PURCHASING PROCEDURES - University of Central Lancashire
PURCHASING PROCEDURES - University of Central Lancashire
PURCHASING PROCEDURES - University of Central Lancashire
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<strong>PURCHASING</strong> <strong>PROCEDURES</strong><br />
INTRODUCTION<br />
<strong>PURCHASING</strong> PHILOSOPHY<br />
<strong>PURCHASING</strong> POLICY<br />
<strong>PROCEDURES</strong> Last reviewed – December 2011<br />
1. - Services<br />
2. - Primary Budget Holder<br />
3. - Authority to Order<br />
4. - Request to Purchase<br />
5. - Selection <strong>of</strong> Potential Suppliers<br />
6. - Invitations to Tender/Quote<br />
7. - EU Procurement Legislation<br />
8. - Use <strong>of</strong> Purchase Orders<br />
9. - Dealing with Suppliers<br />
10. - Use <strong>of</strong> Specifications<br />
11. - Contracts<br />
12. - Purchasing Consortium<br />
13. - Buyers Guide<br />
14. - Lead Purchasers‟ Group<br />
15. - Financial Health Checks<br />
16. - Supplier Appraisal<br />
17. - Approved Suppliers<br />
18. - Purchasing Cards<br />
19. - Corporate Cards<br />
20.- Negotiation Briefing Notes<br />
21.- Purchasing Guidance Notes<br />
(when bidding for funds)<br />
22.- Consultancy<br />
23.- Purchasing Flowchart<br />
FINANCIAL SERVICES<br />
<strong>PURCHASING</strong> OFFICE<br />
DECEMBER 2011<br />
Purchasing Procedures December 2011
INTRODUCTION<br />
The purpose <strong>of</strong> these procedures is to advise and assist those staff within the<br />
<strong>University</strong> who undertake purchasing duties as part <strong>of</strong> their overall responsibilities.<br />
The Purchasing Office is part <strong>of</strong> Financial Services and its primary purposes are to<br />
formulate Purchasing Policy, co-ordinate purchasing activities within the <strong>University</strong><br />
and to provide pr<strong>of</strong>essional purchasing advice and assistance to all parts <strong>of</strong> the<br />
<strong>University</strong> Group. A more detailed description <strong>of</strong> the role <strong>of</strong> the Purchasing Office<br />
can be found under the Service Standards section <strong>of</strong> these procedures.<br />
All purchasing procedures are derived from the Purchasing Policy <strong>of</strong> the <strong>University</strong><br />
and the Policy Statement now forms part <strong>of</strong> the Financial Regulations <strong>of</strong> the<br />
<strong>University</strong> Group.<br />
To assist with the location <strong>of</strong> Purchasing Policies within the regulations <strong>of</strong> the<br />
<strong>University</strong> Group the following details are supplied:<br />
Financial Regulations<br />
The Financial Regulations <strong>of</strong> the <strong>University</strong> Group establishes approved practices<br />
governing the purchasing process (see paragraphs 701-719 <strong>of</strong> the Regulations). The<br />
Purchasing Procedures cover the operational detail and standard documentation which<br />
implement the Financial Regulations.<br />
Purchasing Policy<br />
Appendix A-5 <strong>of</strong> the Financial Regulations sets out the <strong>University</strong>'s approved<br />
Purchasing Policy.<br />
Tendering Procedure<br />
Appendix A-8 <strong>of</strong> the Financial Regulations sets out the <strong>University</strong>'s procedures for<br />
purchases valued in excess <strong>of</strong> £50,000.<br />
Purchasing Procedures December 2011
<strong>PURCHASING</strong> PHILOSOPHY<br />
The <strong>University</strong> aims to establish an effective and efficient organisational structure for all its<br />
purchasing activities to ensure the promotion and achievement <strong>of</strong> value for money.<br />
The established organisational structure seeks to secure the management advantage <strong>of</strong> devolved<br />
budgets and decentralised purchasing with arrangements to secure best price, to promulgate good<br />
practice in purchasing and ensure co-ordination <strong>of</strong> all buying activity across departments.<br />
To achieve these aims, the <strong>University</strong> has developed a central Purchasing Office responsible for the<br />
development <strong>of</strong> a purchasing strategy, the implementation <strong>of</strong> good purchasing practice, and the<br />
provision <strong>of</strong> pr<strong>of</strong>essional purchasing advice across the <strong>University</strong>.<br />
Within each School and Service, the <strong>University</strong> has implemented the role <strong>of</strong> 'Lead Purchasers' to<br />
focus the purchasing activities and to develop a common approach to purchasing. Lead Purchasers<br />
are assisted by the central Purchasing Office in areas such as contract compliance, purchasing<br />
procedures, the formulation <strong>of</strong> a Buyers Guide and the negotiation <strong>of</strong> standard item goods/services<br />
for use across all faculties and services.<br />
Senior management <strong>of</strong> the <strong>University</strong> is concerned with the achievement <strong>of</strong> a comprehensive and<br />
consistent overview <strong>of</strong> the <strong>University</strong>'s purchasing and supply policies and activities, including<br />
training and the application <strong>of</strong> pr<strong>of</strong>essional purchasing skills to achieve value for money.<br />
The purchasing philosophy underpins the purchasing policy <strong>of</strong> the <strong>University</strong>, and the<br />
implementation <strong>of</strong> the policy is detailed in the following procedure notes.<br />
Purchasing Procedures December 2011
<strong>PURCHASING</strong> POLICY<br />
The <strong>University</strong>'s Views on Purchasing<br />
The <strong>University</strong> seeks to ensure that its operational activities are consistent with, and supportive <strong>of</strong>,<br />
the Mission Statement and its associated values and aims, and are consistent with the policy stances<br />
taken by the institution on equal opportunities, regional affairs and environmental issues. The<br />
<strong>University</strong>, therefore, wishes to ensure that the process <strong>of</strong> the purchasing <strong>of</strong> goods for the<br />
<strong>University</strong> is sensitive to environmental factors, that it shows commitment to the region by,<br />
wherever possible, procuring goods from local firms, and that it facilitates equality <strong>of</strong> opportunity<br />
through contract compliance measures. These principles <strong>of</strong> purchasing will only be adopted,<br />
however, where value for money can be achieved.<br />
Policy Statement on Purchasing<br />
The <strong>University</strong>'s Purchasing Policy is derived from the Mission Statement and associated values<br />
and aims. The Purchasing Policy will also operate within the wider framework <strong>of</strong> the Financial<br />
Regulations and legislative requirements.<br />
The Purchasing Policy is as follows: -<br />
1. The <strong>University</strong> will seek to achieve value for money in all purchases.<br />
2. Environmentally friendlier products will be purchased, wherever possible.<br />
3. Wherever possible, the <strong>University</strong> will not deal with companies who are known to operate<br />
discriminatory practices. All <strong>University</strong> contracts will include a clause upon which contract<br />
compliance will be sought.<br />
4. Subject to European directives, products will normally be purchased within the North West<br />
<strong>of</strong> England and, wherever possible, in <strong>Lancashire</strong> and Cumbria.<br />
5. Goods and Services will be purchased from within approved contracts and ranges where<br />
available.<br />
6. Purchasing will be on the basis <strong>of</strong> "just-in-time" to prevent unnecessarily large levels <strong>of</strong><br />
stock being maintained.<br />
Principles <strong>of</strong> Implementation<br />
All contracts for standard items and environmentally friendlier products (as defined in the<br />
purchasing procedures) will be negotiated by the Head <strong>of</strong> Purchasing. Major items and group<br />
purchases (as defined in the purchasing procedures) will be technically specified by the specialist<br />
staff, and the Head <strong>of</strong> Purchasing will undertake all contract negotiations.<br />
Purchasing Procedures December 2011
<strong>PURCHASING</strong> <strong>PROCEDURES</strong><br />
1: SERVICES<br />
The role <strong>of</strong> the Purchasing Office within the <strong>University</strong> is to formulate Purchasing Policy, coordinate<br />
purchasing activities within the <strong>University</strong>, provide pr<strong>of</strong>essional purchasing and insurance<br />
advice and assistance to all parts <strong>of</strong> the <strong>University</strong> Group.<br />
In general, the Purchasing Office shall be responsible for the following on behalf <strong>of</strong> the <strong>University</strong><br />
Group:<br />
<strong>Central</strong> Role - The Purchasing Office has a responsibility for all major purchases <strong>of</strong><br />
non-pay expenditure, including Capital.<br />
Contract Development - Commodity Research; Contract Strategy; Supplier Appraisal; Contract<br />
Reviews; Supplier Management.<br />
Tender Process - Production and issue <strong>of</strong> documents; Supplier Appraisal; Commercial Evaluation;<br />
Contract Award.<br />
Operational Issues - Pr<strong>of</strong>essional Purchasing advice and guidance relating to: acquisition <strong>of</strong> goods<br />
and services; assistance with compilation <strong>of</strong> Specifications; obtaining quotations; commercial<br />
negotiations; sourcing <strong>of</strong> Suppliers and commodities.<br />
For further information about the services provided by the Purchasing Office and specific detail<br />
relating to standards and time scales, please refer to the Service Standards for Purchasing Office on<br />
the Purchasing Office web site Purchasing service standards.<br />
Environmentally friendlier products are those products and services, which are generally<br />
recognised as providing a positive environmental performance and contribute to achievement <strong>of</strong> the<br />
<strong>University</strong>‟s Sustainable Development Strategy. In recommending the adoption <strong>of</strong> these products<br />
or services to the <strong>University</strong>'s Environment and Sustainable Development Steering Group, the<br />
Purchasing Office will ensure that value for money issues are addressed. Following approval, the<br />
products will appear in the Buyers Guide.<br />
Purchasing Procedures December 2011
2: PRIMARY BUDGET HOLDER<br />
The Financial Regulations <strong>of</strong> the <strong>University</strong> Group (see paragraphs 501 - 516) detail budget policy<br />
and budgetary control.<br />
Primary Budget Holders are defined as persons to whom budget responsibility has been delegated<br />
by the <strong>University</strong> Board or by the Vice-Chancellor.<br />
Primary Budget Holders are authorised to approve expenditure, ensuring:<br />
- the goods and/or services are necessary and the expenditure which will be incurred can<br />
be contained within that part <strong>of</strong> the budget for which they are responsible;<br />
- established contracts or supply arrangements as contained in the Buyers Guide are<br />
utilised wherever possible;<br />
- where alternatives are available, the purchase represents economy (using the whole life<br />
costing method) and operational efficiency, and the advice <strong>of</strong> the Purchasing Office has<br />
been sought where necessary;<br />
- action is taken on incorrect or poor quality deliveries and/or services, and that the<br />
Purchasing Office is advised <strong>of</strong> such instances;<br />
- the correct purchasing route has been taken in accordance with the specified purchasing<br />
limits, (see paragraph 702 <strong>of</strong> Financial Regulations).<br />
Secondary Budget Holders are defined as persons to whom budget responsibility has been delegated<br />
by a Primary Budget Holder.<br />
Purchasing Procedures December 2011
3: AUTHORITY TO ORDER<br />
The responsibilities and authority <strong>of</strong> Primary and Secondary Budget Holders are defined in<br />
Financial Regulations.<br />
Purchase Orders to be issued for any goods or services necessary may be authorised by a Budget<br />
Holder with the following exceptions:<br />
- The Supplier attempts to impose terms and conditions which conflict<br />
with the <strong>University</strong>'s Standard Conditions (especially payment<br />
terms); only the Head <strong>of</strong> Purchasing, as nominee <strong>of</strong> the Group<br />
Executive Director <strong>of</strong> Finance, may vary the Standard Conditions<br />
under which the <strong>University</strong> trades;<br />
- The single or cumulative value is in excess <strong>of</strong> £5,000 and three<br />
quotations have not been obtained;<br />
- The single or cumulative value is in excess <strong>of</strong> £50,000 and has not<br />
been subject to the Tendering procedure;<br />
- The purchase is for IT equipment: this necessitates additional<br />
authorisation by the Head <strong>of</strong> LIS<br />
If there are any doubts or concerns with regard to the authority necessary to make a particular<br />
purchase, please do not hesitate to contact the Purchasing Office for advice and assistance.<br />
Summary <strong>of</strong> Purchasing Limits<br />
Financial Regulations establish a Purchasing Limit <strong>of</strong> £5,001 - £50,000 where the requirement is for<br />
3 written quotations (i.e. formal <strong>of</strong>fers with fixed pricing). Purchasing Office involvement may be<br />
sought within this limit to assist in this process.<br />
Purchasing Procedures December 2011
Value <strong>of</strong> Order/Contract<br />
(Exclusive <strong>of</strong> VAT)<br />
Purchasing requirements<br />
Up to and including £1,000<br />
Estimated price<br />
£1,001 - £5,000 Estimated price subject to competition<br />
£5,001 - £50,000 Minimum <strong>of</strong> 3 written quotations<br />
£50,001 - £173,000 Minimum <strong>of</strong> 4 Tenders<br />
More than £173,000 EU Tender procedure<br />
Design and Build Contracts<br />
Maximum <strong>of</strong> 4 Tenders<br />
Low Value Orders<br />
The process <strong>of</strong> issuing Purchase Orders has a significant administrative resource cost (time spent in<br />
raising order, actioning copies, processing invoice, processing cheque, impact on finance system,<br />
etc.). Therefore, for low value purchases, the <strong>University</strong> purchasing card should normally be<br />
utilised.<br />
Purchasing Procedures December 2011
4: REQUEST TO PURCHASE<br />
The Buyers Guide details all supply arrangements currently in force and will be regularly updated<br />
by the Purchasing Office. Where goods/services are required which are not referred to in the Guide<br />
and have a value (singly or cumulatively) <strong>of</strong> between £5,000 and £50,000 (exclusive <strong>of</strong> VAT), then<br />
the Purchasing Office can assist in the acquisition process. A Purchasing Request Form may be<br />
completed and sent to the Purchasing Office for action to facilitate this. The Purchasing Request is<br />
purely an internal document and must not be transmitted to Suppliers as an intention to purchase.<br />
Alternatively, an email request may be sent containing all information detailed below.<br />
When completing a Purchasing Request Form (available on the Purchasing Office web site) or<br />
submitting an email request, the following details must be provided:<br />
- Quantity and description <strong>of</strong> the goods/services required, including any technical<br />
specifications or recognised Standards;<br />
- Potential and/or preferred Suppliers;<br />
- Estimated and/or maximum (budget) cost;<br />
- Details (or attached copies) <strong>of</strong> any informal quotations obtained;<br />
- Full delivery requirements - date (or period)/location/recipient;<br />
- Authorised Budget Holder's signature.<br />
From receipt <strong>of</strong> a fully completed Purchase Request Form / email, the Purchasing Office will<br />
