CERTIFICATE OF COMPETENCE IN PURCHASING SUPPLY

Document Sample
CERTIFICATE OF COMPETENCE IN PURCHASING SUPPLY Powered By Docstoc
					Certificate of Competence in Purchasing & Supply
July 2004                                 1a
CERTIFICATE OF COMPETENCE IN PURCHASING & SUPPLY:
DETAILED SYLLABUS

Module 1A (35.5 hours)

1. INTRODUCTION TO PROCUREMENT IN GOVERNMENT

1.1 The Procurement Function in Government                                                       3 hours

Aim: To give students an overview of procurement in the government context, including the role
of the procurement function, the procurement cycle, and the ethical and policy framework within
which government procurement functions operate.

Learning Outcomes:
At the end of this session, students will be able to:

         Describe the procurement cycle, listing each stage in the correct sequence, and
          demonstrate the application of the cycle in the public sector environment

Topics:

             Principles of government procurement (Public Procurement Guidelines &
              Government Accounting): value for money; use of competition; EC procurement
              rules; clear definition of roles and responsibilities; separation of financial and
              purchasing authority; separation of contracting, receiving and paying duties.
             Objectives of government procurement.
             The standing/relationship of procurement with the organisation/end user;
             Educating the organisation about procurement services and skills available;
             Challenging the requirement;
             Aggregating demand, where appropriate, to achieve better VFM;
             The principle of standard terms and conditions of contract
             Roles and responsibilities of the procurement professional in the organisation
             Interpersonal skills of a procurement professional.
             Characteristics of the procurement professional (standards and ethics).
             Procurement Ethics: Fraud and corruption
             Roles and responsibilities of procurement;
             The purchasing/procurement cycle; need, contract strategy/EC obligations,
              budget/target price, specification/evaluation criteria, select tenderers, invite tenders,
              receive tenders, evaluate tenders, award contract, manage contract, vendor rating.
             Initiatives e.g. Better Quality services (BQS)
             The Role of the Office of Government Commerce (OGC) * Guest Speaker – GPS
              Manager
             The Role of the Government Procurement Service (GPS) * Guest Speaker – GPS
              Manager




                                              -1-
Certificate of Competence in Purchasing & Supply
July 2004                                 1a
1.2 Economics, Finance and Government                                                1 hour

Aim: To provide students with a broad understanding of government accounting in the context
of procurement.

Learning Outcomes:
At the end of this session, students will be able to:

         Describe in broad terms how government expenditure is managed


Topics:
             Government accounting
                - expenditure
                - revenue
                - public expenditure survey
                - government accounting rules.
                - Separation of duties
                - PEX Process - the Relationship of departments to Parliamentary Supply and
                    the PES/CSR process


2. CONTRACT LAW

2.1 Contract Law                                                                              9 hours

Aim: To provide students with an understanding of the principles of the law of contract and its
effect on the practices and procedures of the government procurement function.

Learning Outcomes:
At the end of this session, students will be able to:

         Describe the 7 elements required to form a legally binding contract in English law
         Demonstrate an appreciation of the difference between the use of framework contracts
          and framework arrangements as defined in EU legislation, explain the meaning of
          standing and continuing offers, call-off arrangements, agreements and contracts.

          Reference – OGC Procurement website – ‘Legal and Policy Framework’ for latest
          guidance

Topics:

             Definition of a contract.
             Types of contract; contract by deed/under seal; simple contract. Formation of a
              contract under seal.
             Formation of a simple contract; by word of mouth; in writing; by the action of the
              parties; or any combination of the three.
             Elements of a simple contract; offer; unqualified acceptance; consideration (except
              Scots Law); legal objective; capacity of the parties; intention to create a legal
              relationship; reality of consent.


