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Procurement Policy

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									  PROCUREMENT POLICY AND PROCEDURES
          FINANCE SERVICE



NB. This policy is available on Procurement Office website and it should be noted
that any printed copies are uncontrolled and cannot be guaranteed to constitute the
current version of the policy.




POLICY SCHEDULE
Policy title                     Procurement Policy and Procedures
Policy owner                     Director of Finance
Policy lead contact              Head of Procurement
Approving body                   SMT
Date of approval                 15/3/2010
Date of implementation           25/3/2010
Version no.                      1
Related Guidelines,
Procedures, Codes of Practice
etc.
Review interval                  Annually
Contents
  1. Procurement Policy

  2. Background Information

  3. Legality

  4. Ethical

  5. Code of Conduct

  6. Structure

     6.1 Procurement Department Role

        6.1.1    Head of Procurement Role
        6.1.2    Contract Management
        6.1.3    Operational Role

     6.2 Services and Faculty Role

        6.2.1    Specific Roles within Faculties and Departments

            6.2.1.1 Key Purchaser
            6.2.1.2 Requisitioner
            6.2.1.3 Authoriser
            6.2.1.4 Specialist Procurement Contact

     6.3 Segregation of Duties

  7. Payment

  8. Unauthorised Orders

  9. Intellectual property and Commercial Information

  10. Inventory and Fixed Assets

  11. Disposal

  12. Information and Reporting, Record Keeping and Archiving.




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1. Procurement Policy

The purpose of this Policy is to set out guidelines for University staff that are
engaged in procurement activity, in order to ensure compliance with varying
statutory requirements whilst allowing the University to meet its objectives.

The Procurement Policy operates within the wider framework of the
Financial Regulations and legislative requirements

Procurement objectives:

   All university procurement activity aims to achieve the best possible value at
    the lowest possible administrative cost. Value includes not only the initial
    purchase price, but the whole life cost of the product or service. Whole life
    costing forms an integral part of all ‘Procurement’ lead tenders; therefore:

   Goods will be purchased from approved contracts where available

   The University in achieving ‘best possible value’ in both the goods and
    services it buys and the methods it uses to procure them, will not expose the
    university to undue risk, infringe existing laws, and will conform to high
    ethical, social and environmental standards.

   Subject to European Directives, products will normally be purchased within
    the North West of England, and wherever possible, in Cumbria and
    Lancashire.

   All Suppliers will be dealt with equally, with integrity, fairness, and courtesy
    and in a professional manner. Relationships with suppliers should be
    constructive, but built on a competitive approach that will lead to cost savings
    and better quality.

Implementation

All contracts for standard items will be negotiated by the Head of Procurement.
Major specialist items will be technically specified by specialist staff, and the
Head of Procurement will conduct all contract negotiations.

2. Background Information

Context - The University of Cumbria is an £80m turnover commercial business,
      with a large and diverse purchasing requirement and corresponding supplier
      base
      Analysis of the University's current purchasing patterns shows an annual
      revenue budget expenditure on supplies and services of approximately £30
      million.

3. Legality

The University must comply with all of its legal obligations. The legal framework
for public procurement includes:
    EU and other international obligations, as implemented in UK
    legislation or by virtue of direct effect, e.g. discrimination on grounds of
    nationality, restrictions of free movement of goods and services, equal



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     treatment, transparency and competitive procurement;
     Specific domestic legislation, e.g. on corrupt gifts or unfair contract
     terms;
     Contract and commercial law in general; and
     Domestic case law
     The Procurement Team will ensure compliance with all legal requirements
     relating to procurement activity.


 4. Ethical, Social and Environmental Responsibilities

The University of Cumbria’s procurement will be conducted so that any supplier
that has the necessary abilities to be of service to the University has a fair
opportunity to secure its business. In particular, the University must be seen to
ensure that its procedures do not place unnecessary obstacles in the way of small
companies, new companies, and companies owned or managed by members of
minority or disadvantaged groups.

The University will, as far as possible, work only with suppliers that its own
customers would be prepared to trade with. The University will seek to avoid using
companies, at home or overseas, that exploit child or sweated labour, that
disregard basic health and safety provision, that ‘pirate’ the Intellectual Property of
others, or that wilfully and avoidably damage the environment.

University staff are encouraged to favour products showing clear environmental
advantages.