(within the time scales defined in Service Standards):<br />
- Advise whether a supply arrangement already exists;<br />
- Aggregate the request with requests from other Departments and Services as<br />
appropriate;<br />
- Source quotations/information from Suppliers and make recommendations for purchase<br />
to the budget holder;<br />
- If unable to locate minimum number <strong>of</strong> Suppliers, advise the budget holder to submit a<br />
waiver request to the Head <strong>of</strong> Purchasing<br />
Purchasing Procedures December 2011
5: SELECTION OF POTENTIAL SUPPLIERS<br />
In line with good purchasing practice, the <strong>University</strong> needs constantly to monitor and limit its<br />
established Supplier base in order to minimise administration resource costs and maximise bulk<br />
purchasing power.<br />
Details <strong>of</strong> existing supply agreements are listed on the Purchasing Office website under the Buyers<br />
Guide. This is constantly updated as contracts are renewed and new contracts are established.<br />
All suppliers must be set up on Agresso before purchases can be made (see section 18) unless the<br />
<strong>University</strong> Purchasing Card is being used to place the order.<br />
During Quotation or Tender exercises, user Departments may recommend Suppliers to the<br />
Purchasing Office for technical reasons. There is no guarantee that such Suppliers will be successful<br />
or acceptable once the Purchasing Office has undertaken a commercial evaluation. Where strong<br />
technical recommendations prove commercially unsound, the Purchasing Office will liaise with the<br />
User Department to reach an acceptable solution.<br />
The Head <strong>of</strong> Purchasing will evaluate the level <strong>of</strong> input for the <strong>University</strong> necessary to balance the<br />
costs <strong>of</strong> obtaining further quotations against the likely benefits or value for money issues. The<br />
Head <strong>of</strong> Purchasing will make recommendations, where necessary, to the Group Executive Director<br />
<strong>of</strong> Finance.<br />
Purchasing Procedures December 2011
6: INVITATIONS TO TENDER/QUOTE<br />
The <strong>University</strong> will seek to achieve value for money in all purchases.<br />
Tenders<br />
Any single or cumulative (over any 12 month period) purchase likely to be in excess <strong>of</strong> £50,000<br />
(excluding VAT) may be subject to the <strong>University</strong>'s formal Tendering Procedure. The Head <strong>of</strong><br />
Purchasing will make recommendations to the Group Executive Director <strong>of</strong> Finance regarding any<br />
necessary Contract Strategy.<br />
A copy <strong>of</strong> the Tendering Procedure may be obtained from the Purchasing Office website<br />
In order to commence the Tendering process, a standard Tender Request Form should be completed<br />
and forwarded (with Specification etc.) to the Purchasing Office. A copy <strong>of</strong> the Form may be<br />
obtained from the Purchasing Office.<br />
Quotations<br />
It is recognised that for most purchases <strong>of</strong> goods or services below £5,000 (excluding VAT), it is<br />
unlikely that the purchaser within the department will require specialist or pr<strong>of</strong>essional purchasing<br />
input. Quotations for these purchases are still likely to generate savings for the purchaser.<br />
Standard Conditions have been developed (please refer to the website - Terms and conditions)<br />
which will apply to all purchases made by the <strong>University</strong>, thereby reducing commercial risk in the<br />
procurement process.<br />
Where it is intended to make a purchase from a Supplier not set up on Agresso, the procedure<br />
outlined in Approved Suppliers must be followed before issuing a Purchase Order.<br />
For purchases, which are greater than £5,000 in value (over any 12 month period ) but below the<br />
Tendering threshold, a Purchasing Request Form or email detailing requirements should be created<br />
if the Purchasing Office is to be involved in obtaining quotations. Quotations may be obtained by<br />
departments but must then be forwarded to the Purchasing Office for confirmation / clarification.<br />
A standard request for Quote form is available from the Purchasing Office website to ensure that<br />
suppliers are complying with the <strong>University</strong>‟s standard terms and conditions. This form must be<br />
used for all quotations regardless <strong>of</strong> value to ensure suppliers comply with the <strong>University</strong>‟s standard<br />
terms and conditions.<br />
Purchasing Procedures December 2011
7: EU PROCUREMENT LEGISLATION<br />
INTRODUCTION<br />
The primary function <strong>of</strong> the European public procurement legislation is to open each Member<br />
States‟s public sector purchasing to intra-community competition. The legislation is founded on<br />
two main principles <strong>of</strong> non-discrimination (i.e. that a potential, or actual, tenderer is not<br />
discriminated against because <strong>of</strong> their nationality) and transparency (i.e. that the contract awarded<br />
is openly advertised and awarded using objective procedures that will withstand scrutiny. These<br />
principles are fully compatible with the UK government‟s policy which is that the public sector‟s<br />
purchasing decisions should be based on value for money achieved through open competition.<br />
The legislation which impacts upon the purchasing practices <strong>of</strong> UK public sector bodies was<br />
originally enacted via three distinct Statutory Instruments in the early- to mid-1990s, but all three<br />
have now been superseded by a „consolidated‟ European Directive which was introduced into UK<br />
law on 31 January 2006 (Public Contracts Regulations 2006, Statutory Instrument No.5).<br />
The 1990s Regulations placed a responsibility on public sector contracting authorities (which<br />
includes universities) to advertise certain types <strong>of</strong> contract above pre-determined values in the<br />
Official Journal <strong>of</strong> the European Union (OJEU), and thereafter deal with the tendering and award <strong>of</strong><br />
such contracts using a pre-determined set <strong>of</strong> procedures and practices. The 2006 legislation<br />
incorporates and refines most <strong>of</strong> the principles and practices described in the earlier Regulations,<br />
whilst broadening the scope <strong>of</strong> the legislation to cover novel or hitherto less-regulated areas <strong>of</strong><br />
public procurement, in particular environmental issues, electronic tendering, electronic auctions and<br />
framework agreements.<br />
The Head <strong>of</strong> Purchasing is responsible for guidance in ensuring that the <strong>University</strong> complies with<br />
its legal obligations concerning EU Procurement legislation. All departments and sections <strong>of</strong> the<br />
<strong>University</strong> are required to co-operate fully by notifying the Head <strong>of</strong> Purchasing <strong>of</strong> any purchases<br />
likely to exceed the appropriate threshold under any <strong>of</strong> the above Directives. All purchases under<br />
the Works Directives must be notified to the Director <strong>of</strong> Facilities Management.<br />
1 DEFINITIONS<br />
1.1 Public Supply Contracts<br />
A public supply contract is one for the purchase, lease, rental or hire purchase, with or<br />
without option to buy, <strong>of</strong> products. It includes siting and installation <strong>of</strong> the products where<br />
these are part <strong>of</strong> the main purchase.<br />
1.2 Public Services Contracts<br />
Purchasing Procedures December 2011
A public service contract is one where the purchaser engages a contractor (the service<br />
provider) to provide services. There are two categories <strong>of</strong> services - Part A (to which the<br />
Services Regulations apply in full) and Part B (where the tender is only subject to some <strong>of</strong><br />
the requirements in the Regulations, namely rules regarding technical specifications and the<br />
publication <strong>of</strong> contract award notices). Parts A and B appear as lists in annexes to the<br />
Directive. If a contract includes both products and services, the element which has the<br />
highest value determines whether it is to be treated as a public supply contract or public<br />
service contract.<br />
1.3 Design contests<br />
Design contests are procedures for obtaining plans or designs which are intended to lead to<br />
the award <strong>of</strong> a public service contract, <strong>of</strong>ten including the <strong>of</strong>fer <strong>of</strong> a prize or payment to the<br />
participants. The value <strong>of</strong> the contest for the purposes <strong>of</strong> assessing whether it exceeds the<br />
threshold is the value <strong>of</strong> the resultant public services contract plus the value <strong>of</strong> the prize.<br />
1.4 Public Works Contracts<br />
A public works contract is one for the execution, or design and execution, <strong>of</strong> civil<br />
engineering or building works. A list <strong>of</strong> these works appears as an annex to the legislation.<br />
The list is surprisingly wide-ranging; including such activities as demolition work, test<br />
drilling, plumbing, wiring, installation <strong>of</strong> fixtures and fittings, painting and wallpapering and<br />
renting <strong>of</strong> construction or demolition equipment with an operator. Where the contract<br />
involves supplies and/or services as well as works, it should be classified according to its<br />
predominant purpose.<br />
A public works concession is a contract where the consideration (payment) for the works is<br />
wholly or partly the granting <strong>of</strong> a right to exploit the works.<br />
Subsidised works contracts are works contracts to which public authorities (which includes<br />
universities) contribute more than 50% <strong>of</strong> the cost. Even though the contract might be<br />
awarded by a private sector body, the public authority must ensure that the Regulations are<br />
complied with. Note that the threshold value applies to the total contract value, not the<br />
value <strong>of</strong> the subsidy.<br />
1.5 Framework Agreements<br />
A framework agreement can be made with one or more than two suppliers. Its purpose is<br />
to establish the terms governing multiple purchases to be made over a particular period.<br />
Special rules apply to the formation and operation <strong>of</strong> framework agreements; these are<br />
described in more detail below.<br />
1.6 An electronic auction can be used after full evaluation <strong>of</strong> initial tenders, where final bids are<br />
ranked automatically, usually on the basis <strong>of</strong> price. The process is unsuitable for many<br />
services and works contracts. Specialised s<strong>of</strong>tware is required to undertake electronic<br />
auctions, and there are special EU rules governing their conduct which are outside the scope<br />
<strong>of</strong> these procedures.<br />
Purchasing Procedures December 2011
2 VALUATION OF A CONTRACT<br />
The proposed tender will fall within the Regulations if its estimated value is greater than the<br />
prescribed thresholds. These have been summarised in Table 1 below.<br />
The Regulations provide guidance on how to estimate the value <strong>of</strong> proposed tenders. If,<br />
after calculation, the value <strong>of</strong> the contract exceeds the appropriate thresholds, it will fall<br />
within the scope <strong>of</strong> the Regulations. The method <strong>of</strong> calculation used depends upon the type<br />
<strong>of</strong> purchase to be undertaken.<br />
Regulations Threshold European Threshold Equivalent UK *<br />
Supply Contracts 200,000 Euros £173,934<br />
Service Contracts 200,000 Euros £173,934<br />
Works Contracts<br />
inc. Subsidised Works<br />
Contracts<br />
5,000,000 Euros £4,348,350<br />
* Calculated 1 January 2012, revised every 2 years<br />
Table 1:<br />
Relevant Thresholds for Public Procurement Regulations<br />
(VAT and Insurance Premium Tax are excluded)<br />
Purchasing Procedures December 2011
2.1 Public Supply and Public Service Contracts<br />
2.1.1 If the contract is for a “one-<strong>of</strong>f” purchase, estimate the total value including all component<br />
parts, transport costs, installation and commissioning.<br />
2.1.2 The value <strong>of</strong> a series <strong>of</strong> contracts, or repeat orders, for the same or similar products, should<br />
be estimated over a reasonable period (e.g. expected length <strong>of</strong> requirement.) This can be<br />
either historically or in the future. Note, however, that requirements cannot be<br />
disaggregated in order to avoid the Regulations.<br />
2.1.3 Fixed term contracts for services or for the lease, rental or hire purchase <strong>of</strong> products should<br />
be estimated for the duration <strong>of</strong> the contract. Where the contract is part <strong>of</strong> a series, the<br />
whole series should be estimated over a 12 month period or longer, if appropriate. If a<br />
contract is for a fixed period, say one year, but has an option to extend for up to two<br />
additional years, then regardless <strong>of</strong> whether or not there is uncertainty about exercising the<br />
extension option, the duration has to be taken as 3 years (the maximum duration in this<br />
example) when estimating its value.<br />
2.1.4 If a contract, or series <strong>of</strong> contracts, for services is for an indefinite or uncertain period, or the<br />
total price is not known but the contract period exceeds 48 months, then its total value<br />
should be calculated by multiplying the estimated monthly value by 48.<br />
Note: Where the proposed contract includes more than one <strong>of</strong> the above elements, the<br />
value must be determined by calculating the highest possible value.<br />
2.2 Specific types <strong>of</strong> Public Service Contract<br />
For the following types <strong>of</strong> services, the values to taken as a basis for calculating the<br />
estimated contract values are:<br />
- insurance services: the premium payable and other forms <strong>of</strong> remuneration;<br />
- banking and other financial services: the fees, commissions, interest and other forms<br />
<strong>of</strong> remuneration;<br />
- design contracts: fees, commission payable and other forms <strong>of</strong> remuneration.<br />
2.3 Public Works Contracts<br />
2.3.1 Estimate the value <strong>of</strong> the whole works contract.<br />
2.3.2 Where the contract is part <strong>of</strong> a series necessary to carry out a project, it is the total value <strong>of</strong><br />
the aggregated contracts, which will determine if the contract falls within the scope <strong>of</strong> the<br />
Regulations.<br />
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2.4 Waivers for „Small Lots‟<br />
For Public Supply, Service and Works purchases where the contracts are awarded at the<br />
same time in the form <strong>of</strong> separate lots, it is the aggregated value <strong>of</strong> the lots which will<br />
determine whether the Regulations apply. However, application <strong>of</strong> the threshold can be<br />
waived in respect <strong>of</strong> lots below the Small Lots thresholds identified in the above table,<br />
provided that the aggregate value <strong>of</strong> those lots does not exceed 20% <strong>of</strong> the value <strong>of</strong> the<br />
overall aggregate value <strong>of</strong> the lots as a whole.<br />
Example: Public supply contracts for a particular commodity will be let in five lots: three <strong>of</strong><br />
an estimated £20,000 each and two <strong>of</strong> £130,000 each. Thus the aggregate value <strong>of</strong> the<br />
contracts is £320,000 which clearly exceeds the EU threshold. However, each <strong>of</strong> the three<br />