                                             -2-
Certificate of Competence in Purchasing & Supply
July 2004                                 1a
             Difference between and Offer and an Invitation to Treat; supplier's catalogues,
              business and consumer; goods in shop windows.
             Tendering; ordering from supplier's catalogue/offering to purchase to department's
              terms and conditions; requiring supplier's unqualified acceptance; acceptance may be
              made by action i.e. goods delivered; may be qualified by supplier's terms and
              conditions; 'battle of the forms', status of email
             Competitive tendering process; i) inviting offers to departments' specification/terms
              and conditions; ii) receiving offers from tenderers; iii) after tender evaluation, making
              an unqualified acceptance of the 'best' offer to form the contract.
             Importance of making the department's/supplier's action clear e.g. offering to
              purchase from a supplier, making an unqualified acceptance of the department's offer,
              inviting offers from tenderers, making an unqualified acceptance of a tenderer's offer.
              Meaning of contract acknowledgement.
             Consideration; definition; difference between English and Scots Laws. Future
              consideration. Capacity of the parties to contract. Also consider 'authority to
              contract'; who can/cannot commit the department contractually.
             Legal Objective discussed; Intention to Create a Legal Relationship discussed e.g.
              where is this requirement satisfied in government contracts? Reality of
              Consent/Consensus Ad Idem discussed.
             Formation of Contract by competitive tender; communication of offer, acceptance,
              revocation; by phone, by FAX, face-to-face, by Royal Mail; general rule/postal rule.
              Splitting the requirement between different suppliers; legal position.
             Once made, how long does an offer last? Reasonable time, specific time; effect of
              rejection/counter-offer. Fulfilment of contract.
             Meaning and use of 'Standing' or 'Continuing Offers'; 'Call-Off Arrangements'; 'Call-
              Off Agreements'; 'Call-Off Contracts'.
             Reflect new EU legislation framework contracts - legally binding, framework
              arrangements – not legally binding.
             Electronic Act 2000 – electronic sending and receiving tenders plus electronic
              signatures

2.2 Terms and Conditions of Contract                                                             2 hours

Aim: To give students an understanding of the use of appropriate terms and conditions of
contract to secure the contractual rights of government and the supplier.

Learning Outcomes:
At the end of this session, students will be able to:

         Discuss the rights and obligations of both parties
         List and evaluate the use of common terms and conditions

Topics:

             Why written contracts are (usually) required in government business; evidence;
              certainty of terms; management/audit trail; staff training, etc.
             Conditions and Warranties.
             Purchaser's rights when supplier in breach of a condition.
             Securing the department's contractual rights; understanding of when a contract is
              formed.



                                              -3-
Certificate of Competence in Purchasing & Supply
July 2004                                 1a
             Ensuring the department has secured appropriate contractual rights and understands
              its obligations.
             Typical departmental terms e.g. payment; break; ownership; risk; rights to terminate;
              default; etc.


2.3 Sale and Supply of Goods Act 1994                                                 2 hours

Aim: To identify the role and impact of the Act on government procurement.

Learning Outcomes:

Topics:
         Conditions and Warranties; definitions and rights of the buyer when supplier is in
          breach. Terms implied by the Acts e.g. sale by sample, sale by description, sale other
          than by the owner, merchantable quality/satisfactory quality, passing of risk, property
          and ownership, acceptance of goods.
         The effect of the Act(s) upon the public sector and the relationship with departmental
          terms and conditions of contract.

3 PROCUREMENT PROCESSES

3.1 Competitive Tendering/Tender Evaluation                                                   3 hours

          Reference – OGC Successful Delivery Toolkit (SDTK) ‘Invite and Evaluate
          Proposals’

Aim: To provide students with an understanding of the purpose and processes of competitive
tendering

Learning Outcomes:
At the end of this session, students will be able to:

         Explain the purpose of competitive tendering
         List the key requirements of the EC Procurement Directives for competitive tendering
         Describe a simple competitive tendering process, with reference to the principles of
          propriety, transparency and procurement ethics

Topics:

             A principle of Government procurement.
             Purpose of competitive tendering; getting the best from the market and encouraging
              the best in the market.
             Pre-requisites of competitive tendering.
             Whom to invite to tender; link with EC Procurement Directives.
             Tender Board procedures and practices. Propriety/Transparency.
             Treatment of tenderer's errors; dealing with very low/very high prices; bid
              clarification.
             Treatment of late tenders.
             Contract award/evaluation criteria; VFM.



