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PROCUREMENT POLICY STATEMENT

We are a customer-focused organisation committed to the people we serve. Our aim is to provide better quality services that offer value for money for the people of the Borough. All our goods, services and works will be procured in an open and transparent manner. Our procurement practices and procedures recognise the principles of Best Value, thereby ensuring the delivery of cost effective and efficient services. Through working in partnership with our suppliers, we will seek to secure continuous improvement in the way our services are provided for the benefit of those within our community. This policy should be read in conjunction with the Councils Standing Orders, Financial Regulations, Guide to the Procurement Process (Appendix 1) and Procurement Options (Appendix 2). Barrow Borough Council will compete by adopting an approach to procurement that: Gives priority at all times to the quality and cost-effectiveness of services Takes account of the availability of alternative methods of service delivery and the capacity of the market Supports in-house teams to compete successfully where they can demonstrate that they are potentially the best value providers Helps others to deliver services where they are best placed to provide the required balance of quality and cost Exploits the opportunities for partnership working with local organisations and businesses Reflects the views of local people as to the standards and level of services they require

The Council will evaluate and appraise procurement options identified by adopting an approach which recognises that: The needs of services users must at all times be given priority The Councils Procurement Policy Statement has been observed There are limited resources available The Councils strategic objectives and values are important evaluation criteria Specifically, in evaluating options the following should be taken into consideration: Service Issues The following issues need to be considered: Quality of the service and evidence of the required quality criteria Any service user/stakeholders needs and expectations Needs of the Local Economy Requirements for Environmental Sustainability Any legal requirements Cost of the service and cost comparisons Ease of obtaining alternative suppliers How accurately could we specify the service required Performance measures how well is the current supplier doing Comparisons of current service using benchmarking data The performance of others Availability of reputable alternative suppliers with good past performance and financial standing

Ability to invest capital/economies of scale and scope Evidence of innovative approaches Ability to link with the Councils Information Technology Systems

Central Procurement Procurement of the most frequently purchased goods and services such as consumables, office stationery etc. shall be centrally co-ordinated and implemented through Cumbria Supplies so as to maximise bulk buying power, fully utilise the Councils negotiating expertise and ensure that value for money is obtained. Performance Measures All significant contracts, i.e. those in excess of 50,000 in value, of goods, services and works must include performance-based measures, which will seek to improve, innovate, enhance best practice and seek continuous improvement with a Best Value environment. This will show the Council and the public the improvements that can be expected as part of our drive towards demonstrating continuous improvement under Best Value. Training and Development Procurement functions need to be discharged by capable and appropriately trained people. We will ensure that staff are kept up to date in relation to internal procedures and regulations as well as statutory legislation and guidance, all of which will have an impact on the work that they perform. Also, they will be kept fully aware of the latest developments in procurement best practice. Safe Working Environment All prospective employers must have a health and safety policy that will ensure healthy and safe working conditions. Employees must have skills accreditation where appropriate. Equal Opportunities The Council supports fairness at work and expect our suppliers, whether internal or external, to give consideration towards good employment practices, for example, training and development, equal opportunities policy etc. Furthermore, we believe that staff training and development are essential factors towards securing continuous improvement in the services we deliver. Environmental Sustainability The Council is committed towards securing a safe and attractive environment for current and future generations. The procurement option must reflect the key elements in the Councils Local Agenda 21 Strategy including the Purchase of goods and services which are sustainable, the reduction of wasteful consumption of materials and the prevention of pollution. Economic Development Competition is one of the main themes of the Best Value regime. We will seek to stimulate competition, where appropriate, the procurement of the goods, works and services that we require from all relevant sectors of the market. Whenever appropriate, local suppliers will be given every opportunity to obtain Council business. In return, suppliers will be required to act in a competitive manner and in accordance with any statutory or regulatory requirements of the Council, Central Government and the European Union. Conduct of Staff involved in Procurement The Council expects the highest standard of honesty, integrity, impartiality and objectivity from all staff involved in the procurement process, both in their work and personal conduct that may be relevant to their work duties.

Consultation The concerns of those staff affected by any change, arising from the use of competition, should be fully taken into account and properly addressed through regular, clear and open dialogue with staff and trade union representatives. Obtaining the views of other stakeholders such as service users, the general public and the local business community is also an important part of the consultation process. Full and effective consultation and communication between all parties involved is the key to successful improvement and change. Under Best value the Council has a commitment to on-going consultation with stakeholders as part of the Best value review process. Achieving Strategic Objectives The Council will seek to identify those services critical to the achievement of its aims and objectives; maintain accountability for public funds and retain sufficient capacity to identify need and know what is required. Advice and Information Legal advice and guidance are available by contacting the Legal Services Department.

APPENDIX 1

THE PROCUREMENT PROCESS AS IT APPLIES IN BEST VALUE REVIEWS


The process starts when the Best Value Review begins to identify the service configurations which are needed to meet current and future needs and demands. At this stage it is necessary to identify which of the procurement options set out below are currently available to the Council. The choice among the options will depend on an objective analysis of what has emerged from the review. Review teams should explore the full range of practical alternatives and select the option (s) most likely to deliver best value to the public. 1. Best Value and Procurement Options The main options for future service delivery: The cessation of the service in whole or part The creation of a public/private partnership through a strategic contract or a joint venture company for example The transfer or externalisation of a service to another provider (with no in-house bid) The market testing of all or part of the service (where the in-house provider bids in open competition against the private or voluntary sector) The restructuring or re-positioning of the in-house service The re-negotiation of existing arrangements with current providers where this is permissible The joint commissioning or delivery of the service

A definition and analysis of the various procurement options, identifying their strengths and weaknesses is attached. (Appendix 2) The attached flow chart sets out the various stages in the procurement process. (Appendix 3)