small contracts falls below the Small Lots threshold. In aggregate, they comprise slightly<br />
less than 20% <strong>of</strong> the overall value <strong>of</strong> the five lots (18.75% to be precise). Therefore the<br />
three small contracts are not subject to the EU tendering process. The two larger lots still<br />
collectively exceed the threshold, and must therefore be subjected to an EU tendering<br />
process.<br />
Note: Where the proposed contract includes more than one <strong>of</strong> the above elements,<br />
the value must be determined by calculating the highest possible value.<br />
3 SPECIFIC EXCLUSIONS<br />
Contracts for the following types <strong>of</strong> purchase are excluded from the procedures:<br />
a) Land, existing buildings or other immovable property or rights thereon. However,<br />
financial services associated with the acquisition are subject to the procedures.<br />
b) Programme material for broadcast, and contracts for broadcasting time.<br />
c) Arbitration and conciliation services.<br />
d) Transactions relating to securities or other financial instruments (particularly where<br />
these are to raise capital), and central bank services.<br />
e) Employment contracts.<br />
f) Research and development services, providing the service is wholly paid for by UCLan.<br />
However, where the benefits accrue exclusively to UCLan for use in its own affairs,<br />
the EU procedures do apply.<br />
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4 TENDERING <strong>PROCEDURES</strong><br />
Tenders may be sought by one <strong>of</strong> four procedures: Open, Restricted, Negotiated or<br />
Competitive Dialogue. Open and Restricted are by far the most commonly-used procedures.<br />
4.1 Open Procedure<br />
A notice is published in the OJEU stating that tenders will be sought under the Open<br />
Procedure. All potential suppliers requesting tender documentation by the deadline stated in<br />
the notice must be sent the documentation within 6 days <strong>of</strong> their request. Alternatively the<br />
documentation can be made available to all interested suppliers on the internet. The<br />
advantage <strong>of</strong> the Open Procedure over the Restricted Procedure is that minimum timescales<br />
are shorter. However, if there are a large number <strong>of</strong> potential suppliers in the marketplace,<br />
use <strong>of</strong> the Open Procedure can result in a large number <strong>of</strong> tender submissions, which in turn<br />
increases the assessment workload. One way <strong>of</strong> attempting to control the number <strong>of</strong> tenders<br />
is to stipulate minimum levels <strong>of</strong> economic and financial standing or technical/pr<strong>of</strong>essional<br />
ability in the contract notice. Care must be taken to ensure that the minimum levels are<br />
related to and proportionate to the subject matter <strong>of</strong> the contract, and that the levels used do<br />
not exclude smaller companies unreasonably.<br />
4.2 Restricted Procedure<br />
A notice is published in the OJEU stating that tenders will be sought under the Restricted<br />
Procedure. Firms communicate, in response to the notice, their interest in tendering for the<br />
contract. The contracting authority, using criteria stated in the notice (e.g. legality to<br />
operate, financial and economic standing, and technical/pr<strong>of</strong>essional ability) which must be<br />
drawn from a list provided in the legislation, selects firms who will be invited to submit a<br />
tender.<br />
It is permitted to state the number <strong>of</strong> firms the contracting authority intends to invite to<br />
tender, sometimes expressed as a range. This is the main advantage <strong>of</strong> the Restricted<br />
Procedure over the Open Procedure, since it restricts the number <strong>of</strong> tenders and<br />
consequently reduces the amount <strong>of</strong> effort required to evaluate them. The range must be<br />
stated in the contract notice and in any event the minimum number permissible is 5. If the<br />
number <strong>of</strong> eligible respondents falls below 5, the process may continue, providing there is<br />
still genuine competition. However no “new” candidates can be introduced at this stage and<br />
the selection criteria cannot be artificially relaxed to allow more firms to pass to the tender<br />
submission stage.<br />
The criteria stated in the notice cannot deviate from those set out in the legislation. Thus it<br />
can <strong>of</strong>ten be very difficult to differentiate suppliers so that enough <strong>of</strong> them can be eliminated<br />
at the first (<strong>of</strong>ten called the „prequalification‟) stage even after minimum levels <strong>of</strong> economic<br />
and financial standing or technical/pr<strong>of</strong>essional ability have been stipulated. Any exclusion<br />
<strong>of</strong> a supplier at this point must be fully justifiable in terms <strong>of</strong> its failure to match the<br />
selection criteria stated in the original contract notice.<br />
If there is likely to be a large number <strong>of</strong> applications from interested firms, great care must<br />
be taken to develop a prequalification questionnaire that has the desired effect <strong>of</strong> being able<br />
to be used effectively and fairly to differentiate the firms‟ capabilities, so that only the<br />
required number <strong>of</strong> firms passes through to the tendering stage.<br />
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4.3 Negotiated Procedure<br />
Under the Negotiated Procedure the terms <strong>of</strong> the contract are negotiated directly with one or<br />
more suppliers. However, the procedure can only be used in the specific instances described<br />
below. Moreover, the Office <strong>of</strong> Government Commerce advises that use <strong>of</strong> the Negotiated<br />
procedure is likely to decline as the Competitive Dialogue procedure becomes more widely<br />
accepted.<br />
It is NOT mandatory to advertise the Negotiated tender in the OJEU unless specifically<br />
stated to the contrary below. It is permissible for the Negotiated Procedure to take place<br />
in successive stages to gradually reduce the number <strong>of</strong> tenders, providing the contract notice<br />
or specification states that this is the intention.<br />
4.3.1 For public works, public supplies and public service contracts:<br />
a) Tenders received under a previous competitive exercise held under the Open, Restricted<br />
or Competitive Dialogue procedures have been irregular, or unacceptable. The<br />
proposed terms <strong>of</strong> the contract must be substantially unaltered from those originally<br />
used. The resultant tender must be advertised in the OJEU, giving the reasons for use<br />
<strong>of</strong> the Negotiated Procedure.<br />
Note: If all <strong>of</strong> the participants in the Open or Restricted exercise are invited to<br />
negotiate then there is no need to advertise the use <strong>of</strong> the Negotiated procedure.<br />
However, if one or more <strong>of</strong> the participants from the earlier tender exercise who<br />
submitted tenders is rejected, then the use <strong>of</strong> the Negotiated procedure must be<br />
advertised in the OJEU. In both instances, the terms <strong>of</strong> the Negotiated tender must be<br />
substantially unchanged from the original exercise undertaken under the Open or<br />
Restricted procedure.<br />
b) A competitive exercise held under the Open or Restricted procedure has resulted in no<br />
applications or tenders, or unsuitable tenders.<br />
c) There is only one supplier available for technical or artistic reasons or on account <strong>of</strong><br />
exclusive rights.<br />
d) Extreme urgency exists for reasons that are unforeseeable and are not attributable to<br />
the contracting authority.<br />
e) In exceptional cases where the nature <strong>of</strong> the works, supplies or services or the risks do<br />
not permit overall pricing, the Negotiated tender must be advertised in the OJEU.<br />
4.3.2 For public supply contracts:<br />
a) The goods covered by the contract are to be manufactured purely for the purpose <strong>of</strong><br />
research, experiment, study and development; but not when the goods are to be<br />
purchased or hired to establish their commercial viability or to recover their research<br />
and development costs.<br />
b) The goods covered by the contract are partial replacements for, or additional to, existing<br />
goods or an installation, or when obtaining the goods from another source would cause<br />
Purchasing Procedures December 2011
problems <strong>of</strong> incompatibility or disproportionate technical difficulties. Such extensions<br />
may not, as a general rule, be for more than three years.<br />
c) The goods are purchased on a commodity market.<br />
d) The goods are being purchased on particularly advantageous terms because the supplier<br />
is being wound up, is bankrupt or in receivership.<br />
4.3.3 For public service contracts:<br />
a) Where the contract follows a design contest and there is more than one successful<br />
candidate. (Note that the Negotiated procedure cannot be used for a Works contract in<br />
this manner.)<br />
b) For insurance, banking and investment contracts, and intellectual services such as the<br />
design <strong>of</strong> works, but only if the activities cannot be defined well enough for the Open<br />
or Restricted Procedures to be used. The tender must be advertised in the OJEU.<br />
4.3.4 For public works contracts:<br />
Where the works are to be carried out solely for the purposes <strong>of</strong> research, testing or<br />
development and not with the aim <strong>of</strong> ensuring pr<strong>of</strong>itability or recovering research and<br />
development costs. The tender must be advertised in the OJEU.<br />
4.3.5 For public works and public service contracts:<br />
a) Additional works or services not included in the original contract where the need has<br />
arisen through unforeseen circumstances, and where they cannot be technically or<br />
economically separated from the original contract without major inconvenience to the<br />
contracting authority, or where they are necessary for completion <strong>of</strong> the contract.<br />
However, the Negotiated procedure cannot be used where the aggregate value <strong>of</strong> the<br />
additional works or services exceeds 50% <strong>of</strong> the value <strong>of</strong> the original contract.<br />
b) Where new works and services which repeat the initial contract are being carried out<br />
by the same supplier, providing the original contract was awarded through the Open or<br />
Restricted Procedure, and the original advertisement mentioned the possibility <strong>of</strong><br />
additional requirements. However this procedure may only be used during the three<br />
years following the end <strong>of</strong> the original contract.<br />
Note: A contract award notice must be published for every case where the Negotiated Procedure is<br />
used regardless <strong>of</strong> whether the tender exercise was advertised or not. It is advisable to hold a report<br />
on file should information be requested by HM Treasury on behalf <strong>of</strong> the European Commission.<br />
4.4 Competitive Dialogue Procedure<br />
This procedure is suitable only for particularly complex contracts, for example Public<br />
Private Partnership (Private Finance Initiative) contracts where the contracting authority is<br />
unable to specify its requirements at the outset without entering into detailed discussions<br />
with potential suppliers. The aim <strong>of</strong> the discussions is to identify and compare possible<br />
solutions before requesting final tenders.<br />
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A contract notice must be published in the OJEU setting out the needs and requirements <strong>of</strong><br />
the contracting authority. A dialogue may then commence between the contracting<br />
authority and suitable candidates in which all aspects <strong>of</strong> the contract can be discussed. Care<br />
must be taken to ensure that all candidates are treated equally. From a practical point <strong>of</strong><br />
view, this can best be demonstrated by keeping a detailed record written record <strong>of</strong> all<br />
discussions which is then signed <strong>of</strong>f by both the Supplier and the <strong>University</strong>.<br />
When the contracting authority has identified a suitable solution or solutions, it declares that<br />
the dialogue is concluded and requests that tenders be submitted. It is important that the<br />
request and the resultant tenders are as comprehensive as possible because the scope for<br />
post-tender negotiation is even more limited than in the Open and Restricted procedures<br />
(such negotiations having already taken place in the dialogue phase).<br />
4.5 Choice <strong>of</strong> Procedure<br />
Under the Regulations, universities have a free choice between the Open and Restricted<br />
procedures.<br />
Use <strong>of</strong> the Negotiated or Competitive Dialogue procedure is unusual, and is more likely to<br />
invite the scrutiny <strong>of</strong> the European Commission than the other procedures. Where it is<br />
agreed that the Negotiated or Competitive Dialogue procedure can be used, the contracting<br />
authority must justify its choice and take great care to ensure that the reasons are properly<br />
documented.<br />
5 FRAMEWORK AGREEMENTS<br />
Framework agreements set out the terms and conditions under which specific purchases<br />
(„call-<strong>of</strong>fs‟) are made over a pre-determined period <strong>of</strong> time. They are particularly useful for<br />
creating a panel <strong>of</strong> several approved suppliers who then compete with each other for each<br />
„call-<strong>of</strong>f‟.<br />
Framework agreements can be made either with one supplier or with a panel <strong>of</strong> at least three<br />
suppliers, and must not exceed four years‟ duration unless there are exceptional<br />
circumstances. The suppliers are appointed through a tendering process, usually following<br />
the Open or Restricted procedure.<br />
Where there is one supplier, the contracting authority should ask the supplier to provide<br />
specific prices or terms for „call-<strong>of</strong>f‟ orders within the parameters set out in the original<br />
Framework agreement.<br />
It is more usual for Framework agreements to have a panel <strong>of</strong> three or more suppliers. In<br />
some cases it is a straightforward task to determine which <strong>of</strong> the suppliers should win the<br />
„call-<strong>of</strong>f‟; for example, where all <strong>of</strong> the suppliers on the panel have fixed price lists or there<br />
is pre-agreed mechanism for calculating prices for comparable items. Here, the contracting<br />
authority would simply compare the prices and select the lowest without re-opening<br />
competition. In cases where the task is not so clear-cut, a process <strong>of</strong> „mini-competition‟ is<br />
undertaken whereby the contracting authority issues a statement <strong>of</strong> requirements to all <strong>of</strong> the<br />
suppliers on the panel capable <strong>of</strong> undertaking the task. These proposals are then evaluated<br />
in accordance with the criteria set out in the original Framework tender.<br />
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6 TIMESCALES<br />
In each <strong>of</strong> the procedures, there are timescales laid down regarding publication <strong>of</strong> notices,<br />
invitations to tender, receipt <strong>of</strong> tender submissions etc. These timescales vary with the<br />
procedure used and are summarised in Table 2 below.<br />
The publication <strong>of</strong> a Prior Information Notice (PIN) enables the time periods for the Open<br />
and Restricted procedures to be shortened. The PIN is intended to give potential suppliers a<br />
