Contracts' Procedural Rules
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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 1st 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.
Use of Consultants Pro Forma
Signed:
________________________________________________
Date: ________________________________________________
Guidance on Use of Consultants Review.
55. In September 2007 the Council agreed a
framework for the procurement of consultancy services and a number
of changes to Contract Procedure Rules. Final approval of
this document was provided by the Procurement Advisory Board in
February 2008 and can be found here.
56. A summary of the key points and changes
made by this document are highlighted below. As part of the
framework a pro forma (this document) has been developed to assist
Officers in the decision making process that should be taken when
considering using a consultant. When considering the use and
appointment of a consultant this pro forma must be completed
and a copy submitted via the intranet.
57. The submittal of this pro forma is
not related in anyway to seeking authority to appoint a
consultant. The decision to appoint a consultant lies
entirely with the manager concerned. This pro forma serves
two purposes: To assist an Officer in considering all the
options available when thinking of using a consultant and to
provide a central database that allows a corporate overview of the
use of consultants across the Council as requested by members.
Summary of key points and
changes
- The use of consultants must be fully
justified and should be the exception and not the norm.
- Officers must be able to demonstrate that
they have considered alternatives to the use of consultants.
- In all instances of commissioning consultancy
work the objectives and requirements for the work must be set out
in a project brief.
- Officers must ensure that there is an agreed
and approved budget available. Where no specific budget is
available and one cannot reasonably be made available then approval
to proceed must be provided by Management Team.
- At all times Officers must follow Contract
Procedure Rules as stated in part 4 of the Council’s
Constitution.
- Contract Procedure Rules have been amended so
that there is a presumption against single supplier tendering and
sourcing. Where an Officer wishes to appoint a consultant via
a single supplier route for a project and where the anticipated
cost is in excess of £5,000 Management Team approval must be sought
prior to proceeding to appoint the consultant.
- For contracts with estimated values between
£50,000 and £150,000 if less than three tenders are sought or less
than three quotations received then consent from management team is
required before proceeding with the appointment of a
consultant.
- Officers must carry out a post project
evaluation which must be included on an updated pro forma.
Purpose of assignment
1. Background & Strategic
Context
2. Expected Benefits & Date
Appointment of Consultants
1. Consultant Identification &
Tendering Process (including justification for single supplier
tendering and sourcing)
Alternative Options
1. Status Quo
2. In-House Option (including secondment and
training)
3. Working with other Councils – joint
procurement options
Expected Deliverables
1. Consultants’ Expected Output
(Consultants’ Brief)
Project Management
1. Project Management
Arrangements
Proposed Division of Work
1. Expected Hours of Work (Consultants/In-House
Staff)
Expected Costs
1. Cost of Consultants (including payment profile of
fees)
2. In-House Support Costs
3. Other Financial Considerations (budget
streams, potential savings etc.)
Performance Review Arrangements
1. Monitoring Responsibility
2.
Measuring Performance of Consultant (KPIs etc)
Implementation & Evaluation Plan (to be updated
once project is completed)
1. Application of Consultant's output
2.
Post Project Evaluation
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
This webpage was updated on
5/13/2011