, tender and
contract documentation to ensure a consistent corporate
approach
5.
have a procurement team able to
provide advice and guidance
6.
have access to the
Government’s Contracts Finder system to advertise contracts
(currently over £25k) in line with procurement
legislation.
4.1.2 The
councils also recognise that to achieve the procurement objectives,
they will need to build capacity and skills within the
organisation. As such training programmes will be developed
to increase skills of staff engaged in procurement
activity.
4.1.3 The
councils are committed to ongoing review, of all applicable
procurement documentation, processes, and procedures.
4.2.
Countering fraud
4.2.1.
The councils are committed to
countering fraud and corruption and officers who procure goods,
works, and services must be fully aware of the rules and procedures
that support this aim.
4.2.2.
Counter-fraud and corruption
arrangements should be the consequence of effective business
systems, practices, and control arrangements, specifically
the:
o
procurement Strategy
o
procurement policies and
procedures
o
employees’ code of conduct,
which applies to all procurement and especially the sections on
relationships with contractors, personal interests, equalities,
separation of roles in procuring/tendering, use of financial
resources, gifts, and hospitality
o
anti-fraud and anti-corruption
policy and process.
4.3.
Management of risk
4.3.1.
Risk management is embedded within
the councils. The risk when procuring, including that of fraud and
corruption, will be a key consideration and an integral part of the
procurement process. The councils will identify the risks
associated with major procurements and the contingency for service
disruption in the corporate risk register, if
applicable.
4.3.2.
Procurement activity throughout the
councils will be monitored on a regular basis by the Exchequer and
Procurement Service Manager.
5.
Ethical Procurement
5.1. The councils recognise that through the purchase
of goods, services and works the resulting contracts should promote
ethical procurement. Decisions made during the
procurement
process can have a direct effect on
socio-economic and environmental implications.
5.2. The councils’ approach to this is attached
as Appendix 3 – Ethical Procurement Statement
6.
Climate and Ecological Impacts
6.1.
The councils require consideration
of climate and ecological impacts to be at the heart of procurement
decisions.
6.2.
Due consideration of the carbon
footprint of service delivery, goods manufacturing and provision of
works should be factored into the procurement process through
statements of requirements and evaluation criteria
6.3.
Current Government policy requires
local authorities to consider tackling climate change through their
procurement activities. [5]
7.
Standard of conduct
7.1.The highest standards of conduct
must be observed by all employees engaged in procurement
activity. In their dealings they must preserve the highest
standards of honesty, integrity, impartiality, and objectivity and
comply with this strategy, the procurement process and
policies.
7.2. All procurement activity undertaken by employees
must be conducted in a fair, objective, reasonable and transparent
manner. This is monitored regularly by the Internal Audit
Team.
7.3. In developing the procurement strategy and
procurement procedures the National Procurement Policy Statement
PPN 5/21, the National Procurement Strategy for Local Government in
England 2018; The Public Contracts Regulations 2015, the Local
Government Transparency Code 2015 and the Modern Slavery Act 2015
have all been considered.
8.
Social Value
8.1. The Public Services (Social
ValueAct 2012 requires
the councils to consider how the economic, social and environmental
well-being of their area may be improved when procuring public
service contracts. It allows the councils to take into
consideration, in the award of contracts, any offer of additional
community benefit over and above the specified requirements, where
these meet the councils’ priorities. The Public Services
(Social Value) Act 2012 is intended to have as a positive impact
on:
1.
growth in the
local economy by supporting local business and community
groups
2.
the
Improves and protection of the local environment
3.
residents’
health, safety and wellbeing in the community by maintaining and
improving the services provided including supporting vulnerable
residents, reducing health inequalities and improves educational
attainment.
8.2. The council’s procedures will direct
service teams, where relevant, to include Public Services (Social
Value) Act 2012 requirements in their specifications and evaluation
matrix
This strategy
should be read in conjunction with the following council
documentation:
Procurement Policy - Action Plan
Ethical Procurement Statement
This statement sets out South Oxfordshire
District Council and Vale of White Horse District Council’s
approach to ethical procurement.
It is based on the following
principles
with advice on how to apply them when procuring goods, services,
and works for the councils:
1. working
conditions are safe
2. promotion
of good health
3. employment
is freely chosen
4. working
hours are not excessive
5. wages
meet, at least, the national minimum standards
6. training
is provided
7. diversity
and good workforce practices are encouraged
8. child
labour is eliminated
9. inhumane
treatment is eliminated
10. Minimise environmental
impact
Legal
requirements
Public procurement must be carried out in
accordance with UK Public Procurement Directives.
This requires the councils to award relevant
contracts, whether subject to procurement rules
or not, in line with EC Treaty principles, including the principles
of non-discrimination, equal treatment, transparency, fairness,
mutual recognition and proportionality.
These ethical principles are mostly governed
by law within the UK/EU and, as such, are legal requirements which
would be grounds for excluding a supplier from an award of contract
if breached.
These principles, where appropriate, will be
included in the councils’ standard terms and conditions to
ensure that suppliers fully understand the councils’
expectations.
Working Conditions
are safe
Operate appropriate health and safety policies
and procedures overseen by a senior manager responsible for
compliance and monitoring and ensuring employees have the necessary
training and health and safety equipment.
Provide comfortable and hygienic working
conditions with clean toilets and water suitable for drinking and
washing.
Promotion of good
health
Invest in measures for tackling ill health as
healthy employees experience a better quality of life and tend to
be more productive.
Employment is freely
chosen
Afford employees the freedom to choose to work
and not use forced, bonded or nonvoluntary prison labour.
Afford employees freedom of association with
the right to join an independent trade union or other
workers’ associations and to carry out reasonable
representative functions in the workplace.
Facilitate alternative means of democratic
representation where laws restrict freedom of association and
collective bargaining.
Working hours are
not excessive
Comply with national and international laws or
industry standards on employee working hours, whichever affords
greater protection
Wages meet, at
least, the national minimum standards
Work towards paying the Living Wage and
provide wages and benefits at rates that meet at least national
legal standards.
Provide employees with an easy-to-read
contract of employment clearly explaining wage levels.
Wages should be in cash and not in kind (e.g.
goods, vouchers) with no deductions made unless permitted under
national law or agreed by the employee, without duress.
Training is
provided
Suppliers will be expected to show, where
applicable, training programmes for staff to raise skills and aid
professionalism
Diversity and good
workforce practices are encouraged
No discrimination - Practice no
discrimination in hiring, compensation, training, promotion,
termination, or retirement either directly or indirectly, in
accordance with the Equality Act 2010 (or subsequent iteration of
the Regulations). For the avoidance of doubt this includes
compliance with Regulations in relation to blacklisting
employees.
Disputes procedure - Provide clear and
accessible processes for resolving disputes with employees.
Child labour is
eliminated
Provide for any children found to be
performing child labour to attend and remain in quality education
until no longer a child.
Ensure no children and young persons are
employed at night or in hazardous conditions, as defined by the
International Labour Organisation.
Inhumane treatment
is eliminated
Suppliers must prohibit physical abuse or
coercion, the threat of physical abuse, sexual or other harassment
and verbal abuse or other forms of intimidation
Minimise
environmental impact
Consideration of the environment and impact on
climate change should be made in all procurements, ensuring minimal
impacts. Suppliers should be able to demonstrate their
environmental standards.
Reference Documents
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/69421/ethical-procurement-policy-statement.pdf
Other local authority published
statements
