P2P
PURCHASING PROCEDURE
April 2012
Contents
Page
1 Introduction 3
2 Purchasing Requirements 3-7
3 Number of Quotes or Tenders Required 7
3.1 Use of Contract Suppliers – Goods and Services 7
3.2 Use of Contract Suppliers – Works 8
3.3 Use of Non-contract Suppliers – Goods and Services 8
3.4 Use of Non-contract Suppliers – Works 9
3.5 Single Quotes or Tender 9-10
Purchasing Process Chart – Goods and Services 11
Purchasing Process Chart – Works 12
4 Quotations 13
4.1 Quotation Procedure 13
4.2 Specifications 13
4.3 Quote Information Requirement 13
4.4 Value for Money and the Assessment Quotations 14
5 Tenders
5.1 Tender Procedure 14-15
5.2 Specifications 15-16
5.3 Terms and Conditions 16-17
5.4 Programmes 17
5.5 Taking Over 17-18
5.6 Pre-Qualification of Suppliers 18-19
5.7 Health and Safety 19-20
5.8 Insurance 20
5.9 Tender Costs 20
5.10 Liquidated Damages 21
5.11 Bonds and Guarantees 21
5.12 Contract Price Adjustment 21
5.13 Retentions 21-22
5.14 Amendment to Tender Documents 22
5.15 Tender Opening 22-23
5.16 Value for Money and the Assessment of the Tenders 23
6 Separation of Duties 24
7 Order Placement 24-26
8 Authorisations 26-27
9 Order Amendments 27
10 Confirmations (Goods Receipts) 27
11 Purchase Invoices 28
12 Goods Returns 28-29
13 Settlement Disputes 29
14 Document Retention and Audit Records 29
NEWCASTLE UNIVERSITY
PURCHASING PROCEDURE
1. Introduction
This Procedure sets out the mandatory process to be followed when purchasing all Works, Goods and Services however funded.
The aim of this Procedure is to ensure that the University purchases works, goods and services in a manner that is compliant with Financial Regulations; provides value for money for the University as required in the University’s Value for Money Policy; and meets all of the legal and funding requirements placed on the University.
Quotations for Purchase Orders with an estimated value below £50,000 should be obtained in accordance with the Quotation Procedure described in Section 4. Tenders for Purchase Orders in excess of £50,000 should be obtained following the Formal Tender Procedure described in Section 5.
Failure to comply with this Procedure may result in disciplinary action being taken against the person concerned.
ESS Policies and ProceduresNote 1
ESS Procurement Procedures have been incorporated into this document. Any variances from this document will be highlighted in the ESS Policies and Procedures box at the end of each section.
2. Purchasing Requirements
Limits of Devolved Authority
i. Tenders for Goods and Services likely to be in excess of £50,000 (exc. VAT), and Works in excess of £250,000 (which may be conducted by authorised ESS staff), must be conducted with the involvement of Procurement Services staff.
ESS Policies and ProceduresNote 2
The ESS Project Manager will decide on the appropriate procurement route and if the Due North e-tendering system is to be used.
ii. Where the contract value is in excess of the EU purchasing thresholds of £173,934 (ex VAT) for Goods and Services and £4,348,350 (ex VAT) for Works a formal EU tender should be conducted with the involvement of Procurement Services staff.
It is the responsibility of Procurement Services to place an advert in the Official Journal of the European Union (OJEU). Contract notices should be sent to the OJEU using Achilles Themis system. A copy of the Notice should be kept on file by the Procurement Services Office.
ESS Policies and ProceduresNote 3
The thresholds are recalculated in accordance with the EU Directives on Public Procurement and are adjusted every two years. The latest thresholds can be viewed at www.ojec.com/Threshholds.aspx Any projects with an estimated value of 90% of the thresholds will need to follow the OJEU route.
iii. All purchase orders with a value in excess of £1million (ex VAT) must be authorised by the Executive Director of Finance before they can be placed.
ESS Policies and ProceduresNote 4
ESS Purchase orders authorisation levels;
>£1m – Executive Director of Finance
£250k to £1m – PVC or Registrar
£50k to £250k – Director of Service
£5k to £50k – Direct Report to Director of Service
£500 - £5k – Service Nominee
<£500 on catalogue – No approval required
Additional Procedures to be followed
iv. Tenders or Quotes involving the provision of on-campus Services such as maintenance or installation of equipment should be carried out in accordance with the ‘Guidelines for Engaging Contractors to Work in Academic Departments’. (See www.safety.ncl.ac.uk/uploads/GUIDE.DOC).
