Contact Us

Address:
The Guildhall
Frankwell Quay
Shrewsbury
SY3 8HQ
 
Telephone:
01743 281000
 
email:

Council Contract Procedure Rules

1

Section 1 Purpose and Scope

1.1

Purpose

 

1.2

Scope

 

2

Section 2 Types of Contracts

 

2.1

Definitions

 

2.2

Valuing Minor and Ordinary Contracts

 

2.3

Procedures for Agreeing Contracts

 

3

Section 3 Officer Responsibilities

 

3.1

All Officers

 

3.2

Service Managers

 

3.3

Senior Solicitor

 

3.4

Monitoring Officer

 

3.5

Property Services Manager

 

3.6

Head of Finance

 

3.7

Assistant Council Manager/Monitoring Officer

 

3.8

Outside Consultants/Technical Officers

 

4

Section 4 Approving Contracts

 

5

Section 5 General Requirements

 

5.1

Contents of Ordinary Contracts

 

5.2

Loans & Leasing Arrangements

 

5.3

Contracts

 

5.4

Certified Contracts

 

5.5

Disposal of Land/Property

 

5.6

Other Legal Requirements

 

6

Section 6 Access to information

 

7

Section 7 Recording information

 

7.1

All Contracts

 

7.2

Registers of Contracts

 

8

Section 8 Storing documents

 

9

Section 9 Approved Supplier Lists

 

10

Section 10 Exemptions from Tendering

 

11

Section 11 Corruption: Tenders and Contracts

 

 

Appendices

  

1

Process when using WMS or other approved Consortia, framework agreements

Process for Minor Contracts

 

 

2

Process for Ordinary Contracts

 

3

Contracts where the Council is the Supplier

 

4 i

Contents of Ordinary Contracts

 

4 ii

Types of Contract: Industry Standards

 

5

Disposal and Acquisition of Land or Property

Chart 1 – Auction

Chart 2 – Informal Tender

Chart 3 – Formal Tender

 

 

 

 

     
 

Forms

  
 

1 Local Register of Ordinary Contracts

 

 

2 Register of Contracts where the Borough Council is the supplier of goods or services

 

     

6

Appointing Experts or Consultants

 

CONTRACT RULES

SECTION 1 PURPOSE AND SCOPE

1.1 PURPOSE

These rules help us to:

    • obtain value for money;
    • keep within the law;
    • maintain standards of conduct;
    • be fair to our suppliers and to our clients; and
    • show the public that we are honest.

The old Contracts Standing Orders were regulatory provisions only. The new contract rules encompass different kinds of transactions and include guidance and procedures to protect the Council, ensure value for money is obtained and help guide you in the award of contracts

1.2 Scope

Contract Rules apply to all contracts with outside organisations or people. These Contract Rules must be observed on every occasion the Council enters into a contract – failure to do so may result in disciplinary action. It is acceptable to reach a written agreement with an outside organisation when carrying out works on their behalf that their contract rules will be complied with instead of The Shrewsbury and Atcham Borough Council's Contract Rules.

A contract is any agreement to provide goods, work, services or property in exchange for payment. This includes:-

    • placing orders;
    • all contracts for selling property by formal tender;
    • loan or leasing arrangements;
    • employing outside experts or consultants under contracts for services;
    • tenders for subcontracts;
    • contracts where we are the supplier;
    • disposal of land or property;
    • purchase of land or property; and
    • engaging professional advisers

Supplier means any person or organisation providing the goods, work or services.

These Contract Procedure Rules should be viewed in conjunction with the emerging procurement strategy and the government's report on "Rethinking Construction". There are clear links between the Council's Fraud and Corruption Policy and Financial Regulations.

SECTION 2 TYPES OF CONTRACT

2.1 Definitions

The different types of contracts are as follows:-

Minor Contracts

A contract to provide goods, work or services for greater than £5,000 but less than £50,000.

Ordinary Contracts

A contract to provide goods, work or services for £50,000 or above.

Supply Contracts

A contract where we are the supplier.

Disposal of Land or Property

A contract for the disposal of land or property.

Acquisition of Land or Property

A contract for the acquisition of land or property.

Works, Goods or Services under £5,000

Officers should ensure records are maintained and should always endeavour to ensure value for money for the Council.

"A tender" means a written offer to supply goods, materials, services, or to execute works based on terms and conditions imposed by the Council.

"A contract" means any contract in writing or otherwise for the supply or disposal of property goods, materials, or services or for the execution of works but shall exclude contracts of employment. Contracts for the sale or purchase of any interest in land have special provisions contained within these Rules.

"Consideration payable" means the total value of consideration payable by or to the Council under the contract or any series of contracts of which it forms a part.

"Most cost effective" means the lowest if payment is made by the Council and the highest if payment is made to the Council.

"Negotiation" means any alteration in the terms of a tender offered to the Council or in the requirements of the Council in relation to such tender and shall include any variation in the terms of a tender whether by deletion of any requirement or provision or the rectification of any error or omission or otherwise.

"The Register of Tenders" is a bound book held and maintained by the Assistant Council Manager/Monitoring Officer which records the tenders received, those present at the tender opening, names of tenderers received, values of tenders received and any tenders not returned.

"The Central Contracts Register" means the register held by Legal Services containing records of all ordinary contracts, contracts for the sale and/or purchase of land and property and such other contracts as may be determined by the Senior Solicitor.

"The Contract Payments Register" is a register held and maintained by Finance Services to record and monitor all contract payments made.

"Quotation" means an informal, speedy offer to execute works or to supply goods, materials or services by the provider. It is an abbreviated form of tendering, often on the provider's terms and conditions.

"Estimate" means a reasoned evaluation of the cost or price for the contract by the service provider.

2.2 Valuing Minor and Ordinary Contracts

If the contract is to last for more than a year (including extension periods), the total value is:-

  • the yearly value of the contract; multiplied by
  • the period of the contract and any extension periods.

For example, a contract for three years with a yearly value of £30,000 has a total value of £90,000. A contract for three years with a yearly value of £30,000 and power to extend for a further two years has a total value of £150,000.

As a result of the extension, the contract value differs substantially from the original yearly value. This would have an impact on both the tendering process and the EU rules, if applicable. You must seek the advice of the Senior Solicitor.

