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APPENDIX 1

 

CONTRACT STANDING ORDERS

 

 

1              Introduction – Purpose of the Contract Standing Orders

 

1.1          Purchasing decisions and processes are important because the money involved is public money. The purpose of these Contract Standing Orders is to provide a structure within which purchasing decisions are made and implemented and which ensure that the Council:

 

1.1.1                      Furthers its corporate objectives

 

1.1.2                      Uses its resources efficiently

 

1.1.3                      Purchases appropriate quality goods, services and works 

 

1.1.4                      Safeguards its reputation from any implication of dishonesty or corruption.

 

1.2          Purchasing by the Council, from planning to delivery, shall incorporate (where appropriate) principles of sustainability, efficiency, whole life costings and cost savings.

 

1.3          These Contract Standing Orders are made in accordance with the requirements of Section 135 of the Local Government Act 1972.

 

1.4          These Contract Standing Orders do not provide guidelines on what is the best way to purchase works, supplies (goods) and services.  They set out minimum requirements to be followed.  Further information and guidelines are set out in the Council’s Purchasing Guide.

 

2              General Principles – Application and Compliance with Contract Standing Orders

 

2.1          These Contract Standing Orders apply to the purchase by or on behalf of the Council of works, supplies (goods) and services.

 

2.2          These Contract Standing Orders apply to all contracts including all purchase orders, concessions and contractual arrangements entered into by or on behalf of the Council, except for the specific types of contracts and purchasing methods which are listed in 2.3. 

 

2.3          These Contract Standing Orders do not apply to:

 

2.3.1                      Employment contracts

 

2.3.2                      Contracts relating solely to the purchase or sale of interests in land

 

2.3.3                      Contracts for retention of legal counsel and the appointment of expert witnesses in legal proceedings

 

2.3.4.                   Service level agreements setting out the conditions which the Council applies to its funding of particular voluntary sector bodies.

 

 

3              General Principles Applying to All Contracts

 

3.1          All purchases however small shall be in writing.

 

3.2          Standard contract clauses shall be used in all contracts.  The standard contract clauses are attached as an annex to these orders.

 

3.3          As a minimum, all contracts shall include clauses which set out:

 

3.3.1                      The works, supplies (goods), services, material, matters or things to be carried out or supplied

 

3.3.2                      The time within which the contract is to be performed

 

3.3.3                      Quality requirements and/or standards which must be met

 

3.3.4                      Requirements on the contractor to hold and maintain appropriate insurance

 

3.3.5                      What happens in the event that the contractor fails to comply with its contractual obligations (in whole or in part)

 

3.3.6                      Requirements on the contractor to comply with all relevant equalities and health and safety legislation

 

3.3.7                      That the Council shall be entitled to cancel the contract and recover losses in the event that the contractor does anything improper to influence the Council to give the contractor any contract or commits an offence under the Prevention of Corruption Acts 1889 to 1916 or s117(2) Local Government Act 1972.

 

3.4          Written contracts shall not include non commercial terms unless these are necessary to achieve best value for the Council.  In this context, “non commercial” means requirements unrelated to the actual performance of the contract.

 

3.5          All contracts shall include relevant specifications and/or briefs/technical requirements which are prepared taking into account the need for effectiveness of delivery, quality, sustainability and efficiency (as appropriate) and the information set out in the Council’s Purchasing Guide.

 

3.6          All contracts of a value of £5,000 or more or which involve a substantial risk to the Council must be subject to a written risk assessment, which should be kept on the contract file.

 

4              Regulatory Context

 

4.1          All purchasing shall be conducted in accordance with Regulatory Provisions which are:

 

4.1.1                      All relevant statutory provisions

 

4.1.2                      The relevant EU Rules and EC Treaty Principles which are defined in the Council’s Purchasing Guide

 

4.1.3                      The Council’s Constitution including these Contract Standing Orders,  the Council’s Financial Procedure Rules and Scheme of Delegation

 

4.1.4                      The Council’s Purchasing Guide and other policies and procedures of the Council as appropriate.

 

4.2          In the event of conflict between the above, the EU Rules will take precedence, followed by UK legislation, then the Council's Constitution, the Council’s Purchasing Guide and guidelines, policies and procedures.

 

5              Responsibilities of Directors and Responsible Officers

 

5.1          Each Director shall:

 

5.1.1                      be responsible for the purchasing undertaken by his/her Directorate.