brief overview <strong>of</strong> the forthcoming tender requirement. The PIN is only permissible as a<br />
means <strong>of</strong> shortening timescales if it is sent for publication between 52 days and 12 months<br />
before the date the actual contract notice is sent.<br />
In cases <strong>of</strong> extreme urgency it is possible to use accelerated Restricted or Negotiated<br />
procedures. The circumstances under which the shortened time periods can be used are<br />
strictly defined and must be justifiable. The cause <strong>of</strong> the „extreme urgency‟ must be outside<br />
the contracting authority‟s control. For example, having to spend funds before a specific<br />
date would not be considered an appropriate reason.<br />
Where a contract is voluntarily advertised, i.e. where it is not expressly covered by the<br />
requirements <strong>of</strong> the Directives or Regulations, then the timescale requirements are not<br />
binding in relation to the tender procedures. Thus, it may be beneficial for a contracting<br />
authority to give wider exposure to its requirements by choosing to use the European forum<br />
even where not absolutely necessary.<br />
Table 2:<br />
Summary <strong>of</strong> prescribed time periods<br />
Procedure Phase Days<br />
Open<br />
Restricted<br />
Restricted<br />
Accelerated<br />
Minimum time for receipt <strong>of</strong> tenders from<br />
45<br />
date contract notice sent<br />
Reduced when PIN published to, generally<br />
36<br />
But never less than<br />
22<br />
Minimum time for receipt <strong>of</strong> requests to<br />
30<br />
participate from date contract notice sent<br />
( reduced by 7 days for electronic system)<br />
Minimum time for receipt <strong>of</strong> tenders from the 35<br />
date invitation sent<br />
( reduced by 5 days for electronic system)<br />
Reduced when PIN published to, generally<br />
36<br />
But never less than<br />
22<br />
Minimum time for requests to participate<br />
15<br />
from date contract notice sent<br />
Minimum time for receipt <strong>of</strong> tenders from the 10<br />
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Competitive<br />
Dialogue and<br />
Negotiated<br />
Negotiated<br />
Accelerated<br />
Notes:<br />
date invitation sent<br />
Minimum time for receipt <strong>of</strong> requests to<br />
participate from date contract notice sent<br />
Minimum time for receipt <strong>of</strong> requests to<br />
participate from date contract notice sent<br />
37<br />
15<br />
a) The time period starts on the day the notice is despatched to the OJEU, not the date<br />
when it is actually published. If the last day is a Saturday, Sunday or public holiday<br />
then the receipt or closing date will be the first ordinary working day thereafter.<br />
b) PIN = Prior Information Notice.<br />
7 CONTRACT DOCUMENTATION<br />
Once the contracting authority has established that the proposed contract falls within the<br />
remit <strong>of</strong> one <strong>of</strong> the Regulations, and has selected which procedure to use, the contract must<br />
be advertised and documentation prepared, paying special attention to the technical<br />
specification and selection criteria.<br />
7.1 Advertising Requirements<br />
The Open, Restricted and, where applicable, Negotiated procedures require that the<br />
contracting authority places a notice in the OJEU, stating its intention to seek <strong>of</strong>fers in<br />
respect <strong>of</strong> the perceived need. The notice must take into account the timescales detailed in<br />
Table 2 above.<br />
It is important that the maximum anticipated duration <strong>of</strong> the contract is stated in the notice.<br />
For example, if the expected duration is 3 years but there is a possibility that it could be<br />
extended to 5 years, then state “up to 5 years” in the notice. The circumstances under which<br />
a contract extension might be granted can then be described with more precision in the<br />
invitation to tender document.<br />
The contracting authority cannot advertise the contract in its local or national press<br />
before the notice has been despatched to the OJEU. The advertisement must not contain any<br />
more information than is contained in the OJEU notice.<br />
7.2 Technical Specifications<br />
When preparing the documentation it is necessary to ensure that the specifications for the<br />
product are non-discriminatory. In particular, the specification must not be based upon the<br />
specification <strong>of</strong> an existing product from one supplier. This would be in breach <strong>of</strong> the<br />
regulations and is likely to invite challenges from other suppliers. If the requirement can<br />
only be expressed by reference to a brand or proprietary name, then the name must be<br />
accompanied by the words “or equivalent”.<br />
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The technical specification should be defined by reference to European specifications where<br />
they exist, in the following order <strong>of</strong> preference:<br />
a. National standards incorporating European standards<br />
b. European technical approvals<br />
c. Common technical specifications, e.g. Electromagnetic Compatibility<br />
d. International standards<br />
e. Other technical reference systems established by the European standardization<br />
bodies<br />
Only where none <strong>of</strong> the above standards exist is it appropriate to refer to national standards.<br />
All references must be accompanied by the words “or equivalent”.<br />
There are, however, instances where it is permissible to derogate from the prescribed<br />
hierarchy <strong>of</strong> specifications. Again, like other exceptions, these are clearly defined in the<br />
Regulations, for example, where there exists a statutory duty in relation to health and safety;<br />
technical reasons <strong>of</strong> conformance; incompatibility or disproportionate technical differences<br />
or disproportionate costs; or innovative reasons.<br />
Technical specifications may define environmental characteristics, e.g. production method<br />
and/or environmental impact. Methods <strong>of</strong> defining environmental impact must be drawn up<br />
using scientific criteria that are accessible and understandable to all parties. For works and<br />
services, information about the supplier‟s technical ability with regard to environmental<br />
management measures may be requested, but only if is appropriate. The standards indicated<br />
in the tender documentation must always be EU standards or equivalent.<br />
8 SUPPLIER SELECTION CRITERIA<br />
Potential tenderers may be excluded from tendering if they do not meet prescribed criteria,<br />
which should be designed to determine their economic and financial standing and their<br />
capability <strong>of</strong> fulfilling the requirements <strong>of</strong> the contract. These criteria must be stated in the<br />
notice published in the OJEU and/or in the contract documentation.<br />
A firm may be ineligible if, for example, it is found to be in financial difficulty, or guilty <strong>of</strong><br />
misconduct. It may be asked to provide details <strong>of</strong> its financial standing, and its technical<br />
capacity. The contracting authority may select which criteria it considers appropriate in<br />
relation to economic and financial standing or technical capacity.<br />
If a company marginally fails to meet one or more <strong>of</strong> the criteria, then a second opinion may<br />
be sought from a third party credit-referencing agency. If the rating given by the agency<br />
defines the company as low to medium risk, then a decision can be made to let the company<br />
proceed to the next phase <strong>of</strong> the tender process. If however the rating is high risk then the<br />
company should not proceed any further.<br />
Standards may be waived by the Group Executive Director <strong>of</strong> Finance (or nominee).<br />
Any selection/shortlisting exercises must be even-handed, consistent with stated criteria and<br />
must not discriminate on grounds <strong>of</strong> nationality or geographical location.<br />
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9 CONTRACT AWARD<br />
9.1 Award Criteria<br />
Having ascertained the suitability <strong>of</strong> the tenderers, the contracting authority must award the<br />
contract to the submission which:<br />
<strong>of</strong>fers the lowest price, or<br />
is most economically advantageous to the contracting authority – in addition to price, this<br />
includes factors like quality, technical merit, aesthetic and functional characteristics,<br />
environmental characteristics, running costs, cost-effectiveness, after-sales service and<br />
technical assistance, delivery date and delivery period or period <strong>of</strong> completion.<br />
In most cases it would be extremely unwise to award the contract on the basis <strong>of</strong> price alone<br />
without giving any consideration to other factors.<br />
The award criteria must be listed in the contract notice and/or in the invitation to tender<br />
document. The relative weighting given to each criterion must also be stated. This can be<br />
expressed in terms <strong>of</strong> a range with an appropriate maximum spread. These criteria and<br />
weightings must be used in the tender evaluation; they cannot be altered after publication.<br />
9.2 Abnormally Low Tenders<br />
Tenders may be rejected if they are abnormally low but only after the tenderer has been<br />
given an opportunity to justify/confirm or withdraw the <strong>of</strong>fer submitted.<br />
10 NOTIFICATION OF CONTRACT AWARD<br />
10.1 Contract Award Notice<br />
The contracting authority must publish a contract award notice in the OJEU within 48 days<br />
<strong>of</strong> the contract award or establishment <strong>of</strong> a framework agreement. This requirement also<br />
applies to categories <strong>of</strong> public service contracts covered by Part B (see section 1.2 above). It<br />
is important to observe the mandatory standstill period (see section 10.3 below).<br />
10.2 De-briefing Unsuccessful Tenderers<br />
Under the Regulations, after an award decision has been made, the unsuccessful tenderers<br />
may request a de-briefing to ascertain why their bid was unsuccessful. This de-briefing, if<br />
requested, should take place within 15 days <strong>of</strong> the request. A tenderer can request an<br />
accelerated debrief within 2 working days <strong>of</strong> the date <strong>of</strong> dispatch <strong>of</strong> the decision notification.<br />
The contracting authority must then provide a debrief within 3 working days <strong>of</strong> the end <strong>of</strong><br />
the standstill period. If the tenderer requests a debrief outside the 2 working days limit, then<br />
the debrief must be provided within the normal 15 day period.<br />
Great care must be taken during de-briefing to avoid giving the tenderer information which<br />
is confidential to other tenderers. Where practicable, the overall score obtained by the<br />
winner <strong>of</strong> the tender and the tenderer being de-briefed should be given; avoid giving further<br />
details <strong>of</strong> other tenderers‟ bids. A poorly-handled de-briefing can result in resentment and,<br />
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at worst, a legal challenge to the selection decision from an aggrieved supplier. The<br />
Purchasing Office must be present at any debriefing sessions.<br />
10.3 Mandatory standstill period<br />
As soon as a decision has been made to award a contract or conclude a framework<br />
agreement, the contracting authority must inform all bidders (preferably by fax or email).<br />
They should be provided with details <strong>of</strong> the award criteria; their own score and that <strong>of</strong> the<br />
winner (where practicable); the name <strong>of</strong> the successful tenderer; the reasons for the decision<br />
including the characteristics and relative advantages <strong>of</strong> the successful tender and reasons (if<br />
any) why they did not meet the technical specification. The award notice must contain a<br />
statement <strong>of</strong> either when the standstill period is expected to end or the date before which the<br />
contracting authority will not enter into a contact. The contracting authority must then wait<br />
10 days before actually entering into the contract or concluding the framework agreement.<br />
10.4 Reporting Requirements<br />
Contracting authorities are required to report, for each public supply and services contract,<br />
details <strong>of</strong> the value, procedure, type <strong>of</strong> goods and the nationality <strong>of</strong> the successful tenderer to<br />
H.M. Treasury. Purchasing Office will collect this information annually and issue a report<br />
on behalf <strong>of</strong> the <strong>University</strong>.<br />
11 DISPUTES AND REMEDIES<br />
Failure to adhere to the Regulations may cause a legal challenge by an aggrieved supplier, or<br />
investigation by the European Commission. This can result in a contract being suspended or<br />
even completely set aside and/or compensation being paid to tenderers. Purchasing Office<br />
must be contacted immediately if there is any indication that a tenderer is unhappy with<br />
the conduct <strong>of</strong> a tender or the final result, even if the complaint appears petty or without<br />
foundation, so that action can be taken to avoid escalation.<br />
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8: USE OF PURCHASE ORDERS<br />
Purchase Orders are formal <strong>University</strong> documents which, when issued to an external party, commit<br />
the <strong>University</strong> to expenditure and form a legally binding Contract with the external party. An order<br />
must be raised prior to the ordering <strong>of</strong> any goods or services (unless the <strong>University</strong> Purchasing card<br />
is being used.) Failure to do so will result in a breach <strong>of</strong> Financial Regulations (see paragraphs 705-<br />
706.)<br />
Purchase Orders are individually numbered and are obtained through Agresso.<br />
In order to reduce the commercial risk in the use <strong>of</strong> such documentation, Purchase Orders<br />
must always be approved by the Budget Holder and any over £5,000 are approved by the<br />
Purchasing Office. The <strong>University</strong>‟s Terms and Conditions are available on the Internet as stated<br />
on the Order Form. Only the Head <strong>of</strong> Purchasing, as nominee <strong>of</strong> the Group Executive Director<br />
<strong>of</strong> Finance, may vary the Standard Conditions under which the <strong>University</strong> trades.<br />
Where Suppliers issue an 'order acknowledgement', then User Departments should check quantity,<br />
price and delivery details against the original Order and discrepancies taken up with the Supplier<br />
immediately. Of particular importance is the need to check whether the acknowledgement<br />
attempts to enforce the Suppliers Conditions <strong>of</strong> Sale. If so, this must be challenged by fax or<br />
letter before receipt <strong>of</strong> goods or services: please contact the Purchasing Office for assistance, if<br />
necessary.<br />
Once a Purchase Order has been issued, a check to determine progress on the delivery <strong>of</strong> the<br />
products or services may be required (either before or after the specified date). The responsibility<br />
for progress chasing (expediting) rests with the Budget Holder/User Department issuing the<br />
Purchase Order.<br />
Any unreasonable delays or erroneous deliveries from a Supplier who is listed in the Buyers Guide<br />
must be made known to the Purchasing Office so that appropriate action can be taken.<br />
Required delivery dates must be stated when raising Purchase Orders so that progress can be<br />
checked against such dates. The use <strong>of</strong> 'Urgent' or 'ASAP' are not acceptable terms for<br />
delivery dates.<br />
Purchasing Procedures December 2011
9: DEALING WITH SUPPLIERS<br />