3. Procedures for Agreeing Contracts

All contracts must comply with relevant English and European laws and all ordinary contracts must follow the tendering process set out in these rules.

Minor contracts must also meet the requirements set out in Appendix 1.

Ordinary contracts must also meet the requirements set out in Appendix 2.

Supply contracts must also be approved in line with Appendix 3.

Acquisition or Disposal of Land or Property must also meet the requirements set out in Appendix 5.

SECTION 3

OFFICERS' RESPONSIBILITIES

3.1 All Officers

All have the following responsibilities:-

(a) To understand the rules they must follow when agreeing contracts or ordering goods, work or services.

(b) To follow any relevant code of conduct for local government employees.

(c) To declare to their Corporate Director any interest which could influence their judgement in contracting matters, and to enter the interest in the Declaration of Interests Register for officers.

(d) To make sure that we get value for money.

(e) To follow these Contract Rules, any codes of practice issued by the Standards Committee or guidance or instructions provided by the Senior Solicitor.

(f) To follow all relevant legal requirements.

(g) To follow the Council's Financial Regulations and to follow the systems and procedures that are in place to control budgets properly.

It is an implied condition of employment of all staff of the Council with responsibility for the administration of contracts that they should at all times observe the provisions of Contract Rules. Failure to observe Contract Rules may be regarded as a disciplinary matter.

3.2 Service Managers

Service managers have the following responsibilities:-

(a) To enter into contracts (up to £50,000) on behalf of Shrewsbury and Atcham Borough Council. For contracts of £50,000 or above the authority to enter into contracts is with Corporate Directors, the Engineering Services Manager or the Property Services Manager, in all cases being restricted to the service managed, or to the Senior Solicitor for any contract. Each service manager must ensure that he/she has authority to enter into the agreement.

(b) To ensure that the nature of discussions and correspondence exchanged with potential suppliers does not inadvertently commit the Council to contractual relationships.

(c) To obtain a report and advice from the Head of Finance on the financial status of suppliers bidding for ordinary contracts.

(d) To ensure that minor and ordinary contracts are legal, affordable, within budget, and that the Council can carry out its duties under them.

(e) For ordinary contracts, to seek advice from the Senior Solicitor in good time (at least 21 days before signing and commencement of the contract).

(f) To make sure that we deal with contracts and tendering procedures in line with Contract Rules and Financial Regulations and to seek advice from the Senior Solicitor before any exemptions are made.

(g) To deter fraud and corruption having regard to our fraud and corruption policy. In the event of any indication of problems arising from fraud and corruption the Monitoring Officer and the Head of Audit should be informed immediately.

(h) To keep complete records of all contracts.

(i) To keep a written register within the service area of all ordinary contracts in the format shown in Appendix 5.

(j) To submit to the Senior Solicitor for consideration and approval or rejection any ordinary or contract where the Council is the supplier.

(k) To make sure that they have the appropriate authority for each contract for which they are responsible and have been obtained prior to the contract being entered into, for example Cabinet or Committee approval or member approval under the scheme of delegation.

(l) To keep complete records of all contracts and provide details to the Property Services Manager, whether or not the Property Services Manager is responsible for the day to day administration of that contract.

(m) To maintain records and store documentation in accordance with Sections 7 and 8 of these Contract Rules.

(n) To ensure that the tender process complies with UK and EC legislation.

3.3 Senior SolicitorThe Senior Solicitor has the following responsibilities:-

(a)  To keep the Contract Rules up to date in conjunction with the Monitoring Officer.

(b) To approve all contracts of £50,000 or above where the Council is either the purchaser or the supplier, and all I.T. contracts. This means that the Senior Solicitor will advise on the terms of the agreement but will not execute it.

(c) To provide guidance, instructions and training on contracting arrangements.

(d) To specify whether the contract has to be under seal.

(e) To approve all contracts relating to interests in land (and shall be signed by a solicitor).

(f) To sign and record in the Council's sealing register all contracts under seal in addition to the Central Contracts Register.

(g) To sign all certified contracts as specified in Procedure Rule 5.4. (These are contracts where the Council is asked formally to certify that the Council has the power to enter into the contract before it is signed).

(h) To consult the Monitoring Officer and recommend action if arrangements within Directorates/Services for agreeing contracts have not met with the requirements of these Rules.

(i) To maintain the Council's Central Register for ordinary contracts.

3.4 Monitoring Officer

The Monitoring Officer will have the following responsibilities:-

(a) To work with the Property Services Manager to produce a formal report each year on whether Directorates/Services have complied with Contract Rules.

(b) To take action including remedial action if appropriate, if Directorates/Services have not complied with Contract Rules.

3.5 Property Services Manager

The Property Services Manager will have the following responsibilities:-

(a) To produce a formal report each year on whether Directorates/Central Services have complied with the Contract Rules.

(b) To consult the Monitoring Officer and recommend action if arrangements within Directorates/Services for agreeing contracts have not met with the requirements of these rules.

(c) To issue the Prior Indicative Notices required by the Council in February of each year to ensure compliance with EU procurement directives.

(d) To provide guidance, instructions and training on contracting arrangements.

3.6 Head of Finance

The Head of Finance will have the following responsibilities:-

(a) The financial recording and monitoring of all contract payments in the Contract Payments Register.

(b) The authentication of a tenderer's financial status for an ordinary contract.

(c) The determination of whether security should be sought, and if so the type and amount, for all ordinary contracts.

3.7 Assistant Council Manager/Monitoring Officer

The Assistant Council Manager/Monitoring Officer will have the following responsibilities:-

(a) The safe custody of all tender documents received.

(b) The arrangements for the opening of tenders and notification of such to the relevant portfolio holder and the relevant Project Officer.

(c) The maintenance of the Register of Tenders.

3.8 Outside Consultants/Technical Officers

When outside consultants or technical officers are employed to supervise contracts they must follow these Contract Rules. Their contract for services must include this requirement.

SECTION 4 APPROVING CONTRACTS

4.1 All contracts must be authorised before they are entered into. This can be in the form of:-

(a) A Council resolution.

