contract procedure rules

8/3/2019 Contract Procedure Rules

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Contract Procedure Rules


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Contents

1 Introduction 3

2 Application and Interpretation 4

3 Calculation of Contract Values 4

4 Responsibilities of Directors/Heads of Service 4

5 Authorisation & Acceptance Procedures 6

6 Selecting Contractors 9

7 Social Care and Temporary Housing Contracts 14

8 Receipt and Opening of Tenders 14

9 Post Tender Clarification 16

10 Tender and Contract Details 17

11 Glossary of Terms 21

List of Tables

Table 5 1:Authorisation (where not previously Authorised by the Budget and supporting plansand strategies) and Acceptance Thresholds for Works, Supplies and Services .7

Table 5-2:

Acceptance thresholds for contract extensions and variations8

Table 6-1Barnet tendering and quotation thresholds for Works, Supplies and Services11

Table 7 Authorisation and Acceptance thresholds and tendering requirements for SocialCare and Temporary Housing contracts.14


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1 Introduction

1.1 Procurement decisions are among the most important decisions a managerwill make because the money involved is public money and the Council isconcerned to ensure that high quality supplies, works and services areprovided. Efficient use of resources in order to achieve best value istherefore an imperative. The Council's reputation is equally important andshould be safeguarded from any imputation of dishonesty or corruption.

1.2 For these reasons, it is a disciplinary offence to fail to comply with ContractProcedure Rules and the Procurement Code of Practice when lettingcontracts. Council employees have a duty to report breaches of Contract

Procedure Rules to an appropriate senior manager and the Head of InternalAudit and Ethical Governance.

1.3 The Contract Procedure Rules provide the framework within which theCouncil may procure works, supplies and services. The aim of these rulesis to:

1.3.1 ensure value for money and propriety in the spending of public money;and

1.3.2 to enable services to be delivered effectively and efficiently withoutcompromising the Councils ability to influence strategic decisions.

1.3.3 To ensure that the Council is not exposed to unnecessary risk andlikelihood of challenge arising from non compliant tendering activity

1.4 To ensure the continued effectiveness of the Contract Procedure Rules, theCabinet Resources Committee may, from time to time, amend the thresholdsset out below as deemed appropriate.

1.5 Reference should be made to the Procurement Code of Practice for moredetailed procurement procedures

1.6 The Commercial Director, in consultation with the Chief Finance Officer andthe Head of Legal, shall maintain and issue the Contract Procedure Rulesand the Procurement Code of Practice. Any procurement activity shallproceed in accordance with the Contract Procedure Rules and theProcurement Code of Practice.

1.7 The Contract Procedure Rules take precedence over the Procurement Codeof Practice.


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2 Application and Interpretation

2.1 The Contract Procedure Rules shall apply to all contracts entered into by or

on behalf of the Council including where funding, such as grant allocation, isreceived by the Council from external sources. Exceptions to the ContractProcedure Rules can be approved by means prescribed by the LeadersScheme of Delegation, Constitution Part 3 Responsibility for Functions.

2.2 Where the Council is entering into a contract as an agent and/or incollaboration with another public body or government department theseContract Procedure Rules apply only in so far as they are consistent withthe requirements of the body concerned. Where the Council is acting asprincipal, these Contract Procedure Rules will take precedence.

2.3 The Council may adopt different Contract Procedure Rules for schools. TheEducation Finance Team oversee the Finance Standing Orders for Schoolswhere such variation is applicable.

2.4 Unless the context otherwise requires, terms used in these ContractProcedure Rules shall have the meanings ascribed to them as set out in theGlossary of Terms to be found at Section 11.

3 Calculation of Contract Values

3.1 Unless otherwise specifically provided, where a value or an estimated valueis given in these Contract Procedure Rules it means the aggregate valuepayable in pounds sterling exclusive of Value Added Tax over the entirecontract period, including any form of option and any renewals of thecontract.

3.2 Directors/Heads of Service must ensure that a pre-tender estimate ofanticipated costs is prepared, is in budget and recorded in writing. WhereEU Public Procurement rules apply, Directors or Heads of Service mustalso ascertain the value of a contract in accordance with those rules.

3.3 Contracts must not be artificially under or over estimated or divided into twoor more separate contracts where the effect is to avoid the application ofContract Procedure Rules/EU Regulations and UK legislation.

4 Responsibilities of Directors/Heads of Service

4.1 Directors and Heads of Service are responsible for all contracts tenderedand let by their service areas. Their duties in relation to contract letting andmanagement are:


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4.1.1 to ensure compliance with English Law, U.K. and EU legislation andCouncil policy;

4.1.2 to ensure value for money and optimise risk allocation in all

procurement matters;

4.1.3 to ensure compliance with the Contract Procedure Rules and theProcurement Code of Practice;

4.1.4 to maintain a service scheme of delegation, in accordance withConstitutional Requirements;

4.1.5 to ensure that all relevant staff are familiar with the provisions of theContract Procedure Rules and the Procurement Code of Practiceand that they receive adequate training on their operation;

4.1.6 to ensure compliance with any guidelines issued in respect of theseContract Procedure Rules;

4.1.7 to take immediate action in the event of a breach of the ContractProcedure Rules or the Procurement Code of Practice within theirdirectorate or service area;

4.1.8 to ensure that all existing and new contracts anticipated during theforthcoming financial year are clearly itemised in the Budgetsupporting documentation;

4.1.9 to keep proper records, of all contracts, tenders etc. includingminutes of tender evaluation panels and other meetings which maybe inspected by a member of the Council at any time during officehours;

