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Contract Standing Orders

Contract Standing Orders

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Published by: Thuongthuong.tran on Jul 10, 2009
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07/28/2010

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Page 1 of 9 03/04/2008 RulesFinRegApBContract StandingOrders.doc
CONTRACT STANDING ORDERS
1 Purpose and status
These Standing Orders are made and approved by the Council to regulate and ensure probityin all its dealings with suppliers and contractors. They are part of the internal controlmechanisms that exist to ensure that spending on goods, works and services takes place withinthe budgets approved for the purpose and within the limits of authority incorporated in theScheme of Delegations.All orders or contracts for goods, works and services should follow the principles set out in theCouncil’s Procurement Strategy, available on e-link. Other than in emergencies, for whichprovisions are defined separately in the Rules for Financial Governance, exceptions to theirprovisions are only permitted as described in sections 3.3 and 10Compliance with these Standing Orders is mandatory for all staff employed by or on behalf ofSouth Norfolk Council and failure to observe them without good and sufficient reason will betreated as a disciplinary issue. Staff letting or managing contracts must ensure that allcontractors are aware of their provisions and comply with them.
2 Suppliers and Contractors
The basic details required from ANY supplier before orders can be placed or payments madeare set out in the form available on e-link or from the Payments Control Team. The form mustbe fully completed by all prospective suppliers prior to placing orders or entering into contracts,whatever the value of goods works or services involved.For any contract involving supplies other than at one time or where guarantees and/or aftersales service are likely to be an issue, the standing, suitability and reliability of potentialsuppliers and contractors should be assessed before entering into any commitment. Thedegree of assessment necessary should be proportional to the risks involved should thesupplier or contractor fail, be subject to take-over or otherwise become unavailable during thelife of the contract or goods acquired.For contracts involving major expenditure, specialist skills or significant risks, more detailed andrigorous evaluation of potential suppliers and contractors is required. This will normally takethe form of a specific pre-qualification process, designed for the job involved. The CorporateProcurement Officer can provide any help or advice you need.
Orders for Goods, Works and Services2.1 Integra-RSS (POPCA)
Before placing any order, seeking quotations or inviting tenders, you should first always checkto see if what you need could be supplied under any of our existing corporate arrangements. Alist of these is available on e-link or from the procurement staff, (procurement@s-norfolk.gov.uk). Remember also that the Eastern Shires’ Purchasing Organisation (ESPO) cansupply many commonly used items under arrangements already tested in competition and thiscan save you both time and effort.The normal method of ordering goods, works and services is through the electronic purchaseordering module of Integra, the Council’s financial management and information system.Orders will be transmitted electronically wherever possible, either directly to the supplierssystem or by e-mail in an official Council format.This system is simple and straightforward to use and makes sure that orders are placed only bythose authorised to do so against budgets where the provision exists for the expenditure. Itregisters commitment of the expenditure at the time the order is placed to improve budgetarycontrol and accounting and ensures that, where corporate contracts or other arrangementsexist that the Council obtains best value for money by using them. It also prevents staff timebeing wasted in costly research.
2.2 Paper-based official orders
Paper-based orders using the former official order books will only continue to be used until
 