(b) A decision made properly within the powers of the Cabinet, Standing Committees or a Council employee under a statutory scheme as set out in the Constitution; or

(c) The delegated powers of the Council Manager, as specified in the scheme of delegation or delegated by Council or Cabinet to him.

And, the following conditions must also be met:-

(d) The contract must comply with the Council's Contract Rules and Financial Regulations.

(e) The officer involved must have the power to deal with the particular contract and must ensure that authority exists to enter into the agreement by, i.e. a Committee resolution or a delegation.

(f) There must be enough money in the budget to cover the financial commitment being made, including ongoing revenue costs. Officers will need to seek approval for virement to offset any shortfall in budget as provided for in the financial regulations or a supplementary estimate.

SECTION 5 GENERAL REQUIREMENTS

5.1 Contents of Ordinary Contracts

All ordinary contracts must be in writing and their contents must comply with the requirements set out in Appendix 4(i).

5.2 Loans and Leasing Arrangements

In addition to the other requirements of these Contract Rules, loans and leasing agreements must not be entered into without approval from the Head of Finance. Advice should be sought from the Head of Finance before entering into operating or finance leases. This is because the value of leases may count against the Council's capital allocations, and will also give prior notice of revenue commitments.

5.3 Contracts

For contracts up to £5,000 there is no requirement to obtain quotations or engage in a tender process and a purchase order should therefore be placed. For contracts over £5,000 but no more than £50,000, at least three competitive quotations are to be obtained, and for contracts of £50,000 and above formal tendering is required.

For all contracts in excess of £100,000 officers must seek the advice of the Senior Solicitor before proceeding.

All ordinary contracts must be signed by a Corporate Director, Engineering Services Manager or the Property Services Manager, in all cases being restricted to the service managed, or the Senior Solicitor for any contact.

Contracts under seal, which will be determined by the Assistant Council Manager/Monitoring Officer, will be sealed by the Assistant Council Manager or Senior Solicitor.

All minor contracts must be signed by the service manager.

All contracts for engineering or construction projects of whatever value shall be under seal.

5.4 Certified Contracts

If a supplier asks the Council to certify that the contract is legal, it must be passed to Monitoring Officer for signing. No officer other than the Monitoring Officer is authorised to express a legal opinion on the vires of any contract. You must also send details of the approval for the contract and any other relevant documents.

5.5 Disposal of Land/Property

Indications of surplus land within Directorates should be made known to the Property Services Manager. Consideration for disposal should then be made by Cabinet after reports by the Property Services Manager who may seek the advice of suitably qualified consultants (see Appendix 6).

5.6 Other Legal Requirements

Where it is appropriate, contracts must also follow the European Procurement Rules. Advice should be sought about these Rules from the Senior Solicitor before contracts in this category commence.

SECTION 6

ACCESS TO INFORMATION

6.1 Ensure that you do not show tender or contact documents, or other information relating to anyone who is not entitled to see them and, in particular, must not show them to anyone who has a financial interest in the contract.

6.2 Ensure that you do not give to anyone, in particular tenderers or contractors, any information about the bids or the financial or business affairs of any other tenderer or contractor unless the law requires this.

6.3 Once the contract has been awarded, the name of the successful tenderer and the value of the contract will become information available to the public. However you must not name the unsuccessful tenderers.

6.4 Service managers may also choose to make available to the unsuccessful tenderers the value of all the bids, but not details of the bidders.

6.5 Ensure that contract documentation is properly secured during the tendering process.

6.6 Where members may wish to be involved in contract arrangements, reference should be made to the Member Involvement in Commercial Transactions Protocol.

SECTION 7

RECORDING INFORMATION

7.1 All Contracts

Each Authorised Officer must keep detailed written records of:-

(a) Any advice sought and given on the procurement process itself;

(b) The different stages of the tendering process;

(c) Any post-tender negotiations (where this is part of the approved process) including any revisions to specifications and price. For ordinary contracts two officers must be present when post tender negotiations are taking place other than to action minor changes to the specification agreed with the client Directorate.

(d) Any information provided to tenderers or contractors; and

(e) Any decisions made, together with the reasons for those decisions.

7.2 Registers of Contracts

Each Directorate must keep, in a form approved by Senior Solicitor:-

(a) A register of all ordinary contracts that have been agreed; and

(b) A register of all ordinary contracts that have been agreed where the Council is the supplier.

The registers must be kept separately as shown in Forms 1 and 2 in Appendix 5 and shall be available for inspection on request.

Ensure that ordinary contracts are recorded in the Central Register of Contracts in the Legal Section. So, for example, a contract for £140,000 must be recorded in your Directorate Register of Contracts and the Central Register of Contracts.

7.3 Contracts Payments Register

The Finance Service will maintain a Contracts Payments Register. Before releasing any certificate for payment, the details will be entered into the Contract Payments Register, which will be used as a record of payment and as a financial control record. For each contract the register will show the value of work to date less retention and less the value of previous payments, so as to confirm the net amount payable on the latest certificate.

SECTION 8

STORING DOCUMENTS

8.1 Ensure that confidentiality and security is maintained when storing contracts and other information relating to tenders and agreements.

8.2 Ensure that all contracts (together with relevant correspondence and other records) are kept for at least six years after the contract comes to an end. Contracts under seal must be kept for at least twelve years after the contract comes to an end. All ordinary contracts should be kept in the Council's strong room - with copies lying with relevant Directorates.

8.3 Ensure that documents relating to unsuccessful or late tenders are retained for at least four years from the date the successful contract is awarded.

8.4 You must not dispose of contract documents without the Senior Solicitor's agreement.

SECTION 9

APPROVED SUPPLIER LISTS

9.1 Approved supplier lists have proved very useful in some areas of our activities. They can be an efficient way of identifying suppliers. You cannot use them for contracts governed by the European Procurement Rules as these contracts must be advertised, however, a short-list may then be drawn from successful applicants to the advert.

If you decide to use an approved supplier list to choose which suppliers to invite to tender, you will need a system for selecting suppliers from the list. Your system must make sure that all suppliers on the list have the same opportunity over time to tender for work.

You may use approved supplier lists or any central register maintained by the Office of the Deputy Prime Minister (ODPM) such as Construction Line from which to:-

  • Select those invited to bid for a contract; or

  • Buy one-off items.