All dealings with Suppliers must preserve the highest standards <strong>of</strong> honesty, integrity, impartiality<br />
and objectivity, while remaining fair, efficient, firm and courteous.<br />
Most transactions between the <strong>University</strong> and external Suppliers - although forming a legallybinding<br />
contract - usually operate and conclude with relatively few incidents or disputes.<br />
The following guidance points will help to ensure consistency <strong>of</strong> commercial activity, raise<br />
awareness <strong>of</strong> contractual issues, and thereby lessen the risk <strong>of</strong> potential disputes.<br />
1. Please ensure familiarity and compliance with the following:<br />
- Selection <strong>of</strong> Potential Suppliers (section 5)<br />
- Buyers Guide (section 14)<br />
- Standard Conditions <strong>of</strong> Contract ( Policies and conditions)<br />
- Code <strong>of</strong> Conduct (Code <strong>of</strong> Conduct)<br />
2. It is not a policy <strong>of</strong> the <strong>University</strong> to pay for goods/services in advance: please refer to<br />
paragraph 805 <strong>of</strong> Financial Regulations or contact the Purchasing Office for advice.<br />
3. When requesting quotations careful consideration should be given to the following areas:<br />
- Specification or Operational Requirements<br />
- Usage figures<br />
- Quality standards<br />
- Specified terms/conditions<br />
- Delivery requirements<br />
The UCLan standard quote form should be used to avoid any conflicting terms.<br />
4. All Supplier agreements requiring the signature <strong>of</strong> a <strong>University</strong> representative (e.g.<br />
service/rental/maintenance contracts) must be authorised by the Head <strong>of</strong> Purchasing.<br />
5. In the event <strong>of</strong> any legal, contract, or general supply dispute arising or likely to arise, advice<br />
from the Purchasing Office should be sought at the earliest opportunity. At all times, a<br />
careful record must be kept <strong>of</strong> communication with Suppliers, particularly those by<br />
telephone.<br />
Purchasing Procedures December 2011
10: USE OF SPECIFICATIONS<br />
In general, a Specification is a description <strong>of</strong> the product or service required. An effective<br />
Specification should enable Suppliers to tender or quote to the <strong>University</strong> on an equal basis and<br />
must not show bias towards any one product, brand or Supplier.<br />
Specifications are more likely to be used where the purchase is <strong>of</strong> significant value (e.g. during the<br />
tender process), but can be utilised in the procurement <strong>of</strong> complex or specialised low value<br />
commodities.<br />
Guidance for the preparation <strong>of</strong> Specifications is detailed below:<br />
<br />
<br />
Drafting checklist<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
use simple language, avoid using jargon;<br />
define terms, symbols and acronyms;<br />
do not expect the specification to be read by experts; write it so that a layman will understand;<br />
use a logical structure;<br />
be as concise as possible, but keep the meaning clear;<br />
plan and analyse your needs;<br />
arrange the components <strong>of</strong> the requirement into a logical form matching the evaluation model;<br />
(a good way <strong>of</strong> doing this is to set out a skeleton structure with the main headings and then add<br />
in sub-headings as necessary;)<br />
do not embed requirements in background information - suppliers may miss them - keep<br />
requirements in their own sections;<br />
list the most important elements <strong>of</strong> the requirement first and work through to the least<br />
important; and<br />
discuss the requirement with colleagues, other users and procurement staff. During this<br />
process you may also identify other topics you need to include.<br />
endeavour to reduce costs, and increase effectiveness and efficiency to contribute to VFM<br />
endeavour to improve our carbon footprint by considering more environmentally friendly<br />
methods <strong>of</strong> production/servicing etc.<br />
Review checklist<br />
A good specification should:<br />
<br />
<br />
<br />
<br />
state the requirement specification completely, clearly, concisely, logically and<br />
unambiguously;<br />
focus on outputs not how they are to be met;<br />
contain enough information for potential suppliers to decide and cost the goods or services<br />
they will <strong>of</strong>fer, or in the case <strong>of</strong> negotiated route arrive at realistic budgetary costs;<br />
permit <strong>of</strong>fered goods or services to be evaluated against defined criteria by examination, trial,<br />
Purchasing Procedures December 2011
test or documentation;<br />
state the criteria for acceptance by examination, trial, test or documentation;<br />
contain only the essential features or characteristics <strong>of</strong> the requirement;<br />
provide equal opportunity for all potential suppliers to <strong>of</strong>fer a product or service which<br />
satisfies the needs <strong>of</strong> the user and which may incorporate alternative technical solutions; and<br />
comply with any legal obligations e.g. under UK law, the EEC Treaty, an EC Directive or the<br />
GATT Agreement on Government procurement.<br />
A good specification should not:<br />
<br />
<br />
over-specify requirements;<br />
contain features that directly or indirectly discriminate in favour <strong>of</strong>, or against, any supplier,<br />
product, process or source. Discrimination on grounds <strong>of</strong> nationality is illegal in the EC,<br />
contrary to the GATT Agreement, where applicable, and may not achieve value for money.<br />
Leading Edge Technology<br />
<br />
<br />
Where equipment is specified at or near the leading edge <strong>of</strong> technology, it is common for the<br />
specification to be developed in conjunction with one or more suppliers. It is important that<br />
this process does not result in a specification which is so detailed as to eliminate any<br />
effective competition. The focus should be on what the department or research project needs<br />
rather than specifying what the supplier can supply. The approach should be to specify<br />
performance rather than technical details. In the latter case, there is the risk that the final<br />
product will be technically superb but does not do what is required.<br />
In discussing specifications with suppliers it is essential that no commitment is entered into<br />
prior to seeking tenders and quotations.<br />
Include “Extras”<br />
Consider specifying what is wanted on the basis that everything is negotiable. The specification<br />
could include:<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
provision for on-site tests, and pre-negotiation trials if these are desirable;<br />
a price which is fixed and firm, irrespective <strong>of</strong> inflation or exchange rate fluctuations;<br />
free delivery, installation and commissioning;<br />
maintenance cover for however long the department needs it;<br />
escrow agreement for s<strong>of</strong>tware purchases<br />
the price <strong>of</strong> consumables;<br />
details <strong>of</strong> spare parts availability for the life <strong>of</strong> the equipment, together with contractual<br />
notification before the supplier ceases manufacture <strong>of</strong> spare parts;<br />
handbooks with full maintenance instructions, including circuit diagrams;<br />
training.<br />
Purchasing Procedures December 2011
11: CONTRACTS<br />
All formal contracts must be authorised by the Group Executive Director <strong>of</strong> Finance, usually by the<br />
signing <strong>of</strong> Supplier documentation or Contract Award Forms.<br />
Contracts will <strong>of</strong>ten take the form <strong>of</strong> 'standing <strong>of</strong>fers', i.e. a firm price quotation which remains open<br />
for a specified period (usually 12 months), so that Purchase Orders can be placed against the<br />
standing <strong>of</strong>fer as need arises. The Suppliers' prices are usually based on the <strong>University</strong>'s 'best<br />
estimate' <strong>of</strong> usage.<br />
Once a contract or standing <strong>of</strong>fer is in place, User Departments must ensure that those goods<br />
or services are not purchased elsewhere, since the <strong>University</strong> will normally have entered into a<br />
legal agreement for exclusive business with the contracted Supplier.<br />
Minor or temporary price advantages are occasionally <strong>of</strong>fered to User Departments from other<br />
Suppliers. These should be advised to the Purchasing Office but not taken advantage <strong>of</strong>, since they<br />
would normally jeopardise greater advantages from the established Supplier.<br />
Contracts or standing <strong>of</strong>fers should be placed for a period appropriate to the value and effort<br />
involved in their award process. The Purchasing Office can give advice regarding this issue.<br />
Contracts/supply arrangements should be subject to regular review and a note <strong>of</strong> the review retained<br />
on the contract file held in the Purchasing Office.<br />
Purchasing Procedures December 2011
12: <strong>PURCHASING</strong> CONSORTIUM<br />
The <strong>University</strong> <strong>of</strong> <strong>Central</strong> <strong>Lancashire</strong> is a member <strong>of</strong> the North Western Universities Purchasing<br />
Consortium (NWUPC).<br />
The Consortium consists <strong>of</strong> a number <strong>of</strong> commodity/service based user groups, representing most<br />
<strong>University</strong> or Higher Education institutions in the North West <strong>of</strong> England and North Wales.<br />
The Commodity Groups are:<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
Admin & Pr<strong>of</strong>essional Services<br />
Laboratory Supplies<br />
Estates<br />
Computer Supplies/Equipment<br />
Catering<br />
Domestic Supplies & Services<br />
Stationery & Office Equipment<br />
Furniture & S<strong>of</strong>t Furnishings<br />
Audio-Visual Equipment<br />
Telecommunications<br />
Advantages <strong>of</strong> membership <strong>of</strong> the Consortium are:<br />
- increased value for money because <strong>of</strong> bulk purchasing power;<br />
- consistency <strong>of</strong> supply arrangements within the sector;<br />
- 'networking' <strong>of</strong> best practices within user Departments;<br />
- administration resource savings due to unnecessary tender or quotation exercises.<br />
The Head <strong>of</strong> Purchasing shall make recommendations to the Group Executive Director <strong>of</strong> Finance<br />
for purchases in excess <strong>of</strong> £50,000 where a Consortium supply arrangement exists, in order to<br />
maximise value for money.<br />
Details <strong>of</strong> Consortium contracts or supply arrangements are included in the Purchasing Buyers<br />
Guide.<br />
As a member, UCLan will encourage the consortium to incorporate issues detailed in the<br />
<strong>University</strong>‟s Sustainable Development Procurement Procedure in future contracts.<br />
Further information relating to the Consortium appears on the website at North Western<br />
Universities Purchasing Consortium<br />
Purchasing Procedures December 2011
13: BUYERS GUIDE<br />
The Purchasing Office has a Buyers Guide on the Purchasing Web site with a listing <strong>of</strong> all current<br />
contracts or supply arrangements ( Buyers guide)<br />
The Guide covers a large proportion <strong>of</strong> goods and services purchased by the <strong>University</strong>. Where any<br />
necessary or regular items are purchased but not contained within the Guide, please advise the<br />
Purchasing Office.<br />
Standard Items and Contracts<br />
As defined in the Buyers Guide (and detailed in Financial Regulations paragraph 701). These are<br />
items normally used and purchased by all user Departments although some items are ordered via<br />
Facilities Management.<br />
The Purchasing Office will update the web page (additions, new contract details, etc.) to ensure that<br />
the Guide remains current.<br />
Purchasing Procedures December 2011
14: LEAD PURCHASERS' GROUP<br />
An informal Group - established by the Group Executive Director <strong>of</strong> Finance - seeks to include all<br />
those staff who have departmental purchasing responsibilities.<br />
The Group meets on a regular basis, and the role <strong>of</strong> the Group is to:<br />
- maintain compliance with all aspects <strong>of</strong> the <strong>University</strong>'s Purchasing<br />
Policy, Strategy, and Procedures;<br />
- identify and address operational issues relating to the purchasing process;<br />
- discuss and measure Suppliers performance;<br />
- help identify areas for standardisation or new contracts;<br />
- discuss and measure Purchasing Office's performance;<br />
- maintain a fully informed and consistent approach to purchasing activity<br />
within the <strong>University</strong>.<br />
Purchasing Office staff are members <strong>of</strong> the Group, and provide Departmental Lead Purchasers with<br />
any necessary guidance and assistance in areas such as contract compliance and purchasing<br />
procedures.<br />
The <strong>University</strong> has established a Purchasing Strategy, and the Lead Purchasers Group is a focus<br />
point for the implementation <strong>of</strong> any actions/procedures deemed necessary by the strategy.<br />
Purchasing Procedures December 2011
15: FINANCIAL HEALTH CHECKS<br />
The Purchasing Office has the responsibility <strong>of</strong> carrying our financial appraisals on new and<br />
existing suppliers.<br />
Financial appraisals will take the form <strong>of</strong> a credit report and / or can be extracted from the Suppliers<br />
audited accounts.<br />
Purchasing together with Financial Services will then provide interpretations and advise to the user<br />
department/requester.<br />
Although credit reports and audited accounts provide a good indication <strong>of</strong> Suppliers financial status<br />
or „health‟, care must always be taken as the information can be up to 12 months out <strong>of</strong> date.<br />
Due to the diversity and volume <strong>of</strong> <strong>University</strong> business it is not appropriate to carry out financial<br />
appraisals on all Suppliers – this will depend on the contract value but is mandatory for all new<br />
purchases / contracts that have been through the tender process.<br />
Purchasing Procedures December 2011
16: SUPPLIER APPRAISAL<br />
It is an objective <strong>of</strong> the <strong>University</strong> to continually improve the quality <strong>of</strong> goods and services<br />
delivered into the <strong>University</strong> by external suppliers.<br />
Any problems arising with the supply <strong>of</strong> goods and services should always be notified to the<br />
Purchasing Office immediately to ensure they are dealt with promptly and are not allowed to<br />
escalate. Staff in the Purchasing <strong>of</strong>fice are skilled in dealing with suppliers and should always be<br />
involved in any discussions that take place.<br />
Supplier performance on <strong>University</strong> contracts are regularly reviewed through the Contract<br />
Monitoring process. Where appropriate, contracted suppliers will attend regular review meetings<br />
throughout the life <strong>of</strong> the contract. The timings <strong>of</strong> the meetings will depend on the type <strong>of</strong> contract,<br />
frequency <strong>of</strong> issues etc and will be decided between the Purchasing Office, the user department and<br />
the Supplier. Meetings may include discussions regarding the supplier‟s performance and adherence<br />
to the service Level Agreement / contract terms.<br />
Purchasing Procedures December 2011
17: APPROVED SUPPLIERS<br />
1. Approved Suppliers<br />
An approved supplier is one who has been authorised by the Head <strong>of</strong> Purchasing to supply<br />