4.1.10 to make appropriate arrangements for the opening of tenders andtheir secure retention so as to protect the integrity of the tenderingprocess;

4.1.11 to submit to the Corporate Procurement Team tender forms andGateway Review Forms as required by the Contract Procedure

Rules;

4.1.12 to ensure original contract documents are forwarded to theAssistant Director Legal for safekeeping;

4.1.13 to keep a register of contracts over 5,000, which (1) may beinspected by a member of the Council at any time during officehours, and (2) will support the annual budget review;

4.1.14 to ensure effective contract management, contract reviews andmonitoring during the lifetime of all contracts in their areas;


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4.1.15 to seek and act upon advice from the Assistant Director - Legal theChief Finance Officer and the Director with responsibility forCorporate Procurement where necessary to ensure compliancewith these responsibilities;

4.1.16 to keep records of waivers of any provision of these ContractProcedure Rules.

5 Authorisation & Acceptance Procedures

Authorisation Principles

Authorisation is the approval required before quotations or tenders for supplies,

services or works may be sought in accordance with 3.2

5.1 The aim is to speed up the procurement process by removing unnecessarybureaucracy in this case, a duplication of the authorisation process.

5.2 Any contract, including additions, extensions and variations, which hasbeen included in a directorate or services Budget and supporting plans andstrategies or any other Committee approved plan is deemed as authorisedirrespective of value.

5.3 Any contract which has not been Authorised as set out in 5.2 must be

Authorised as set out in Table 5-1.

Acceptance Principles

Acceptance is the approval to proceed with the purchase of supplies, services orworks.

5.4 The aim is to speed up the process by allowing, where possible, theacceptance of tenders to be delegated to a level of authority lower than thatrequired for Authorisation. This recognises that in most instances, theinfluencing decision is at the Authorisation stage, not at the point of

Acceptance.

5.5 Table 5-1 sets out the Authorisation and Acceptance thresholds.


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Table 5-1: Authorisation (where not previously Authorised by the Budget andsupporting plans and strategies) and Acceptance Thresholds for Works, Suppliesand Services

Contract Value*Level of authorityfor Authorisationand Acceptance

Up to24,999

25,000to

74,999

75,000 to156,422 *

156,422 to*499,999

500,000 and above

Authorisation by:

(based onestimated contractvalue)

Director/Head of ServiceCabinetMember

Cabinet Committee

Acceptance** by:

(based on actualcontract value over

the lifetime of thecontract)

Director/Headof Service

Where tenderis lowest price

Director/Head of Service

Where tender/quotation is lowest orwhere tender/quotation represents

value for money and is the bestavailable option for the Council

CabinetMember

Where tenderrepresentsvalue for

money and isthe bestavailable

option for theCouncil.

Cabinet MemberWhere tender is: a)lowest; or (b) where

tender represents valuefor money and is the best

available option for theCouncil and the tender

value is no more than 25percent above the lowest

priced tender.

** Notes onAcceptance:

1. Acceptance of contracts in all cases is subject to:

a) budgetary provision existing;

b) the usual enquiries as to financial status.

2. Director/Heads of Service and Cabinet Members are required to consult theChief Finance Officer in respect to value for money and address riskconsiderations.

3. Acceptance thresholds for contract extensions, additions and variations of allvalues are subject to further conditions as set out in the paragraph 5.6.

4. Under no circumstances may a contract extension, addition or variation beAuthorised more than once without being referred back to the relevant Cabinet

Committee for Authorisation.

*Please check with CPT for the latest threshold set out by EU Regulations as thesefigures are subject to change.

* With additional European requirement for Indicative Notice thresholds and smalllots thresholds. It is recommended that in accordance with good practice Barnetadopts a position that OJEU notices are published for all contracts within 10% of thethreshold.


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Acceptance Parameters for Contract Additions, Extensions andVariations and Authorisation Parameters for Contract Novationsand Assignments

5.6 The Acceptance thresholds for contract additions, extensions and variationsare as set out in Table 5-2. Contract extensions and variations are, also,subject to the following:

5.6.1 In the case of an extension to a contract:

5.6.1.1 The initial contract was based on a competitivetender or quotations;

5.6.1.2 the initial contract has not been extended before;and

5.6.1.3 the value of the extension is less than half the costof the existing contract without the extension andhas a budget allocation.

5.6.2 In the case of a contract variation and in accordance with the termsand conditions of that contract:

5.6.2.1 the variation is notified to and agreed in writing withthe contractor;

5.6.2.2 any additional expenditure necessarily incurred doesnot exceed 10% of the initial contract.

Table 5-2 Acceptance thresholds for contract extensions and variations

Level ofAcceptance

Less than 156,441* Greater than156,422*

Director/Head of Service

May still authorise and acceptthe contract but must reportafterwards to the relevantCabinet Member

Cabinet Committee

authority must be sought

5.6.3 In the case of a contract novation or assignment, the originalcontract value shall be used to determine the level ofauthorisation required in accordance with the thresholds forWorks, Supplies and Services set out in table 5-1 above.


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Urgent/Emergency Procedures & Waiver of Contract ProcedureRules

5.7 Directors/Heads of Service may take decisions on urgent or emergencymatters as set out in the Leaders Scheme of Delegation providing theyreport afterwards to the relevant decision making body setting out thereasons for the urgency. Such decisions include waiver of the ContractProcedure Rules where this is justified on the basis of urgency and one ormore of the matters set out in 5.8 below.