The Property Services Manager will be able to advise service managers on the above.

9.2 Before drawing up an approved supplier list you should advertise and invite applications to become approved suppliers for the particular type of contract. When considering whether to include someone on the list you should look at:-

(a) Their past performance on similar contracts (quality and costs);

(b) Their technical capacity;

(c) Their other commitments;

(d) Their specialist experience in the type of products and services you are looking for; and

(e) Their financial situation.

9.3 Review the approved supplier lists every two years against the requirements indicated above to assess whether a supplier should remain on or be added to the list. Delete suppliers, where there are grounds to, such as poor performance, disputes, poor financial standing. You should also consider whether there are any new suppliers to add to the list.

9.4 Advertise to compile subsequent lists of approved suppliers at least every five years, or earlier if the number of approved suppliers remaining on the list means there is little competition. Advertise in the local and relevant trade press and, if necessary, the EC Journal.

9.5 You can also consider other things as long as:-

(a) They are relevant;

(b) They do not prevent fair competition; and

(c) They do not illegally discriminate between suppliers.

Collect your information from suppliers using a standard business questionnaire (which can be obtained from the Property Services Manager). This will make it easier to sift through the replies and ensure transparency in the process.

9.6 All contracts which are let through the approved Supplier List must comply with these Rules, in particular when seeking competitive bids and maintaining records.

9.7 Service managers should seek advice from the Property Services Manager and give adequate explanation for the exclusion of any supplier from an approved list.

SECTION 10

EXEMPTIONS FROM TENDERING (FOR ORDINARY CONTRACTS)

10.1 Exemptions are only allowed from the tendering process in exceptional circumstances. You must obtain permission for any exemption from the Council Manager.

10.2 To obtain exemption from the tendering process a written application must be made to the Council Manager setting out the reasons. You will need to allow sufficient time (at least 21 days) for the Council Manager to consider your application and to allow sufficient time for the tendering process if your application is refused.

10.3 Examples of circumstances which may justify an exemption are:-

(a) No effective open competition – the service manager must use market analysis to explain why there is only one suppler;

(b) Extending an existing contract – it must be in the Council's interests to negotiate with the existing supplier;

(c) Price control – if the price is controlled by trade organisations or government order and there is no reasonable alternative;

(d) Repairs or parts – if the only option is to repair or buy new parts for existing equipment or buildings and there is only one supplier;

(e) A partnership arrangement – if the partner is making a large contribution to the funding, and the work, goods or services could not be provided as economically without that contribution.

(f) Used, recycled or second hand goods – if the service manager is satisfied that the market for such goods or materials is such that it would be unreasonable to tender or where the time required to complete the tender process is likely to lead to the loss of opportunity to purchase a used or second-hand item.

10.4 Where the Council Manager considers it appropriate to take external legal advice or to engage Counsel or a private practice lawyer in any matter, then this will qualify as an exemption to the Contract Rules.

10.5 In case of real emergency where immediate action is necessary (such as works out of hours to make safe a building following a fire, flood or storm or following vandalism), this work is exempt from the tendering process.

SECTION 11 CORRUPTION: TENDERS AND CONTRACTS

11.1  Every invitation to tender must state that the Council can cancel the contract and recover any resulting losses if the contractor or his/her employees or agents with or without his/her knowledge:-

(a) Does anything improper to influence the Council to award the contract. (In this respect the attention of employees of the Council is drawn to the National Code of Local Government Conduct which must be observed).

(b) Commits an offence under the Prevention of Corruption Act 1906 to 1916 or Section 117(2) of the Local Government Act 1972 (as amended).

The contract terms must therefore include a clause dealing with bribery and corruption in the format described in A4.8 of Appendix 4.

Appendix 1

PROCESS WHEN USING WEST MERCIA SUPPLIES OR OTHER APPROVED CONSORTIA, FRAMEWORK ETC.

A1.1 Shrewsbury and Atcham Borough Council may purchase through West Mercia Supplies (WMS) joint purchasing consortium. WMS is managed through a Joint Committee of Members and where purchases are made from or through WMS, the Shrewsbury and Atcham BC Contract Rules apply as follows.

Arrangements for the supply of goods and services supplied through the WMS catalogue or other WMS trading arrangements accord with the EU Directives and WMS' own procedures as agreed by the Joint Committee. Goods or services purchased through the WMS Trading Operation will be deemed to meet the requirements of the Borough Council's Contract Rules.

WMS also provides purchasing support services. This can be with WMS as the Lead Authority when tenders will be sought by WMS under their name and in compliance with their procedures, in which case WMS carry full responsibility for the procedures followed and the records kept. If this option is chosen, the requirements of Shrewsbury and Atcham BC Contract Rules will be deemed to be met.

PROCESS FOR MINOR CONTRACTS GREATER THAN £5,000 AND LESS THAN £50,000

A1.2 For goods or services that cost between £5,000 and £50,000 and are 'one-off' items obtain three written quotations and then simply place an official order with your chosen supplier.

A1.3 For goods or services where individual items or jobs cost less than £50,000 but the Borough Council's total expenditure on such items or jobs will exceed £50,000 then the process for ordinary contracts applies as set out in Appendix 2.

A1.4 For goods or services that cost in excess of £50,000, tenders should be invited from at least five suppliers.

Appendix 2

PROCESS FOR ORDINARY CONTRACTS (TOTAL VALUE OF £50,000 OR ABOVE)

A2.1 Using West Mercia Supplies (WMS) or other recognised Local Government Consortia

See Appendix 1.

A2.2 Describing the Service or Goods

Produce a description of the goods or specification of the works or services required before you start the tendering process. This will enable the Council to compare prices properly. You also need to prepare a contract with terms and conditions, tender instructions and a tender form. Your description or specification must include enough detail to allow us to control the quality, cost and time of performance.

A2.3 Standard Form of Contract

See Appendix 4 for details of the content requirements in contracts.

Check whether there is a standard form of contract which has been approved by the Senior Solicitor. Seek advice from the Senior Solicitor if you are not clear. If there is no approved form or changes, send your draft or details of the changes to the Senior Solicitor for approval.