goods and/or services in accordance with Purchasing Procedures; Selection <strong>of</strong> Potential<br />
Suppliers (section 5) and Dealing with Suppliers (section 9).<br />
<strong>University</strong> personnel are required to utilise the existing Supplier base for the supply <strong>of</strong> goods<br />
and services. In considering a variation <strong>of</strong> supply a user must indicate their intention before<br />
placing an order by completion <strong>of</strong> New supplier form. The Purchasing Office will then<br />
consider the requirements <strong>of</strong> the user, evaluate the supplier and will confirm their decision<br />
within TWO working days. The Purchasing Office will then inform the Creditors Office<br />
within Financial Services <strong>of</strong> their decision by authorising the Application.<br />
Purchase Orders must not be placed with Suppliers until approved by the Purchasing<br />
Office. If the user has already placed an order they must be considered in breach <strong>of</strong><br />
Financial Regulations.<br />
Where invoice documents have been processed directly to the Creditors <strong>of</strong>fice they will<br />
verify if the supplier exists as an Approved Supplier. If the Supplier does not exist the<br />
document will be returned to the budget holder. As the user will be considered in breach <strong>of</strong><br />
Financial Regulations the Head <strong>of</strong> Purchasing will consider any further action to be taken.<br />
User concerns/problems should be directed in the first instance to the Purchasing Office. The<br />
Purchasing Office will be responsible for maintaining the Supplier database on Agresso.<br />
The payment <strong>of</strong> Approved Suppliers shall be in accordance with the Creditor Payment<br />
Business Rules. The Purchasing Office can negotiate special terms subject to the cash flow<br />
requirements <strong>of</strong> the <strong>University</strong> Group Treasury <strong>of</strong>fice to ensure the availability <strong>of</strong> funds.<br />
Special payment terms must then be communicated to the Creditors <strong>of</strong>fice before the invoice<br />
is received.<br />
Purchasing procedures December 2011
18: <strong>PURCHASING</strong> CARDS<br />
1. Overview<br />
2. Procedures and Regulations<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
Requesting a Purchasing Card<br />
Card transaction limits and limitations<br />
Ordering <strong>of</strong> goods/services by Purchasing Card<br />
Receiving goods<br />
Payment <strong>of</strong> goods<br />
Disputes and queries<br />
Security<br />
Contacts<br />
APPENDICES<br />
A. Flowcharts: -<br />
A.1.<br />
A.2.<br />
A.3.<br />
A.4.<br />
A.5.<br />
Purchasing goods via a Purchasing Card<br />
Problems with the supply <strong>of</strong> goods.<br />
Dealing with the Purchasing Card statement<br />
Dealing with the Transaction Log (optional)<br />
Checking <strong>of</strong> VAT invoices.<br />
B. Quick Reference Guide for Internet Transactions<br />
C. Purchase Card Transaction Log (optional)<br />
Purchasing Procedures December 2011
1. Overview<br />
The introduction <strong>of</strong> the Purchasing Card is to utilise an alternative method <strong>of</strong> ordering and<br />
payment <strong>of</strong> goods/services that are <strong>of</strong> relatively low value and not in regular repeat demand<br />
but, nevertheless, create a high volume <strong>of</strong> transaction requirements.<br />
Added value projections will be determined by speeding up the acquisition process without<br />
diluting management and budgetary control and should reduce invoice processing and<br />
creditor activity.<br />
The Purchasing Card looks like any normal credit card but embossed on the card will be: -<br />
the <strong>University</strong>‟s name,<br />
the cardholder‟s name,<br />
the expiry date,<br />
the card number – on reverse <strong>of</strong> card a 3-digit security number<br />
(also an individual pin number will be supplied)<br />
When the approval to issue a Purchasing Card is granted, the Purchasing Office will retain<br />
the card and the cardholder will be advised <strong>of</strong> its number and expiry date but not the pin<br />
number. The pin numbers will be kept sealed, in the safe <strong>of</strong> the Cashiers Office.<br />
On those occasions when the cards are required for „point <strong>of</strong> sale‟ transactions, they will have<br />
to be collected from, and returned to The Purchasing Office. The pin number will be given to<br />
the card holder which they must then memorize as the Purchasing Office has no<br />
responsibility for this once the number has been given to the card holder.<br />
Procedures and regulations for the use <strong>of</strong> the Purchasing Card and its limitations are<br />
contained in the following procedure and guidance notes.<br />
The Purchasing Office will provide the details <strong>of</strong> all cardholders to SMT on a quarterly<br />
basis. All cardholders will be subject to Financial Regulations <strong>of</strong> the <strong>University</strong> <strong>of</strong><br />
<strong>Central</strong> <strong>Lancashire</strong> and the following procedures and regulations will form part <strong>of</strong><br />
these Financial Regulations. Failure to adhere to these regulations may result in<br />
disciplinary action and cancellation <strong>of</strong> the card.<br />
Purchasing Procedures December 2011
2. Procedures and Regulations<br />
2.1 Requesting a Purchasing Card<br />
All applications for use and ownership <strong>of</strong> a Purchasing Card will be requested by<br />
the completion <strong>of</strong> the Authorised Signatory / Budget Access Form and authorised by<br />
the Head <strong>of</strong> Purchasing and Group Executive Director <strong>of</strong> Finance.<br />
Cardholders will be staff responsible for ordering goods and services for their<br />
department. If they are not also the budget holder, this person must approve the<br />
application.<br />
The Head <strong>of</strong> Purchasing will arrange for the completion <strong>of</strong> the Organisation‟s<br />
application form<br />
Card holders will -<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
Complete the Cardholder section <strong>of</strong> the application form.<br />
Provide to the Head <strong>of</strong> Purchasing a nominated project code for the creation<br />
and setting up <strong>of</strong> the account in the Financial Services department.<br />
Not disclose the card number and expiry date and pin number to any other<br />
person (other than the budget holder)<br />
Agree and abide by the limits and limitations applicable.<br />
Not use the card for personal use.<br />
Agree to the completion and timely input <strong>of</strong> transactions onto Agresso<br />
(optional Purchase Card Transaction Log – see Appendix C) and the<br />
retention <strong>of</strong> all related receipts for a period <strong>of</strong> 7 years after the date <strong>of</strong><br />
purchase.<br />
Inform the Purchasing Office immediately if they are due to leave the<br />
<strong>University</strong> or move to another role.<br />
2.2 Card Transaction Limits and Limitations.<br />
<br />
<br />
.<br />
Each cardholder will have a standard transaction limit <strong>of</strong> £1000 (inclusive <strong>of</strong> VAT)<br />
and a monthly credit limit <strong>of</strong> £5000 (inclusive <strong>of</strong> VAT). In certain circumstances this<br />
can be increased by application to the Head <strong>of</strong> Purchasing and it can be set at a lower<br />
level if required by the budget holder.<br />
This limit should match the authorised signatory limit for the applicant. If this is not<br />
the case, the authorised limit should be amended prior to proceeding with the credit<br />
card application.<br />
Purchasing Procedures December 2011
Cards cannot be used for obtaining cash or acting as cheque guarantee cards to<br />
personal cheques.<br />
Cardholders must only use the Purchase Card when incurring expenses in the pursuit<br />
<strong>of</strong> <strong>University</strong> business. Any misappropriation <strong>of</strong> <strong>University</strong> funds will be treated as<br />
gross misconduct.<br />
Any unauthorised or fraudulent use <strong>of</strong> the card will result in disciplinary action being<br />
taken.<br />
2.3 Ordering <strong>of</strong> Goods by Card<br />
Ensure the proposed transaction complies with the Purchasing Card usage criteria<br />
and the seller will accept the card.<br />
Confirm credit available by checking current transaction log or account 6504 on<br />
Agresso. If there is insufficient credit left on the card and the purchase cannot wait<br />
until the following month, contact the Purchasing Office to request a temporary<br />
increase<br />
When approved by the budget holder, place order by telephone/e-mail/fax quoting<br />
card number and expiry date. Confirm costs/prices and delivery date.<br />
Request that a VAT receipt is sent with the transaction voucher and goods advice<br />
note.<br />
Enter transaction details onto Agresso (credit entry to 6504) and also complete the<br />
Purchase Card Transaction Log (optional) immediately following completion <strong>of</strong><br />
purchase. Completing a Purchasing Card Transaction Log is now optional.<br />
If completing the log, identify the account code per transaction.<br />
2.4 Receipt <strong>of</strong> Goods<br />
Check satisfactory receipt <strong>of</strong> goods ordered.<br />
Ensure VAT receipt is enclosed with the transaction voucher and that the price<br />
details are correct.<br />
Enter receipt details on Purchase Card Transaction Log (Optional).<br />
File the VAT receipt, awaiting Purchasing Card statement.<br />
Purchasing Procedures December 2011
2.5 Payment <strong>of</strong> Goods/Services ordered by Purchasing Card.<br />
Financial Services to post Purchase Card Statement balances to nominated project<br />
code on account code 6504 each month when statements are received.<br />
Check statement received with Agresso by running an enquiry on your nominated<br />
project code and account code 6504. If you have completed a Purchase Card<br />
Transaction Log you can also use the log to help check your statement.<br />
Ensure VAT receipts are available and are correct.<br />
Ensure project code and account code for each transaction is correct.<br />
If the Purchase Card Transaction Log has been completed, obtain authorisation by<br />
the Line Manager (authorising manager) for the project code detailed. Or you can<br />
ask for the statement to be authorized.<br />
Reconcile the entries on the card statement to Agresso- making any amendments as<br />
necessary<br />
Attach relevant VAT receipts and statement to back <strong>of</strong> Purchase Card Transaction<br />
Log or the Statement and file in month order.<br />
Retain all documentation and store in a secure location: the Purchase Card Log,<br />
Statement and back up documentation are prime documents and must be retained for<br />
a period <strong>of</strong> seven years.<br />
Financial Services to check the nominal ledger on a monthly basis to ensure all<br />
cardholder‟s accounts are being cleared regularly.<br />
In addition Financial Services to conduct ad-hoc audits to review transactions and<br />
check that all required back up documentation has been retained and filed in<br />
monthly order.<br />
2.6. Disputes and Queries<br />
Initially disputes and queries should be taken up with the seller (supplier) by the<br />
cardholder, who should keep a record <strong>of</strong> the details <strong>of</strong> the dispute/query and contacts<br />
made with the seller.<br />
When credits are due, the seller should be asked to raise refund vouchers together<br />
with VAT credit receipts if applicable and the cardholder should ensure that these<br />
credits appear on subsequent statements.<br />
Purchasing Procedures December 2011
In the event <strong>of</strong> non-settled disputes and queries the Purchasing Card company will<br />
intervene.<br />
When this situation arises, contact The Purchasing Office who will advise on<br />
contacts and procedure.<br />
2.7 Security<br />
Cardholders only will be notified <strong>of</strong> the card number and expiry date and when<br />
necessary the pin number, and will not disclose this to any other person other<br />
than the budget holder.<br />
The Purchasing Office will retain signed cards.<br />
Pin numbers will be kept in the safe in the Cashiers Office.<br />
For „point <strong>of</strong> sale‟ requirements, cards will have to be collected from, and returned<br />
to, the Purchasing Office by the cardholder.<br />
In the event <strong>of</strong> cards becoming lost or stolen (when out for „point <strong>of</strong> sale purchases),<br />
or suspected and reported fraudulent use, the matter must be advised immediately to<br />
the Purchasing Office who will arrange for the account to be „suspended‟.<br />
If the card holder no longer requires the card, has obtained a replacement or will be<br />
leaving the <strong>University</strong> employment, the card must be destroyed and Purchasing<br />
Office informed immediately. If the card is lost/stolen the cardholder should contact<br />
Barclaycard directly to arrange for the card to be deactivated and contact the<br />
Purchasing Office for a replacement to be issued.<br />
<br />
<br />
To prevent card details being accessed by unauthorized persons, card transaction<br />
receipt details should be retained in a secure place at all times.<br />
When destroying back up transactions details care must be taken to ensure papers are<br />
shredded or put in confidential waste bins.<br />
2.8 Best Practice Purchasing over the Internet<br />
“Company Barclaycard guarantee against unauthorised transactions”<br />
Purchasing Procedures December 2011
When you buy online with Company Barclaycard you are not liable for unauthorised<br />
transactions. In the unusual event that unauthorised transactions do occur on your account,<br />
they will immediately suspend and investigate them for you. Whatever happens, you won‟t<br />
have to pay for transactions you didn‟t make.<br />
2.8.1 Take care <strong>of</strong> your card details online<br />
Secure sites will start with https, not http. Secure sites have an added encrypted<br />
transaction layer. Other security systems include Secure Socket Layer (SSL), Secure<br />
Electronic Transaction (SET) and HyperText Protocol Secure (HTTPS). Use these<br />
whenever possible. Refer to section 2.8.6 for how to check if a website is secure.<br />
2.8.2 Get to know a company before you buy<br />
If you're not familiar with a supplier, it's a good idea to contact them first and ask for<br />
some company background before you buy. Are the company‟s registered details<br />
displayed on the home page? Is there some form <strong>of</strong> accreditation which can be<br />
verified, eg Which? If you are unsure don‟t buy!<br />
Contact the Internet Fraud Watch (www.fraud.org) to check out merchants first<br />
2.8.3 Be aware <strong>of</strong> private sellers<br />
Members <strong>of</strong> the public <strong>of</strong>ten use classified ads and auctions to sell online. Most<br />
people are perfectly honest. However, if you do have any problems, your legal rights<br />
may not be the same as they would be if you were dealing with a business. So always<br />
make sure you know who you're buying from - then you can make an informed<br />
choice.<br />
2.8.4 Keep your passwords secret<br />
If you register with a particular site, you'll be asked to enter a user name and<br />
password. Keep your passwords completely secret - the same way, as you would look<br />
after your personal debit / credit card PIN number.<br />
2.8.5 Read the delivery and returns policy before you buy<br />
Read the delivery and return policies on the merchant‟s home page before completing<br />
an on-line transaction. Check you can return any unsatisfactory items and whether<br />
you will get a refund or a merchant credit. The website ideally should also cover<br />
delivery methods, delivery cost, currency accepted, taxes applied, return and refund<br />