ESS Policies and ProceduresNote 5
For all ESS projects refer to the ESS Management of Contractors and other documents. http://www.ncl.ac.uk/estates/healthsafety/Policy.htm For specific information or advice please contact please contact the ESS Health and Safety Officer Ext: 6847
v. Purchases made with a University Purchasing Card should follow the Purchasing Card Procedure.
vi. University approved contracts set up through the Procurement Services Office and detailed on the P2P-Marketplace or the Procurement Services website MUST be used.
(See www.ncl.ac.uk/internal/purchasing- services/agreements/index1.php)
University contracts include those let by the NEUPC, National Working Parties, NEPO, and the GPS.
Use of a non contracted supplier must be avoided as the purchase order could be in breach of the EU directives on aggregation of demand, non compliance within the scope of the EU directives (Supplies 93/36/EEC, Services 92/50/EEC and Works 93/37/EEC) or breach of an existing contractual term.
Whenever a purchase order is to be placed outside of an approved University contract permission to place the order must be obtained from the Procurement Services Office.
ESS Policies and ProceduresNote 6
ESS Contracted Suppliers are suppliers that have tendered their particular service for a specified cost and a specified time period. Please see current list of ESS contracted suppliers
Purchase Orders Requiring Additional Approval
vii. Tenders for Consultancy Services MUST follow the Engagement of Consultants - Regulations and Procedures. (See http://www.ncl.ac.uk/internal/purchasing-services/regulations/index.php)
ESS Policies and ProceduresNote 7
This process is not necessary when consultants are appointed from a framework panel. ESS has consultants frameworks for the following disciplines:
· Architects
· Cost Consultants
· Structural Engineers
· Project Managers
· Mechanical & Electrical Engineers
· Building Surveyors
· Landscape Architects
· CDMC
Consultants are to be selected using a mini-competition as detailed on capital procedures.
viii. The provenance of the goods being purchased should be known. Web sites such as ebay or any type of auction website shall not be used without the approval of the Procurement Manager.
ix. All purchases of telecommunication services and equipment (e.g. telephone and data lines, mobile phones, telephone handsets) must be procured through ISS.
x. All purchases of computers should be approved by the faculty, school or services Computing Officer before any orders are placed.
xi. All purchases of photocopiers should be approved by Procurement Services before any order is placed.
xii. All requirements for on-campus hospitality and catering provisions should be made to the University’s delivered hospitality service ‘Food Chain’.
In the event that Food Chain are unable to supply the requirement suppliers on the approved external catering contractors list as detailed on the Procurement Services website may be used. (See http://www.ncl.ac.uk/internal/purchasing-services/agreements/RegisteredFoodCateringContractors.php)
xiii. All purchases of Vehicles should be approved by the Procurement Manager before any order is placed.
xiv. All purchases of radioactive materials and x-ray generating equipment must be approved by the Radiation Protection Adviser. All purchases of Unsealed (Open) sources of radioactivity must be routed via the Radiation Protection Office using the approved forms. (http://www.safety.ncl.ac.uk/opensourceuse.aspx).
Standards for Purchasing
xv. Suppliers requested to provide quotations should be known to be capable of providing the works, goods or services required, they should be competitive and commercially sound.
xvi. Any contract with the University should not exceed 25% of the Supplier’s annual turnover unless approved by Procurement Services.
xvii. A member of Council or a member of staff having a personal, financial or any other beneficial interest in any transaction between a third party and the University must disclose this interest to the Procurement Manager prior to commencing any tender process.
xviii. No person may communicate, or allow to be communicated to a tenderer any information that may give the Supplier a commercial advantage (all tenderers must be aware of all of the same information and be able to bid in full knowledge of all of the facts).
xix. The University is entering into a legally binding contract which is enforceable by a Court of Law. All correspondence (verbal or written) and actions can be included in any case against the University should it reach such a stage, therefore members of staff must always ensure they conduct themselves with this in mind.
xx. No person shall seek or accept any gift or hospitality that could be construed to be an inducement to award an order or contract.
3. Number of Quotes or Tenders Required
Purchase Orders less than £25,000 raised using the Parabilis Market Place catalogues or Punch Out do not require a quotation where the lowest priced item or shopping basket has been selected (the basket comparison facility should be used to determine this). It is the responsibility of the Procurement Services Office to ensure that only goods and services from contracted suppliers are included on the Market Place.