5.8 Except in situations of urgency or emergency (see 5.7 above) the ContractProcedure Rules may only be waived on the decision of a CabinetCommittee and only where that Committee is satisfied, after considering a

written report by the appropriate officer, that the waiver is justified because:

5.8.1 the nature of the market for the works to be carried out or the suppliesor services to be provided has been investigated and is demonstratedto be such that a departure from the requirements of ContractProcedure Rules is justifiable; or

5.8.2 the contract is for works, supplies or services that are required incircumstances of extreme urgency that could not reasonably havebeen foreseen; or

5.8.3 the circumstances of the proposed contract are covered by legislativeexemptions (whether under EU or English Law); or

5.8.4 there are other circumstances which are genuinely exceptional

6 Selecting Contractors

European Tender Procedures and Thresholds

6.1 Tender procedures are governed by EU procurement regulations if the

supplies, services or works contract is:

6.1.1 of a type which is covered by the European procurement regulations(see EU Checklist in the Procurement Code of Practice); and

6.1.2 has a total lifetime value above the specified threshold:

6.1.2.1 For Public Works - 3,927,260;or approximately 4,845,000million *

6.1.2.2 For Public Services - 156,442;or approximately 193,000 *


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6.1.2.3 For Public Supply - 156,442or approximately 193,000 *

*These thresholds are valid from 1st January 2010. They are revised every

two years. Please check with CPT for the latest threshold set out by EURegulation.

6.2 So far as services are concerned, the EU procurement regulations splitthese into Part A and Part B services. Part A services are subject to thefull European procurement regime. Part B services are subject only to partsof the European procurement regime. Social care, housing and educationalservices are likely to be Part B services but you must check the position withCPT.

6.3 The Procurement Code of Practice provides more detail on the EU tendering

requirements.

Barnet Tender Procedures

6.4 For those contracts not subject to EU procurement regulations, tenderingshould follow guidance set out in the Procurement Code of Practice.

6.5 To offer equality of opportunity, all tender opportunities should be advertisedopenly. The European Court of Justice has ruled that low value contracts(below the EU thresholds) should be advertised before the contract isawarded. Please check with CPT on this requirement.

6.6 Thresholds for the tendering of works, supplies and services not subject toEU statutory requirements are set out in the table below.


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Table 6-1: Barnet tendering and quotation thresholds for works, supplies andservices

Contract Value*

less than24,999* 25,000 upto 74,999* 75,000 upto156,442*

156,442 upto 499,999* 500,000 andup to3,927,259*

3,927,260*and over

SuppliesandServices

Contracts

Reasonablemeans ofselectionincludingbudgetauthorisationand an audittrail

Requesttwo(2) ormorewrittencompetitivequotationsbut musthaveminimum 2returned.

Less than 2bidsreturnedthen repeatcompetition

Requestthree(3) ormorewrittencompetitivequotationsbut musthaveminimum 2returned.

Less than 2bidsreturnedthen repeatcompetition

Tendering process or other approved routerequired and Gateway Review Process must beused. May be subject to EU legislation. Less than2 bids returned then justification must be evidentto proceed.

WorksContracts

Reasonablemeans ofselection

Requesttwo(2) ormorewrittencompetitivequotationsbut musthave

minimum 2returned.Less than 2bidsreturnedthen repeatcompetition

Requestthree(3) ormorewrittencompetitivequotationsbut musthave

minimum 2returned.Less than 2bidsreturnedthen repeatcompetition

RequestFive(5) ormore writtencompetitivequotationsfrom approvedlist andGateway

Review Formmust be used.

Must haveminimum 2returned. Lessthan 2 bidsreturned thenjustificationmust beevident toproceed.

ApprovedTenderingProcessrequiredandGatewayReviewProcess

must beused

Subject to EUlegislation

Tenderingprocess requiredand GatewayReview Processmust be used.

*Please check with CPT for the latest threshold set out by EU Regulations as thesefigures are subject to change.

Utilising Consortia Purchasing Arrangements

6.7 Consortia Purchasing Arrangements where the Council is the lead authorityare subject to these Contract Procedure Rules.

6.8 Any other Consortia Purchasing Arrangements are not subject to theseContract Procedure Rules. However, the Council must not enter into


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Consortia Purchasing Arrangements unless:

6.8.1 the Commercial Director has, in a written report, approved theConsortia;

6.8.2 the relevant Director/Head of Service has authorised enteringinto the Consortia Purchasing Arrangement;

6.8.3 the terms and conditions of any proposed Consortia contractand any contract proposed to be made, thereunder, areacceptable to the Assistant Director - Legal

Framework Agreements

6.9 Before promoting the procurement of a new or joining a pre-existingframework agreement, the Commercial Director must be satisfied that suchan approach represents the most economically advantageous solution for aservice work, supply or utility provision and complies with the Relevant EURules on the use of such agreements.

Before procuring or entering into a framework agreement, the CommercialDirector shall be satisfied that:

6.9.1.1 the term of the arrangement shall be or is for a period of no

longer than four years duration;6.9.1.2 the terms and conditions of the arrangement do not

compromise the Councils contractual requirements;

6.9.1.3 the parties to the arrangement are recognised public bodies orproviders from the private sector;

6.9.1.4 full, open and proper competition in respect of the creation ofthe framework agreement has taken or will take place inaccordance with the Relevant EU Rules and/or RelevantContract Procedure Rules.

6.9.1.5 Preference should be given to use of any GovernmentProcurement schemes e.g. OGC.

Approved Lists of External Providers

6.10 At least one third of the organisations selected for tendering must be pickedrandomly. The process for establishing and maintaining Approved Lists is setout in detail in the Procurement Code of Practice.