2. Assessing the Market


Nature of the Supply Market The first stage of the process is assessing the market to see what is currently available. The Council must develop an understanding of the supply market if it is to explore the full range of procurement options available to it. The nature of demand for the service is an integral part of the early stages of the review. In thinking about procurement we are looking at the nature of the supply side of the market. The Governments guidance suggests that in researching supply markets authorities should explore: The service developments that are anticipated in response to best practice, legislation or user views The current market for the provision of the service(s) New combinations of service which the marketplace suggests could deliver best value The alternative ways to procure the service(s) This will require engagement with those active in the supply markets, perhaps through: Holding discussions with selected private and voluntary sector providers Sending a questionnaire to suppliers to ask how they could add value Discussing existing experience with other authorities who have contracted the service from an external provider Holding a contractors briefing day to explain the objectives of the authority and to elicit their views

Where no market exists The Council will explore ways of developing a market. The Council should consider: Basing requirements on outcomes to allow for and encourage innovative methods of provision Grouping activities to reflect prospective market competencies. This too can help generate interest from innovative providers Packaging work appropriate to the market. In some areas of activity larger packages may generate more interest than smaller ones; in others the Council may wish to encourage small and mediumsized companies to bid Being clear about intentions. The Council needs to make clear where they want long-term relationships with potential suppliers and demonstrate a genuine interest in using the best suppliers, regardless of the sector from which they come Developing an understanding of the potential sources of supply. Early discussions with prospective suppliers can help in shaping the optimum size, composition and length of contracts, whilst ensuring the fairness, openness and transparency required by EC procurement rules. Being clear in advance whether there will be an in-house bid for the work. 3.

Assessing the Options

The next stage in the process, having identified those procurement options that are currently open to the Council is to assess each objectively to test their ability to deliver Best Value. This appraisal should be carried out in accordance with the policy. This will enable each option to be considered against a range of criteria to determine its suitability. This may result in the selection of a preferred option or possibly options which would then be reported to members in the final review report. This in turn will result in the development of an Action Plan to secure the delivery of the preferred option. In-house Service Provision Retaining work in-house will only be justified when an authority can show it is competitive with the best alternative taking into account all corporate and Local Economy interests. Where in-house teams can demonstrate that they have the potential to become the best value providers, the Council will support them to compete successfully. Services should not be delivered directly if other more efficient and effective means are available. Review Teams must therefore test the competitiveness of in-house services in the following ways: Through comparison with others in the private/public/voluntary sectors By commissioning independent benchmarking reports By using detailed knowledge of the market to illustrate effectiveness/efficiency of current provision

APPENDIX 2

PROCUREMENT OPTIONS
1. The creation of a public/private partnership, through a strategic contract or a joint venture company This type of arrangement is fairly common in private business and can by agreement define what each partner will contribute. Typically the partners work together for long term advantage, with prices being settled by negotiation. Advantages if partnering arrangements: Reduces the opportunity for conflict or a claims culture Positive working together to achieve a common goal Likely to lead to more effective collaboration Disadvantages of partnering arrangements Danger of developing too close an arrangement Longer term possibilities of exploitation of the relationship Costs of preparing complex partnership agreements (alternative is to have a loose arrangement which then runs risk of the potential for conflicting interpretations) 2. The transfer or externalisation of a service to another provider with no in-house bid This approach has now been followed by a number of authorities in a variety of service areas. Potential advantages: Can facilitate the exploitation of economies of scale May allow much needed capital investment (sometimes it is the only way of introducing capital) May introduce individuals with specialist skills Potential disadvantages: Need to retain expertise within the authority to understand and define what the authority needs (otherwise you are in the hands of suppliers) No test on price as the internal supplier usually provides the price benchmark against which others are measured 3. The market testing of all or part of the service (where the in-house provider bids on open competition against the private or voluntary sector) This is an approach now widely used by local authorities. Potential advantages: The market can deliver in a wide range of service areas Source of possible innovation/change Choice of suppliers Clear test of price especially where services can be clearly specified Potential disadvantages: Time consuming and expensive Inflexibility being limited by the terms of the contract Development of a claims culture Limited by the scope of the specification Need for very detailed monitoring of performance

APPENDIX 3 4. The restructuring or re-positioning of the in-house service This will only emerge once the authority has explored the full range of practical alternatives. Potential advantages: Avoids costs and time associated with any tendering exercise Provides an opportunity to show in-house service in competitive with the best alternative Sets challenging targets for improvement Potential disadvantages: No impetus for radical change Not offering the authority a choice 5. The re-negotiation of existing arrangements with current suppliers where this is permissible A number of authorities already have contractual arrangements in place with existing suppliers. Potential advantages: Securing a better services for users with familiar supplier Introduce greater flexibility by negotiation Potential disadvantages: Risk of excessively close relationships/impropriety Contractual arrangements can be very inflexible Potential for increase in costs of the service is significant 6. The joint commissioning or delivery of the service (by local authorities and other public bodies) This is an area authorities are beginning to explore. Potential advantages: Exploit economies of scale for regional/specialist services Provide greater opportunity for innovative solutions Shared goals Potential disadvantages: Loss of control by individual authorities Creation of a new organisation Potential for conflict between authorities with different objectives

APPENDIX 3

THE PROCUREMENT PROCESS STAGE 1


Service Specification Identify the service we want delivered. (See Best Value & Procurement Options)

STAGE 2
Assessing the Market What options are there for delivering our service priorities. These could be broad or very specific

STAGE 3
Assessing the Options Assess against the Councils procurement strategy And identify those options which will deliver

STAGE 4
Option Selection Choosing the preferred option

STAGE 5
Action Plan May then require a further exercise to identify specific supplier