Page 2 of 9 03/04/2008 RulesFinRegApBContract StandingOrders.doc
such time as all services are linked to and trained in the use of the Integra purchasing module.At that stage all of the current order books will be withdrawn and only the methods described inthese Standing Orders will be used.
2.3 Corporate VISA cards
Where necessary and/or appropriate, orders can be placed and paid for using the Council’scorporate VISA cards. There are currently two such cards, one for the use of the ChiefExecutive and Executive Directors, which is held by the Chief Executive’s PA, and one forgeneral use, which is held by the Corporate Procurement Officer. The Rules of FinancialGovernance allow Directors to hold their own Visa or other forms of purchasing cards, subjectto the compliance with the Council’s policies and procedures as set by the CorporateProcurement Officer.This method is ideal for use where payment is required in advance of delivery or to secure abooking for courses, accommodation or transport. It is also useful for telephone or Internet-based orders where this is the supplier’s normal way of doing business or where earlier deliverycan be arranged by doing so.
2.4 Other forms of order
Other forms of order are not permitted other than in the following circumstances.In cases of real urgency, orders can be placed by telephone or by fax but must in all cases beconfirmed through Integra as soon as possible and in any case within five working days.Where it is clearly in the best business interests of the Council to do so and with the specificauthority of the Director of Finance, Property and IT, orders can also be placed over theInternet or by e-mail. Payment can be made at the time of order using the corporate VISAcards. In all other circumstances, the commitment must be registered through Integra as soonas possible and in any case within five working days.
2.5 Internal and Budgetary Control
Note that the provisions in the Rules for Financial Governance for maintaining effective internaland budgetary control (summarised in sections 9 and 10 of these Contract Standing Orders)apply to all orders, however they are placed. The necessary controls are built in to Integra andorders placed this way will automatically comply but individuals placing orders in other ways,,including those placed using credit cards, need to take particular care to observe theseprovisions.
3 Tendering and Quotations
Tenders and quotations are both offers to supply goods, works and services but vary in thecomplexity of the documentation involved. Quotations will typically be appropriate where youare looking to buy standard items available from different sources and prices may be expressedin terms of discount on a standard price list. Tenders will normally be used for more complexcircumstances when you as purchaser or client need to define in detail exactly what goods orservices you want supplied or to specify results to be achieved or works to be done at aparticular site, with bidders entering their prices for work against a schedule of separateelements.The procedures to be followed vary with the estimated value of the goods, works or servicesconcerned. It is important to remember that the relevant value is not just the amount of anyindividual transaction. The value for the purposes of these Standing Orders and for theEuropean Union regulations referred to below is the aggregate value of the all similar goods,works and services to be supplied over at least the forthcoming 12 months or in some caseslonger. Essentially, it is the value of all the similar goods, works and services you can foreseeordering. Where you are not contracting for a set period, it is the value of the supply over thefirst four years of the contract that counts.This value will determine whether you need quotations, tenders and/or OJEU advertising andwill also influence what form of contract you should be using.
 
Page 3 of 9 03/04/2008 RulesFinRegApBContract StandingOrders.doc
3.1 Financial Categories and Competition Requirements
3.1.1 Under £20,000
There are no particular requirements for competitive quotations or tenders for goods, works andservices of these values. However, the general duty to obtain best value for the Council impliesthat competitive offers should be obtained wherever possible. These need not be in writing butyou should always record the basis of your decision in sufficient detail for the logic to beapparent to anyone subsequently reviewing the circumstances.Formal contracts are not required but may be useful, depending on the circumstances. Youshould always ensure that there is a written record of the agreement, although a simpleexchange of letters may often suffice.
3.1.2 Between £20,000 and £100,000
You must obtain at least three written competitive quotations before placing orders or creatingcontracts of this value. Formal contracts will normally be required and may be executed underseal depending on the nature of the work and degree of protection required.
3.1.3 Over £100,000
For all contracts in this range, a minimum of five formal competitive tenders are required, basedon a detailed specification and an invitation to tender setting out the terms and conditionsproposed.Formal contracts under seal are required unless the legal section deem them not to benecessary.
3.1.4 General provisions
Bidders for work of any size may choose to offer alternative solutions and prices to those setout in the bid documents. These can be advantageous and should not be discouraged unlessthe specific provisions of the bid documents are considered essential to the success of theproject concerned. Where there is a likelihood of such offers, it may be sensible to say so inthe invitation to tender and to specify the criteria which will be applied to any offers received.
3.1.5 Alternatives to Formal Quotations or Tenders
Regardless of the value of the supply concerned, in circumstances where the desired outcomeis clear but scope exists for alternative approaches to its delivery, a two-stage process,modelled on the Competitive Dialogue Procedure introduced by the EU’s ConsolidatedProcurement Directive (see Section 5 below) may be appropriate. Directors wishing to usesuch a process should first agree the details in each case with the Director of NeighbourhoodManagement and Democratic Services and Director of Finance, Property and IT.
3.1.6 Negotiations on Offers
Where any of the following circumstances prevail, a Director may, prior to the formal agreementof any contract, carry out negotiations to clarify offers received or otherwise to agree the pricesand other terms of the contract proposed:
Where one or more offers is accompanied by alternative proposals;
Where examination of offers reveals errors, discrepancies or misunderstandings whichwould affect the contract price;
Where the relevant Director considers that the best offer presented does not represent thebest Value For Money that can reasonably be obtained.In all cases, the following provisions shall apply:
All bidders shall receive fair and equitable treatment and shall be given equal opportunity toclarify their offers or to submit alternative proposals;
The relevant Director(s) shall ensure that all negotiations are fully documented and that thisdocumentation and all other evidence of negotiations is collated and filed so as to be readilyavailable for audit or other inspection as required. All such evidence shall be retained inaccordance with the Council’s Document Retention Policy;

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