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Single source suppliers

6.11 Where the Director/Head of Service is satisfied, following the making ofsuitable investigations, that there is only one supplier in the market for therequired supplies/services/works, the competitive tendering provisions willnot apply provided that:

6.11.1 the Director/Head of Service and Commercial Director approve theentry into the contract with the single provider; and

6.11.2 there is compliance with the Authorisation and Acceptanceprocedures

Gateway Review Process

6.12 The aim of the Gateway Review Process is to ensure that the largerprocurements are appropriately structured and will therefore deliver value formoney to the Council. The process applies to:

6.12.1 tenders for supplies and services valued at 156,442or more; and

6.12.2 tenders for works valued at 500,000 or more.

6.13 The Gateway Review Process requires the completion of a Gateway Review

form, which will be provided by the Corporate Procurement Team, both foraudit purposes as well as to provide a framework and checklist for theprocurement process. It also includes two checkpoints:

6.13.1 At the first checkpoint, the proposed contract must be approved bythe Corporate Procurement Team and must be subject toconsultation with local trade unions, before it may go out to tender.The aim of this is to ensure that procurements are appropriatelystructured as this preliminary work is critical to the overall successand value for money of the final contract.

6.13.2 Six months after contract award, the Corporate Procurement Teamwill verify that a second Gateway Review Check has been carried outby Director/Head of Service or nominated Contract Officer whichassesses the contract management and monitoring arrangements.The aim is to ensure that appropriate structures have been put inplace so that the Council receives the services for which it is paying.

Financial Restrictions on Selection Procedures

6.14 If the aggregate cost across all Council services in a financial year for eitherworks, supplies or services of a similar type or contracts with a singlesupplier is expected to exceed 156,442 then an annual or term contract


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must be established. The appropriate contractor selection proceduresdetailed in the Procurement Code of Practice must be followed unless therelevant Cabinet Member is satisfied that it is inappropriate to use such aprocedure and a waiver has been agreed.

6.15 The Commercial Director will ensure that expenditure is monitored bycategory across the Council to ensure these levels are not exceeded.

7 Social Care and Temporary Housing Contracts

7.1 These provisions apply only to Social Care and Temporary HousingContracts. The aim is to enable Directors/Heads of Service to provide theirservices as efficiently and effectively as possible whilst ensuring that large

contracts (greater than 1 million) deliver value for money.

7.2 The Authorisation and Acceptance thresholds and tendering requirements forSocial Care and Temporary Housing Contracts are set out in the table below.

Table 7-1: Authorisation and Acceptance thresholds and tenderingrequirements for Social Care and Temporary Housing contracts

Up to 499,999 500,000 up to999,999

Greater than 1m

Authorisation by: Pre Authorisedthrough inclusion in

Annual Budget orCabinet Committee

Pre Authorisedthrough inclusion in

Annual Budget orCabinet Committee

Cabinet Committee

Acceptance by: Director/Head ofService

Director/Head ofService

Delegated CabinetMember

Tenderingrequirements

Reasonable meansof selection, seesection 11 Glossaryof Terms.,

Five(5) or morewritten competitivequotations andGateway ReviewForm must befollowed

A minimum 2 bidsmust be returned.

Less than 2 bidsreturned thenjustification must beevident to proceed

Tendering processrequired andGateway ReviewProcess must befollowed.

8 Receipt and Opening of Tenders

Non- electronic Tender Process

8.1 Contractors must be informed when tenders are invited that their tender willonly be considered if:


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8.1.1 it is contained in a plain inner envelope, securely sealed and self-addressed by the tenderer;

8.1.2 the inner envelope is contained in a plain outer envelope. The outer

envelope must be securely sealed, bearing the word "tender" followedby the subject matter of the contract, with closing date and time.Barnet approved tender envelopes may be obtained from theCorporate Procurement Team;

8.1.3 the outer envelope should not bear any distinguishing matter indicatingthe identity of the sender;

8.1.4 the outer envelope is addressed impersonally to:

Corporate Procurement Team

London Borough of BarnetNorth London Business ParkOakleigh Road SouthLondonN11 1NP

8.1.5 and, it is delivered by the time stated in the tender invitation.

8.2 Tenders which do not meet the requirements of Contract Procedure Rule 8.1may only be considered if the other tenders have not yet been opened and:

8.2.1 The tenderers failure to comply is due to fault on the part of the

Council's; or

8.2.2 a tender is late, and it is clear without any contact with the contractorthat the tender was sent in such a way that in the normal course ofevents it would have arrived on time.

8.3 Upon receipt each tender must be marked with date and time of receipt withinitials of recipient.

8.4 Tenders must be kept safe until the time for their opening by an officer giventhis duty by the Commercial Director.

8.5 Tenders for a particular contract must be opened at the same time in thepresence of two officers appointed by the Commercial Director who have notbeen involved in the tendering process and who are responsible for formerlyrecording receipt on tender receipt log. On opening the tenders, the officersshall:

8.5.1 Number each tender consecutively;

8.5.2 If there are priced bills, schedules of rates or the like, date andphotocopy each summary sheet indicating the main contract prices;


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8.5.3 Otherwise, date and photocopy each page of the tender that containsprices; and

8.5.4 Complete and sign a schedule or record of tenders received.

8.6 The photocopies and schedule or record shall be retained for futureinspection.

8.7 If a tender is received after the specified time and date then only the outerenvelope shall be opened. The inner envelope shall be endorsed with the timeand date of receipt, and promptly returned unopened to the tenderer. If there isno suitably addressed inner envelope the tender may be examined but only tothe extent necessary to discover the name and address of the tenderer. Nodetails of the tender shall be disclosed and it will be returned promptly to thetenderer.