Advice must be sought from the Senior Solicitor at the beginning of the process for letting of contracts in excess of £100,000 in value. Each service manager is responsible for ensuring that the tender process complies with UK and EC legislation.

Each service manager must ensure that the contracts within his or her services:-

(a) Are legal;

(b) Comply with Financial Regulations;

(c) Are drafted properly; and

(d) Protect the Council's interests fully.

See Appendix 4(i) 'Contents of Ordinary Contracts' for advice on the standard contents of contracts. In addition, many standard types of contract have been established as an industry standard. These are referred to in Appendix 4(ii) and officers are advised to use this standard documentation.

All ordinary contracts must be signed by a Corporate Director, Engineering Services Manager or the Property Services Manager, in all cases being restricted to the service managed, or the Senior Solicitor for any contract when the contracts are not under seal. It is not a requirement that ordinary contracts go to Legal Services before they are signed if they are not to be sealed. If, however, Service Managers are not clear about the form of contract, or changes are needed to a standard form, advice should be sought from Legal Services.

A2.4 Is There An Approved Supplier list?

Advice on approved supplier lists is given in Section 9

A2.5 Advertising for Suppliers

If your contract will fall under European Procurement rules, you must advertise in a relevant trade or professional journal and, if necessary, the EC Journal. Collect your information from suppliers using a standard business questionnaire. Then use this information to select the suppliers you will invite to tender. As with approved supplier lists, you should consider the supplier's:-

(a) Past performance on similar contracts (quality and cost) including references;

(b) Financial situation;

(c) Experience and skills;

(d) Technical capacity.

You must advertise for all contracts where European procurement rules apply. Select lists cannot be used.

It is a requirement to have expert procurement advice when letting contracts. For construction works (including building works and highways) external procurement advice must be sought for contracts above £50,000. The procurement advisers must be part of the whole tendering process.

A2.6 Selecting Tenderers

A method for selecting tenderers must be produced before any selection from an approved supplier list is made or an advertisement placed. The method must:-

(a) Treat all tenderers in the same way;

(b) Keep the process clear and simple;

(c) Record all your selection decisions; and

(d) Follow a strict criteria for selection

The information you collect on the standard business questionnaires forms the basis of the assessment, and the same questionnaire must be used for all potential suppliers. Information from referees and from company searches may also be used.

At least five suppliers should be invited to tender for contracts of £50,000 and above. Each of them should be informed by post as soon as you have made a decision to select them or not. The names or details of suppliers must not be passed on to anyone at any time during the tendering process.

In the selection of suppliers to be invited to tender for a particular contract, the following must be considered:-

(a) Past performance on similar contracts (quality and cost);

(b) Financial situation;

(c) Experience and expertise;

(d) Technical capacity; and

(e) Service managers must ensure that whenever they use an approved list to invite tenders they must record the names of the persons/suppliers invited to tender.

A2.7 Inviting Tenders

Everyone who makes a bid must be treated fairly and equally. The Council must obtain best value and remember the need for competition, efficiency and savings.

Invite at least five suppliers to tender. An invitation to tender, the contract documents and a tender form should be sent, together with instructions on when and how the tenders should be returned. The invitation must state that the Council do not bind themselves to accept the lowest or any tender.

The invitation to tender needs to explain how the Council will deal with mistakes. The invitation to tender must set out the criteria upon which the contract will be awarded. Assessment criteria might include:-

(a) Price;

(b) Technical standard;

(c) Experience and skills;

(d) Practical considerations;

(e) Financial proposals;

(f) Contract management;

(g) Quality management proposals; and

(h) Delivery proposals.

You should identify which, if any, of the above criteria might need to be weighted.

If you want to know whether the supplier has received the invitation to tender, you must enclose a 'Tender received confirmation form'.

During the period allowed for preparing tenders, all communications with tenderers must be recorded. If a tenderer raises a query during this period, it must be passed on to all other tenderers, together with the reply. The identity of the tenderer who has raised the query must not be revealed.

A2.8 Returning Tenders

Each tenderer must be provided with an envelope or label bearing the name of the contract and the word "Tender" and they must be instructed to return their tender in the envelope provided, or in a plain envelope with the label attached. No other marks or writing should be made on the envelopes. Tenderers must be advised not to use their company franking machine. Tenders will not be accepted if there are identifying marks. Tenders can be returned by hand or by post to the Council Manager , The Guildhall, Frankwell Quay, Shrewsbury, SY3 8HQ. Tenderers should be advised to use postal services that provide them with proof of postage and the time of sending. Tenders sent by fax or e-mail will not be accepted. This is because the information cannot be kept secret. Suppliers must be told that tenders sent by fax or e-mail will not be accepted.

As tenders are identified in the incoming mail they should be recorded in the register which shows "the name of the contract and the time and date on which tenders are received". Tenders delivered by hand should be acknowledged with a written receipt and the time, date and name of the contract similarly recorded in the register. To ensure that all tenders are received by the Clerk when the tenders are collected, confirmation will be made that the number of envelopes handed over agrees with the number recorded in the register since the last collection.

The Clerk should initial the register to indicate the number is correct and to take responsibility for the custody of the tenders collected. Tenders will not be opened until the final deadline for receiving them. They must be kept in a safe in the Guildhall.

Tenders must be stored securely until it is time for them to be opened. The storage used should be fireproof and access to it available only to those officers in Democratic Services responsible for handling tenders, who must ensure that keys are secure at all times.

If a tender is opened by mistake before the deadline, a record of how this has happened should be attached to the packaging. The tender should be re-sealed immediately and its contents kept secret.

If fewer tenders are received than expected, do not contact tenderers to ask whether they have sent one in.

When the tender process is being undertaken suppliers should be advised that tenders are opened at the same time and no advantage is secured by seeking to delay submission until the last moment.

A2.9 Opening Tenders

Agree a time for opening the tenders before the suppliers return them to you. Try to open the tenders as soon as possible after the deadline for returning them. If a delay becomes necessary, the service managers must agree to this and the reason must be recorded. Never extend the deadline for returning tenders or delay the time for opening them to allow for late tenders. If problems do arise you must seek advice from the Senior Solicitor.

The Assistant Council Manager/Monitoring Officer must make sure that the procedures for opening tenders are followed and that the correct records and documents are completed. For contracts with an estimated value of £50,000 or above the tenders should be opened in the presence of the relevant portfolio holder.

