A to Z of Services

A| B| C| D| E| F| G| H| I| J| K| L| M

| N| O| P| Q| R| S| T| U| V| W| X| Y | Z

 

  Constitution

Contracts' Procedural Rules

Back to Constitution Contents webpage

1.0 Contract Procedure Rules

1.1 Introduction

 

These Procedure Rules, which are required by Section 135 of the Local Government Act 1972, apply to all contracts that the Council enters into after 1^st August 2008.  Any Tender already in place for works, materials or services will be governed by the Procedure Rules in force at the time the Tender was issued.

 

1.2 Value for Money

 

In some parts of these Procedure Rules, Officers are given discretion in what they do, or are able to issue instructions based on that discretion.  If this is the case, then they are only able to exercise that discretion or issue such an instruction if they can show that it allows the Council to achieve value for money and the efficient provision of services by or to the Council in all the circumstances.

 

1.3 Best Value

 

When preparing Contracts, Officers must be guided by the requirements of Best Value and must follow all guidelines issued by an Officer of the Performance and Improvement Team in consultation with the Head of Legal and Democratic Services

 

1.4 Interpretation and Definitions

 

1.4.1 These Procedure Rules are to be read in the context of legislation and relevant European Community Rules dealing with publicity, the compilation of Select Lists, issuing invitations to tender and anything else which relates to the letting of Contracts by the Council.  These Contract Procedure Rules shall always be considered in the light of any procurement strategy, Government legislation and EC rules.  Regard must also be had to the Council’s Procurement Code of Practice and any guidance issued in respect of electronic tendering, framework agreements and the appointment of consultants.

 

1.4.2 The Head of Legal and Democratic Services is responsible for the interpretation of these Contract Procedure Rules.  The Head of Legal and Democratic Services is also responsible for preparation and guidance on particular aspects of Procedure Rules, including European Public Procurement.

 

1.4.3 The singular shall include the plural and the masculine gender shall include the feminine gender and vice versa.

 

1.4.4 In these Contract Procedure Rules, the following expressions have the following meanings:-

 

Executive	Includes any Committee or Sub-Committee of the Executive
Contract	Includes any Official Order issued by a Head of Service or other authorised Officer
Contractor	The legal personality with which the Council contracts
Financial Procedure Rules	The Financial Procedure Rules of the Council
Goods and Services	As defined in the European Procurement Directives
Head of Internal Audit	The appointed Officer or any Officer authorised by him
Official Order	An Official Order issued in accordance with Financial Regulations
Quotation	The written statement of the market price of specified goods, services or work
Select List	The Council’s Select List of Contractors
Head of Service	The appointed Head of Service, Chief Executive, Deputy Chief Executive or any person authorised by either of them.
Tender	A formal written offer made in competition to supply specified goods or services or carry out specified work at a stated cost or rate
Work or Works	As defined in the European Procurement Directives

 

1.4.5 Subject to 1.5 below these Contract Procedure Rules apply to all Contracts between the Borough Council and any Contractor (including consultants) whether or not the Contract involves the Council paying or receiving money or any other consideration.

 

1.5 Exceptions to Procedure Rules

 

These Contract Procedure Rules shall apply to all Contracts except:-

 

(a) if the Council or the Executive decides otherwise and gives its reasons in the Minutes.

 

(b) in the case of an emergency or other special circumstance identified by the appropriate Head of Service.  If this happens, the Head of Service must either submit a report to the next available meeting of the Executive explaining why he considered it was an emergency or special circumstance or, alternatively, include a report in the Information Digest. The report must identify the particular Procedure rule(s) which have not be followed and the reasons.

 

(c) Contracts of employment entered into by the Head of Personnel and Development in relation to directly employed staff.  Where Consultants or other individuals (including temporary staff) are appointed to carry out specific services, Contract Procedure Rules do apply.

 

(d) when dealing with the acquisition or disposal of interests in or rights over land.

 

(e) when dealing with the Council funding of particular voluntary sector bodies

 

(f) When using  Framework Agreements entered into by third parties subject to (i) the proposal to use a framework agreement having been considered at a prior meeting of the Procurement Advisory Board  (ii) agreement to its use by Management Team and (iii) the proposed documentation having been agreed by the Head of Legal and Democratic Services.

 

1.6 Amendment and Review

 

1.6.1 These Contract Procedure Rules may only be amended by submitting a report to the Executive which will make recommendations to the Full Council.

 

1.6.2 The Head of Financial Services must, in consultation with the Head of Legal and Democratic Services, review the financial limits in these Contract Procedure Rules at least every five years and report any recommendations to the Executive which will make recommendations to the Full Council.

2.0 Certificate Under Local Authorities (Contracts) Regulations 1997

2.1 The Local Government (Contracts) Act 1997 and regulations made thereunder provide for a local authority to certify that it has the powers to enter into a contract. 

 

2.2 If any Officer is asked to issue a certificate under the Local Authorities (Contracts) Regulations 1997, he must immediately report the situation to the Head of Legal and Democratic Services.

 

2.3 Any Certificate under the Local Authorities (Contracts) Regulations 1997 shall only be issued if the Council agrees with the proposal following a joint report to the Executive by the Head of Internal Audit, the Head of Legal and Democratic Services and the Chief Executive.  The form of any such Certificate must be approved by the Council’s Monitoring Officer and signed by the Council’s statutory Chief Finance Officer.

 

2.4 The Executive will make a recommendation to the Full Council.

3.0 Annual Contracts/Aggregation

3.1 A Head of Service should think about tendering for an annual (or “call off”) Contract if he is likely to need a number of similar requirements during a financial year but cannot realistically estimate the amount of work or cost involved.  In such cases, orders may be issued as required on the basis of previously tendered rates or prices.

 

3.2 Officers must not break down what would normally have been a single Contract into smaller lots in order to avoid the provisions of these Contract Procedure Rules or appropriate EC Directives.

4.0 Market Testing/Indicative Bids

If an Officer wants to find out about the market price of an item or service (either for Best Value benchmarking or for some other reason) then he must make it clear in the invitation that he is not planning to choose a service provider but is simply finding out whether or not the Council will ask for Tenders at a later date.

5.0 Contracts Excluded From Competition

Whilst there is a general presumption against single supplier tendering and sourcing for all procurements, Tenders or Quotations must be sought for all Contracts with a value in excess of £5,000 except where:-

 

(a) the Head of Service is satisfied that goods or materials are only available from one manufacturer or that the services can only be supplied by one Contractor. The Head of Service is responsible for this decision and must document the reasons for such decision and make this available for audit purposes

 

(b) the identity of the person supplying a professional service is particularly important. The Head of Service is responsible for this decision and must document the reasons for such decision and make this available for audit purposes

 

(c) the work is of a specialist nature and the skill of the particular Contractor is particularly important. The Head of Service is responsible for this decision and must document the reasons for such decision and make this available for audit purposes

 

(d) parts are being bought for existing machinery or plant.

 

(e) goods or materials are bought through a consortium of which the Council is a Member.