5.   Code of Conduct for Procurement

The University insists on ethical standards from its suppliers, and in turn it must
exhibit the highest ethical standards itself. The University must not only be fair and
above board in its dealings, but avoid any conduct that is capable of having an
adverse interpretation put on it.

Outright corruption is fortunately rare in commercial life in this country, but it does
occur. Any improper approaches, whether in the form of inducements or threats,
must be reported. All University employees when undertaking any purchasing
activity should consider themselves bound by the Code of Ethics of the Chartered
Institute of Purchasing and Supply which is set out below:

     Persons engaged in any aspect of purchasing on behalf of the University shall
     never use their authority for personal gain and shall seek to uphold and
     enhance the standing of the University by:

    maintain the highest standard of integrity in all my business relationships
    reject any business practice which might reasonably be deemed improper
    never use my authority or position for my own personal gain
    enhance the proficiency and stature of the profession by acquiring and
     applying knowledge in the most appropriate way
    foster the highest standards of professional competence amongst those for
     whom I am responsible
    optimise the use of resources which I have influence over for the benefit of
     my organisation


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   comply with both the letter and the intent of:
    - the law of countries in which I practice
    - agreed contractual obligations
    - CIPS guidance on professional practice
   declare any personal interest that might affect, or be seen by others to affect,
    my impartiality or decision making
   ensure that the information I give in the course of my work is accurate
   respect the confidentiality of information I receive and never use it for
    personal gain
   strive for genuine, fair and transparent competition
   not accept inducements or gifts, other than items of small value such as
    business diaries or calendars
   always to declare the offer or acceptance of hospitality and never allow
    hospitality to influence a business decision
   remain impartial in all business dealing and not be influenced by those with
    vested interests

    The following points should be particularly noted:

       Gifts, hospitality, inducements etc

For their own protection staff need to be aware that under the Prevention of
Corruption Acts passed between 1889 and 1916, no employee of a public body
may solicit or receive any gift or other consideration from any person or body with
whom they deal as part of their official duties as an inducement or reward for
doing or refraining from doing anything, or showing favour or disfavour to any
person or firm, in their official capacity. Gifts and other considerations are
automatically considered corrupt unless the individual can prove otherwise. In
addition, the Local Government Act of 1972 requires any officer to report in
writing the fact that he or she, or any close relation, has a direct or indirect
pecuniary interest in a Contract to be awarded by his or her employing
Authority. An example would be a shareholding in a potential supplier.

Only gifts of small intrinsic value – pens, desk diaries and the like – may be
accepted from actual or potential suppliers. Personal gifts of real worth should be
reported, and returned to the supplier with a polite explanation of why the offer
cannot be accepted. Suppliers who persist in making such offers should be made
aware that the University will cease to deal with them. Please refer to the
universities gifts and hospitality policy which may be accessed by clicking on the
following link:
http://staff.cumbria.ac.uk/DocumentLibrary/PublicANDInternal/Finance/Policies/Gi
ftAndHospitalityPolicy.doc

On occasion it is necessary both to give and receive hospitality. However, any
hospitality offered or accepted must be modest and proportional to the occasion,
and of the type and scale that the University would offer if the situations were
reversed. Please refer to the Travel & Employee Benefits Policy which may be
accessed by clicking on the following link:
http://staff.cumbria.ac.uk/DocumentLibrary/PublicANDInternal/Finance/Policies/E
mployeeTravelAndBenefitsPolicy.doc

Invitations to visit user sites, attend specialist conferences, association annual
dinners and the like as the guest of a supplier should be treated with caution and
approved in advance by your line manager. Invitations extended to a spouse or


                                                                                   4
other guest need to be considered very carefully and must be approved by your
line manager if such an invitation is considered to be appropriate. All invitations to
sporting occasions and other functions with little or no business content should
be carefully considered, evaluated and approved in advance by your line
manager. This applies at all times, not just in working hours. In the event that
invitations are declined they should be declined politely but firmly.

Incidences of gifts, hospitality and inducements should be reported to the
Christine Hall, Finance who maintains a gifts and hospitality register. The details
should include the nature of the gift, hospitality or inducement, the reason for
acceptance, the date of receipt, the recipient’s name and confirmation of line
manager approval.

Some benefits are unavoidable, as they come packaged with the product. All
benefits gained through spending the University’s funds are the property of the
University and should be reported and surrendered (although if they are of no
value to the University the Head of Procurement may authorise the recipient to
retain them).

