NORFOLK COUNTY COUNCIL Price Transparency by MikeJenny

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									                              NORFOLK COUNTY COUNCIL
                               PURCHASING OVERVIEW

Introduction
Everyone who requests, orders, purchases goods, services or places works contracts on
behalf of Norfolk County Council should read this Guide. It gives general guidance
applicable to all employees. More information can be found in the Procurement Guide on
the intranet http://intranet.norfolk.gov.uk/purchasing/guide.htm.

Whether you are making simple or complex purchases, there are matters that we should
all be aware of:
 Spending lawfully and wisely.
 Having the budget available and the approval to spend.
 Ensuring the customer is identified, what the need is and that the purchase is Best
    Value.
 Identifying the quality features that are equally as important or more important than
    price.
 Ensuring competition and no discrimination.
 Probity and transparency, i.e. keeping records and providing an audit trail.
 Using existing contractual arrangements or in-house providers.
 Environmental, Health and Safety, tax and insurance considerations.

Contract Standing Orders (CSO)

You should use approved procurement procedures laid down by the Council within
Contract Standing Orders (CSO). The CSO are agreed by the Council and form part of
Council’s Constitution. You must follow CSO - not to do so may be a disciplinary
offence.

CSO do not apply to contracts for the acquisition and disposal of interests in land, for the
lending or borrowing of money or for employee contracts of employment.

CSO state that purchasers must use Eastern Shires Purchasing Organisation (ESPO)
contracts or other existing contractual arrangements where they exist, unless better value
for money can be demonstrated elsewhere. If so, the Corporate Procurement Unit (CPU)
must be informed and, as for any exemption from CSO, a form completed and signed by
an authorised officer and returned to CPU. Contact the Corporate Procurement Unit
helpline for further advice, 01603 222820.

Best Value

The principle purpose of public sector procurement is:

   The achievement of value for money.
   The optimum combination of quality and cost that meets the required needs of the
    customer.
   Compliance with regulatory obligations.

Before purchasing, as a minimum you need to find out:
 What is required? What will it be used for?
 Who will use it and how often will it be used?
 What is the level of ability of the users to use the product/service?
 Do you need to purchase something different to cover a range of needs?
 What compatibility is needed with existing arrangements?
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     How easy is it to maintain? Will it need ongoing support?
     What are the Health and Safety features and Environmental considerations?

  Before you approach a supplier, be clear on what quality features you require:
   How important is quality?
   What features are crucial?
   What features are just nice to have?
   What is the likely price and what compromise are you willing to make to balance the
     price and the quality?

  Procedures for purchasing goods and services below £30,000

                       An Overview of the Purchasing Process – Under £30,000

Pre-purchase steps:                             Calculate pre-estimate     Identify
Confirm customer requirements                                              quality
Best Value Review                               How much do you            standards
What options are available?                     expect the purchase        where
                                                to cost?                   applicable



Purchase from                       Can you buy via ESPO or
ESPO or other                       other existing contracts?
existing contracts –
order through            YES
iProcurement                             NO


                             Identify award criteria:
                             Lowest price
                             Balance of Quality and Price



  Under                                  Between                          Between
  £100                                   £100 and                         £1500 and
                                         £1500                            £30,000




If 3 alternatives                                                        Obtain at least
are readily                                                              3 competitive
available,                     Obtain 3 comparative prices
                                                                         quotations (in
compare &                                                                writing) plus
select. Where                                                            one from a new
alternatives are                                                         supplier.
not available, do                    Accept Quotation which
not waste time                       best meets award criteria.
shopping                             Place an official order
around, go and                       through iProcurement and
buy. Use                             quote price and terms and
purchasing card                      conditions. Keep all
if authorised to                     quotations,
do so.                               correspondences etc. on
                                     file.