 

(f) the Contract is a continuation of an existing Contract - but note: This exception only applies if the new Contract is negotiated with the Contractor on the basis of rates and prices which were originally agreed (in the existing Contract) through the normal tendering process.  This exception can only be used to allow any one Contract to be extended once except in the case of Housing Revenue Account Programme of Works contracts. The Procurement Advisory Board must be advised of any proposed negotiation of a continuation contract. In cases involving Housing Revenue Account Programme of Works contracts the following will apply:

 

       (i) any proposed extension being agreed with the Head of Legal and Democratic Services

       (ii) any contract or extension shall not exceed four years in duration

       (iii) the original tender documentation having indicated the possibility of any potential extension

       (iv) the Head of Housing being satisfied  that following a review of the contractors previous performance that it is
       proper for an extension to be granted

 

(g) equipment needs to be maintained by the manufacturer of that equipment and only the manufacturer can provide the maintenance.

 

(h) where equipment is supplied under terms which require maintenance be undertaken by a specified provider.

 

In the event of doubt as to whether any exception can be used, the Head of Service should seek the advice of either the Head of Internal Audit or the Head of Legal and Democratic Services

 

Where the estimated value of a consultancy contract exceeds £5,000 and competitive tenders or quotations are not proposed the approval of Management Team must be sought prior to entering into a contract.

 

These exceptions are conditional on any statutory or European constraints

6.0 Contracts Which Must Be Made Under Competition

6.1 Estimate of Contract Cost

 

Prior to issue of Tender documentation, the Head of Service must estimate what he thinks the proposed Contract will cost and keep a record of his estimate and how he made the calculation.

 

6.2 Public Advertisement

 

Whilst this Standing Order gives Financial Limits regard must always be had to the EU Requirements in respect of Low Value Advertising.

 

6.2.1 A public advertisement must (unless otherwise agreed by the Head of Legal and Democratic Services) be placed:-

 

(a) whenever the estimated cost or income exceeds £150,000 (Goods and Services) or £250,000 (Works) except in the case of Housing Revenue Account Programme of Works where this shall only apply to the first phase of any contract subject to full financial vetting being carried out when any (individual) extension exceeds £250,000 in value.

 

(b) if a Head of Service thinks it is in the Council’s interest.

 

(c) if required under EC Rules or Government legislation.

 

6.2.2 Prior to placing an advertisement the Head of Service must have a clearly written selection criteria which will be used for selecting those to be invited to tender. The selection criteria shall not include any non-commercial matters unless the Head of Legal and Democratic Services is satisfied that the provisions of the Local Government Best Value (Exclusion of Non-Commercial Considerations) Order 2001 apply A written record must be kept by the Head of Service identifying the reasons why anyone who has responded to the advertisement has not been selected for tendering purposes. This record and the selection criteria should be retained with the contract documentation.

 

6.2.3 The procedure for public advertisement (except where 6.2.4 applies) is as follows:-

 

(a) an advertisement needs to be placed in at least one local newspaper, if appropriate, and in one or more newspapers or journals which are likely to be read by potential suppliers.  The advertisement needs to explain what the Contract is for and give potential Contractors at least 10 clear working days to express an interest.

 

(b) when the closing date is reached, Tender documents must be sent to those potential suppliers who meet the right technical standards and – for Contracts costing more than £150,000 (Goods and Services) or £250,000 (Works) – who have been financially vetted.  The number of people invited to tender is down to the Head of Service, who needs to ensure that he invites enough people to achieve value for money but wherever possible shall not be less than four.

 

6.2.4 If EC Rules or legislation apply, then those Rules or legislation must govern the way in which the advertisement is placed.  All EC advertisements must be placed by the Head of Legal and Democratic Services through the Office for Official Publications of the European Communities.  The EC advertisement must be despatched before any national advertisement appears.

 

6.2.5 Except where the Select List procedures apply, any proposed tender with a value in excess of £50,000 should be advertised using the South East Business Portal (SEBP) (Minute No. 81/6/09 refers) and allowing prospective tenderers at least ten clear working days to express an interest.

 

6.3 Contracts for the supply of Goods or Services

 

6.3.1 Estimated Value to exceed £150,000

 

(a) There must be a public and South East Business Portal (SEBP) advertisement unless the requirement for public advertisement has been waived- Contract Procedure Rule 6.2).

 

(b) The Head of Service must prior to selecting any prospective tenderers have a clearly written selection criteria. .The selection criteria shall not include any non-commercial matters unless the Head of Legal and Democratic Services is satisfied that the provisions of the Local Government Best Value (Exclusion of Non-Commercial Considerations) Order 2001 apply.

 

(c) Any Contractor invited to tender must be have been vetted for technical competence.

 

(d) No contract shall be awarded unless a satisfactory financial reference in respect of the successful tenderer has been received.

 

(e) When inviting Tenders, the Head of Service must at the same time inform the Head of Internal Audit and the Customer Contact Centre. They must also specify the proposed arrangements for the opening of Tenders received.

 

6.3.2   Estimated Value at between  £50,000 and £150,000

 

(a) Except where the Select List procedures apply the proposed procurement shall be advertised on the South East Business Portal (SEBP) giving potential suppliers at least ten clear working days to express an interest.

 

(b) The Head of Service is responsible for identifying prospective suppliers.  If possible, four  suppliers who have been vetted for technical competence should be invited to tender. The Head of Service must keep a written record of his selection criteria. In the event of the Head of Service wishing to invite less than three tenders the prior approval of Management Team must be sought.

 

(c) When inviting Tenders, the Head of Service must at the same time inform the Head of Internal Audit and the Customer Contact Centre. They must also specify the proposed arrangements for the opening of Tenders received.

 

(d) The Head of Service can accept the lowest tender as long as it is for less than £150,000 unless less than three tenders are received when the agreement of Management Team must be first obtained

 

6.3.3   Estimated Value between £25,000 and  £50,000

 

(a) The Head of Service needs to be satisfied, as far as possible, that anyone invited to quote for the work is technically competent.  At least three quotations must be sought.

 

(b) Heads of Service should ask for quotations to be returned in a plain sealed envelope labelled “Quotation”, followed by the subject to which it relates.  The envelope must be addressed to the Head of Service.

 

(c) Quotation envelopes shall be kept in a secure place by the Head of Service until it is time for them to be opened.

 

(d) All quotations shall be opened at the same time, if possible, on the day that quotations close.

 

(e) The Head of Service can accept the lowest quotation as long as it is for less than £50,000 unless it is the only quotation when the agreement of the Head of Financial Services must be first obtained.

 

6.3.4   Estimated Value between £5,000 and £25,000

 

(a) The Head of Service needs to be satisfied, as far as possible, that anyone invited to quote for the work is technically competent. At least two quotations must be sought.

 

(b) Heads of Service should ask for quotations to be returned in a plain sealed envelope labelled “Quotation”, followed by the subject to which it relates.  The envelope must be addressed to the Head of Service.