   Conflicts of interest

When dealing with suppliers, potential conflicts of interest can sometimes
arise. Staff may be associated with a supplying company, spouses or other
relatives may be employed by the Supplier company or personal friendships may
grow up over time. Such potential conflicts should be reported to your manager
and documented in the Head of procurement’s record of interests as soon as
they are identified. They will not normally prevent its trading with the company
concerned, but it may be in everybody’s interests to arrange for the expenditure
to be handled by someone else.

Sometimes, former employees may be potential suppliers – indeed their
knowledge of the University’s operations may make them particularly suitable. It
is important that they do not receive or expect to receive special consideration. If
their ‘inside knowledge’, for instance of the University’s cost structures, appears
to give them an unfair competitive advantage, it may be desirable to take steps to
ensure fair competition among all suppliers.

Employees should avoid as far as possible dealing with the University’s suppliers
in their private affairs, particularly if this is likely to put them under some
obligation to the supplier. Where such arrangements are unavoidable, it is
essential that they ensure that they are not offered any sort of deal which is not
commonly available, and which could be construed as a reward for actions taken
in the course of their employment.

   Anti-competitive behaviour

The University is obliged to comply with the Competition Act 1998 in ensuring
that its purchasing activity does not prevent, restrict or distort competition.

From time to time, buyers may become aware of supplier organisations
apparently acting in concert to fix prices or divide up markets. More rarely, there
may be arrangements between buyers from different organisations designed to
put pressure on suppliers. Any such arrangement is illegal unless specifically
cleared by the Restrictive Practices Court. Any such suspicions should be


                                                                                    5
reported (with any supporting evidence) to the Procurement Department, which
will investigate and if necessary pass the information to the Office of Fair Trading.

   ‘Whistleblowers’

It is the University’s policy to support, protect and, where possible, preserve the
anonymity of any of its employees that report apparently questionable activity,
even if their fears subsequently prove to be unfounded. Early reporting is
essential so that, where necessary, legal advice can be taken and both the
individual and the University protected. Further information can be found in the
Universities Whistleblowing Policy, which forms part of the Human Resources
Policy handbook (page 25), and Anti- Fraud Policy by clicking on the respective
following links:

http://www.cumbria.ac.uk/Services/HumanResources/Documents/section%20P.d
oc

http://staff.cumbria.ac.uk/DocumentLibrary/PublicANDInternal/Finance/Policies/A
ntiFraudPolicyoct09.doc

6. Structure and Authority

The Procurement Policy and Procedures underpin the Financial Regulations. The
University’s Head of Procurement is responsible for recommending the
Procurement Policy and Procedures, (of which this document is a part), to the
Director of Finance, for subsequent implementation. Authority levels are
approved by the Director of Finance. Procurement Strategy is approved by the
Director of Finance.

Procurement structure has been designed to enable budget holders to be
empowered to transact their day to day procurement locally, while the
Procurement Department provides the knowledge, skills and information to
support this.

The Procurement Department takes a broad view across the university to
maximise its leverage and will use its expertise to lead the procurement process
when purchasing high value and/or high-risk products or services.

    6.1 Procurement Department role

    The Procurement Department has three key roles: Head of Service, Contract
    Management, and Operational role.

           6.1.1 Head of Procurement role

           The Procurement Department has responsibility for all aspects of
           purchasing and supply, in particular it aims to;

              provide a centre of excellence and source of guidance on
               procurement matters
              responsibility for all major purchases of non-pay expenditure
               including capital items.




                                                                                   6
          publish operational guidance, marketing intelligence and best
           practice advice
          develop appropriate systems and procedures
          provide assurance on legislation compliance and value for money
          develop a procurement training plan
          define contracting strategy and develop procurement techniques


       6.1.2 Contract Management

          lead commercial role on procurement contracts over £25k
          management of the tendering process
          negotiation of contracts for common materials.
          distribution and/or uploading and maintenance of catalogues and
           contracts
          maintenance of partnerships with key strategic suppliers
          collaboration with regional and national consortia
          Commodity Research


       6.1.3 Operational role

          Management of the order processing function to ensure timely
           placing of orders in line with procurement policies
          Lead role on the approval of new suppliers.
          Management of the procurement card system.
          Key contact between faculties and services for general enquiries.



6.2 Services and Faculty role

Services and Faculties are responsible for transacting effective procurement
on a day to day basis up to defined levels, thereby ensuring effective budget
management.