Electronic Tendering & E-Auctions

8.8 At the discretion of the relevant Chief Officer (see table of Chief Officers setout in Article 12 of the Constitution), requests for quotations and invitations totender may be either issued and/or received by electronic means. Thefollowing conditions shall apply:

8.8.1 The Corporate Procurement Team will carry out and/or select anaccredited tendering vault for eTendering and eAuctions, at a cost tothe service area

8.8.2 In the case of eAuctions, its use must be stated in the Contract Notice;and it can only take place after the initial evaluation of tenders onquality. The eAuction to cover the pricing element of the tender iscosted to the service area.

9 Post Tender Clarification

9.1 Where negotiated procedures have not been followed and theDirector/Head of Service considers that post tender clarification would beadvantageous to the Council, the Director/Head of Service, in consultationwith the Cabinet Member for Policy and Performance, may give authority toproceed. See Procurement Code of Practice for reporting requirements.

9.2 Clarification of ambiguous tenders, if limited to clarification only, does notconstitute post tender negotiations.


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10 Tender and Contract Details

Tender Contents

10.1 Each tender must contain:

10.1.1 an undertaking signed by the tenderer that to the best of theirknowledge and belief they have complied with all the relevantprovisions of the Health and Safety at Work Act 1974 andregulations made under it;

10.1.2 a statement that the tenderer will comply with all current,relevant British Standard Specification or Code of Practice orequivalent European Union or international standards offering

guarantees of safety, reliability and fitness for purpose;

10.1.3 a statement by the tenderer that they will not try to obtain orreceive by whatever means any information which gives or isintended or likely to give the tenderer or another party anyunfair advantage over any other tenderer (including theCouncil's own workforce) in relation to the tendering for andaward of any works/services contract;

10.1.4 A statement that the Council shall not be liable for expensesincurred in the preparation of tenders; nor shall the Council be

bound to accept the lowest or any tenders submitted; nor shallthe Council have to give reasons for the rejection of any tenderand shall have reserved to them the right to invite fresh tendersshould they consider that course desirable.

Contract Contents

10.2 Every contract shall have written terms and conditions which shall containthe following terms:

10.2.1 terms and conditions of contract;

10.2.2 terms specifying the work, services or supplies inquestion

10.2.3 the price or basis of charge (including discounts); and.

10.2.4 the time of performance and key performance indicators

10.2.5 transitional arrangements at the end (Exit Strategy) or earliertermination of the contract .e.g work in progress and costs oftransferring ownership of assets, data and records.


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10.2.6 the contract management and monitoring plan

Conditions applying to all contracts over 25,000 in value or whereappropriate to the nature of the contract

10.3 Every contract with a value of 25,000 or more must, unless the Head ofLegal and the Chief Finance Officer agree to the contrary, contain clauses tocover the following:

10.3.1 compliance with all legislation;

10.3.2 compliance with the Council's insurance requirements;

10.3.3 a prohibition on assignment/or sub-contracting withoutthe written consent of the relevant Director/Head of

Service;

10.3.4 a provision allowing the Council to cancel the contractand recover any resulting loss from the contractor if thecontractor does anything which is contrary to thePrevention of Corruption Acts 1889 to 1916 or incitesbreach of Section 117 (2) of the Local Government Act1972;

10.3.5 a provision to ensure the Council is protected against thecontractor's defective performance by default provisions

which are appropriate to the contract;

10.3.6 provision(s) that if the contractor is in breach of contractthe Council can do any or all of the following

10.3.6.1 determine all or part of the contract ordetermine the contractor's appointment;

10.3.6.2 itself perform the contract in whole or in part;

10.3.6.3 recover from the contractor any additionalcost resulting from the completion or

cancellation of the contract.

10.3.7 In respect of every contract that is to be performed instages or over a period of time;

10.3.7.1 the contract shall, where practicable, requirethe contractor to pay liquidated damages forany default;

10.3.7.2 a sufficient surety (e.g. a bond) shall be takenfor due performance unless:


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- the cost of the contract is less then 300,000;

- the Director/Head of Service, the Chief Finance Officerand the Head of Legal so direct following the completion

of a risk assessment;

- the contract is with a statutory body.

10.3.8 if the contractor is a subsidiary or a member of a groupof companies then its parent company or anothercompany in the group whose assets are sufficient shallbe required to guarantee performance and indemnify theCouncil against loss from any default, unless the ChiefFinance Officer and the Head of Legal so direct;

10.3.9 if the contractor has obtained or received by whatevermeans any information which gives or is intended orlikely to give the contractor any unfair advantage overany other tenderer (including the Council's ownworkforce) in relation to the tendering for and award ofany supplies/works/services contract, that the Councilshall be entitled to terminate that contract;

10.3.10 that the contractor shall be required to make available tothe Council or its auditors such documents or access toinformation or access to the staff/officers of the

contractor as is necessary to conduct any auditinvestigation into the contract;

10.3.11 that the contractor shall be required to make available tothe Council upon request such information as theCouncil considers necessary whether in relation to staffor otherwise, to enable the Council to meet its duties inrelation to re-tendering the contract.

10.3.12 It shall be a condition of the engagement of any personto supervise a Council contract that he or she shall

comply in all respects with the requirements of theseContract Procedure Rules.

Signing and Sealing of Contracts

10.4 Every contract must be in writing.

10.5 Every contract must be in a form approved by the Head of Legal if its valueexceeds 25,000, or where appropriate to the nature of the contract.

10.6 The following contracts must be sealed on behalf of the Council:


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10.6.1 those whose value exceeds 156,422, unless theAssistant Director - Legal directs otherwise; and

10.6.2 those where the Head of Legal so requires.