 

(c) Quotation envelopes shall be kept in a secure place by the Head of Service until it is time for them to be opened.

 

(d) All quotations shall be opened at the same time, if possible, on the day that quotations close.

 

(e) The Head of Service can accept the lowest quotation as long as it is for less than £25,000 unless it is the only quotation when the agreement of the Head of Financial Services must be first obtained.

 

6.3.5 Estimated value up to £5,000

 

No tender or quotation is necessary but the Head of Service must have regard for value for money and Best Value.

 

6.4 Contracts for the Execution of Work

 

6.4.1   Estimated Value to exceed £250,000

 

(a) There must be a public and South East Business Portal (SEBP) advertisement (unless the requirement has been waived - Contract Procedure Rule 6.2).

 

(b) The Head of Service must prior to selecting any prospective tenders have a clearly written selection criteria. .The selection criteria shall not include any non-commercial matters unless the Head of Legal and Democratic Services is satisfied that the provisions of the Local Government Best Value (Exclusion of Non-Commercial Considerations) Order 2001 apply.

 

(c) Prior to inviting tenders a satisfactory financial reference must be obtained in respect of the proposed tenderer together with evidence of technical competence.

 

(d) A Surety Bond or guarantee from a parent company is required unless the Head of Service determines otherwise. If a Surety Bond is required for any contract, then the tender documentation needs to ask all tenderers to price for the Bond as a separate item.

 

(e) When inviting tenders, Heads of Service must at the same time inform the Customer Contact Centre giving brief details of the contract and specifying the proposed arrangements for opening of tenders received.

 

6.4.2 Estimated Value between £150,000 and £250,000

 

(a) Except where the Select List procedures apply the proposed procurement must be advertised on the South East Business Portal (SEBP) giving potential contractors at least ten working days to express an interest.

 

(b) The Head of Service must prior to selecting any prospective tenderers be in receipt of a satisfactory financial reference and have a clearly written selection criteria which shall not include any non-commercial matters unless the Head of Legal and Democratic Services is satisfied that the provisions of the Local Government Best Value (Exclusion of Non-Commercial Considerations) Order 2001 apply.

 

(c) the Head of Service is responsible for identifying prospective Tenderers.  If possible, four Contractors who have been vetted for technical competence should be invited to tender.

 

(d) A Surety Bond is not required unless the Head of Service wants one.  If a Surety Bond is required for any Contract, then the documentation must ask all Tenderers to price for the Bond as a separate item.

 

(e) When inviting Tenders, the Head of Service must at the same time inform the Head of Internal Audit and the Customer Contact Centre giving brief details of the contract and  specifying the proposed arrangements for the opening of Tenders received.

6.4.3 Contracts estimated to be between  £50,000 and  £150,000

 

(a) If there is a Select List of potential Contractors for the type of work to be carried out, it must be used (subject to personal limit being not less than the estimated contract value when seeking Tenders) except where a public advertisement is used under Contract Procedure Rule 6.2.

 

(b) Tenders shall be invited from at least three Contractors on the appropriate category of the Select List.

 

(c) Where the category of work is not included in the Select List, the Head of Service is responsible for identifying prospective Tenderers. An advertisement must be placed on the South East Business Portal (SEBP). At least three Contractors who have been vetted for technical competence should be invited to tender.

 

(d) When inviting Tenders, the Head of Service must at the same time inform the Head of Internal Audit and the Customer Contact Centre giving brief details of the contract and specifying the proposed arrangements for the opening of Tenders received.

 

(e) A Surety Bond is not required unless the Head of Service wants one.  If a Surety Bond is required for any Contract, then the documentation must ask all Tenderers to price for the Bond as a separate item. 

 

6.4.4 Contracts estimated to be between £5,000 and £50,000 in total value

 

(a) The Head of Service needs to be satisfied, as far as possible, that anyone invited to quote for the work is technically competent and in a position to fulfil the contract.

 

(b) Quotations shall be invited from at least two Contractors.

 

(c) The Head of Service should ask for quotations to be returned in a plain sealed envelope labelled “Quotation”, followed by the subject to which it relates.  The envelope must be addressed to the Head of Service.

 

(d) Quotation envelopes shall be kept in a secure place by the Head of Service until it is time for them to be opened.

 

(e) All quotations shall be opened at the same time, if possible, on the day that quotations close.

 

(f) The Head of Service can accept the lowest quotation as long as it is for less than £50,000 unless it is the only quotation when the agreement of the Head of Financial Services must first be obtained.

 

6.4.5 Contracts for less than £5,000 in value

 

No tender or quotation is necessary but the Head of Service must have regard for value for money and Best Value.

 

7.0 Tender Return

 

7.1 Unless use is being made of electronic tendering, the tender documentation must make it clear that tenders are to be returned in plain sealed envelopes or packages which clearly state “Tender” followed by the subject involved and which bear no mark or identification of the sender. The envelope or package must be addressed to the Customer Contact Centre.

 

7.2 The procedure to be adopted in respect of electronic tendering shall be in accord with a protocol prepared by the Head of ICT in consultation with the Head of Legal and Democratic Services.

8.0 Surety Bonds And Parent Company Guarantees

8.1 Where a Surety Bond is required, it has to be:-

 

(a) in a form to be determined by the Head of Legal and Democratic Services.

 

(b) valued at 10% of the Contract Sum unless otherwise agreed  with the Head of Financial Services.

 

(c) with a financial institution approved by the Head of Financial Services.

 

8.2 The Head of Service can obtain a parent company guarantee instead of a Bond, in which case, it must be in a form which is acceptable to the Head of Legal and Democratic Services .

 

9.0 Tendering And Quotation Procedures

9.1 Fixed Budget Tenders

 

9.1.1 Where a project has a fixed level of funding and it is not practical to specify in detail the extent of the work, supply or service required, tenderers should be given the budget figure and asked to specify what they would provide for the money.

 

9.1.2 The Tender documentation needs to set out how the Tender will be evaluated.

 

9.1.3 The Head of Service is responsible for making sure his selection process is clearly documented and “transparent” and should keep a full written record of his evaluation process.

 

9.2 Receiving, Looking after and Opening of Tenders (non-electronic)

 

9.2.1 Except where Contract Procedure Rule 9.3 applies, no Tender can be considered unless it is received in a plain sealed envelope or package bearing the word "Tender" followed by the subject to which it relates.  Tenders must be securely looked after by the Customer Contact Centre until they are passed to the Head of Service  at the time when they are due to be opened.

 

9.2.2 All Tenders shall be opened at the same time, if possible on the day that the Tenders close.  If the estimated cost is £250,000 or less, they may be opened by the Head of Service in the presence of another Officer.

 

9.2.3 When the estimated cost exceeds £250,000, Tenders must be opened in the presence of the Head of Service, the Head of Internal Audit and a Member of the Council.  The Customer Contact Centre must not release the Tender envelopes until these people are available.