Fundamental to the success of a devolved purchasing environment is the role
of the Faculty/Service in ensuring that day to day procurement is effectively
managed.

More specifically the responsibility and accountability of the Faculty/Service is
as follows:

      To ensure that an effective structure is in place to support
       procurement activity
      To ensure that staff roles are adequately defined (see 6.2.1) and that
       staff have the key competencies required to perform effective
       procurement.
      To ensure that the needs of the Department are met through effective
       day to day buying which delivers value for money.
      Contributing to the procurement contracting process for specialist or
       technical items where an ‘expert’ input is required.



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6.2.1 Specific roles within Faculties and Departments

More specifically the procurement roles within departments breakdown as
follows:

Budget Holders

Budget holders are defined as persons to whom responsibility has been
delegated by the University Board or Vice-Chancellor

Budget Holders are authorised to approve expenditure, ensuring:

      The goods and/or services are necessary and that the expenditure
       which will be incurred can be contained within the part of the
       budget for which they are responsible.
      Tendered contracts or established supply arrangements (as
       detailed in the Universities Buyers Guide) are used wherever
       possible
      Action is taken on incorrect or below quality delivery and/or
       services, and that the Procurement Department is informed of
       such instances.
      The correct procurement route has been taken in accordance with
       the specified procurement limits.
      Delegated Budget Holders are defined as persons to whom
       budget responsibility has been delegated by the Budget Holder.

 6.2.1.1 Key Purchaser

   For each department one key purchaser should be nominated. This
   representative shall ensure that every buyer within the department has
   the correct skills and knowledge to undertake such duties and will
   provide regular assurance on compliance, and define local levels of
   authority for purchasing.

   This Manager may be a budget holder and/or is the line manager but
   principally will be the person responsible for:

          defining departmental levels of authority for purchasing in
           accordance with defined authority levels and notifying them to
           the Procurement Department
          delivery of value for money in all purchasing activity
          working with the Procurement Department to achieve effective
           recruitment, development and training in procurement.

   6.2.1.2 Requisitioner

   Any person who has a requirement to buy something and is given
   authority to submit external purchase requisitions to Procurement to
   raise as Purchase Orders or authority to raise internal requisitions to
   other university departments.




                                                                        8
           6.2.1.3 Authoriser

           Any person who has been given authority to sign-off expenditure by
           counter-signing invoices.

           6.2.1.4 Specialist Procurement Contact

           A person with relevant departmental and commercial knowledge to
           source, price, negotiate and contract for an item on behalf of the
           above people in liaison with the Procurement Department.

           These are not necessarily the staff that have the authority to commit
           expenditure. Their role is to undertake procurement activity on behalf
           of colleagues, because they have the specialist area knowledge to do
           so.

   6.3 Segregation of Duties

   For control purposes and to ensure that the University and its employees are
   protected it is imperative that no one person is nominated to requisition,
   authorise, order and goods receipt.

7. Payment

The University’s standard payment terms are 30 days from receipt of invoice. The
University’s suppliers are entitled to receive their payment within the payment
terms provided their goods or services meet contractually agreed specifications.

Unreasonably delaying payment benefits the University little or not at all
financially, can cause significant cash-flow problems to its suppliers, especially
smaller firms, generates an unnecessary and unpleasant administrative burden in
dealing with irate suppliers, and erodes the atmosphere of mutual trust which the
University is trying to establish. Furthermore, the University may be fined under
the Late Payment Debt Collection Act 1998. It is the duty of everyone involved in
purchasing to ensure that the information necessary to generate payment is
passed through as quickly as possible.

Suppliers must quote the Official University of Cumbria order number on all
invoices submitted to ensure prompt payment.

If a supplier has failed to supply goods or services to the University’s satisfaction,
and it is deemed necessary to withhold payment, this must be reported to the
procurement department along with all relevant documentation. The procurement
department will be responsible for ensuring that the supplier rectifies his
omissions before payment is authorised.




                                                                                    9
8. Unauthorised Orders

     All commitments for expenditure must be made on an Official University of
     Cumbria Order Form and follow the necessary approvals.

     Any supplier invoice received which has no corresponding Official University
     of Cumbria order number will be deemed a personal order and as such the
     supplier will need to recover payment from the individual member of staff who
     placed the order.

     Members of staff who place orders without raising an official university order
     will be liable for payment of the invoice and may face disciplinary action as a
     result.

     Staff who transact an unapproved order/invoice, which results in the setting
     up of a new supplier will have a £100 administrative fee levied on their
     department, and may face disciplinary action.