The Assistant Council Manager/Monitoring Officer is custodian of tenders. He/she convenes the tender opening sessions and is responsible for maintaining a Register of Tenders, which should be a bound Register. Before tender opening, the register should comprise a list of contractors invited to tender for the project, the closing time and date of return of tenders and an estimated value. As each tender is opened, a value is to be entered against the name of each contractor/consultant submitting a bid and an endorsement against any contractor who has not submitted a tender. Those present at the opening of tenders will sign the register, including the Project Officer who will be responsible for subsequent evaluation of those tenders received.

You must open all tenders at the same session. Open them one at a time. Then each officer present must sign and date them. It is important that two officers are present throughout the tender opening and recording process.

The officers must sign each page of the tender form.

Once the tenders have been opened, they should be held in a secure place and delivered as soon as possible to the service manager responsible for the tender.

A2.10 Assessing the Tenders

Before assessing the tenders, the service manager needs to check that each part of them meets the requirements of the specification and invitation to tender. You also need to make sure that there are no major mistakes and that nothing is missing. If there are substantial omissions of data or documentation which make it impossible to assess the tender, these omissions should be fully recorded and the tender rejected.

Check the accuracy of the figures in each tender. If you find mistakes which do affect the price or the description of the goods or services, contact the tenderer and ask them to confirm the correct figures in writing.

Keep a record of all mistakes and attach it to the tender documents together with any corrections you have agreed with the tenderer.

You need to decide and record how you will assess the tenders well before the tender invitation process begins. The assessment criteria:-

(a) Must not prevent fair competition;

(b) Must not illegally discriminate between tenderers; and

(c) Must meet relevant English and EU laws.

The assessment criteria used for the tender evaluation must be the same in all respects as the criteria advised to prospective suppliers at the beginning of the process.

Assessment details are strictly confidential, so you must not pass them on to anyone else. During the course of the assessment, tender documentation must be kept secure and confidentiality preserved. If, in a major tendering exercise, the documentation is going to be copied or divided to aid the assessment process, a record should be maintained to identify to whom such documents have been issued and the date returned. It is recommended that the service manager retains a complete set of documents in a secure place in case any parts of the documentation go missing.

Once you have completed the assessment, you need to produce a report showing:-

(d) The result of your assessment of each tender;

(e) A comparison of assessment results; and

(f) Your recommendation for who should get the contract.

Your assessment might include:-

(g) Price

(h) Technical standard

(i) Experience and skills

(j) Financial proposals

(k) Contract management

(l) Quality management proposals; and

(m) Delivery proposals

A2.11 Accepting and Rejecting Tenders

The service manager should ensure that he/she has the relevant authority to accept the tender which is by Committee/delegation in our best interests. This will usually be:-

(a) Subject to contract, the lowest tender where we are the purchaser or the highest tender where we are the supplier; or

(b) Subject to contract, the tender which will be of most economic benefit to us. In this case, where it is not the lowest, the service manager will need to obtain the prior approval of the Cabinet before accepting the tender.

If acceptance of the tender is intended to conclude the contract, then all relevant contractual terms must be incorporated at this stage.

The relevant service manager must establish a Tender Panel comprising at least three officers, one of which shall be a representative of the Head of Finance. The Panel shall make decisions as to who should be awarded an ordinary contract and it is expected that the Tender Panel will reach a consensus on the winning bid. However, in the event that a consensus cannot be reached, the service manager will make the final decision. On some occasions it may be beneficial to include an elected member on the Tender Panel. It is suggested that the relevant portfolio holder should be approached in the first instance. Agendas and minutes of the Tender Panel meetings must be made.

You should always consider whether your recommendation for awarding the contract should be put before Cabinet or Full Council for formal approval before contacting the successful tenderer. If in doubt, seek advice/approval from your Director or the Property Services Manager.

After the expiry of any call-in periods, write and tell the successful tenderer your decision as soon as possible after you have received all necessary approvals. Let unsuccessful tenderers know your decision after you have told the successful tenderer. If unsuccessful tenderers ask why their tender was not successful, you can tell them in general terms about the areas of their tender which scored poorly in your assessment. Do not give them details of the other tenders or become involved in detailed arguments in trying to justify the decision.

The name of the successful tenderer and the value of their bid will be made available to the public (see section 6).

A2.12 Selecting the Supplier

The supplier chosen must be the one who offers us the best value-for-money solution. This applies whether you get prices by quotes or by more formal tendering processes. In most cases you will choose the supplier whose price is the lowest. But in some circumstances you may prefer higher-priced options because they offer best value for money. In these situations you should record on file your reasons for not accepting the lowest price before you tell the supplier your decision.

No tenderer shall be approved for an ordinary contract without a current authentication of their financial status by the Head of Finance.

A2.13 Negotiating

If it is in our best interests, the service manager may negotiate with tenderers for more favourable prices or terms. The following conditions apply to negotiating:-

(a) Advice should be sought from the Property Services Manager regarding the process and parameters of the negotiation process.

(b) Approval from the Corporate Director or service manager is required before negotiations commence.

(c) Two officers must always be present at negotiations and a full written record of all discussions should be made and signed by both officers. A copy of this record should be sent to the Corporate Director or service manager concerned and the Monitoring Officer. It is recommended that all negotiations are carried out at the Council's offices.

(d) You must not discuss one tenderer's detailed prices, conditions or terms with another tenderer.

(e) You must not give anyone information about our criteria for accepting a tender or any other matter connected with the contract or tenders.

(f) If negotiations lead to a material change in the description of the goods, work or services or other terms, you must invite everyone who has provided a tender to re-tender on the basis of the revised contract. If this is the case, the whole process of assessment should start again.

(g) What constitutes a material change will depend on several factors. You should take advice from Legal Services regarding this.

(h) If other tenderers as well as the tenderer who sent in the lowest price are to be approached the Procurement Manager must agree that negotiations can take place.

(i) All negotiations and meetings must be documented.

If there is an in-house bid for the contract or the contract falls under European Procurement Rules or other legal requirements, negotiations must not take place without permission from the Senior Solicitor and the Property Services Manager.