 

9.2.4 When opening Tenders, Heads of Service must make sure that a Tender Return Sheet is completed.  Each Tender sum must be recorded on this Sheet, which must be signed by all those present at the opening and passed to the Head of Financial Services with a copy to the Head of Internal Audit.

 

9.2.5 The Head of Service is responsible for keeping the Tender documentation safe during the evaluation process, after which the successful Tender forms part of the contract.  The second most acceptable Tender should be kept by the Head of Service for a minimum of three months.

 

9.2.6 Up until a formal contract has been agreed with the successful Tenderer, all sums involved should be treated as confidential.  They must only be disclosed to Officers or Members who need to know in connection with their duties or to comply with these Contract Procedure Rules.

 

9.2.7 In the case of contracts with a value in excess of the EC threshold, the outcome of the tendering exercise must be formally notified to unsuccessful Tenderers at least 15 calendar days prior to the successful Tenderer contracting with the Council. The successful Tenderer must be informed of the notification sent to the unsuccessful tenderers advising that the Council may:

 

(a) until the contract has been signed either abandon the procurement or cancel the award procedure without the tenderers being entitled to claim any compensation.

 

(b) suspend signing the contract for additional examination, if justified by requests or comments made by unsuccessful tenderers during the fifteen day period or by any other relevant information received during that period.

 

9.3 Marked Tenders

 

If the Tender envelope or package reveals the identity of the Tenderer:-

 

(a) the Tender must be opened in accordance with Contract Procedure Rule 9.2.

 

(b) if the Head of Service wants to accept the Tender, he can only do so if the Head of  Legal and Democratic Services  agrees.

 

9.4 Late Tenders

 

If a Tender envelope or package is received after the time and date for then return of tenders then it shall not be considered. This must be made clear to prospective tenderers in the Instructions to Tenderers.

 

9.5 Tender Negotiation

 

9.5.1 This will only be permitted where:-

 

(a) the Tender has been invited under the European Community negotiated or competitive dialogue procedure and notice has been given by the Head of Legal and Democratic Services in the Supplement to the Official Journal of the European Communities.

 

OR

 

(b) the Tender figure is below the appropriate European Community threshold and the Head of Legal and Democratic Services has agreed to the use of a negotiated procedure.

 

OR

 

(c) the aim is to negotiate the continuation of an existing Contract in accordance with the provision of Contract Procedure Rule 5(f).

 

9.5.2 Where a negotiated procedure is used:-

 

(a) there must be a clear and rigorous method of evaluating Tenders that takes account of price, quality, innovation and improvement.

 

(b) all prospective Tenderers must be told in advance how the evaluation will be carried out.

 

(c) at least two Officers must carry out the evaluation and agree on the results.

 

9.5.3 Where post-Tender negotiations take place:-

 

(a) they must always be carried out by more than one Officer from the Council.

 

(b) clear delegation limits must have been given to the negotiators.

 

(c) an accurate written record must be made promptly following all formal and informal meetings.

 

(d) the results of negotiations must be fully documented.

 

9.6 Tender/Quotation in Excess of Estimate

 

9.6.1 Subject to 9.6.1(a), 9.6.1(b) and 9.6.2, if the most acceptable Tender or Quotation exceeds the budget estimate, it can only be accepted if it is approved by the Executive and only then if it is within the budget head threshold.  If it exceeds that amount the Executive must make a recommendation to the Full Council.

 

(a) If the cost of the scheme (including fees) is within the Capital Programme, and does not exceed the estimate by more than 10% or £25,000 (whichever is the less) the Tender/Quotation may be accepted if the Head of Financial Services is satisfied that the Head of Service can find compensatory savings on other approved capital schemes which are within that Committee’s programme and which will be underspent at completion.

 

(b) for a scheme funded from the Revenue Budget, a Tender/Quotation can be accepted which exceeds the estimate by up to 10% if the Head of Financial Services is satisfied that the Head of Service can find equivalent savings within the approved Revenue Budget for that Committee.

 

9.6.2 The provisions of 9.6.1 may, in the case of Housing Revenue Account Programme of works be waived by the Head of Housing subject to the prior agreement of the Head of Financial Services.

 

9.7 Evaluation of Tenders/Quotations

 

9.7.1 Tender documentation must explain how Tenders will be evaluated.

 

9.7.2 The way Quotations will be evaluated needs to be recorded by the Head of Service in advance unless price is to be the only criterion.

 

9.8 Acceptance of Tenders/Quotations

 

9.8.1 No Tender or Quotation should be accepted by notifying the proposed Contractor in advance of the Contract itself being issued unless the Head of Legal and Democratic Services agrees.

 

9.8.2 If a Tender is to be accepted, the lowest Tender must be accepted if the Council is paying for goods and services and the highest Tender must be accepted if payment is to be received by the Council unless:-

 

(a) the Executive (in relation to Executive functions) or the Council or appropriate Committee (in relation to Council functions) decides otherwise following a report from the Head of Service concerned.

 

OR

 

(b) the Tenders or Quotations are evaluated in accordance with Contract Procedure Rule 9.7.1 and the evaluation suggests that accepting another Tender would be in accord with such evaluation criteria.

 

9.8.3 A Tender or Quotation that needs changing or revising (other than because of an arithmetical error or where post-Tender negotiations are permitted) shall only be accepted after consulting the Head of Legal and Democratic Services.

 

9.8.4 No Tender or Quotation which would be part of a larger Contract should be accepted unless it fully satisfies the conditions of the principal Contract concerning sub-letting.

 

9.8.5 No Tender or Quotation shall be accepted unless the Head of Service is satisfied that the Tenderer has adequate public liability and other relevant insurance.

10.0 Contractual Arrangements

10.1 General Requirements

 

10.1.1 For the purposes of the Local Authorities (Executive Arrangements) (Modification of Enactments and Further Provisions) (England) Order 2001 every Contract with a value in excess of £50,000 shall be in writing and be the subject of one of the following:-

 

(a) a Contract prepared or settled by the Head of Legal and Democratic Services.

 

(b) one of the national standard forms of Contract previously agreed with the Head of Legal and Democratic Services for that type of work.

 

(c) some other documentation approved by the Head of Legal and Democratic Services.

 

(d) an Official Order (subject to Procedure Rules 10.1.3 and 10.1.4 below).

                 

10.1.2 All Official Orders must comply with the requirements of Financial Procedure Rules.  They must not incorporate or be deemed to incorporate (by acknowledging a Contractor’s Official Order or otherwise) any condition unless that condition has been approved by the Head of Legal and Democratic Services.

 

10.1.3 If any proposed Contract for the supply of goods, plant, equipment, machinery or vehicles requires or will necessitate either the supplier or a third party providing maintenance or support the Head of Legal and Democratic Services  needs to approve the  terms for  such maintenance and/or support.

 

10.1.4 Every Contract over £75,000 shall be under seal unless the Head of Legal and Democratic Services agrees it is inappropriate.  A Contract of £75,000 or less can be under seal if the Head of Service considers it should be.