10.7 Contracts not made under seal can be signed by the relevant Director/Headof Service, Chief Executive, Director of Corporate Governance, AssistantDirector - Legal or any officer authorised by them.

Contract Management and Monitoring

10.8 During the life of the contract Directors/Heads of Service must ensure thatsystems are in place to manage and monitor contracts in respect of:

10.8.1 contract performance and key performance indicators;

10.8.2 compliance with specification and contract;

10.8.3 cost; cross check contract payments to work done orsupplies or services supplied;

10.8.4 ensuring continuous improvement and any Best Valuerequirements;

10.8.5 user satisfaction, lessons learned and risk management;

10.8.6 eliminating unlawful discrimination and promoting

equalities

10.8.7 all the above in accordance with any instructions givenby the Head of Internal Audit and Ethical Governance.

10.8.8 ensuring that a second Gateway Review Check (see6.12.2) is performed 6 months after contract award

Contract Payments

10.9 This Procedure Rule applies to contracts which provide for payments to be

made in instalments against a certificate indicating partial, staged or finalperformance against a specification (typically, these are building orengineering contracts using the standard forms). In SAP, this is deliveredthrough Framework Orders (Invoicing Plans) and or Works Orders set topartial rather than periodic payment for building/phased worksimplementations.

10.10 Directors/Heads of Service shall ensure that all amounts due and paymentsmade under such contracts, are recorded against the loaded contracts heldin SAP.

10.11 Such payments shall be made on provision of a certificate signed by the


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relevant Director/Head of Service. All payments to contractors onaccount of contracts shall be made in accordance with the contractand the relevant Director/Head of Service shall provide the ChiefFinance Officer with:

10.11.1 details of the total amount of the contract;

10.11.2 the estimated value of work to date and of materials onsite;

10.11.3 the amount deducted by way of retention, VAT,liquidated and ascertained damages in respect ofunsatisfactory work; and

10.11.4 the amounts previously paid and the amount now due

for payment as adjusted for taxation purposes; and

10.11.5 Any sums to be paid after a defects liability period.

11 Glossary of Terms

Acceptance is the approval to proceed with the purchase of supplies, services orworks from a particular contractor/provider.

Approved List applies to Consturctionline, Compete For and/or another

framework contract or consortium list approved in accordance with the ContractProcedure Rules

Authorisation is the approval required before quotations or tenders for supplies,services or works may be sought.

Consortia means an arrangement whereby a contracting authority;(a) acquires supplies or services intended for one or more contracting

authorities;(b) awards public contracts intended for one or more contracting

authorities; or

(c) concludes framework agreements for work, works, supplies, servicesintended for one or more contracting authorities; otherwise know ascentral purchasing body.

CPT means Corporate Procurement Team

eTendering - An electronic tendering solution that facilitates the completetendering process from the advertising of the requirement through the placing of thecontract. This includes exchange of all relevant documents in electronic format.

eAuction is a reverse auction; repetitive electronic process for the presentation of


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Revised May 2011

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prices to be revised downwards or of new improved values of quantifiable elementsof tender.

Emergency where immediate action is need to protect life or property to maintain

critical service. Decisions that were not anticipated within the budget or budget planbut nevertheless relate to everyday business, not major changes/decisions outsidethe approved budget and 11 statutory plans.Example: school heating fails during mid-winter term or a school roof collapses.

EU means European Union.

Framework agreement is an agreement between one or more contractingauthorities and one more economic operators, the purpose of which is to establishterms governing contracts awarded during a given period, in particular with regardto price and, where appropriate, the quantity envisaged. In the UK we would knowthis as a standing offer to treat.

Low Value means values below 25,000

OJEU means the Official Journal of the European Union

Quotation this is a price bid for the provisions of a service, supply or works.

Reasonable means of selection an unbiased selection process based on therelative merits of the quotation provided and taking into account of previouspurchasing practices for supplies, services or works of a similar type. Normally thisprocess would involve attaining more than one quotation.

SAP the Councils on-line system for processing purchase orders and invoices.

Services Contract are contracts under which the purchaser engages acontractor (service provider) to provide services.

Single Source of Supply contract for which the requirement is so specialisedthat there is only one supplier in the market place.

Social Care refers to;(a) Fostering arrangements and the provision of care and support toindividuals at home or in settings in partnerships with the NHS,voluntary sector organisations and carers;

(b) The provision of care, support and education to meet the specialeducational needs of individuals.

(c) Block contracts securing future capacity for the provision of SocialCare (as defined above)

Supply Contracts relate to the delivery of products. They include purchaselease, rental or hire purchase, with or without the option to buy.


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Revised May 2011

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Temporary Housing refers to:(a) The provision of temporary accommodation to meet the statutory

requirements of the Housing Act of 1996 as amended by theHomelessness Act of 2002;

(b) Block contracts securing future capacity for the provision ofTemporary Accommodation (as defined above)

Tendering this is formal process for obtaining price bids for works, supplies orservices and which must be followed for procurements above the thresholds ser outin Table 6-1. Further details are available in the Procurement Code of Practice.

Urgency (not emergency) where urgent action is required but might be delayedby following normal procedures. Decisions that were not anticipated within thebudget for budget plan but nevertheless relate to everyday business, not majorchanges/decisions outside the approved budget and 11 statutory plans.Example: school heating system fails at the beginning of the autumn term.

Works Contract are contracts for the carrying out of civil engineering or buildingworks or under which such facilities are provided to meet specific userrequirements.