Where the Council is the supplier, the service manager, subject to the rules above, may also negotiate with the higher tenderer where they consider it to be in the best interests of the Council, with a view to increasing any consideration payable to the Council.

A2.14 Ordering and Entering into a Written Contract

Once you have selected a supplier, you need to complete the contractual arrangements. The contract should meet the requirements set out in Appendix 4. Make sure the contract is signed by a Corporate Director, Engineering Services Manager or the Property Services Manager, in all cases being restricted to the service managed, or the Senior Solicitor for any contract.

A2.15 Information to Tenderers

You must not give tenderers or suppliers any information about the bids or affairs of any other tenderer or contractor unless the law says you must do this. The information you receive is confidential.

The only information you should make public is the name of the successful tenderer and the value of their bid. However, do not release this information until the contract has been awarded and signed.

Service managers may decide to make available the amounts of the other bids received. This information should not include the names of the unsuccessful tenderers. Service managers should make sure that if they are planning to release this information, tenderers know this at the start of the process.

A2.16 Records of Contracts

You must keep written records of each contract, including all the quotes and letters you have received, and notes of phone calls and meetings about selecting suppliers. You need to keep these records for the periods set out in section 8.

A2.17 Authorisation

A Corporate Director, Engineering Services Manager or the Property Services Manager, in all cases being restricted to the service managed, or the Senior Solicitor for any contract must sign the contract documents. The documents should clearly set out the name of the supplier, what the contract is for, and the terms and conditions of the contract. They should also show that there is suitable insurance to protect our interests. Advice on insurance matters is available from the Head of Finance. If in any doubt with the contract documentation, clearance should be sought from the Senior Solicitor.

A2.18 Honesty

Corporate Directors and service managers must make sure that their employees follow the code of conduct for local government employees (as set out in the Council's Employee Induction Handbook and in the Constitution). They must also make sure that if there is an in-house bid for a contract, those involved in making the bid do not take part in the decision about who wins the contract.

Appendix 3

CONTRACTS WHERE THE COUNCIL IS THE SUPPLIER

A3.1 Contract Rules also apply if we are supplying goods, work or services.

RESPONSIBILITIES OF THE SERVICE MANAGER

A3.2 The service manager must keep a list of all ordinary supply contracts and a list of their unsuccessful bids. He or she must record the details of all supply contracts in the Directorate register. (see section 7.2).

A3.3 Before the contract is signed:-

(a) The Senior Solicitor must confirm that we can legally enter into the contract before we provide a tender.

(b) The Senior Solicitor must approve the terms and conditions.

(c) The Property Services Manager and Head of Finance must be satisfied that our bid is financially practical.

(d) There must be enough insurance to cover any liability we may have under the proposed contract. Advice can be sought from the Head of Finance.

CONTENTS OF ORDINARY CONTRACTS Appendix 4 (i)

Every ordinary contract we enter into must be in writing and must set out the following as a minimum. (N.B. Service managers will be expected to use the Standard Forms of Contract listed in Appendix 4(ii) where these are relevant).

A4.1 Names and Addresses

Our full name and address and the supplier's full name and address must be on the contract. If the supplier is a company, the contract should show its registered office address.

A4.2 What the Contract is For

This means the work, services or goods we are buying. This information will usually be set out in a specification which gives a description of the requirements or the desired results.

A4.3 PriceThey may be:-

(a) A lump sum;

(b) A single rate; or

(c) Several rates.

It may be impossible to define the price in advance. In this case you will need to draw up a pricing schedule which refers to the unit of pricing, quantities, and a fixed or index-linked price basis.

Do not review the prices of ongoing commitments more than once in any year unless the service is linked to prices or rates from statutory organisations and they are reviewed or adjusted at a contract fixed rate. Agree any change to prices in writing.

A4.4 The Programme or Timescales

The contract should show the time and method for providing the services or goods. The dates for delivery and completing the work must be set out clearly.

A4.5 A Suitable Quality Standard for Goods and Materials

The contract must include any relevant standards and test required. The level of detail will depend on the type and value of the contract.

A4.6 Standard and Codes to be Followed

The contract should require compliance with relevant European and English legislation EC, legal and council requirements. It must put the responsibility on the supplier to meet all legislative requirements, even if they are not specifically listed. Other standards and codes should be dealt with in the conditions of contract or the description of service. The contract must specifically refer to compliance with all equal opportunities legislation.

A4.7 Insurance

The supplier must arrange and maintain the following insurance:-

In all cases:-

(a) Public liability - insurance at least £5million. Suppliers often try to argue that they do not have insurance of this level or try to limit their liability to the total amount to be paid under the contract. This is not acceptable. Tell contractors about our insurance requirements in your tender documents.

If necessary:-

(b) Product liability insurance - at least £2 million

(c) Professional indemnity cover - at least £1 million

(d) Employer's liability insurance - at least £10 million

(e) Motor policy for physical injuries - unlimited

(f) Motor policy for property damage - at least £5 million

Our insurers have recommended these limits to make sure that we are protected properly. If you need more advice on insurance, contact the Head of Finance. If you want to change the recommended levels, you need the agreement of the Head of Finance.

The above values apply to 2002/03 and may change in future years.

A4.8 Anti-bribery and Anti-Corruption Clauses

The invitation to tender will have contained a statement that the Council can cancel the contract and recover any resulting losses if the contractor or his/her employees or agents with or without his/her knowledge:-

(a) Does anything improper to influence the Council to award the contract. (In this respect the attention of employees of the Council is drawn to the National Code of Local Government Conduct which must be observed).

(b) Commits an offence under the Prevention of Corruption Act 1906 to 1916 or Section 117(2) of the Local Government Act 1972 (as amended).

The contract terms must therefore include a clause dealing with bribery and corruption.