                                             -4-
Certificate of Competence in Purchasing & Supply
July 2004                                 1a
             Case study - analysis of tenders and awarding the contract.
             Bid Evaluation Rules
             Reference to EC Directives
             Procurement Ethics.
             Corrupt Gifts and Payments of Commission' Condition. Departmental systems and
              procedures.
             Particular importance in Government procurement.

3.2 Sole Source Procurement                                                                    3 hours

Aim: To enable students to recognise when sole source procurement might be appropriate, and
to provide an understanding of how to manage such procurements to achieve and demonstrate
value for money.

Learning Outcomes:
At the end of this session, students will be able to:

         Give examples of when competitive tendering may be set aside
         List the options for challenging a single tender requirement to allow competition
         Describe Single Tender Action, and how to evaluate single tenders

Topics:

             When competitive tendering might be dispensed with.
             When competitive tendering might be impracticable.
             Single Tender Action
             Challenging the requirement to allow the use of a competitive market; encouraging
              the use of alternatives for which a competitive market exists; aggregating small,
              repetitive requirements; using competitively tendered, call-off arrangements; affect of
              EC Procurement rules.
             Evaluating single tenders; demonstrating and ensuring value for money.

4. SPECIFYING THE REQUIREMENT                                                             3hrs 30mins

          Reference : SDTK ‘Producing the Requirement Specification’

Aim: To emphasise the importance of the specification in the procurement cycle, and of the early
involvement of the procurement function in the specification process. To give students an
understanding of the different types of specification and the ability to write a specification.

Learning Outcomes:
At the end of this session, students will be able to:

         Explain the importance of specification, and the contribution made by the procurement
          function to the formation of an appropriate specification

Topics:

             Importance of the contract specification.
             Contribution made by procurement skills and knowledge.


                                             -5-
Certificate of Competence in Purchasing & Supply
July 2004                                 1a
             Involvement of the market.
             Using/not using: - brand name, chemical analysis; sample; drawings etc.
             Early involvement of procurement in compiling the specification.
             Challenging the specification.
             Pre-requisites of a sound specification e.g. clear, unambiguous, simple, legal, avoid
              inconsistencies.
             Types of specification - functional, performance, technical; combination of types to
              suit need.
             Quality characteristics - need to address quality issues in specification.
             Allowing for innovative responses from tenderers.


5. SOURCING                                                                                  1hr 30 mins

          Reference: SDTK ‘Requirements Definition and Procurement Strategy’

Aim: To provide an overview of sourcing activity and how sources of supply may be identified
and developed.

Learning Outcomes:
At the end of this session, students will be able to:

         Explain the importance of sourcing, the potential risks of inappropriate sourcing,
         List and evaluate sources of supply

Topics:
             Role of procurement in sourcing.
             Importance of adequate sourcing.
             Identifying sources of supply: databases; trade directories; trade journals; exhibitions;
              visits from suppliers; advertising; discussions with other purchasers; etc.
             Problems arising from inadequate sourcing.
             SMEs

6. SUPPLIER APPRAISAL                                                                        1hr 30 mins

          Reference: SDTK ‘Selecting Potential Suppliers’

Aim: To provide an overview of the principles and components of the supplier appraisal process,
its place in the procurement cycle, and its impact on achieving value for money.

Learning Outcomes:
At the end of this session, students will be able to:

         Evaluate appropriate means of appraising suppliers in differing market conditions

Topics:
             Value for money unattainable from poor suppliers.
             Importance of dealing with competent suppliers.




                                              -6-
Certificate of Competence in Purchasing & Supply
July 2004                                 1a
            Supplier appraisal criteria; consideration of financial, technical, commercial aspects;
             (EC terminology) legality to operate; minimum economic and financial standing;
             technical capacity to perform.
            Use of supplier questionnaires; 'factory' visits, factors to consider.