 

5.1.2                      be accountable to the Executive for the performance of his/her duties in relation to purchasing

 

5.1.3                      comply with the Council's decision making processes including, where appropriate, implementing and operating a Scheme of Delegation

 

5.1.4                      appoint a Responsible Officer in writing who shall be an authorised signatory

 

5.1.5                      take immediate action in the event of breach of these Contract Standing Orders

 

5.2          A Responsible Officer is an officer with responsibility for conducting purchasing processes for the purchase of works, supplies (goods) or services on behalf of the Council

 

5.3          A Responsible Officer’s duties in respect of purchasing are to ensure:

 

5.3.1                      compliance with all Regulatory Provisions and integrity of the tender process

 

5.3.2                      compliance with the relevant statutory provisions and the Council’s requirements relating to declarations of interest affecting any purchasing process

 

5.3.3                      that there is an appropriate analysis of the requirement, timescales, procedure and documentation to be used

 

5.3.4                      the purchasing process, from planning to delivery incorporates (where appropriate) principles of sustainability, efficiency, whole life costings and cost savings

 

5.3.5                      compliance with the Council's decision making processes

 

5.3.6                      ensuring that all contracts of a value of £15,000 or more are included on the Council’s Contract Register

 

5.3.7                      making sure that proper records of all contract award procedures, waivers/exemptions and extensions are maintained, with separate files for each purchase of a value of £15,000 or more

 

5.3.8                      that value for money is achieved

 

5.3.9                      that adequate and appropriate security (such as a bond or guarantee) is taken to protect the Council in the event of non-performance

 

5.4          In considering how best to procure works, supplies and services Directors and/or Responsible Officers (as appropriate in the context) shall take into account wider contractual delivery opportunities and purchasing methods including the use of Purchasing Schemes and e-procurement/purchasing methods, and the availability of local authority charging and trading powers under the Local Government Act 2003.

 

5.5          It is a disciplinary offence to fail to comply with these Contract Standing Orders and the Council’s Purchasing Guide.  All employees have a duty to report breaches of Contract Standing Orders to the Head of Internal Audit and Risk Strategy.

 

5.6          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.

 

6              Scheme of Delegation

 

6.1          Council purchasing may only be undertaken by officers with the appropriate delegated authority to carry out such tasks as set out in the Council's Scheme(s) of Delegation.  Officers with delegated authority may only delegate to other officers who have the appropriate skills and knowledge for the task and such delegation shall be recorded in writing by the officer delegating the task and notified to the relevant Head of Service. 

 

6.2          Officers shall, where appropriate, be informed by their Head of Service of the extent of any delegated authority and applicable financial thresholds.

 

7              Financial Thresholds and Procedures

 

7.1          The table below sets out the general rules applying to the choice of purchasing procedure for contracts at the stated threshold values. 

 

7.2          There is a general presumption in favour of competition.  Wherever possible contract opportunities should be advertised by way of a public notice.  The Council must consider the potential effect of a contract on interstate trade (at a European level).  If a contract may be of interest to contractors from other member states then this may result in a need to advertise in a manner which ensures that potential contractors from other member states are aware of the opportunity, even for small value contracts or contracts under the EU Threshold levels outlined below in Table 7.4.

 

7.3          The public notice referred to at 7.2 may take the form of a notice or advertisement in an electronic or paper format, on an easily accessible website or other electronic media and/or in the press, trade journals or Official Journal of the European Union (“OJ”) (as appropriate). The Responsible Officer may choose to place one or more public notices in different media.

 

7.4          Table setting out financial thresholds and procedures

 

Total value          £	Type of contract	Procedure to be used
0 to 10, 000	works, supplies and services	At least one quote in advance
10,001 to 74,999	works, supplies and services	At least three written quotes in advance
75,000 to 139,892**	works, supplies and services	At least three written tenders in advance,  following advertisement by public notice
139,893** plus   **EU Threshold for supplies and services	Supplies and services	EU Rules apply – full competitive process following advertisement in the OJ for supplies and Part A* services. For Part B* services reduced requirements apply under the EU Rules but there is a presumption in favour of advertising and a competitive process
139,893 to 3,497,313**	Works	Full competitive process with tenders following advertisement by public notice
3,497,313**   **EU Threshold for works	Works	EU Rules apply – full competitive process with tenders following OJ advertisement

 

* For the purposes of the EU Rules services are divided into two types and the EU Rules apply to a different degree. Responsible Officers should act cautiously and seek advice when considering the procedure to be used and application of the EU Rules to services contracts

** or relevant threshold in force at the time under the EU Rules

 

7.5          Where contracts are of a type and value which means that they are subject to the EU Rules then there are four main types of EU procedures available. These are the open, restricted, competitive dialogue and competitive negotiated procedures. Care must be taken to ensure that the correct and most appropriate procedure is used and assistance on the choice and use of EU procedure should be sought.