You need a clause which entitles us to cancel the contract and get back our costs as a result of doing so if the contractor tries to influence any of our officers. A standard clause is shown below:-

'The Council may cancel the contract and recover from the Contractor the amount of any loss resulting from the cancellation if at any time it becomes known to the Council that the Contractor or any person employed by the Contractor or acting on his behalf whether with or without the knowledge of the contractor has:-

      (i) offered, given or agreed to give any inducement or reward to any person or body in relation to the obtaining or execution of the contract or any other contract with the Council; or

      (ii) favoured or discriminated against any person in relation to this or any other contract with the Council; or

      (iii) committed an offence in relation to any contract with the Council under the Prevention of Corruption Acts 1889 to 1916 or section 117(3)d Local Government Act 1972 (as amended). '

A4.9 Transferring and Subletting

Your contract must identify any nominated or domestic sub-contractors or state that the contractor cannot transfer or sublet any rights or responsibilities without our written permission. This helps us to make sure that suppliers do not use anyone who is unacceptable to us to perform the contract.

A4.10 Liquidated Damages

In all ordinary contracts we need a clause which entitles us to liquidated damages if the supplier fails to meet the dates given in the contract. If you need more advice about this, please ask the Senior Solicitor. Liquidated damages are any pre-estimated costs or expenses we have to pay as a result of the supplier failing to perform as set out in the contract.

A4.11 Security

In all ordinary contracts the Head of Finance will consider whether we should ask for security and, if so, the type and amount. Security would usually be a guarantee from a parent company, bondsman or bank. For professional services it is common to require adequate indemnity insurance.

A4.12 Format of the Contract

You need to consider the suitability and style of the terms, conditions and descriptions in the contract as well as the way it is presented. The Senior Solicitor has approved standard formats for particular types of contracts in particular Directorates (see Appendix 4(ii)).

The original tender and specification must be incorporated as part of the contract.

Some contract formats have been agreed nationally, for example, Joint Contracts Tribunal (JCT) contracts, and approved by the Senior Solicitor for certain types of contracts. Changes to these formats agreed by the national organisation must be sent immediately to the Senior Solicitor. If you want to adapt these formats to other types of contracts, you will need permission from the Senior Solicitor. Any new type/forms of contract that have not been previously agreed must be approved by the Senior Solicitor.

A4.13 Any notice to be served on the contractor or supplier shall be deemed to have been duly served if sent by registered or recorded delivery post to his usual or last known place of business or abode.

A4.14 Contracts may also require:-

(a) Definitions;

(b) Schedule of rates;

(c) Specification;

(d) Bond; and

(e) Guarantees

Appendix 4 (ii)

INDUSTRY STANDARD CONTRACTS

The following are some example standard types of contracts and agreements. Authorised Officers are advised to use these standard contracts where appropriate. If you are unsure as to whether a particular form of contract is appropriate, advice should be obtained from the Senior Solicitor, Property Services Manager or the Engineering Services Manager.

(a) For building and engineering works, e.g. JCT standard form (Local Authorities) edition (with or without quantities), or ICE conditions of contract.

(b) For specialist work associated with building and engineering works, e.g. Institution of Electrical Engineers and other standard form contracts produced by professional bodies.

Appendix 5

DISPOSAL OF LAND OR PROPERTY

Disposals of land or property should normally require the invitation of competitive bids and exceptions should only be permitted by members on consideration of a report from the Council’s Officers recommending an alternative course. Regard should be paid to past practice/Council policy to ensure that potential accusations of unfairness are minimised. The usual methods of disposal are:

(a) private treaty

(b) public auction

(c) closed bids

(d) open bids

A decision on the appropriate method of disposal and tenure to be granted should be made by members upon advice, at the outset of any disposal.

Special rules apply to the disposal of recreational land. Private Treaty as a method of disposal should only be used in certain circumstances to ensure Best Value. Councillors should avoid any involvement in negotiation and need to refer to the protocol for members' involvement in commercial transactions.

A disposal need not involve the sale of the freehold. Consideration must be given to whether the Council's greater interests would be served by a lease or licence. This must be balanced against the price to be obtained.

Any proposal to dispose of land for less than the best terms reasonably obtainable should usually require member consent and unless the disposal is of a short lease will require the consent of the Secretary of State for the Environment. In order to determine whether the best price is being obtained account will need to be taken of the development potential of the land concerned. As a guide to determine whether consent is needed refer to the ‘Disposal of Land – Guidance on Good Practice’ by Local Government Ombudsman Paragraph 33.

Prospective purchasers should be fully informed of the basis on which they are bidding so that hopes and expectations are not raised unreasonably, possibly giving rise to complaints and for unnecessary expenses incurred.

ACQUISITION OF LAND OR PROPERTY

Land or property may be acquired by any of the methods listed under disposal (above) but to include also compulsory purchase order.

A decision on the appropriate method of acquisition should be made upon professional advice, usually that of the District Valuer at the outset.

The Senior Solicitor has authority to sign contracts for the acquisition of land and property. Such transactions should also comply with Financial Regulations.

FORM 1

LOCAL REGISTER OF ORDINARY CONTRACTS

(FOR USE BY CONTRACTS OFFICERS)

DATE

CONTRACTOR

SUPPLY

QUANTITY OR DURATION

VALUE

AUTHORITY

TENDER PROCESS

TENDERS RECEIVED

AUTHORISED BY

                 
                 
                 
                 
                 
                 
                 
                 
                 
                 

 

APPENDIX 5

FORM 2

REGISTER OF CONTRACTS WHERE THE BOROUGH COUNCIL IS THE SUPPLIER OF GOODS OR SERVICES

DATE

CLIENT

TYPE OF SUPPLY

QUANTITY OR DURATION

VALUE £

AUTHORITY

AUTHORISED BY

             
             
             
             
             
             
             
             
             
             

Please note that advice should be sought from the Senior Solicitor on the form of contract and terms and conditions for all ordinary contracts where the Borough Council is the supplier. Advice should also be sought on the insurance implications.

Appendix 6

APPOINTING EXPERTS AND CONSULTANTS

There is often confusion about the status of people we "employ" as experts or consultants and whether they are under a "contract for services" (as an independent contractor) or a "contract of service" (as our employee). Therefore you need to liaise thoroughly with Personnel Services and Payroll Services on all aspects of appointing experts, consultants, casual employees and self-employed persons, including, e.g. status of the contract; terms and conditions; taxation arrangements; national insurance, and where appropriate, pension contribution arrangements; method of payment; and codes to be charged.

It should not be assumed that because a person contracted to carry out work for the Council is currently self-employed that this status continues whilst undertaking work for the Council.