8PROCUREMENT OVERVIEW
8.1GENERAL PROCUREMENT PRINCIPLES
800As a public sector institution Edinburgh College must ensure that in its purchasing the following principles are observed:
a)Accountability
b)Propriety
c)Value for Money
d)Equality of Opportunity
e)Sustainability
8.2PROCUREMENT & CONFLICTS OF INTEREST
801Where employees have any potential relationships that may result in a conflict of interest in connection with procurement activities, the nature of the relationship must be disclosed to their line manager. For example, a conflict of interest will arise if an employee or an employee’s family member holds shares in or works for an organisation that is going to provide a competitive quote.
802Employees with potential conflicts of interest must be excluded from the related review and award decision process.
803To ensure individuals with potential conflicts of interest are excluded from major procurement decisions, the Procurement department will require the members of the decision panel for any tenders to submit a conflict of interest disclosure in order to confirm connections to any of the shortlisted suppliers.
8.3PROCUREMENT REQUIREMENTS FOR LEVELS OF EXPENDITURE
804Purchasers should check that current year budget is available before engaging in procurement activity or committing any spend.
805To ensure value for money the following should be carried out:
a)Where a suitable APUC framework is available (e.g. stationery, travel services, legal services, personal protective equipment) the guidance contained in the framework should be followed, either by simple call-off or mini competitions. The purchaser should contact Procurement for guidance if unsure how to access or use any framework. A listing of frameworks available to Edinburgh College is maintained in the APUC Available Frameworks listing (8.6)
b)Where the cost estimate of the goods/services is under £5,000 (excluding VAT), verbal quotations should be obtained to confirm the cost of any order.
c)Where the cost estimate of the goods/services is £5,000 to under £25,000 (excluding VAT), at least 2 written quotations should be obtained.
d)Where the cost estimate of the goods/services is £25,000 to under £50,000 (excluding VAT), at least 3 written quotations should be obtained.
e)Where the cost estimate of the goods/services is £50,000 and over (excluding VAT), formal tender action should be undertaken, and the process confirmed with the Procurement department.
f)Requirements for goods or services above the current EU thresholds (£172,514 for goods and services contracts and £4,322,012 for works contracts, excluding VAT from 1st January 2014) will be subject to full EU tendering procedures, which must only be conducted after consultation with the Procurement department.
804Failure to observe our obligations under the EU guidelines could lead to the cancellation of the contract. In all cases where these thresholds are exceeded, contracts should be handled by Procurement.
805Details of the procurement exercise and the quotes/tender responses received should be recorded on a Bid Summary form (8.1), which should be attached to the resulting order on Pecos, along with copies of the quotes/tender responses. The reasoning behind the decision taken should be clearly documented.
8.4AUTHORISATION LIMITS
806Authorisation limits have been delegated to departmental budget holders in line with the following guidelines:
a)Executive Team - approve and authorise expenditure within designated cost centres up to £75,000.
b)Leadership Team - approve and authorise expenditure within their designated cost centres up to £25,000.
c)Cost Centre Mangers - approve and authorise expenditure within their designated cost centres up to and including £5,000.
807Expenditure greater than £75k requires further authorisation by the Director of Finance.
808Authorisation of orders on PECOS is given at each required level, so several authorisations will be given to larger value purchases, with each subsequent authoriser being able to view the previous authorisations given.
8.5REQUISITIONING, RECEIPTING AND PAYMENT OF INVOICES
809For non-recurring purchases up to £1,000(including VAT) Government Procurement Cards,or where suppliers do not accept credit card payments the Special Payment Request process, may be used where applicable.
810For all other spend it is vital that the purchasing department ensures the supplier is set up on the Finance systems before incurring any expense with the supplier. There is no process to shortcut this procedure, and purchasers should ensure that any request to set up a new supplier on the systems is passed to Procurement in plenty of time.
811For all other purchases, purchase orders should be raised and authorised on PECOS to ensure that:
a)Correct authorisation is obtained prior to committing the college to any spend
b)Committed spend is reported correctly for departments - if purchase orders are not raised, commitments will be understated and budget holders will not be able to adequately control their budgets
c)A purchase order number is quoted by our suppliers on all invoices, to allow the subsequent invoice to be matched to the order and paid timeously
812Individuals can only be set up as a requisitioner or an approver, but not both, so it is never possible for one individual to raise an order and also approve it.
813Suppliers have been instructed not to accept orders from Edinburgh College without an official Purchase Order number, and if invoices are received without the purchase order number included then the invoice may be returned to the supplier for update prior to any payment being made. This will result in late payment to suppliers and may result in the possible interruption of services resulting from late payment of invoices.
814When raising a purchase order on PECOS:
a)Standard multiline orders should be raised for orders where there are fixed contracted payment terms for a series of payments. For example, if a window cleaner is contracted to be paid £1,000 per month for the year for his services, an order should be raised with 12 lines for each monthly payment of £1,000 totally £12,000 – and each invoice will be matched against the order as the year progresses.
b)Where a purchase order for goods or services may result in multiple receipts and invoices, but does not have a fixed series of payments, it should be ensured that multiple quantities are used on the order to allow the order to be split.
c)Once goods or services have been received, the purchaser should update the purchase order to be receipted, in full or in part, which indicates that the resulting invoice can be paid.
d)Blanket orders should not be used as a matter of course – this may result in potential poor control over the payment of invoices, and in the potential overstatement of commitments in the monthly management accounts. Where a blanket order could enable more efficient processing, this should be reviewed with the Financial & Risk Accountant, Finance Manager or Head of Finance, who will advise when blanket orders can be used. If the use of blanket orders is agreed this will be recorded on the Blanket Order listing (8.2) maintained by Finance. Blanket orders can be raised for the forecast budgeted spend for the year, and receipted as invoices are received during the year. When raising a blanket order, it should be ensured that multiple quantities are used on the order to allow the order to be split for receipting and invoice matching.
815Receipting of orders:
a)As soon as goods or services have been received, the purchasing department must receipt the order as appropriate
b)Orders should be receipted either in full for a simple order, or in part for blanket orders or orders with multiple lines
816Payment of Invoices:
a)Where an invoice matches the original order or part of the original order, and the order has been receipted, no further authorisation is required and Finance will arrange payment.
b)Where a resulting invoice exceeds the original purchase order by more than 10%, the invoice will require further authorisation and will be processed through the authorisation workflow on Agresso, which is based on the same levels of approval within PECOS. There is no requirement to raise a further purchase order for the additional invoice value.
c)Where an invoice is received for which the purchaser should have raised a purchase order and has failed to do so, the purchaser will be asked to raise an order retrospectively. Retrospective purchase orders should not be raised as a matter of course, and purchasers who repeatedly fail to raise purchase orders in line with College procedures may be subject to disciplinary action.
817Where a purchaser has failed to raise a purchase order in line with finance procedures and payment is required urgently, by the agreement of the Finance Manager or Head of Finance, an invoice may be processed for payment without a purchase order being raised retrospectively. The invoice should be:
a)Coded by the purchasing department with the relevant expense code and department cost centre
b)Signed (sign, date and print name & department) by an individual within the relevant department to confirm that the goods or services have been received and the invoice can be paid
c)Authorised for payment (sign, date and print name) by the Department Head or member of the Executive Team
d)Passed to Finance for processing to Agresso, where electronic authorisation will be sought from an individual with the relevant delegated authority