 

10.1.5 It is a requirement of the Local Authorities (Executive Arrangements) (Modification of Enactments and Further Provisions) (England) Order 2001 that any contract required to be in writing by virtue of these Procedure Rules must either be under seal or signed by at least two Officers of the Council.

 

10.1.6 The Head of Service is subject to the provisions of these Contract Procedure Rules authorised to sign contracts not required to be under seal unless the value of the contract is in excess of £50,000 when it shall be signed by the Head of Service and an Officer of Grade MG7 or above.

 

10.2 What the Contract must include

 

10.2.1 Every Contract must:-

 

(a) specify what goods, services or work are to be supplied or performed.

 

(b) specify the price to be paid, the estimated price or basis upon which the price is to be calculated and say what discounts or other deductions have been agreed.

 

(c) specify the time or times within which the Contract is to be performed.

 

(d) require that goods or services used or supplied and workmanship carried out is in agreement with the appropriate Standard.  If there is an appropriate and current Agrement, Standard Specification or Standard Code of Practice issued by either the British Standards Institution or a recognised body of any Member state of the EC, then that Agreement and/or Standard should be specified with the addition of the wording “or equivalent”.

 

(e) ensure that relevant Council policies (including its whistle-blowing policy) are reflected in the documentation.

 

(f) provide for liquidated damages to be paid by the Contractor if any Contract for works or services worth more than £75,000 is not carried out properly.  This provision shall not apply to the supply of goods, plant, equipment, machinery and vehicles or if the Head of Service does not feel it is appropriate.  A Contract worth £75,000 or less may provide for liquidated damages to be paid by the Contractor if the Head of Service considers it appropriate.

 

(g) if possible, make provision for continuous improvement in accordance with the principles of Best Value.

 

10.2.2 Every Contract must include a clause which allows the Council to cancel the Contract and recover from the Contractor any subsequent loss if:-

 

(a) the Contractor (or any of his employees) has offered or given any gift or other benefit to an Officer in an attempt to influence the outcome of a Contract decision.

 

(b) the Contractor has shown (or not shown) any favour or disfavour to any person in relation to the Contract.

 

(c) the Contractor (or any of his employees) commits an offence under the Prevention of Corruption Acts 1889 to 1916, or any subsequent amendments to these Acts.

 

(d) the Contractor (or any of his employees) gives any fee or reward that is an offence under Section 117 Sub-Section (2) of the Local Government Act 1972.

 

10.2.3 The Head of Legal and Democratic Services may waive the requirement of Contract Procedure Rule 10.2.2 if he feels that it is not appropriate. The reason for any waiver must be recorded in writing and retained with the contract documentation.

 

10.3 Variations during the Course of the Contract

 

10.3.1 Every variation to a Contract shall be authorised in writing by a person authorised to sign Official Orders (in the case of goods or services procured by way of an Order) or by the Head of Service in the case of other types of Contract.

 

10.3.2 If authorising any variation is likely to cause the original Contract Sum (including any contingency sum) or total project budget to be exceeded, the Head of Service shall not issue such variation unless the Head of Financial Services has agreed.  The effect of this Standing Order shall not restrict the issue of a variation if it would result in a stoppage of the Contract works or a breach of the contractual conditions.

 

10.4 Nominated and/or Named Sub-Contractors or Suppliers

 

10.4.1 No Sub-Contractor or supplier is to be nominated or named unless the proposed Sub-Contractor or supplier has been vetted for technical competence.

 

10.4.2 In the case of nominated Sub-Contractors:-

 

(a) these Contract Procedure Rules shall as far as possible operate as if the Contract were between the Council and the Sub-Contractor.

 

(b) the terms of the Tender or Quotation must require the proposed Sub-Contractor to agree that (if selected) he will enter into a Contract with the main Contractor on terms similar to those in the main Contract as far as the work to be undertaken or goods to be supplied is/are concerned.

 

(c) the Head of Service must tell the main Contractor the identity of the Sub-Contractor whose Tender or Quotation is, in his opinion, the most satisfactory.  If that nomination is accepted by the main Contractor, the Head of Service shall accept the Tender or Quotation of the Sub-Contractor.

 

10.5 Custody and Retention of Contracts

 

10.5.1 The Head of Legal and Democratic Services  is responsible for safely looking after all Contracts under seal.

 

10.5.2 Heads of Service are responsible for the safe keeping and custody of contracts not under seal (see Standing Order 10.1.4).

11.0 Maintenance Of The Select List

11.1 The Head of Environmental Services is responsible for compilation and review (at least every five years) of the Select List following consultation with relevant Heads of Service.

 

11.2 The Select List may be amended as required by the Head of Environmental Services who has discretion to (1) add a Contractor to or remove a Contractor from the Select List and (2) update the details of any Contractor on the Select List.

12.0 Partnering

12.1 There is an increasing requirement for partnering contracts. In so far as such is to be with the private sector these procedure rules will apply but such arrangements may be considered a special circumstance and the provisions of 1.5(b) may apply. Prior to the commencement of any negotiations (as compared to establishing whether such partnering may be of benefit to the Council) the Head of Service shall fully discuss the potential issues with the Deputy Chief Executive.

 

12.2 In the case of partnering arrangements with bodies designated as public bodies for the purposes of the Local Authorities (Goods and Services) Act 1970 these procedure rules in so far as they relate to tendering requirements shall not apply but any proposal to enter into negotiations shall be subject to the prior approval of the Deputy Chief Executive.

 

12.3 In all instances regard must be had to the Financial Procedure rules in relation to proposals to Externalise Services/Competitive tendering.

 

12.4 Any partnering arrangement must be the subject of a written agreement (in a form to be agreed by the Head of Legal and Democratic Services) clearly setting out the partners respective responsibilities and liabilities.

13.0       Procurement Advisory Board

13.1 The Procurement Advisory Board consists of two Members of the Council (including the Member Champion for Procurement) and a number of Officers with knowledge of procurement including the Deputy Chief Executive. Its role is purely advisory with no decision making ability. Accordingly it considers procurement arrangements generally with the ability to recommend its views on individual procurements to Officers with delegated responsibilities and on occasions to the Executive.

 

13.2 It is effectively a sounding board for the benefit of Heads of Service and Management Team when considering future forms of procurement. It reviews proposed contracts having regard to a forward procurement register and, where appropriate, requests the attendance of the relevant Service Head. It can consider amendments to procurement rules and guidance.

 

13.3 Whilst the only direct reference to the Board in the Contract Procedure rules relate to Framework Agreements, Heads of Service are encouraged to seek the views of the Board more generally.  