 

8              Financial Thresholds and Processes Applying to Approval and Execution of Contracts

 

8.1          For contracts over the relevant EU Threshold (in force at the time), the choice of purchasing procedure to be used and the decision to proceed to advertisement must be authorised in writing by the Head of Business Improvement (or an Officer authorised in writing by him) in advance.

 

8.2          When a decision is made to award a contract then the Responsible Officer must, in addition to complying with his/her general obligations under these Contract Standing Orders ensure, in particular, that:

 

8.2.1                      the appropriate approvals have been obtained to authorise that decision; and

 

8.2.2                      where appropriate, a standstill period complying with the EU Rules is incorporated into the final award process.

 

8.3          Any contracts valued at £75,000 or above shall be executed as a deed.  All other contracts may be signed by officers with appropriate delegated authority. £10,000 shall be the threshold for the purposes of Regulation 8 of the Local Authority (Executive Arrangements) (Modification of Enactments and Further Provisions) (England) Order 2001.

 

8.4          Electronic signatures may be used in accordance with the Electronic Signature Regulations 2002 provided the sufficiency of security arrangements has been approved by the Head of Internal Audit and Risk Strategy.

 

9              Calculating the Contract Value

 

9.1          The starting point for calculating the contract value for the purposes of these Contract Standing Orders is that the contract value shall be the genuine pre-estimate of the value of the entire contract excluding Value Added Tax. This includes all payments to be made, or potentially to be made, under the entirety of the contract and for the whole of the predicted contract period (including proposed extensions and options).

 

9.2          There shall be no artificial splitting of a contract to avoid the application of the provisions of the EU Rules and/or these Contract Standing Orders.

 

9.3          The EU Rules can cover contracts which are below the stated EU threshold where they constitute repeat purchases and/or purchases of a similar type in a specified period. Responsible Officers should therefore seek advice on the application of the EU Rules where they envisage that they may require repeat purchases and/or purchases of a similar type.

 

10           Principles Underlying Tendering Processes and Tender Evaluation

 

10.1       All tendering procedures (including obtaining quotes), from planning to contract award and signature,  shall be undertaken in a manner so as to ensure:

 

10.1.1                   Sufficient time is given to plan and run the process

 

10.1.2                   Equal opportunity and equal treatment

 

10.1.3                   Openness and transparency

 

10.1.4                   Probity

 

10.1.5                   Outcomes which deliver sustainability, efficiency and cost savings (where appropriate).

 

11           Submission and Opening of tenders

 

11.1       An Invitation to Tender shall be issued by the Council for all contracts over £75,000 and tenders shall be submitted in accordance with the requirements of the Invitation to Tender.

 

11.2       Any tenders received (other than those received electronically, to which 11.3 shall apply) shall be:

 

11.2.1                   addressed to the Director of Prosperity and Regeneration or other nominated Director not involved in the Tender process

 

11.2.2                   in a sealed envelope marked “Tender” followed by the subject matter to which it relates

 

11.2.3                   kept in a safe place by the Director of Prosperity and Regeneration or other nominated Director  

 

11.2.4                   retained unopened until the date and time specified for its opening.

 

11.3       Where the Council has indicated in the Invitation to Tender that a tender can or must be submitted electronically, then those tenders shall be:

 

11.3.1                   addressed to the e-mail address as notified in the Invitation to Tender

 

11.3.2                   in the format specified in the Invitation to Tender

 

11.3.3                   stored in a secure mailbox, which requires a code or other appropriate security measure, to open it

 

11.3.4                   retained unopened until the date and time specified for its opening.

 

11.4       No tender received after the time and date specified for its opening shall be accepted or considered by the Council unless Director of Prosperity and Regeneration or other nominated Director is satisfied that there is sufficient evidence of the tender having been dispatched in time for it to have arrived before the closing date and time, or other exceptional circumstances apply and the other tenders have not been opened.

 

11.5       Tenders shall be opened by the Director of Prosperity and Regeneration or other nominated Director or a member of their staff designated by them and an immediate record shall be made of tenders received including names and addresses and the date and time of opening.

 

12           Evaluation of Quotes and Tenders

 

12.1       All quotes and tenders shall be evaluated in accordance with evaluation criteria notified in advance to those submitting quotes/tenderers.

 

12.2       Tenders subject to the EU Rules shall be evaluated in accordance with the EU Rules.

 

12.3       Save in exceptional circumstances approved in advance by Head of Business Improvement all contracts shall be awarded on the basis of the quote or tender which represents best value for money to the Council and not on the basis of lowest price.