policy, and a contact telephone number or e-mail address.<br />
Purchasing Procedures December 2011
2.8.6 Check for a secure connection before you enter your Company Barclaycard<br />
details<br />
First, make sure that you're using a secure browser<br />
Your browser is the piece <strong>of</strong> s<strong>of</strong>tware that enables your computer to access the World Wide<br />
Web. (You probably know that already, but not everyone does!)<br />
A secure browser such as Micros<strong>of</strong>t Internet Explorer version 4.0 or later will show you<br />
whether or not the web site you are visiting is secure. Internet Explorer uses the padlock<br />
symbols below.<br />
A broken padlock = unprotected<br />
An intact padlock = secure<br />
These browsers also scramble your personal data before sending it, so no one else can read it.<br />
Next, check the web site address<br />
A secure site will <strong>of</strong>ten have https:// at the beginning instead <strong>of</strong> http:// (The 's' stands for<br />
secure). Never send your card details by e-mail i.e. if the address starts mailto.<br />
Secure<br />
Unsecure<br />
Again, if the web site gives you the option <strong>of</strong> using a secure checkout - say yes!<br />
Ensure that a single browser window is open when submitting the data.<br />
2.8.7 Save a record <strong>of</strong> your transactions<br />
Just as you save till receipts in case you need to return or exchange something, you need to<br />
keep a record <strong>of</strong> all online transactions too.<br />
Print and save a copy <strong>of</strong> your completed order form and your order confirmation. Most<br />
reputable suppliers will e-mail you with an order confirmation within 24 hours. Always keep<br />
a record <strong>of</strong> the website address.<br />
Purchasing Procedures December 2011
Remember to update your transaction log and refer to your company procedures.<br />
2.8.8 Inspect your goods carefully<br />
When you take delivery <strong>of</strong> goods you buy online, be sure to check that they're exactly<br />
what you ordered. If you're unhappy with the quality, or have any other problem, first<br />
contact the supplier direct. If you have any difficulty resolving the query with the<br />
supplier, then contact your card administrator for guidance. If, in the unlikely event<br />
you are in dispute with your supplier, please contact Company Barclaycard Customer<br />
Service 08448 222 100.<br />
2.8.9 Check your statement<br />
Check the items on your monthly statement as soon as you receive it against your<br />
saved receipts and Purchase Card Transaction Log (which is now optional). If there<br />
are items on your statement that you don't recognise call Company Barclaycard<br />
Customer Service 08448 222 100.<br />
2.9 Online access<br />
All cardholders have the facility to access their accounts online and the Purchasing<br />
Office encourages this as it helps to reduce fraud and enables cardholders to view<br />
their statements, transactions and remaining credit. Statements can be printed from the<br />
website and this assists in reconciling accounts – vital at year end. Registration details<br />
available from the Purchasing Office and details are on the Purchasing Office website.<br />
2.10 Contacts<br />
Name Department Telephone<br />
Number<br />
Leanne Horton Head <strong>of</strong> Purchasing 2220<br />
Alison Thomas<br />
Ana Maria Pinon<br />
Purchasing Office 2221<br />
2223<br />
Customer Services Company Barclaycard 08448 222 150<br />
Purchasing Procedures December 2011
APPENDIX A (Flow Charts)<br />
A.1 Purchasing Goods via Purchasing Card<br />
Cardholder identifies purchasing requirement<br />
<br />
Purchase authorised by budget holder<br />
<br />
Transaction log or account 6504 checked to confirm credit available<br />
(if not and purchase urgent, limit may be increased temporarily by<br />
Purchasing Office)<br />
<br />
Proceed to order goods from supplier by phone/fax / web quoting all<br />
relevant numbers and confirming with the supplier the amount <strong>of</strong> the<br />
transaction. The transaction voucher is sent with the VAT receipt<br />
and the goods advice note, which is dispatched with the goods.<br />
Both item to be addressed to the cardholder and marked “Paid by<br />
Purchasing Card”<br />
<br />
Input details onto Agresso and (optional) update Purchase Card<br />
Transaction Log with all purchase details.<br />
Posting a Purchase Card Transaction<br />
<br />
Goods/service received - including VAT receipt<br />
<br />
Goods/service checked and reconciled to requirements<br />
<br />
Receive and verify monthly Purchasing Card statement<br />
(follow procedure A.3)<br />
Purchasing Procedures December 2011
A.2.<br />
Problems with Supply <strong>of</strong> Goods<br />
Responsibility <strong>of</strong> the Cardholder<br />
Immediately contact supplier requesting a refund voucher be put through the<br />
Purchasing Card Company and a VAT credit note<br />
<br />
<br />
Does the supplier agree to issue a credit?<br />
<br />
YES<br />
NO<br />
Detail on the Statement or (optional)<br />
Purchase Card Transaction Log and<br />
await receipt <strong>of</strong> credit.<br />
Pursue with supplier until agreement is<br />
reached or<br />
Contact Barclaycard with<br />
complaint/problem<br />
<br />
On receipt <strong>of</strong> statement check<br />
credit has been included and update account on Agresso<br />
<br />
If credit has not been received, contact supplier to find out when the refund voucher<br />
was processed<br />
NOTE:<br />
If you experience difficulty in obtaining a credit after following<br />
these procedures please contact the Head <strong>of</strong> Purchasing.<br />
Online access is now available for all cardholders – contact<br />
Purchasing for details<br />
Purchasing Procedures December 2011
A.3.<br />
Dealing with the Purchasing Card Statement<br />
Responsibility <strong>of</strong> the Cardholder<br />
On receipt <strong>of</strong> the statement, do you have all the VAT invoices?<br />
YES<br />
NO<br />
<br />
Check the details on the statement are the<br />
same as invoice details and the entries<br />
made on Agresso and (Optional)<br />
Purchase Card Transaction Log sheet<br />
<br />
<br />
Contact the supplier<br />
and request a copy<br />
invoice<br />
<br />
Await copy invoice<br />
<br />
Do the entries on Agresso and (optional) Purchase Card<br />
Transaction Log correspond to the statement?<br />
<br />
YES<br />
NO<br />
<br />
<br />
If discrepancy due to dates, carry<br />
forward the outstanding<br />
transactions to the following<br />
month<br />
If credit required, contact<br />
supplier or Purchasing Office<br />
<br />
Are the Purchasing Card company statement details correct?<br />
YES<br />
<br />
NO<br />
<br />
<br />
Raise query with Barclaycard<br />
and advise Purchasing Office.<br />
Proceed with next step when<br />
queries resolved<br />
<br />
Obtain authorization from budget holder to sign and date the<br />
Statement and (Optional) the Purchase Card Transaction Log<br />
<br />
Attach all invoices and (Optional) copy <strong>of</strong> the Purchase Card<br />
Transaction Log or Agresso printout <strong>of</strong> 6504 to statement<br />
Purchasing Procedures December 2011
A.4.<br />
Dealing with the Purchase Card Transaction Log (now Optional)<br />
Responsibility <strong>of</strong> the Cardholder<br />
On the face <strong>of</strong> your log sheet, enter the following:<br />
Name - Staff Number<br />
Department and Location<br />
Phone Number<br />
<br />
Enter each individual transaction detail onto the log as soon<br />
as purchase completed and has been entered on Agresso<br />
<br />
Make sure you get a receipt/invoice for each transaction<br />
review weekly - chase suppliers for invoices not received<br />
<br />
Check invoice details against log details<br />
<br />
Put receipt/invoice into the log envelope and await receipt <strong>of</strong><br />
monthly statement<br />
<br />
Update the Purchase Card Transaction Log with outstanding<br />
details, process paperwork as outlined in A.1.<br />
<br />
Return any invoices that do not appear on the statement to the<br />
log file and await the next statement<br />
Further information re posting the Purchase Card Transaction<br />
Log details onto Agresso can be found at:<br />
Posting a Purchase Card Transaction<br />
Purchasing Procedures December 2011
A.5 Checking <strong>of</strong> the VAT Invoice<br />
Responsibility <strong>of</strong> the Cardholder<br />
On receipt <strong>of</strong> the invoice - is the following correct?<br />
<br />
YES<br />
Items<br />
Quantity<br />
Price<br />
<br />
NO<br />
Attach invoice to, and update, (Optional)<br />
the<br />
Purchase Card Transaction Log.<br />
Immediately<br />
contact supplier<br />
requesting a<br />
refund voucher<br />
be put through<br />
the Purchasing<br />
Card company<br />
AND a VAT<br />
credit note<br />
Purchasing Procedures December 2011
APPENDIX B<br />
Quick Reference Guide for Internet Transactions<br />
Cardholder checks to<br />
make sure supplier<br />
has a secure site and<br />
purchases<br />
goods/services over<br />
the Internet. Enter<br />
the transaction onto<br />
Agresso and<br />
(Optional)<br />
Transaction log<br />
updated with details<br />
Supplier may<br />
acknowledge via e-<br />
mail that he has<br />
goods/services.<br />
Supplier then<br />
delivers<br />
goods/services with a<br />
receipt.<br />
Supplier processes<br />
transaction through<br />
Visa network<br />
Cardholder receives<br />
goods/services and<br />
(Optional)updates<br />
Transaction Log.<br />
Cardholder receives<br />
and checks monthly<br />
statement against<br />
(Optional) log and<br />
receipts<br />
Statement, (Optional)<br />
Transaction Log and<br />
receipts are signed<br />
<strong>of</strong>f by line manager .<br />
When you buy online with Company Barclaycard you are not liable for unauthorised<br />
transactions. In the unusual event that unauthorised transactions do occur on your account,<br />
they will immediately suspend and investigate them for you. Whatever happens, you‟ll never<br />
have to pay for transactions you did not make.<br />
Purchasing Procedures December 2011
APPENDIX C<br />
Purchasing Card Transaction Log<br />
Purchasing Procedures December 2011
19. CORPORATE CARD <strong>PROCEDURES</strong><br />
1. Overview<br />
2. Procedures and Regulations<br />
2.1 Requesting a Corporate Card<br />
2.2 Card transaction limits and limitations<br />
2.3 Ordering <strong>of</strong> goods/services by Corporate Card<br />
<br />
VAT Guidelines<br />
2.4 Receipt <strong>of</strong> goods<br />
2.5 Payment <strong>of</strong> goods/services ordered by Corporate Card<br />
2.6 Disputes and queries<br />
2.7 Security<br />
<br />
<br />
<br />
Password protection<br />
Lost/stolen cards<br />
Cards no longer required<br />
2.8 Best practice purchasing over the internet<br />
2.9 Miscellaneous questions<br />
2.10 Contacts<br />
APPENDICES<br />
A. Flowcharts: -<br />
A.1.<br />
A.2.<br />
A.3.<br />
A.4.<br />
A.5.<br />
Purchasing goods via a Corporate Card<br />
Problems with the supply <strong>of</strong> goods.<br />
Dealing with Corporate Card statement<br />
Dealing with UCLAN Transaction Log<br />
Checking <strong>of</strong> VAT invoices.<br />
B. Quick Reference Guide for Internet Transactions<br />
C. Corporate Card Transaction Log (optional)<br />
Purchasing Procedures December 2011
1. Overview<br />
The Corporate Card was introduced to enable frequent travellers to pay for expenses incurred<br />
whilst on <strong>University</strong> business expenses such as travel arrangements (where the Travel Office<br />
are unable to arrange credit for hotels or other expenses), entertaining guests and purchasing<br />
fuel.<br />
The <strong>University</strong> currently uses a Corporate Card issued by Company Barclaycard, which is a<br />
VISA credit card. Cards are embossed with:<br />
the <strong>University</strong>‟s name<br />
the cardholder‟s name<br />
the expiry date<br />
the card number<br />
(also supplied is an individual pin number)<br />
The Corporate Card reduces the need to request either cheque or cash advances, saving time<br />
and money and easing cash flow. It should also mean less frequent need for reimbursement<br />
via the Cashiers Office for <strong>University</strong> business expenditure. A further benefit is that the<br />
<strong>University</strong> does not have to pay immediately for the transactions undertaken and can obtain<br />
up to 33 days <strong>of</strong> interest free credit.<br />
Security is improved due to the reduction in cash handling and the fact that guarantee card<br />
payment reduces financial risk.<br />
The Card is accepted in over 400,000 UK outlets, 10 million world-wide.<br />
Cardholders benefit from free travel accident insurance where the card is used as the method<br />
<strong>of</strong> payment.<br />
Procedures and regulations for the use <strong>of</strong> the Corporate Card and its limitations are contained<br />
in the following procedure and guidance notes.<br />
The Purchasing Office will provide the details <strong>of</strong> all cardholders to SMT on a quarterly<br />
basis. All cardholders will be subject to Financial Regulations <strong>of</strong> the <strong>University</strong> <strong>of</strong><br />
<strong>Central</strong> <strong>Lancashire</strong> and the following procedures and regulations will form part <strong>of</strong><br />
these Financial Regulations. Failure to adhere to these regulations may result in<br />
disciplinary action and cancellation <strong>of</strong> the card.<br />
Purchasing Procedures December 2011
2. Procedures and Regulations<br />
2.1 Requesting a Corporate Card<br />
The Corporate Card is currently available to the Directorate, Senior Management Team<br />
members and frequent travellers, subject to approval from the Group Executive Director <strong>of</strong><br />
Finance.<br />
Requests for a Corporate Card should be made directly to the Purchasing Office,<br />
accompanied by an authorisation form signed by the Line Manager/Budget Holder (available<br />
from the purchasing <strong>of</strong>fice). Requests should detail the card limit you require (refer to<br />
section 2.2 for guidance). The Group Executive Director <strong>of</strong> Finance will authorise all<br />
qualifying requests. Cards usually take 14 days from the date <strong>of</strong> the card issuer receiving a<br />
correctly completed application form.<br />
The monthly limit is stipulated at the time <strong>of</strong> issue <strong>of</strong> the card but may be adjusted according<br />
to need, on the authority <strong>of</strong> the Group Executive Director <strong>of</strong> Finance.<br />
Corporate Cards are valid for two years and on expiry the Group Executive Director <strong>of</strong><br />
Finance will review the renewal.<br />
There are two card options:<br />
<br />
<br />
Gold Cards will be issued to Directorate and Deans.<br />
Silver Cards will be issued to all other parties<br />
Cardholders will -<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
Complete the Cardholder application form.<br />
Complete an authorisation memo signed by the budget holder.<br />
Provide to the Head <strong>of</strong> Purchasing a nominated project code for the creation and<br />
setting up <strong>of</strong> the account in Financial Services.<br />
Ensure that the card is kept in a safe place and is used solely by themselves.<br />
Not disclose the card number and pin number and expiry date to any other person<br />
(other than when charging an expense to the card).<br />
Agree and abide by the limits and limitations applicable.<br />
Obtain an itemised invoice / receipt for each transaction, containing VAT details<br />
where applicable.<br />
Agree to the completion and timely input <strong>of</strong> transactions onto Agresso (optional<br />
Corporate Card Transaction Log see Appendix C.)<br />
Purchasing Procedures December 2011
Ensure that the Transaction Log (if used) and all related receipts are retained for a<br />
period <strong>of</strong> 7 years after the date <strong>of</strong> purchase.<br />