 

Table To Clarify Contract Procedure Rules

 

NB: There are different provisions for HRA programmed works

 

Value of Goods & Services	Advert	Financial  Reference	Select List	Notify Customer Services	Notify Audit	Cllr  Attend	Others to attend
Tenders Over £250k	Yes	Yes	No	Yes	Yes	Yes	Yes
Tenders £150 - 250k	Yes	Yes	No	Yes	Yes	No	Yes
Quotes £50-150k	Yes	No	No	Yes	Yes	No	Yes
Quotes up to £50k	No	No	No	No	No	No	No

 

Value of Works	Advert	Financial  Reference	Select List	Notify Customer Services	Notify Audit	Cllr  Attend	Others to attend
Tenders Over £250k	Yes	Yes	No	Yes	Yes	Yes	Yes
Tenders £150 - 250k	Yes	No	Yes	Yes	Yes	No	Yes
Tenders £50-150k	Yes	No	Yes	Yes	Yes	No	Yes
Quotations Up to £50k	No	No	Yes	No	No	No	NO

 

Procurement of Consultancy Services – Annex to Contract Procedure Rules

Introduction

 

1. This guidance is specifically targeted at an area of procurement activity (the commissioning and use of consultants) that has not been covered by corporate guidance in the past.  It takes into account external guidance from the National Audit Office¹, the London Regional Centre of Excellence² (which has created a procurement toolkit as guidance for commissioning consultants), and other examples of good practice from local authorities including Wakefield (unitary) Council, which received Beacon Status for procurement in 2006/2007.  The guidance also builds on a recent Internal Audit review.  

 

The Key Issues

 

2. A clear aim for this guidance and the changes to Contract Procedure Rules agreed by Members is to strengthen procurement arrangements in this area and to establish greater corporate information-sharing and corporate assistance in the process.  Key areas of focus are:

 

a) enhancing management information about the Council’s use of consultants to enable stronger corporate management of procurement activity in this area.

 

b) the transparent assessments needed of whether internal resources could be used to minimise the need for consultants.

 

c) the awards of contract by single tender or quotation.

 

d) the sharing of information about consultants, including post-consultancy project evaluations.

 

e) the need to ensure adequate transfer of skills to permanent staff.

 

Intended impact

 

3. Spend on consultancy services fluctuates and, therefore, is not easy to predict from one year to the next. However, this is not to say that a longer-term view of consultancy spending is impossible.  Through the Procurement Advisory Board working with managers a better understanding of longer-term needs will be established. This should help to develop stronger procurement arrangements, possibly leading to better value for money. 

 

4. If the guidance is followed and investment in time is made by managers in the procurement process then the Council can be more confident that decisions taken and contracting arrangements for consultancy contracts are soundly based. Following this guidance does not guarantee savings in cost.  One way in which cost-reductions may arise is through the avoidance of procuring consultants in the first place.  Whilst this may not be possible in every case the guidance places emphasis on managers testing whether there are alternatives before reaching decisions.

 

Scope of Consultancy Services

 

5. Members initially adopted a ‘high-level’ definition of consultancy services as being ‘imported short-term wisdom’.  At a high level this is perfectly adequate but for practical purposes further definitions have subsequently been adopted which are covered later in this Annex.  

 

6. Spend analysis has shown a wide diversity in the type of ‘consultancy services’ commissioned with some procurement more directly related to what this guidance terms as ‘business as usual’ aspects of the Council’s operations, and some procurements related to discrete areas of ‘project work’.

 

‘Business as usual’

 

7. Derived from best practice guidance, this definition captures work that is ordinarily expected to be fulfilled by services as part of their routine work, either by internal staff, or by ‘external agents’ in cases where only external agents may provide a service. 

 

8. Examples of external agent services include, but are not limited to, the Personnel Service’s routine need to use the Occupational Health advisory service, and the commissioning of Counsel’s opinions by the Legal Service. 

 

9. Where external advice is sought that may ordinarily be expected to be provided by internal staff, this amounts to ‘staff substitution’.  This may happen for various reasons, including a lack of capacity, a lack of expertise and skills, or because of unpredictable timing requirements that dictate a more cost effective solution than the engagement of permanent in-house skills.

 

10. In situations of ‘staff substitution’ to fill gaps in in-house staff capacity, due to temporary absences, then this requirement would be met by the established arrangements for engaging temporary staff.  In these cases managers must follow the guidance for the engagement of temporary or agency staff and where possible use the contracts that are in place.  The guidance in this report would apply where the temporary staff contract arrangements are not to be followed. Accordingly managers must ensure that they achieve value for money as well as specifying the required outcomes and skills etc required from consultants acting in a temporary staff capacity. It is also important that managers routinely review the performance of any consultants engaged in this way and ensure that outcomes are being fulfilled, and if not that feedback is given.

 

11. As for the category covered by the use of external agents (mentioned in Paragraphs 7 and 8) while commissioning need not follow all the guidance in this paper there remains a need to ensure the Council receives value for money.  Accordingly, a separate section in this paper is devoted to this category (see Paragraphs 50 and 51).

 

Project-based consultancy work

 

12. This category covers work, either capital or revenue funded, and includes the commission of consultancy services that may only be part funded by the Council, but where the Council is the lead.  This category relates to the engagement of external expertise that is outside the ordinary scope of a service’s everyday routine business.  Again there is a wide range of possible requirements of which the following are examples:

• Specialist advice relating to a physical project’s design or concept
• Specialist advice relating to other aspects of a physical project’s management or delivery
• Organisational reviews and change management
• Policy and strategy reviews
• Business case and other aspects of project financial planning
• Feasibility studies
• Market analysis
• Public relations
• Senior staff or specialist staff recruitment

 

Establishing the Need - When is it appropriate to use consultants?

 

13. Engaging consultants can be expensive; fees are typically charged by the day and could range from anything between £300 - £1,500 per day and sometimes even more.  Accordingly the use of consultants must be fully justified and should be the exception rather than the norm.

 

14.  Using a consultant is not simply a case of identifying a problem you neither have the time or the ability to solve for yourself and, therefore deciding to ‘outsourcing’ the task to someone else.  Certainly constraints on a manager’s capacity or the skills and resources available are important factors to take into account.  Reasons for thinking about engaging consultants would include:

• Access to specialist skills, either ‘issue-specific’, or ‘sector-specific’
• As a resource to implement a ‘project’ or undertake some other work constrained by lack of internal capacity
• To obtain an external objective perspective on an issue or problem
• Access to some creative thinking where some is justifiably needed
• To provide renewed focus and drive to a change management project 

 

15. However, there are alternatives to engaging consultants that must be considered.  Consequently, before considering whether consultants are engaged, managers must demonstrate they have considered the following:

• the availability of internal expertise, including the possibilities of secondments into a team from another service
• the option of establishing an internal ‘working group’ to focus on an issue
• the option of training staff to ensure skills are there in the longer term
• the opportunity for liaising with other councils or organisations that have undertaken similar projects, or faced similar problems
• the scope for joint procurement of advice with another council(s) in order to save costs

 

16. To encourage and to capture thinking on these points a pro-forma template has been designed which must be completed for all instances where consideration is given to the use of consultants for project work.  The pro-forma can be found on the Intranet and a copy is also attached to this guidance.

