Pay online
Find a form
Bin & Wheelie collections
Find your councillor
Council meetings & agenda
Compliment, comment or complaint
Garden waste collection
Licence applications
Planning Applications
Publications
Clubs & Organisations
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 quality goods, services and works
1.1.4 Safeguards its reputation from any implication of dishonesty or corruption.
Purchasing by the Council, from planning to delivery, shall incorporate (where appropriate) principles of sustainability, efficiency, whole life costings and cost savings.
These Contract Standing Orders are made in accordance with the requirements of Section 135 of the Local Government Act 1972.
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 that accompanies this document.
Good and effective purchasing must be embedded in the day to day practices of the Council. The key objectives of purchasing, outlined in CSO 1.1 and CSO 1.2 must be taken into account from the initial planning and conceptual stages of the purchasing process. The purchasing process is not limited to the stage when you seek a quote or tender.
Failure to consider these key issues can impact on both the quote or tender process, and also the long term delivery of the works, supplies or services which are being purchased
Example: You need to think carefully about the quality and specification for the goods you wish to purchase. Failure to incorporate your requirements into the contract may result in substandard or poor quality goods being provided to the Council. The Council is unlikely to be able to do very much about this, if its own requirements have not been clearly specified in the tender and contract documents.
Conversely, if the Council has clearly specified the quality of the goods required and when delivered they are not up to standard, then the Council will be able to ensure that standards can be improved or, potentially, cancel the contract arrangements.
You must take into account the principles of sustainability, efficiency, whole life costings and cost savings, during the purchasing process.
"Sustainability": The UK Government’s sustainable development strategy sets out four key priority areas for action:
Sustainable procurement is a process whereby organisations meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life basis in terms of generating benefits not only to the organisation, but also to society and the economy, whilst minimising damage to the environment.
"Efficiency": The Council must continuously improve all its services. This means that the Council must purchase the most appropriate best value works, supplies or services and deliver continuous improvement throughout each contract. For contracts which relate to more than just a one off purchase, the Council will need to exercise ongoing monitoring and review of the contract to ensure
a) customer satisfaction,
b) continued high quality delivery,
c) compliance with environmental and equality standards, and
d) the opportunity to identify service improvements and cost savings.
This could be reflected in an efficiency and improvement clause in the contract. See further comments on standard clauses at CSO 3.
"Whole life costing": requires you to ensure that the whole potential cost of the contract is taken into account.
Example:In letting an equipment supply contract, as well as the initial capital spend, you need to consider the length of the asset’s useful life, the cost of ongoing maintenance, replacement of parts and servicing and consumables, so that there is true cost to the Council of the purchase being made. To buy a copier which initially costs £2,500 may be more expensive than one that initially costs £4,500, if the cheap copier uses expensive paper and toner, needs servicing every three months and is scrapped after 5 years, whilst the more expensive one uses cheaper paper and toner, needs servicing only once every 2 years and lasts for 10 years.
"Cost savings": Each contract for purchase must set out the agreed price to be paid by the Council to the contractor. The Council cannot then unilaterally reduce the price but conditions relating to long term service improvement and efficiencies can be incorporated into the contract documents.
There may be ways of structuring a purchasing exercise to save costs. This might be through a joint purchasing exercise with other councils, or by re-examining the way a service is provided.
Effective contract monitoring is essential to achieve continuous improvement, especially during the implementation of long-term contracts, particularly if the contractor is under a duty to work with the Council to seek improvements in delivery and efficiency. It is usually sensible to provide for annual reviews in the contract, which can then be tied in with, for example, payments to reflect good performance and provisions allowing for inflation increases.
Example: The Council needs to demonstrate to central government each year, its compliance with the Local Government Equalities Standard. An obligation in the contract to ensure ongoing compliance with Equalities legislation is of little value if the Council fails to review and record the contractor’s compliance regularly.
If the Council knows that a contractor is not complying with contract requirements, then it needs to address the matter promptly. If the Council has regularly raised and recorded issues with a contractor, made formal requests for improvements, which are not delivered, then there may be a clear basis for either an action for damages or termination.
Section 135 of the Local Government Act 1972 obliges councils to make standing orders for contracts for the supply of goods and materials and the execution of works entered into by the Council or on behalf of the Council. The Act requires that the standing orders must include provisions for securing competition for such contracts and must also regulate the way in which tenders are invited. The Act allows for exemptions from the obligation to tender out below a specified threshold and where exemptions identified in the standing orders apply.
This Purchasing Guide is the guide referred to in CSO 1.4. It provides broader guidelines on the best way to purchase works, supplies (goods) and services.
Next page: General Principles – Application and Compliance with Contract Standing Orders
Procurement
E-mail: contracts@thanet.gov.uk
Tel: 01843 577111