Written report means either;(1) a signed and published Delegated Powers Report which record the

decision taken and states clearly the decision maker his/herdesignation and the date of the decision or;

(2) a report to a Cabinet Committee and appropriate solution.


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Management of Real Estate, Property and Land - 1Revised September 2011

MANAGEMENT OF REAL ESTATE, PROPERTY AND LAND

Definitions:Executive

This relates to the Executive as defined in Article 7 of the Constitution, a CabinetCommittee or Cabinet Member acting under delegated powers:

Area Environment Sub-Committee The powers of these Sub-Committees aredefined in Part 3 of the Councils Constitution, Responsibility for Functions.

1. The Councils holdings of land and real property (property) are a corporateresource. Directors and Heads of Service will keep these holdings underreview as part of the Property Review Process managed by the Head ofProperty Services. The Property Review Process will consider properties inthe context of the Corporate Plan and Service Key Priorities and their ability todeliver continuing value for money for the council. A strategy framework willgovern decisions on whether to (i) retain an asset for purposes in accordancewith the Corporate Plan objectives or (ii) to dispose of the freehold (for capitalgeneration purposes) or (iii) to lease it (for a combination of reasons includingcapital or revenue generation or other reasons serving the Councilspurposes). Future reports for decisions on action with respect to individualproperties, in any one of these three ways would need to refer to thestrategies within the framework and confirm compliance with it or reasons fordeparting from it. The strategies will be developed and monitored by therelevant Director with responsibility for real estate, property and land in

conjunction with the relevant Cabinet Member with responsibility for the same,with approval of them sought through Cabinet Resources Committee.

2. If it appears that a property (in the context of these Rules the term propertyshall include an interest in property) is no longer required by the Council or, inthe event of the Council having appropriated the property through othermechanisms if it appears that such property is not required to be retained,then the procedures set out below will apply. These are in addition to anystatutory requirement, such as a requirement for consultation.

3. The relevant Director or designated officer will consult all Directors and Heads

of Service on possible alternative uses of the property.

4. The relevant Director or designated officer will report to the Cabinet meetingor the Cabinet Resources Committee (the relevant body). It may decide totransfer the property to an alternative Council use. Otherwise, it will deal withthe disposal of the property or the disposal may be dealt with by the Directorwithin the parameters set by the Leaders scheme of delegation relating toexecutive functions.

5. On any disposal of property, proper regard will be had to the professionaladvice from a qualified valuer at all relevant stages in the process and where


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the Director or designated officer, the relevant Cabinet Member or therelevant body deems it appropriate, independent valuation advice shall beobtained.

6. Where the relevant body is to deal with the disposal, it will receive a report

from the relevant Director or designated officer or the relevant CabinetMember setting out an analysis of:-

Comparative benefits and disadvantages to the Council and to localresidents and other interested parties of the Council disposing of orretaining the property

the objectives which the Council would secure by disposing of or retainingthe property

the alternative uses to which the property might be put with specificreference to the response from the Directors and Heads of Service.

the alternative bases and methods of disposal

the estimated disposal value or values

the estimated costs associated with disposal together with a statementfrom the relevant Director or designated officer on the extent to which eachitem of expenditure is anticipated to enhance the value of the property

all other financial implications and risks associated with disposal orretention of the property by the Council

the relevance of the proposed disposal within the context of agreedCouncil strategies and plans.

The above requirements shall also apply where the report is made to therelevant Cabinet Member or submitted to him/her in consultation.

7.(i) Whenever a decision is taken by the Executive or the relevant Director actingunder delegated powers to advertise the possible disposal or appropriation of

open space land, the Director or designated officer shall report the matter tothe next relevant Area Environment Sub-Committee to enable it to decidewhether it wishes to make representations to the Executive in relation to thedisposal of the open space land.

7(ii) In the event that the relevant Director confirms that there is insufficient time toreport to the Area Environment Sub Committee (AESC) as above because ofthe timing of the committee cycle and the need to progress the disposalexpeditiously the decision to advertise may be circulated to all members of theAESC and to the relevant ward members to give them the opportunity tomake representations to the Executive on the proposed disposal.


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8. The relevant Director or designated officer will where appropriate apply forany planning permission or other consent.

9. Where disposal by selected tendering is agreed, a report will be submitted to

the relevant body. The report will set out:

those considered for selection

those recommended for selection

the reasons for the recommendation

10. Where disposal is to be by open tender, the relevant Director or designatedofficer will advertise the property and seek competitive tenders reserving theright not to accept the highest or any bid. Advertisements will be placed intwo newspapers circulating in the borough and in such other publication asthe Director or designated officer considers necessary. The closing date for

bids shall be not less than two weeks after the latest publication date.

11. The particulars of sale must indicate the method by which tenders are to bemade. Tenders should not be considered unless contained in a plainenvelope securely sealed and bearing the word Tender followed by thesubject of the disposal and should not bear any other distinguishing mark toidentify the tenders. The envelope should be addressed impersonally to theDirector or designated officer and until the time appointed for opening shallremain in his or her custody. The Director or designated officer will maintain alist of all such tenders received distinguishing between those received beforeand after the closing date and time.

12. Tenders shall only be opened at one time, and only in the presence of:-

12.1 The relevant Director or designated officer or his/her nominatedrepresentative.

12.2 An officer from Legal services.

13. Following the opening of the tenders, the Director or designated officer shallarrange for them to be scrutinised for compliance with the specified conditionsof tender and subject to paragraph 14 report to the relevant body or Cabinet

Member if he/she has authority to accept the bid under the Leaders schemeof delegation relating to executive functions. The Director or designated officerwill ensure that full enquiry is made as to the identity of the recommendedpurchaser and that the relevant information is clearly set out in the report.