 

Objectives and specifying requirements

 

17.  In all cases where external consultancy expertise is deemed appropriate for project work it is necessary for the objectives and the specific requirements of the commission to be considered and documented.  These requirements must then form part of the contract with the selected consultant.  It is recognised that assignments vary in scope and scale and therefore the form that these requirements are specified by needs to be proportionate to the client needs. 

 

Core elements of a consultant’s brief

 

18. In all instances of commissioning consultancy work it is necessary to set out the requirements in a ‘project brief’.  The following elements must be covered; for some types of projects these requirements will need specifying in some detail.

• A clear explanation of the project or consultancy requirement
• Objectives, (that is outcomes), of the work and what is expected from the consultant
• Expected timescales and any key work or project milestones for the consultant
• The contribution to the project or assignment the client service will make
• Reporting requirements and management arrangements
• The requirement that only suitably qualified and experienced consultants be used
• That the use of third parties to carry out some or all of the project is only permissible with prior written agreement from the Council
• Unless it is not necessary the brief should require the consultant to facilitate a transfer of knowledge or skills at the end of the assignment
• Access to information and other resources the consultant may require
• Payment profile of fees

 

19. A pro forma is attached as a guide for managers to use in constructing a consultant’s brief.

 

Engaging Consultants

 

20. When considering and deciding whether to engage consultants managers must:

• Demonstrate that the need is appropriate through the points made at Para 13 and 17 and be absolutely certain there is no reasonable, such as described in Paragraph 15.
• Have produced a consultant’s brief as set out in Para 18,

 

and then

• Ensure there is a budget available and that this has been agreed and approved.

 

21. Where there is no specific budget and one cannot reasonably be made available using the budgetary control procedures (that is from transfers of budgets) then a manager must not proceed and should report the need to the Management Team.   Management Team will then determine whether the need is a priority and if so the appropriate course of action to take. 

 

22. Assuming financial resources are available managers should then consider the position against Contract Procedure Rules more generally.  These apply to all instances of the procurement of consultancy advice and therefore must be followed.  The paramount requirements are stated in Part 4 of the Constitution – Rules of Procedure – Contracts Procedure Rules and are summarised below. Note the engagement of consultancy advice falls under the category of ‘services’ within our procedure rules and European procurement legislation.

 

Summary of amended Contract Procedure Rules

 

23. Tenders or quotations must be sought for all contracts except where:

 

a) The Head of Service is satisfied that services can only be supplied by one contractor.

 

b) The identity of the person supplying a professional service is particularly important.

 

c) The work is of a specialist nature and the skill of the contractor is particularly important.

 

d) The proposed contract is an extension of an existing contract (using) rates and prices which were originally agreed (in the existing contract) through the normal tendering process.

 

24. The Council has amended its Contract Procedure Rules in respect of contracts entered into through single tender action or single quotations (in other words in situations where there was no market testing).

 

25. Single tender action or single supplier sourcing may be appropriate and unavoidable in some instances, but these should be the exception and might include the following circumstances:

• For technical reasons only one specific company has the expertise or capacity to undertake the work.
• In instances where for legal reasons a company has exclusive intellectual property rights and therefore can only advise on a particular solution tied to an existing supply contract or product.
• In instances where a consultant was previously engaged to carry out a project and it is subsequently decided to commission some follow-up work on the rates and terms for the original assignment.

 

26. The above are some reasons for single supplier sourcing, but do not amount to complete justifications.  What needs to be demonstrated is not that a single consultant can provide the most efficient proposal, but that only they can provide what is required.  Managers are responsible for making this judgement, not the consultant.

 

27. Being familiar with a particular consultant, under time pressure to complete a procurement, or single supplier sourcing simply being logistically more convenient are not sound justifications.

 

28. Accordingly, Contract Procedure Rules were amended generally (note: not just in respect of the use of consultants) and for there to be a presumption against single supplier tendering and sourcing.  Where this is deemed desirable managers must document their reasons for not seeking tenders or quotations from more than one supplier in all cases relating to (a) to (d) above and that this information is made available to the Performance and Improvement Team. In circumstances where the estimated value of a consultancy contract proposed for single supplier sourcing exceeds £5,000 the Management Team’s approval is required.

 

29. A pro forma is attached for this purpose.

 

30. In cases where tenders or quotations are to be sought in competition Contract Procedure Rules require the following (summarised and as amended by the Council):

• Public advertisement (to generate expressions of interest) will apply for all service contracts over an estimated value of £150,000 (note this will be rare for consultancy contracts commissioned by the Council), or where a manager considers that public advertisement is in the Council’s interest, or if required under European or UK Government legislation or some other external requirement.  Contracts with an estimated value of £50,000 or more should be advertised on the Council’s web-site.
• For service contracts with estimated values between £50,000 and £150,000 the proposed contract must be advertised on the web-site and the manager must, if possible, identify four prospective suppliers who are competent and who should be invited to tender.  In all cases in this category where less than three tenders are to be sought or less than three quotations are received, the consent of the Management Team is necessary before proceeding further.

             -  For service contracts between £25,000 and £50,000 at least three quotations  must be sought from 
                competent suppliers, unless the decision is taken by a manager to proceed by formal tender.

             -  For service contracts below £25,000 at least two quotations must be sought, unless a manager decides to
                proceed by formal tender.

 

Informed Procurement

 

31. Over many years the Council has developed arrangements for the procurement of commoditised items and works (and will continue to strengthen these), but there has been less corporate emphasis provided when consultancy and other professional services are needed.  The guidance described above will help to strengthen arrangements in this area, but there are other points that need to be taken into consideration when considering how to identify and engage consultants, including arrangements to conclude contracts.

 

Identifying Consultants

 

32. The Council does not have a ‘select list’ that covers consultancy services and does not have a corporate database of consultants it has used.

 

33. There is a vast range and number of consultancy practices and therefore depending on the particular assignment the choice could be very wide, ranging from individuals operating as private consultants to large-scale multi-national companies.  Rarely therefore should managers be in a position where there is very limited choice.  However, knowing how to identify which consultants are appropriate for particular needs may not be so straightforward.  In many cases consultants are identified and appointed because of word-of-mouth recommendation, or simply through a manager’s previous experience of a particular consultant.  These are reasonable starting points but decisions based on these factors alone cannot guarantee success or best value for money.  As described below there are various sources of information that can be accessed and with the array of support available it should be possible to identify sufficient consultancy companies to form shortlists.  If for some reason this is not possible then managers should resist the temptation to search in local directories, but adopt public advertisement.

 

a) The Management Consultancies Association (MCA)

 

34. The MCA is a long established UK umbrella association that represents the management consultancy industry to its clients, the media and government.  MCA also works with its members to attract the top talent into the industry. The MCA provides advice on the selection and use of management consultants and is the main source of data on the UK market.  To be eligible for membership of the association consultancy practices must meet the following criteria:

• Have been in practice in the UK for at least three years
• Employ at least ten consultants on a full time basis
• Practice management consultancy as a strategic activity and offer at least two main consultancy services e.g. strategy, marketing, IT, HR
• Offer fact-based advice
• Offer customised solutions

 

35. The MCA has an on-line service that would allow the Council to search for appropriate consultants at long or short-listing stage.  In instances where management consultancy is needed managers are advised to consult the MCA web-site. 

