Procurement policy

Procurement process

Procurement is the process of acquiring goods, works and services, covering both acquisitions from third parties and from in house providers. It is a much broader term than ‘purchasing’. 

The process spans the whole cycle from identification of needs through to the end of a service contract or the end of the useful life of an asset. It involves options appraisal and the critical 'make or buy' decision that may result in the provision of services in-house.

All procurement of goods, works and services is based on value for money, having due regard to propriety, regularity and our legal obligations. 

Value for money as a contract award criterion is defined for the purposes of our Contract Procedure Rules as "the optimum combination of whole life cost and quality - or fitness for purpose - to meet the customer's requirement", which is consistent with government procurement policy. 

In a procurement process 'obtaining best value for money' means choosing a bid that offers the best combination of costs and benefits to meet our requirement. It means assessing the ongoing revenue costs as well as the initial capital investment. Our requirement can include social, environmental and other strategic objectives and is defined at the start of the procurement cycle.

Procurement Strategy

The corporate procurement service is central to procurement. Our main aims of the service are to provide information, guidance, advice and support to other departments during the procurement process, to manage its own specialist categories and to maintain policy and strategy with central government objectives and guidelines. 

Our procurement strategy is being reviewed at present. It will be made public after the strategy is approved.

There is a National Strategy for Local Government Procurement which is available on the Local Government Association's (LGA) website.

Organisations

Consortia and collaborations

We work with other local councils, procurement agencies and consortia where efficiencies can be delivered through sharing services or leveraging spend. We are currently working with other local councils for Highways and Waste Management and through meet the Buyer/ Supplier Events, as well as with buying consortia like: the Eastern Shires Purchasing Organisation (ESPO).

Small medium enterprises

We are a signatory to the Small Business Concordat, a voluntary code of practice for local authorities working with Small and Medium sized enterprises.

Voluntary sector

We are a signatory to the Derby Compact Agreement. This is a voluntary framework which aims to improve relationships, communication and participation through open, transparent and fair working practices between statutory and voluntary and community partners.

Procurement Regulations and Procedures

To secure value for money and to ensure the fair distribution of contracts to potential suppliers we procure goods and services in the most competitive and equitable way possible. There are a number of rules that govern the way in which we purchase our supply requirements. These are summarised as follows:

• Financial and Contract Regulations and Standing Orders.

These rules govern the way we function in all of our activities and with particular reference to the control of all financial expenditure. There are a number of regulations that specifically control the way in which goods, services and works are purchased. In summary these are:

• If we have a corporate contract (contracted supplier) for a particular supply or service item, all of our employees must use the contract (these suppliers) to meet their requirements in these specified areas.
• If we do not have a corporate contract (contracted supplier) and the estimated value of the requirement is over £10,000 but below £100,000 a quotation process will begin. At least three quotations must be requested to ensure competition and value for money.
• If the item is for a supply or service that does not have a corporate contract (contracted supplier list) and the estimated amount of the purchase is likely to exceed £100,000 a tender process must be used to select the supplier. Two types of tender procedures are used:
  • An open procedure where all interested parties are able to tender.
  • A restricted procedure where a pre qualification stage will be used to select a short list of companies who will then be invited to tender.

The amount of information required about the supplier will be more detailed than in the case of quotation process.

• Supply opportunities are advertised on Source Derbyshire. Depending on their value, they may also be advertised on the Contracts Finder and Find A Tender Service.
• Where requirements for work contracts are met through the use of the Standing lists the same financial cut off points above applies to determine whether a quotation or tender process will be used.

UK Public Sector Procurement Regulations

In addition to our own rules, we must follow several pieces of legislation which also control the procedures that must be adopted in purchasing goods, services and works. This is detailed in the Public Procurement Policy. Updates are available in the Procurement Policy Notes.

The thresholds which apply from 1 January 2020 are:

• Goods and services: £189,330
• Works: £4,733,252
• Light Touch Regime Services: £663,540

Most contracts for goods and services above £189,330 and building or highway works above £4,733,252 must be advertised on the Contracts Finder and the Find A Tender Service.

The regulations set out clear procedures and standards we must follow us when choosing tenderers and awarding contracts.

Terms and conditions

Goods and services

Standard Terms and Conditions for the supply of goods and services apply to our orders except where contracts have been awarded against tender or quotation exercises which may have their own specific terms and conditions in addition to these.

Works contracts

Works contracts are usually subject to specific industry terms and conditions which will be identified at the time of the procurement exercise.