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If you do not have any departmental procedures for purchasing? The minimum
requirements are:
 You should always buy from ESPO or the Council’s other existing contracts,
otherwise:
     Record a written description of the supplies or services required and the estimated
       cost before seeking quotations.
     Obtain at least three competitive quotations plus where possible one from a new
       prospective supplier.
     Purchases below £1,500 may be undertaken by telephoning around and/or
       comparing price lists and product descriptions.
     For purchases below £100, searching for comparative prices may be impractical
       and not cost effective.
     Keep a written note of telephone conversations. Get confirmation in writing of any
       quoted price, of the supplies and services to be supplied, delivery date and any
       special terms and conditions.
     Written invitations to quote must specify the place and the latest day and time for
       receipt of quotations.
     Quotations must be opened in a controlled manner:
               Two officers present.
               Both initial each quotation.
               Details of quotations entered on a record and signed.
               Late quotations must not be opened.
     Accept the lowest quotation. If the lowest price is not Best Value, get authorisation
       for any other proposed action from the Chief Officer and keep a written explanation
       of why the lowest quotation was not picked.
     Get an explanation from any tenderer who gives you an exceptionally low price
       (20% lower than estimated) and if you are not satisfied, you can reject the quote.
     Use of Purchasing Card for one-off purchases where you are authorised to do
    OR
       place an official order through the Oracle iProcurement system, including the
       quoted price and terms and conditions.
     Ensure the Council’s Standard Conditions of Contract are adopted. Where this is
       not possible, as a minimum, emphasise that no invoice will be paid unless the
       Council’s official order number is quoted.
     File quotations and correspondence with the order number.
       Update any central register of contracts and evaluation of contractors.
     Always ask suppliers to provide their BACS details:
               Bank account number.
               Bank account name.
               Sort code.

For Purchases over £30,000

Purchases over £30,000 must be tendered. Refer to your Purchasing/Procurement Officer
or contact the Corporate Procurement Unit.

Eastern Shires Purchasing Organisation (ESPO)
Norfolk, together with four other County Councils and two unitary Councils, own ESPO. It
is a non-profit making consortium managed by a committee made up of councillors from
each authority. It uses its buying expertise on behalf of member authorities to ensure we

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purchase at Best Value prices. ESPO is not set up to make a surplus, but any surplus it
does make, comes back to the constituent authorities. ESPO acts as our buying
expertise.

The main ESPO framework arrangements are advertised in an ESPO catalogue called,
“Dealing Direct”. When dealing direct with an ESPO supplier, an official NCC order has to
be sent to the supplier to confirm the order, including the ESPO contract number (found in
the "Dealing Direct" catalogue). Some ESPO contracts will already be set up on the
Oracle iProcurement system and show the contract number. Details of additional, more
specialised and unusual arrangements are available from ESPO.

ESPO provide purchasing skills covering a wide range of goods and services. Using
ESPO means that purchasers in departments do not have to be an expert in everything
they buy.

ESPO is available for advice, not only on purchasing supplies but on service contracts as
well. ESPO can either arrange a contract on your behalf or provide tendering services,
e.g. placing adverts and evaluating applicants.

Procurements exceeding EU Thresholds should firstly involve ESPO for advice to
safeguard the legality of the purchasing process.

EU Thresholds
EU Thresholds are values of contracts where special procurement requirements may
apply to contracts that exceed these. Thresholds are whole contract value for aggregated
requirements across all departments. Thresholds are in the region of £144,000 for supplies
and services and £3.6m for works contracts. These values change every two years.

The threshold for works is much higher, some £3.6m. Special requirements apply to
contracts that exceed EU thresholds and you should seek advice from your departmental
purchasing officers.

For any further information regarding this leaflet or any other purchasing requirements, do
not hesitate to contact the Corporate Procurement Unit.

Additional Information
Useful telephone numbers:
   Corporate Procurement Unit - Helpline                     01603 222820
   Norfolk’s ESPO Liaison Officer                            01603 222819
                                                              07787 128778
ESPO Buyers:
   Energy                                                    0116 294 4042
   Food                                                      0116 265 7855
   Stationery & Office Equipment                             0116 294 4104
   Information & Communication Technology                    0116 265 7946
   Highways & Vehicles                                       0116 265 7882
   Furniture                                                 0116 265 7883
   Audio Visual, Electrical, Science, Cleaning
     Domestic Equipment                                       0116 265 7898

Advise on Service Contracts & all other requirements          0116 294 4008
Other ESPO customer service enquiries                         0116 265 7907


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