To assess the impact of new Procurement Regulations.
Councillor Bill Soane declared a personal interest on the grounds that he had business links with contractors who may be employed by the Council. Councillor Soane remained in the meeting during discussions.
The Chair invited members of the Audit Committee to take part in discussions.
Kien Lac, Head of Commercial Services, presented an update on the Public Contracts Regulations 2015 legislation, how it had been incorporated into the Council’s own Constitution through the new Procurement & Contracts Rules and Procedures (PCRP) and the execution and impact of this on procurement activity and outcomes across the Council. He explained that the key changes included old part B services such as social care, that had previously been exempt from procurement regulations, were now included and that there was increased support for Small and Medium Enterprises (SMEs) through various provisions.
He stated that the Council had used the opportunity presented by the new regulations to reframe the Council’s own procurement rules and procedures in the following ways:
· Clearer set of core instructions plus the use of linked information sources;
· The PCRP was now more prominent, being a defined section with in the Constitution (section 13);
· Inclusion of checklists of functions that must happen and default processes that were available;
· Implemented through a training programme that included eLearning, classroom training and Procurement Business Partner support, and
· Improving compliance through educating and upskilling officers and instilling best practice in procurement activity across the Council.
He explained that the changes happening as a result of the 21st Century Council would further assist in this process through the development of a dedicated Strategy and Commissioning team to focus much of the key activity in one function.
In regards to the inclusion of social care in the procurement regulations, the Head of Commercial Services suggested that the impact had been an increase in the levels of market testing and tendering which had resulted in savings but which did also place some stress on resources in those Commissioning teams, who were not historically geared up to undertake such levels of activity. Again, the 21st Century Council changes should improve this. The impact of provisions to give increased support for SMEs in public procurement opportunities was less clear at this stage, although there was evidence that more SMEs were participating in Central Purchasing Organisation opportunities (Frameworks) which WBC do procure from.
A reminder was given around the risks of non-compliance including more suppliers challenging the process (potentially unlimited damages; new case law, and regulatory body penalties of up to 10% of annual turnover.
In response to Member questions, the Head of Commercial Services stated that the previous WBC Procurement Regulations had been 122 pages long, and significant work had already been done to ‘summarise’ the rules and procedures into 11 pages of the new PCRP core instructions. When accessed via computer, there were links to working documents, guidance notes, glossaries and flowcharts to assist officers, and that officers were actively encourage to seek professional support from the central Procurement team early in any project. In relation to local suppliers, he stated that actively approaching suppliers to offer contract opportunities was expressly prohibited by law, iterating that the process of procurement had to be seen as open, fair and transparent. It was, however, permissible to widen advertising to encourage SMEs and to actively encourage local SMEs by pointing them towards the adverts for opportunities.
Richard Turner, Procurement Business Partner, Corporate, spoke about existing frameworks, stating that whilst the Council could create its own frameworks or look at other systems such as dynamic purchasing systems, the frameworks, such as Scape that was used for SDLs, were well known and vigorously controlled but difficult for SMEs to access. There was growing evidence that some of the newer frameworks created by Central Purchasing Organisations were being successful in encouraging SME participation.
In response to questions regarding extension of contracts, the Head of Commercial Services explained that extensions were only permissible to a contract if extension provisions were specifically written into the contract at the outset. Otherwise, the contract would have to be re-tendered at the end of the contract term. He went on to state that the onus would be on officers to ensure that contracts did not expire, although this was centrally monitored and reported to senior management routinely, and to be more rigorous and focused at the outset regarding criteria for drawing up contracts and awarding them after the tender process. There would be warning flags at intervals allowing officers to plan ahead. He clarified that it was not expected that all officers would be procurement experts but that the training they were given should at least enable them to actively recognise where their service activities had procurement and contracts implications that they need to plan for and, where appropriate, to seek advice and input from the professional team.
Paul Feven, Interim Head of Strategic Commissioning, stated that procurement procedures in social care had been paper based and that the new system was a great improvement, citing a centralised system with one team of commissioners sitting alongside procurement. In response to a question regarding the process when there were few bidders, the Procurement Business Partner stated that the processes would handle low levels of response and there were clear regulations to deal with the specific circumstances for a direct award. The Head of Commercial Services reiterated these comments, stating that there would be room for checks and balances and improvements in the procedures as time went on, and that, if effort was put in to make sure the process was followed properly it would mean fewer issues then needing to be dealt with reactively.
1. Kien Lac, Head of Commercial Services, be thanked for the Update on the impact of new Procurement Regulations; and
2. That his team be commended on the progress that had occurred.