14. Where a tender, amended tender or other bid is received after the specifiedclosing date or time, or made other than in accordance with the specifiedconditions of tender, and would otherwise have been acceptable, the Directoror designated officer must report the result of the tenders received includingdetails of late or non-complying tenders to the next meeting of the relevantbody.


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15. Where a bid or offer is made after the relevant body or Cabinet Member hastaken a decision to accept an earlier bid or offer then the later bid or offer shallnot be considered unless, in the Directors view (after consulting LegalServices), it is necessary to do so in order for the Council to comply with

statutory duties. In that case, the Director or designated officer shall reportthe matter to the relevant body or Cabinet Member for, or, in cases ofurgency, take a decision under delegated powers and report afterwards to therelevant body.

16. The relevant body may decide to accept a tender or bid that is not the highestbut must explain the reasons.

17. Where disposal by public auction has been agreed, the Director or designatedofficer shall before the auction begins provide the auctioneer with a note ofthe reserve price, if applicable, in a sealed envelope having previously agreed

this in consultation with the Cabinet Member. The auctioneer shall open theenvelope in the presence of the public to ascertain the reserve price but shallnot communicate its contents to any person whatsoever. If the reserve priceis equalled or exceeded, agreement for the sale to the highest bidder shall beconcluded forthwith. If the reserve price is not reached, the property will bewithdrawn from the auction and the matter reported to the relevant body.

18. All other disposals shall be regarded as disposal by private treaty and theDirector or designated officer shall be responsible for:-(i) Taking all necessary steps to determine the level of potential interest

from prospective purchasers and to identify any parties who might wishto purchase the property.

(ii) Determining how the negotiations for each potential disposal by privatetreaty are to be conducted and setting the process out in writing.

(iii) Ensuring that full and reasonably contemporaneous records are madeof all negotiations and that those records are appropriately storedeither by hard copy or electronic means.

(iv) Upon the conclusion of negotiations reporting the results to the relevantbody or Cabinet Member for consideration or where it is appropriate todo so for consultation with the Cabinet Member

(v) Ensuring that full enquiry is made as to the identity of therecommended purchaser and that the relevant information is clearly setout in the report referred to in (iv) above.

19. All recommendations for approval of the sale price and other terms of disposalmust contain a statement from the Chief Valuer or, if appointed, from suitablyqualified external agents that the Council will obtain the best price which canreasonably be obtained or that there is approval through the General Consentor that the consent of Central Government has been obtained or will besought to enable the disposal of the property to proceed as recommended.


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20. The relevant body or Cabinet Member may decide to repeat or postpone thedisposal process.

21. The relevant body may decide to change a previously approved method of

disposal.

22. Where the prospective purchaser will be required by the Council to enter intoobligations in the legal documentation in favour of the Council or of any otherparty or for the benefit of the locality, then the Director or designated officerwill ensure that full and proper enquiry is made as to the financial and othercapacities of the purchaser to carry out the obligations. In so doing, theDirector or designated officer will consult as necessary with the Chief FinanceOfficer, Legal Services, and other Directors and Chief Officers as appropriate.The Director or designated officer will set out the outcome of those enquiriesand consultations in the report seeking approval to the disposal.

23. Where the Council is disposing of property jointly with another party then tothe extent that the procedures for the disposal do not accord with these Rulesthey must be approved in advance by the relevant body.

24. (i) Once a disposal has been approved, the Director or designated officerwill ensure that the Assistant Director - Legal is provided with full andaccurate instructions to enable the legal documentation to be preparedin accordance with the terms of disposal agreed by the parties andapproved on behalf of the Council. In cases of urgency, the Director ora designated officer may provide instructions to the Assistant DirectorLegal to prepare and submit to the prospective purchaser or lessee orhis/her/its advisors the draft legal documentation, subject to obtainingCouncil authority.

(ii) The Assistant Director - Legal will ensure that the Director ordesignated officer is provided with a copy of the draft legaldocumentation for comments/approval before it is sent to theprospective purchaser or lessee or his/her/its advisors except in casesof urgency where the documents will be submitted to the Director ordesignated officer simultaneously with submission to the prospective

purchaser.

(iii) The Director or designated officer will confirm in writing that the draftdocumentation provided by the Assistant Director - Legal fully andaccurately sets out the terms of disposal as agreed by the parties andapproved on behalf of the Council.

(iv) The Assistant Director - Legal will consult the Director or designatedofficer in writing on all and any substantive amendments to the draftdocumentation and the Director or designated officer will respond to


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Management of Real Estate, Property and Land - 6

the Head of Legal in writing with comments on each proposedamendment to the draft documentation.

(v) Prior to completion the Assistant Director - Legal will forward to theDirector or designated officer a copy of the final draft of the legal

documentation as agreed with the prospective purchaser or lessee orhis/her/its advisors and the Director or designated officer will readthrough the final draft documentation in order to verify that thedocumentation fully and accurately sets out the terms of disposal asagreed by the parties and approved on behalf of the Council.

(vi) The Assistant Director - Legal will not proceed to engross andcomplete any legal documentation unless and until the Director ordesignated officer has provided verification in writing that the final draftdocumentation fully and accurately sets out the terms of disposal asagreed by the parties and approved on behalf of the Council.

(vii) Reference to the Assistant Director - Legal includes officers authorisedby the Assistant Director - Legal to carry out these instructions.

25. The relevant Cabinet Member or Director or the designated officer willregularly report to the relevant body on the progress of all previouslyapproved disposals.

contract procedure rules

Documents