9.   Intellectual Property and Commercial Information

     The University owns it’s Intellectual Property – designs, patents, trademarks
     and know-how – and any rights that accrue. It is the responsibility of the
     University to protect its Intellectual Property. Whenever such information is
     passed to a supplier, even as part of an invitation to quote or tender or for the
     purpose of a supplier providing a service to the University, the University must
     ensure that there is a contractual statement which determines that the
     University retains ownership in its Intellectual Property and any associated
     rights and the recipient must have signed a confidentiality agreement.

     The University’s suppliers are often involved in design and development work
     on its behalf, either alone or in conjunction with University staff. Wherever this
     is the case, the Contract must specify the ultimate owner of the Intellectual
     Property so created. This may include rough drafts, supporting calculations,
     prototypes, mock-ups and, in the case of printed matter, plates, progressives,
     bromides and artwork.

     In any instance where the University is buying from a supplier something
     which the University or its customers are likely to need to reproduce or copy
     at a later date, the Contract must make clear the University’s or its customer’s
     right to do so, and, where appropriate, the terms of payment due.

     Similar considerations extend to all forms of commercial information. The
     University’s employees must never pass to suppliers any information that they
     do not need to know (although equally the University has a duty to ensure
     that suppliers do receive the information they do need to carry out work for
     the University). The University must respect the confidentiality of information it
     learns about its suppliers.

     Suppliers must also be aware that they are not allowed to use the University’s
     name, or information about any work they may have performed for the
     University, in any sort of promotional material, without its prior approval.




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10. Inventory and fixed Assets

    Finance maintains an inventory of fixed assets. Each department shall ensure
    that all assets are purchased with prior approval from the Director of Finance,
    using the Capital Purchase Requisition and Tender Authority form (CPRTA).
    This ensures the correct financial treatment of assets and that insurance
    claims can be substantiated.

11. Disposal

    Goods not wholly consumed in the course of use will have to be disposed of
    when no longer needed. The University’s first priority is to reuse the surplus
    internally if appropriate. Any items e.g. furniture, stationery etc. which could
    be used by other staff/departments should be made available using the global
    email as a source of advertising.
    If re-use is not appropriate (e.g. for safety reasons) all such materials must be
    disposed of in the most appropriate manner. i.e. safe and secure collection,
    storage, and sale. All data storage devices, (from computers to filing cabinets)
    must be ‘clean’ before disposal.

    Some assets may have a resale value the decision to dispose of items should
    be made by the budgetary head of department. Items not considered saleable
    should be disposed of in the most economical manner possible. In all cases
    the objective is maximum benefit to the University.


    Saleable Items:

    If at all possible the items should be advertised to staff in the first instance on
    the Universities intranet. This must be done in liaison with the Procurement
    Department who will advertise the goods and request sealed bids for the
    item(s).
    Where there are no suitable bids resulting from internal advertising, the goods
    can be advertised externally, similarly requesting sealed bids to be sent to the
    Procurement Office by a prior agreed deadline.

    Clear records must be maintained to provide a comprehensive trail of the
    decisions
    and actions taken and of the authorisations given to effect the disposal.
    Payment must be received before the item is released to the purchaser.

    Any capital item to be disposed of must be removed from the Universities
    asset register. The asset register is managed by the universities capital and
    compliance accountant.



12. Information and reporting, record keeping and archiving

    All employees involved in purchasing activity shall provide information in the
    most accessible manner to enable the University to undertake its
    procurement activity effectively.


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This will include the collection and dissemination of market intelligence,
details of products and suppliers.

Core to the Procurement Department’s strategy is the use of electronic
communication, which includes its web page, email and the Agresso Finance
System. These provide useful management information on procurement
behaviour that can be used for the benefit of the University, both in identifying
new opportunities for contracts and for strengthening its negotiations.

Procurement processes generate a considerable amount of documentation
(manually and electronically) for legal and accounting purposes.

It is the responsibility of all Faculties and Departments to retain this
documentation, which supports the procurement decision making process
.These must be held accessible and be made available to both Internal Audit
and the Procurement Department upon request.




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POLICY DOCUMENT CONTROL SCHEDULE

REVIEW SCHEDULE
Review no. Due date         Reviewed by   Approved by   Completion
                                                        date
1               25/3/2011




DRAFTING SCHEDULE
Draft no.     Date




Final Version




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