GOODS/SERVICES PROCUREMENT PROCESS

Background

To meet funders rules and regulations, the procurement of goods and services within this Programme are to comply with the EU Treaty-based principles of non-discrimination, equal treatment, transparency, mutual recognition and proportionality. All public procurement is to be based on value for money, defined as “the optimum combination of whole life cost and quality to meet the user’s requirement”.These principles are to apply to all levels of procurement.

With the above in mind this guidance/template document provides a step by step process of how procurement should be undertaken and what details should be included to ensure that an open and competitive procurement of goods and servicesis undertaken. Please remember that all procurement evidence should be made available for inspection by funders and third-party auditors if requested, therefore a robust and transparent audit trail is to be in place and accessible for viewing..

ERDF Guidance Table

Estimated Value / Tender Action Required
Below £250 / No quote required
£250 up to £500 / Single oral quote
£501 up to £2,500 / Minimum of three oral quotes
£2,501 up to £15,000 / Minimum of three written quotes, based on a clear written specification of requirement (£10K – must be advertised on the website_
£15,001 up to £50,000 / Normally minimum of 3 formal competitive tenders invited.
£50,000 - £156,442 / Normally 4 to 6 formal competitive tenders invited.
Over £156,442 / Procurement - OJEU Tender
Please note: €193,000 (approximately £156,442) is the current threshold for OJEU procurement.
The EU thresholds are revised every two years – in December - and the resulting updated thresholds are applied in January.
The current thresholds came into force on 1 January 2010. These will be updated from 01 January 2012.

Please note that where possible/appropriate goods/services should correspond with a full programme timeframe value rather than, for example, an annual period value. This will avoid breaks in service provision requiring re-procurement. Where a shorter-term contract is justifiable, there must be a clear rationale, especially if further procurement may take place subsequently.

The following template can be used for all procurement activity below the OJEU threshold (€193,000 / £156,442)[1].If over €193,0001, an OJEU procurement process will need to be followed.

SECTION1 - PROJECT DETAILS(Applicable to all levels of procurement activity)

Procurement Process for the Purchase of:Name of Goods/Services being procured
Organisation Name:<Organisation Name>
Project Details:<i.e. EBS Programme/Project>
Goods/Services Title:
Project Procurement Reference Number:
Issued by:
Authorised by:
Project Contact Details:
<contact name; address; contact telephone number; contact e-mail address
Goods/Services Description
Where relevant, include a broader description of the item/service in order to inform the requirements of the procurement process.>
Context of Goods/Services
<Rationale which supports why the goods/services are required in order to deliver the programme and how they will add value>
Selection of Procurement Process
Value of Item / Service:
Procurement Process:
Confirm the process to be undertaken in order to comply with the value thresholds provided by funders (See table on opening page).

SECTION 2 – DETAILS OF PROCUREMENT PROCESS

2 (a) £2500
<Record details of providers and quotes received, and record and file details/evidence of process of review and selection>
2(b) £2501 - £15,000
<Record all details of providers and quotes received; retain hard copies of all evidence required for audit trail> including, but not limited to:
  • Source of providers – showing open and competitive sourcing processes
  • Written Quotations
  • Evaluation and Selection criteria/process
  • Decision making process/rationale
NB: Items of £10,000 or over, or items of strategic importance to suppliers, must be advertised in an appropriate manner to ensure an open and competitive process. Website can be used.
2 (c) £15,001 - £50,000
The following template provides a guide to the key documents / information to be captured or kept on file. The content is not exhaustive and should be adapted or added to in order to suit the individual procurement process.
Value of Tender < £ >
No. of Tenders to be invited <...>
Period over which the service provision applies.
<If this is les than the duration of the specific project, a rationale should be provided>
Process of Invitation to Tender (ITT)
Describe, in appropriate detail, the methodologies used toidentify and communicate to potential tender applicants, advertisements, specification process, tender receipt process, audit trail to evidence key stages>
Tender Return Deadline
<Return date of tender submissions
Documentation Required
Detail the number, format, depth etc. of the tender documents, whether these are to be electronic or hard copies or both. Best practice is to receive ‘electronic versions’ on a memory stick, as well as via email>
Terms and Conditions of Contract
<insert details of which terms and conditions of contract for goods/services shall apply
Timeline of Tendering Process
Deadline for Tenders: <date>
Interviews: <If applicable>
Award Contract: <date>
Standstill Period:where applicable>
Inception Meeting:where applicable
Delivery:period when goods/services are to be provided>
Specification of Goods/Services
<Provide a detailed specification of the goods/services to be purchased>
Selection and Award Criteria
<Detail the selection and award criteria. This may include, amongst others: cost, value for money, or the most economically advantageous tender (MEAT), quality of goods/services, experience and capacity to deliver within the required timescales etc. This must demonstrate the relationship with the performance and/or technical specification of the goods/services>
NB: With increasing value, it is considered best practice to have a structured scoring system in order to evaluate the applications.
OGC offer guidance on the requirement to distinguish between “selection” and “award” stages of a public procurement:

Scoring schemes, including weightings and any sub-criteria, must be contained in the contract notice or contract documents, otherwise they cannot be applied in the evaluation.
Selection Criteria and Award Criteria are different and operate at different stages of the evaluation process. They must not be confused.
Selection Criteria is typically the Supplier’s characteristics and suitability, and usually contain: economic and financial standing, technical and professional ability.
Award Criteria is typically related to the services required/offered, i.e. they should be linked to the subject matter of the contract.
The selection and award criteria should be specified within your invitation to tender
Whether or not a tenderer has sufficient experience to undertake the work cannot ever form part of the award criteria. Instead, this must be tested at the prequalification and selection stage.
Evaluation / Justification
The evaluation of the tenders should always be to identify the most economically advantageous tender (MEAT), ensuring value for money and quality.
Evidence
<Evidence is required to demonstrate compliance at each stage of the procurement process. Use of a checklist throughout the procurement process would be considered best practice, containing a short statement by the Project Manager with endorsements by the Project Director. Also refer to the Evidence Base section of this document.>
Authorisation
To authorise that the correct procedure has been undertaken, and that the selection has been through an open and competitive tendering process.
NAME :
POSITION :
SIGNED : <to be signed by Senior Manager>
DATE :

SECTION 3 - OJEU PROCUREMENT

Procurement Process – Over €193,0001 (approximately £156,442) - OJEU
All procurements using public funds must comply with EU Procurement legislation (now UK Law). A full OJEU tender must be carried out for any procurement values in excess of the thresholds (it is illegal to break up contracts to avoid the application of the European Regulations):
Information - OJEU Procurement
Applies to Goods and services from £156,442 (€193,000)1
OGC offers a simple introductory guide to the EU Procurement rules. The guide contains useful explanations of key issues such as:
  • Aggregation
  • Thresholds
  • Processes
  • Post-tender Negotiations

Other useful websites when carrying out an OJEU procurement include, as a starter for ten:




(Annex A)




Evidence Base

The project must retain all documentation which supports each stage of the tendering process. Again, please refer to the BERR website detailed within this Appendix and review the minimum documentation evidence as detailed below.

If the audit trails are not complete and transparent, or it has not been demonstrated that an open and competitive tendering process has been undertaken, then the funding body are within their rights to claw back part or all of the funds which relate to the purchase of goods/services.

Sample Evidence Checklist

In addition to the information detailed earlier on within this document, the following lists provide further guidance on the types of evidence to be retained:

£2,500 (verbal quotes as minimum)

  • A record of who quoted.
  • Dates of the quotes.
  • Value for money considerations.
  • Outcome of selection and reason.

£2,500 and £10,000 (written quotations)

  • A record of who was invited to quote.
  • A copy of the quotes.
  • E-mail or Letter to applicant who are successful.
  • E-mail or Letter to applicants who are unsuccessful.
  • Followed principles of fairness and transparency, and to provide evidence which demonstrates this.
  • Value for Money considerations in selection.

£10,000 to £156,442

  • Route of procurement to decide following the EU principles for procurement.
  • Tender brief.
  • List of tender applicants/quotes.
  • Advertising from £10,000 onwards required; low values – advertisement on website sufficient.
  • Tender proposals.
  • Proof of all tenders arrived within deadline.
  • Details of selection.
  • Scoring matrix’s (signed & dated by scoring panel).
  • Details of any presentations.
  • Proof of standstill period, when applicable.
  • E-mail or Letter to applicant who aresuccessful.
  • E-mail or Letters to applicants who areunsuccessful.

Greater than £156,442

  • OJEU Process

Helpful website links

General

1. Department for Business Enterprise & Regulatory Reform website

2. Office for Government Commerce

OJEU

1. Official Journal of the European Community (OJEC) website

2. Office for Government Commerce

3. Office for Government Commerce

ENWORKS Procurement Guidance and Template v2 (Nov 11) .docx

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[1]This is the threshold as at Sept 2011; however the threshold is subject to change and should be checked at appropriate intervals