 

13           Waivers

 

13.1          The requirement for the Council to conduct a competitive purchasing process for contracts in excess of £10,000 may be waived in the following circumstances.

 

13.1.1                For contracts which are not subject to the EU Rules, the work, supply or service is required as a matter of urgency and a delay would be likely to lead to financial loss, personal injury or damage to property; or

 

13.1.2                the circumstances set out in Regulation 14 apply (whether or not the contract is of a type which is subject to the application of the EU Rules); or

 

13.1.3                the contract is awarded under a  Purchasing Scheme of a type where a competition has already been undertaken on behalf of the Council; or

 

13.1.4            at the discretion of the Head of Business Improvement who may proceed in a manner most expedient to the efficient management of the service/Council with reasons recorded in writing.

 

13.2          A Responsible Officer who seeks a waiver of Contract Standing Orders other than SO 13.1.3 shall do so only in advance and only in exceptional circumstances. Further guidance on what may constitute exceptional circumstances permitting waiver of these Contract Standing Orders is set out in the Council’s Purchasing Guide.

 

13.3       All waivers from these Contract Standing Orders must be:

 

13.3.1                   Fully documented

 

13.3.2                   Subject to a written report in an approved format to be submitted in advance to the appropriate Director which shall include reasons for the waiver which demonstrate that the waiver is genuinely required

 

13.3.3                   Subject to approval in advance by the appropriate Director who shall consult the relevant Cabinet Member and record that they have considered the reasons for the waiver and that they are satisfied that the circumstances justifying the waiver are genuinely exceptional.

 

13.4       All decisions on waivers must take into account:

 

13.4.1                   Probity

 

13.4.2                   Best value/value for money principles.

 

13.5       For contracts subject to the EU Rules, any waiver from the requirement for competition must meet the conditions set out in the EU Rules in addition to the general requirements above.

 

13.6       A waiver shall not be applied for reasons of poor contract planning.

 

14           Extensions to Existing Contracts

 

14.1       Where extensions to existing contracts are made the extensions must be determined in accordance with the contract terms, for a specified period and made in accordance with the principles set out in the Council’s Purchasing Guide.

 

14.2       Any extension must be:

 

14.2.1                   Fully documented

 

14.2.2                   Subject to a written report in an approved format to be submitted to a Director which shall include reasons for the extension which demonstrate that the need for the extension is genuinely exceptional

 

14.2.3                   Subject to approval by the Director who shall record that they have considered the reasons for the extension and that they are satisfied that the circumstances justifying the extension are genuinely exceptional.

 

14.3       Any extension must take into account:

 

14.3.1                   Probity

 

14.3.2                   Best value/value for money principles.

 

14.4       For contracts subject to EU Rules, any extension must meet the conditions set out in the EU Rules in addition to the more general requirements set out above.

 

15           Purchasing Schemes

 

15.1       A Responsible Officer may use Purchasing Schemes subject to the following conditions and the Council’s Purchasing Guide.

 

15.2       Responsible Officers must check in advance that

 

15.2.1                   The Council is legally entitled to use the Purchasing Scheme

 

15.2.2                   The purchases to be made do properly fall within the coverage of the Purchasing Scheme

 

15.2.3                   The establishment and operation of each Purchasing Scheme is in compliance with the EU Rules (where they apply) and meets the Council's own requirements.

 

15.3       A “Purchasing Scheme” may include:

 

15.3.1                   Contractor prequalification lists/select lists

 

15.3.2                   Framework arrangements (including those set up by the Office of Government Commerce)

 

15.3.3                   Purchasing arrangements set up by central purchasing bodies and commercial organisations

 

15.3.4                   Consortium purchasing

 

15.3.5                   Collaborative working arrangements

 

15.3.6                   Formal agency arrangements

 

15.3.7                   E-procurement/purchasing schemes and methods

 

15.3.8                   Other similar arrangements

 

15.4       Where a Purchasing Scheme is used then there shall be a whole or partial exemption from the obligations under these Contract Standing Orders in respect of the choice and conduct of procedures to the extent permitted and indicated in the Council’s Purchasing Guide.

 

16           Review and Changes to these Contract Standing Orders

 

16.1       These Contract Standing Orders shall be reviewed and updated on a regular basis.  Save in the case of revisions to the EU Thresholds in Contract Standing Order 7, amended Contract Standing Orders shall be agreed and adopted by the Council.  Revisions to the EU Thresholds shall be dealt with in accordance with by the Head of Business Improvement.