 

b) Framework Agreements

 

36. These are usually large agreements put together by procurement agencies, such as the Office of Government Commerce (OGC), the procurement Regional Centres of Excellence, some larger-scale procurement consortia (for example the Central Buying Consortium and the Essex Procurement Agency) and in some cases individual public sector organisations. Framework agreements typically provide access to public organisations to centrally negotiated tenders. One advantage is that, if suitable for a client’s needs, they avoid the need for a client organisation to procure through public advertisement. Due to the scale of opportunity that frameworks provide to suppliers tendered rates are usually more competitive than could be achieved by clients through individual tenders. 

 

37. The OGC, for example, has a framework contract for multi-disciplinary consultancy that covers the following areas: strategy formulation and implementation; programme and project management; ICT; human resources; procurement, and finance. Plainly framework contracts have a particular use and are unlikely to suit every need, but should be considered as part of the general search for appropriate consultancy companies, particularly where larger-scale assignments are being considered in the areas mentioned.

 

38. The Performance and Improvement Team can advise on access to framework agreements and legal advice on their use can be obtained from our Legal Services.

 

c) The local authority network

 

39. It is unlikely that our needs will always be unique and that some other council(s) will have had experience of a particular consultant or consultancy assignment.  While it is impracticable to research all councils, managers typically will have developed networks across councils to allow this type of research to be made.  These networks are valuable sources of information and feedback and should be used to help develop intelligence about the use of consultants and the development of consultancy shortlists.

 

d) Professional organisations

 

40. Several professional associations provide on-line access to information databases to allow councils to identify potential consultants.  Good examples are the Royal Town Planning Institute, and the Chartered Institute of Environmental Health.  Other professions, such as the Chartered Institute of Housing and the Chartered Institute of Public Finance and the Society of Local Authority Chief Executives have established wholly owned companies providing management and consultancy services.  Accordingly professional associations should be considered, but in the case of associations that have trading companies they should be considered as one option, rather than a complete solution to a client’s needs.

 

Awarding Contracts and Agreeing Terms

 

41. Where tenders or quotations have been sought the decision to award a contract needs to be based on objective criteria resulting from an evaluation of the proposals made.  Price will be one factor, but the paramount consideration must be the extent the proposal meets with the consultancy brief.  Here managers must be clear about the skills they are looking for as consultants will tend to promote the particular skills they have; the two may not be the same.  Also be aware that consultants will make up for shortfalls in their own skills by saying they will commission other specialist expertise as part of their proposal.  So managers must evaluate proposals carefully and document the results.  As part of this process references must be requested and where appropriate examples of similar types of work to that of the project being undertaken must be provided.  It will be the manager’s responsibility to check such references.

 

42. Often consultants will submit their standard terms and conditions that then become a starting point for the basis of a contract.  The Council is looking to draft a standard set of terms and conditions covering consultancy work, but meanwhile any standard terms submitted by a consultant must be referred to Legal Services for comment.

 

43. Leading up to the award of a contract it may be necessary to clarify the more detailed, but nevertheless important terms before a contract is finalised.  Ideally these issues should all be covered by the instructions issued at the time of requesting tenders or quotations.  Remember if you do not think about these points the consultant will, but may choose not to be upfront about them all.  The detailed points to consider are:

• The number of consultancy days, where applicable, allocated across the individuals in the consultancy team
• Fixed price or capped fees
• The consultancy day rates
• The level of any contingency, if considered applicable
• The rates for expenses and travel time
• What constitutes a consultancy day, does this exclude travelling time?
• The use of sub-contractors
• Ownership of intellectual property rights
• Performance criteria
• Insurance required

 

Post-Contract – Consultancy Management

 

44. Managers making the decision to appoint and award a consultancy contract will more often than not be the consultancy project sponsor. For smaller scale assignments they may also be the project manager, bringing them into close day-to-day contact with the consultant.  It is the Project Manager’s responsibility to ensure that consultants are given appropriate access to information and resources they will need to fulfil the contract. This would include the need to brief staff and other services about the consultancy assignment, where this is desirable.

 

45. It is also the Project Manager’s role to monitor the performance of the consultant.  Here performance will be measured against the agreed brief, the achievement of specific project milestones, and feedback received from staff associated with the consultant’s work.

 

46. Payments should be made only against the payment milestones agreed in the contract and should relate to agreed outcomes.  Care should be taken to avoid interim payments not based on specific outcomes previously agreed.

 

47. If the Project Manager identifies any difficulties or problems during the project these should be discussed with the consultant at the earliest possible opportunity.

 

48. The ultimate test of performance is usually associated with a consultants report on findings and recommendations.  This report will be considered by both the Project Manager and the Project Sponsor, if not one and the same.  A consultant’s report should:

• Address the agreed brief and cover what they said they would do in the proposal (now part of the contract)
• Should be clear, well-written, concise and unambiguous
• Free of jargon
• Contain well-argued conclusions and recommendations supported by relevant data
• Provide a practical basis for taking a problem forward   

 

Post Project Evaluation and Feedback

 

49. To aid future decision-making and learning all managers appointing consultants must carry out a post project evaluation and quality control check. This need not be a lengthy piece of work, but is designed to aid a managers learning and build-up our corporate information about consultants and how they performed on particular projects. The Corporate Centre should hold copies of this information. 

 

Use of external agents where only external suppliers can provide a service

 

50. In Paragraph 12 situations were described where services may require the routine use of external services that can only be provided by external agents, examples of this could include the Occupational Health advisory service, and the use of Counsel by the Legal service. There may be other such examples.

 

51. In these circumstances managers must be satisfied that the use of external agents is proportionate to their service and the Council's needs and that where choice is available the principles within this report are followed. From time to time there should be a review of the arrangements made by managers to ensure that the procurement of this type of service is achieving intended outcomes and providing good value for money.

 

The role of the Corporate Centre 

 

52. It is planned to develop the role of the Corporate Core so that it can assist services in identifying appropriate procurement solutions; this role will complement the role to be undertaken by the Procurement Advisory Board. 

 

53. The corporate centre’s role will be developed so that it is aware of framework contracts and has access to these and can advise accordingly.  It will also have a role in collating information about the use of consultants by the Council, to establish a central record that can be used to inform future procurement decisions.

 

Pro-Forma(s)

 

54. See document on next page, which is a pro-forma for use by Managers when commissioning consultancy services.  We are planning for the pro-forma to be an on-line document on our Intranet, which the Performance and Improvement Team will have access to so that corporate management information may be readily maintained.

Footnote for Procurement of Consultancy Services - Annex to Contract Procedure Rules

 

¹  'Central Government's use of consultants' - NAO report December 2006

²  'Commissioning toolkit for the procurement of consultancy and professional services' - April 2007

 

 

Next -  Officer Employment Procedure Rules