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MAIDSTONE BOROUGH COUNCIL

STANDARDS COMMITTEE

25 NOVEMBER 2009

REPORT OF THE HEAD OF BUSINESS IMPROVEMENT

Report prepared by David Tibbit 

1.           REVIEW OF CONTRACT STANDING ORDERS/PURCHASING GUIDE

1.1        Issue for Decision

1.1.1   To consider a proposed amendment to the Contract Procedure Rules to tighten the rules relating to inducements to cover the period before the award of a contract; and

1.1.2   To consider a proposed amendment to the purchasing guide to strengthen the advice relating to the financial health vetting of prospective tenderers.

1.2        Recommendation of the Head of Business Improvement

1.2.1   That after Clause 5.6 of the Contract Procedure Rules which states that “Any officer or Member who suspects any misconduct or corruption in relation to the purchase by or on behalf of the Council of works, supplies (goods) and services must immediately report that suspicion to the Council’s Monitoring Officer and Head of Internal Audit and Risk Strategy”

a new Clause 5.7 is inserted which states that

“Any person or company against whom any misconduct or corruption referred to in Clause 5.6 is proved will be immediately disbarred from consideration in relation to the purchase by or on behalf of the Council of works, supplies (goods) and services.” ; and

1.2.2   That after Note 14 in section 5 of the Purchasing Guide a new Example box is included providing guidance, prepared by the Chief Accountant , covering assessment of the financial viability of potential Contractors which states that

“All tenders and quotes in excess of £50,000 require the approval of the Director of Resources and Partnerships, see the financial procedure rules. In all such cases the Director requires a financial assessment of the winning tenderer prior to approval. This is good practice and should be considered for all quotes irrespective of their value and especially when the accepted quote is from an organisation that has not transacted business with the Council in the preceding 12 months or the Council faces financial loss if the works are not completed satisfactorily. The Head of Finance will provide support and advice to any officer wishing to carry out such an evaluation.”

1.3        Reasons for Recommendation

1.3.1   The meeting of the Standards Committee on 14 April 2009, at which Members recommended adoption of the new framework for Contract Standing Orders, also recommended that Officers give further consideration to amended guidance to strengthen the advice on the financial health vetting of prospective contractors and to tightening the provisions relating to inducements or rewards to cover the period before the award of contract.

1.4        Alternative Action and why not Recommended

1.4.1   An alternative way to tighten the rules relating to inducements to cover the period before the award of a contract would be to carry out positive vetting of tenderers to ascertain whether they have previous convictions for misconduct or corruption. However, the current interpretation of new Service Directives being promulgated by the EU would appear to allow exclusions only where adverse activity is likely to have a direct bearing on the service to be provided.

1.4.2   The Contract Procedure Rules and Guide could remain unamended, however this would deny the Council the opportunity of improving the guidance regarding financial vetting of contractors and limit the ability to cancel a contract in the event of misconduct or corruption only after the contract has been entered into.

1.5        Impact on Corporate Objectives

1.5.1   The proposed amendments will help the Council maintain its core values of integrity and high standards of corporate governance.

1.6        Risk Management

1.6.1   The procurement section will ensure that officers are made aware of the changes to the contract procedure rules and the purchasing guide.

1.7        Other Implications

1.7.1