For all other purchases where the Parabilis Market Place is not used competitive quotes should always be obtained where possible by following the Quotation or Tender Procedure. The number of quotes or tenders required is detailed below. All Values are exclusive of VAT.
ESS Policies and ProceduresNote 8
Please note the special arrangements for the Measured Term Contract (MTC) and the Consultants Framework.
NB. Any savings from mini-competitions provide an opportunity to demonstrate value for money savings and should be recorded.
3.1 Use of Contract Suppliers – Goods and Services
i. A tender exercise must always be carried out in accordance with EU Procurement
Directives and involving Procurement Services where the purchase order is above
£173,934 (ex VAT). Procurement Services will ensure that the contract complies
with EU procurement Directives.
ii. For all other purchase orders placed through an approved University contract set up
through the Procurement Services Office and detailed on their website
(see www.ncl.ac.uk/internal/purchasing-services/agreements/index1.php), the requirements are:
Value of purchase order (ex VAT) / Quotes required< £25,000 / A single quote is required
£25,000 to £49,999 / Quotes from all appropriate suppliers should be obtained
£50,000 to £173,934 / A tender exercise involving Procurement Services should be used
3.2 Use of Contract Suppliers – Works
A tender exercise must always be carried out in accordance with EU Procurement Directives and involving Procurement Services where the purchase order is above £4,348,350 (ex VAT). Procurement Services will ensure that the contract complies with the EU Procurement Directives.
For all other purchase orders placed through an approved University contract set up through the Procurement Services Office and detailed on their website (see www.ncl.ac.uk/internal/purchasing-services/agreements/index1.php), the requirements are:
Value of purchase order (ex VAT) / Quotes required< £25,000 / A single quote is required as a minimum
£25,000 to £249,999 / Quotes from all appropriate suppliers should be obtained
£250,000 to £4,348,350 / A tender exercise involving Procurement Services should be used
Quotes and tenders for Works contracts may only be obtained by authorised ESS staff.
3.3 Use of Non-contract Suppliers – Goods and Services
Where the value of the purchase order is above £173,934 (ex VAT) a tender exercise shall be carried out by Procurement Services in compliance with EU Procurement Directives. Procurement Services will ensure that the contract complies with the EU Procurement Directives.
For all other goods, services or works obtained outside of an approved University contract set up through the Procurement Services Office and detailed on their website (see www.ncl.ac.uk/internal/purchasing- services/agreements/index1.php) or a contract approved by Procurement Services, the number of quotes or tenders required is as follows:
Value of purchase order (ex VAT) / Quotes required< £100 / Quotes not required
£100 to £1,000 / A single quote is required as a minimum
£1,000 to £9,999 / Two quotes should be obtained as a minimum.
£10,000 to £49,999 / Three quotes should be obtained as a minimum.
£50,000 to £173,934 / A tender exercise involving Procurement Services should be used
3.4 Use of Non-contract Suppliers – Works
Where the value of the Works is above £4,348,350 (ex VAT) a tender exercise shall be carried out by Procurement Services in compliance with EU Procurement Directives. Procurement Services will ensure that the contract complies with the EU Procurement Directives.
For all other Works being obtained outside of an approved University contract set up through the Procurement Services Office the number of quotes or tenders required is as follows:
Value of purchase order (ex VAT) / Quotes required< £1,000 / A single quote is required as a minimum
£1,000 to £9,999 / Two quotes should be obtained as a minimum.
£10,000 to £249,999 / Three quotes should be obtained as a minimum.
£250,000 to £4,348,350 / A tender exercise involving Procurement Services should be used
Quotes and tenders for Works contracts may only be obtained by authorised ESS staff.
3.5 Single Quotes or Tenders
Single quotes or tender should only be obtained in the following circumstances:
i. Where the purchase is made from the P2P marketplace and the total value is less than £25,000.
ii. Where the value of the Works, Goods or Services is below £1,000 (ex VAT) when purchased from a non University contract.
iii. Where the value of the Works, Goods or Services is below £25,000 (ex VAT) and where the purchase is made from a University contract set up through the Procurement Services Office and detailed on the P2P Marketplace or the Procurement Services Website. (See www.ncl.ac.uk/internal/purchasing-services/agreements/index1.php).
iv. Where there is a clear absence of alternative sources of supply and approved by Procurement Services.
v. Where it is necessary to extend, repair or refurbish proprietary or specialist equipment or where a particular expertise is required and approved by Procurement Services.
vi. Where it is necessary to continue the use of specialist professional skills and approved by Procurement Services.