7. VALUE FOR MONEY (VFM) AND PROCUREMENT PERFORMANCE                                              3hrs

Aim: To develop students’ understanding of concepts of value for money and procurement
performance

Learning Outcomes:
At the end of this session, students will be able to:

        Explain the concept of value for money in terms of efficiency, economy and effectiveness
        List the sources of OGC guidance on VFM
        List the potential benefits of measuring procurement performance
        Propose how procurement performance may be measured in their own organisation,
         describing how the resulting information may be used to improve performance

         Reference: Cup 54, SDTK ‘Lifecycle Costing’, OGC / NAO guidance ‘Getting
         Value for Money from Procurement’

Topics
            Government procurement based upon value for money:
            Strategic issues
            OGC latest guidance on VFM.
            Consideration of an organisational development model to demonstrate dynamic
             changes in structure.
            Use of a purchasing and supply development model to consider shifts in
             responsibilities and roles of procurement professionals.
            Examination of the main responsibilities and activities in procurement and supply in
             terms of strategic, tactical and operational activities.
            Examination of the need to measure; theory and practice.
            Examination of the type of performance measures available.
            Examination of what may be measured and what may be achieved by measuring
             procurement performance.
            Examination of how procurement activities may be effectively measured.
            How measures need to develop and respond as the organisation's responsibilities
             shift.
            Introduction and practical use of benchmarking.
            Better Quality Services (BQS), The Business Excellence Model (BEM) and The
             Procurement Excellence Model (PEM).




                                             -7-
Certificate of Competence in Purchasing & Supply
July 2004                                 1a
8. ENVIRONMENTAL ISSUES IN PROCUREMENT                                                         30mins

          Reference: OGC / DEFRA guidance ‘Environmental Issues in Procurement’

Aim: To provide students with an understanding of how environmental considerations should be
taken into account in government procurement

Learning Outcomes:
At the end of this session, students will be able to:

         Give examples of the environmental impact of procurement decisions
         Describe how environmental considerations can be reflected throughout the
          procurement cycle

Topics:
           HMT/DEFRA note on "Environmental Issues in Purchasing (24/3/99)".
           Whole Life Costs
           Recycling/Safe disposal
           Buy less or not at all
           Minimise waste
           Environmental impact of procurement decisions
           Harmful effects of testing products/materials by suppliers
           Environmental influences on Specifications, Sourcing and Appraisal, Contract Award
            and Contract Conditions.
           Environmental Question in pre qualification stage and in/part of ITT documents.

9. ETHICAL PROCUREMENT                                                                         30 mins

          Reference: OGC Procurement website – ‘Legal and Policy Framework’ for
          ‘Guidance on Fair and Ethical Trading’

Aim: To give students an understanding of the principles of fair and ethical trading

Learning Outcomes:
At the end of this session, students will be able to:

         List the sources of policy, guidance, standards and legislation related to ethical
          procurement
         Explain the importance of fair and ethical procurement in government

Topics:
            Policy Developments
            Sourcing and Appraisal
            Human Rights Act
            International Standards e.g. SA 8000
            Ethical Trading Initiatives
            International Labour Organisation (used as a standard across government when other
            guidance not available)
           Freedom of Information Act


                                              -8-
Certificate of Competence in Purchasing & Supply
July 2004                                 1a



10. Small and Medium Enterprises                                                        30 mins

Reference : OGC / SBS booklet : ‘Smaller supplier .. better value?’

Aim: To provide students with an understanding of government guidance regarding engaging
SMEs in the government marketplace

Learning Outcomes:
At the end of this session, students will be able to:

         Critically evaluate the ability of SMEs’ ability to supply UK government with reference to
          OGC guidance
         Identify the drivers for involving SMEs in government contracts
         Evaluate the options available to the procurement function to develop the employment
          of SMEs


Topics:

             Potential benefits of SMEs
             Barriers to government market for SMEs
             How procurement function can minimise barriers


11. INTRODUCTION TO NEGOTIATION                                                            1 hr 30mins

Aim: To introduce the principles of negotiation in a teamwork context, and to identify the stages
in the negotiation process

Learning Outcomes:
At the end of this session, students will be able to:

         Describe the purpose of negotiation
         List the phases of negotiation as defined by the Kennedy Model

Topics:
             Introduction to Negotiation.
             Aims and objectives.
             Overview of Phases/Stages of negotiation: preparation; debate/discussion;
              proposing; bargaining( Kennedy Model). Putting a value on concessions.
             Strengths and weaknesses – introduction will be covered in more detail at Advanced
              Negotiation Workshop




                                             -9-