2.2 Card Transaction Limits and Limitations.<br />
The initial limit for each card is a maximum <strong>of</strong> £5000. This limit should be sufficient to<br />
cover the expenses <strong>of</strong> a two-month period. Card limits may be increased either permanently<br />
or temporarily via a written request to the Head <strong>of</strong> Purchasing. Requests should state start and<br />
end dates, required limit and the justification for the increase.<br />
In exceptional circumstances it may be necessary for members <strong>of</strong> SMT to include personal<br />
expenditure on their corporate card. In such instances;<br />
the personal expenditure should be highlighted on the statement,<br />
the amount owed should be paid into Cashiers as soon as practicable,<br />
the cardholder or their nominee should keep a copy <strong>of</strong> all records on file for audit<br />
purposes.<br />
2.3 Ordering <strong>of</strong> Goods / Services by Corporate Card<br />
Goods or services can be charged to the account either in person by presenting the card, or by<br />
phone quoting all the relevant card details such as your Name, Card Expiry Date, Card<br />
Number and sometimes your security code.<br />
Care should be taken only to quote card details to someone known to the cardholder or who<br />
can reasonably expect to be honestly engaged in business on the cardholder‟s behalf (i.e.<br />
Travel Office staff). Ensure that the right amount is charged to the account and remember<br />
that the monthly card limit must not be exceeded.<br />
The cardholder has personal responsibility to account for the use <strong>of</strong> their card. Cardholders<br />
must therefore:<br />
Ensure the proposed transaction complies with the Corporate Card procedure and<br />
the seller will accept the card.<br />
If necessary, obtain authorization from the project budget holder (if you have access<br />
to more than one project.)<br />
Order goods/service either in person, or by telephone/fax quoting card number and<br />
expiry date. Confirm costs/prices and delivery date.<br />
Ensure that you obtain an itemised invoice/receipt (including VAT details where<br />
applicable). If ordering goods this should be sent with the transaction voucher and<br />
goods advice note.<br />
Enter the transaction details onto Agresso (credit entry to 6516) and also complete<br />
the Corporate Card Transaction Log if required, immediately following completion<br />
<strong>of</strong> purchase. Completing a Corporate Card Transaction Log is now optional.<br />
Purchasing Procedures December 2011
2.3.1 VAT Guidelines<br />
Some expenses charged to the Corporate Card may be vatable. When charging something to<br />
the card, ask whether VAT is applicable, at what rate it is applicable, and ask for the total<br />
VAT amount and a VAT receipt. Not everything that the cardholder charges to the corporate<br />
card will be subject to VAT.<br />
Some suppliers are able to provide VAT details to VISA, who in turn provides <strong>of</strong>ficial<br />
evidence <strong>of</strong> VAT paid. If a # (hash) appears against the transaction then VAT has been<br />
captured electronically. If a # does not appear on the statement, the supplier should have<br />
provided a VAT invoice. If not, the cardholder must ask the supplier to supply a VAT<br />
invoice.<br />
Please retain all sales vouchers. Both sales vouchers and VAT receipts must be kept to<br />
substantiate any transactions made. The VAT receipts will also be used to reclaim VAT<br />
where applicable.<br />
2.4 Receipt <strong>of</strong> Goods<br />
Check satisfactory receipt <strong>of</strong> goods ordered.<br />
Ensure that an itemised invoice / VAT receipt is enclosed with the transaction<br />
voucher and that the price details are correct.<br />
Enter the transaction details on the Corporate Card Transaction Log (optional.)<br />
File the itemised invoice / VAT receipt, awaiting the Corporate Card statement.<br />
2.5 Payment <strong>of</strong> Goods/Services ordered by Corporate Card.<br />
Financial Services will post the total <strong>of</strong> each cardholder‟s Corporate Card Statement balance<br />
to a nominated project code on account code 6516 each month when statements are received.<br />
Cardholders are required to:<br />
Check the statement received with Agresso by running an enquiry on your<br />
nominated project code and account code 6516. If you have completed a Corporate<br />
Card Transaction Log you can also use the log to help check your statement.<br />
Ensure that an itemised invoice/VAT receipt has been obtained for each transaction.<br />
Purchasing Procedures December 2011
Ensure the correct project code, account code, resource number and any other<br />
appropriate details have been entered on the Corporate Card Transaction Log (if<br />
completed.)<br />
If completed, ensure that the Corporate Card Transaction Log is authorised by the<br />
line manager for the project code detailed, which should in all cases be a person<br />
different to the cardholder themselves, and ensure that the Log is input onto Agresso<br />
within 7 days <strong>of</strong> receipt/date <strong>of</strong> statement.<br />
Reconcile the entries on the card statement to Agresso – making any amendments as<br />
necessary<br />
Attach itemised invoices/VAT receipts (for each transaction) and statement to the<br />
back <strong>of</strong> the Corporate Card Transaction Log or Statement and file in month order.<br />
Retain all documentation and store in a secure location; the Corporate Card Log,<br />
Statement and back up documentation are prime documents and must be retained<br />
for a period <strong>of</strong> seven years.<br />
Financial Services will check the accounting system on a monthly basis to ensure<br />
that all cardholder‟s transactions are being input.<br />
Financial Services will conduct regular audits to ensure that Corporate Card<br />
Transaction Logs have been correctly completed and that all required back up<br />
documentation has been obtained and filed.<br />
2.6. Disputes and Queries<br />
<br />
<br />
<br />
Initially disputes and queries should be taken up with the seller (supplier) by the<br />
cardholder, who should keep a record <strong>of</strong> the details <strong>of</strong> the dispute/query and contacts<br />
made with the seller.<br />
When a credit is due, the seller should be asked to raise a refund voucher together<br />
with a VAT credit receipt if applicable and the cardholder should ensure that these<br />
credits appear on subsequent statements. The credit should also be detailed on the<br />
Corporate Card Transaction Log in order for the Log to reconcile exactly with the<br />
value <strong>of</strong> the statement.<br />
In the event <strong>of</strong> non-settled disputes and queries the Corporate Card company will<br />
intervene (see 2.10 Contacts). If you receive an inadequate response contact the<br />
Purchasing Office. However, please do not cross out any <strong>of</strong> the transactions<br />
concerned on the queried statement; the <strong>University</strong> must pay promptly to avoid<br />
interest charges and, therefore, payment cannot be delayed pending any such credits<br />
or dispute resolution.<br />
It is the cardholder‟s responsibility to ensure that their statements are correct.<br />
Purchasing Procedures December 2011
2.7 Security<br />
Company Barclaycard will only issue cards after they receive an application form authorised<br />
by relevant <strong>University</strong> personnel, including the cardholder. The Head <strong>of</strong> Purchasing is the<br />
authorised signatory for the card agreement. Where an application requires two signatures,<br />
i.e. for a limit >£5000, then a member <strong>of</strong> Financial Services who is named on the bank<br />
mandate (Head <strong>of</strong> Purchasing or Group Executive Director <strong>of</strong> Finance) will also sign.<br />
Corporate Cards are posted to the Purchasing Office who will then contact the cardholder to<br />
advise them that the card is available for collection.<br />
On collection <strong>of</strong> the card, the cardholder must sign to confirm receipt and sign their card in<br />
front <strong>of</strong> the Purchasing Office member <strong>of</strong> staff issuing the card and be supplied with their pin<br />
number.<br />
2.7.1 Password Protection<br />
Whilst making a transaction a security number may be required, this is on the reverse <strong>of</strong> the<br />
card. A password will also have been entered on the application form and as such will only<br />
be viewed by the cardholder, the Group Executive Director <strong>of</strong> Finance, the Purchasing Office<br />
and Company Barclaycard employees.<br />
2.7.2 Lost / Stolen Cards<br />
In the event <strong>of</strong> cards becoming lost or stolen, or suspected and reported fraudulent use, the<br />
cardholder should contact Company Barclaycard immediately to arrange for the card to be<br />
deactivated and for a replacement to be issued. The cardholder should then advise the<br />
Purchasing Office.<br />
2.7.3 Cards No Longer Required<br />
If the card holder no longer requires the card, has obtained a replacement or will be leaving<br />
the <strong>University</strong> employment, the card must be cut into four pieces and returned to the<br />
Purchasing Office immediately with an explanatory note.<br />
2.7.4 Transaction Receipts<br />
To prevent card details being accessed by unauthorized persons, card transaction receipt<br />
details should be retained in a secure place at all times.<br />
When destroying back up transactions details care must be taken to ensure papers are<br />
shredded or put in confidential waste bins.<br />
Purchasing Procedures December 2011
2.8 Best Practice Purchasing over the Internet<br />
„Company Barclaycard guarantees against unauthorised transactions.‟<br />
When you buy online with Company Barclaycard you are not liable for unauthorised<br />
transactions. In the unusual event that unauthorised transactions do occur on your account,<br />
they will immediately suspend and investigate them for you. Whatever happens, you won‟t<br />
have to pay for transactions you didn‟t make.<br />
2.8.1 Take care <strong>of</strong> your card details online<br />
Secure sites will start with https, not http. Secure sites have an added encrypted transaction<br />
layer. Other security systems include Secure Socket Layer (SSL), Secure Electronic<br />
Transaction (SET) and HyperText Protocol Secure (HTTPS). Use these whenever possible.<br />
Refer to section 2.8.6 for how to check if a website is secure.<br />
2.8.2 Get to know a company before you buy<br />
If you're not familiar with a supplier, it's a good idea to contact them first and ask for some<br />
company background before you buy. Are the company‟s registered details displayed on the<br />
home page? Is there some form <strong>of</strong> accreditation which can be verified, eg Which? If you are<br />
unsure don‟t buy!<br />
Contact the Internet Fraud Watch (www.fraud.org) to check out merchants first<br />
2.8.3 Be aware <strong>of</strong> private sellers<br />
Members <strong>of</strong> the public <strong>of</strong>ten use classified ads and auctions to sell online. Most people are<br />
perfectly honest. However, if you do have any problems, your legal rights may not be the<br />
same as they would be if you were dealing with a business. So always make sure you know<br />
who you're buying from - then you can make an informed choice.<br />
2.8.4 Keep your passwords secret<br />
If you register with a particular site, you'll be asked to enter a user name and password. Keep<br />
your passwords completely secret - the same way, as you would look after your personal card<br />
cash machine PIN number.<br />
2.8.5 Read the delivery and returns policy before you buy<br />
Read the delivery and return policies on the merchant‟s home page before completing an online<br />
transaction. Check you can return any unsatisfactory items and whether you will get a<br />
refund or a merchant credit. The website ideally should also cover delivery methods, delivery<br />
cost, currency accepted, taxes applied, return and refund policy, and a contact telephone<br />
number or e-mail address.<br />
Purchasing Procedures December 2011
2.8.6 Check for a secure connection before you enter your<br />
Company Barclaycard details<br />
First, make sure that you're using a secure browser<br />
Your browser is the piece <strong>of</strong> s<strong>of</strong>tware that enables your computer to access the World Wide<br />
Web. (You probably know that already, but not everyone does!)<br />
A secure browser such as Netscape Navigator version 4.0 or later, or Micros<strong>of</strong>t Internet<br />
Explorer version 4.0 or later will show you whether or not the web site you are visiting is<br />
secure. Internet Explorer uses the padlock symbols below while Netscape uses keys.<br />
A broken key or padlock = unprotected<br />
An intact key or padlock = secure<br />
These browsers also scramble your personal data before sending it, so no one else can read it.<br />
Next, check the web site address<br />
A secure site will <strong>of</strong>ten have https:// at the beginning instead <strong>of</strong> http:// (The 's' stands for<br />
secure). Never send your card details by e-mail i.e. if the address starts mailto.<br />
Secure<br />
Unsecure<br />
Again, if the web site gives you the option <strong>of</strong> using a secure checkout - say yes!<br />
Ensure that a single browser window is open when submitting the data.<br />
2.8.7 Save a record <strong>of</strong> your transactions<br />
Just as you save till receipts in case you need to return or exchange something, you need to<br />
keep a record <strong>of</strong> all online transactions too.<br />
Print and save a copy <strong>of</strong> your completed order form and your order confirmation. Most<br />
reputable suppliers will e-mail you with an order confirmation within 24 hours. Always keep<br />
a record <strong>of</strong> the website address.<br />
2.8.8 Inspect your goods carefully<br />
When you take delivery <strong>of</strong> goods you buy online, be sure to check that they're exactly what<br />
you ordered. If you're unhappy with the quality, or have any other problem, first contact the<br />
supplier direct. If you have any difficulty resolving the query with the supplier, then contact<br />
Purchasing Procedures December 2011
your card administrator for guidance. If in the unlikely event you are in dispute with your<br />
supplier please contact Company Barclaycard Customer Service 08448 222 150<br />
2.8.9 Check your statement<br />
Check the items on your monthly statement as soon as you receive it against your saved<br />
receipts and Corporate Card Transaction Log. If there are items on your statement that you<br />
don't recognise call Company Barclaycard Customer Service 08448 222 150<br />
2.9 Online access<br />
All cardholders have the facility to access their accounts online and the Purchasing Office<br />
encourages this as it helps to reduce fraud and enables cardholders to view their statements,<br />
transactions and remaining credit. Statements can be printed from the website and this assists<br />
in reconciling accounts – vital at year end. Registration details available from the Purchasing<br />
Office and details are on the Purchasing Office website.<br />
2.10 Contacts<br />
NAME TITLE TELEPHONE<br />
Head<br />
Purchasing<br />
<strong>of</strong><br />
Leanne Horton<br />
AB133 Adelphi Building<br />
2220<br />
Email: lhorton2@uclan.ac.uk<br />
Purchasing<br />
Officers<br />
Purchasing Office<br />
AB 135 Adelphi Building<br />
2221/2223/2225<br />
Customer<br />
Services*<br />
Company Barclaycard<br />
www.companybarclaycard.co.uk<br />
08448 222 150<br />
+44 1642 663 663 (from<br />
abroad)<br />
Lost/Stolen Cards/<br />
24 hour<br />
customer<br />
service<br />
Company Barclaycard 01642 230 230<br />
+44 1642 230 230 (from<br />
abroad)<br />
* Quote card number, name, transaction query, date and amount.<br />
Purchasing Procedures December 2011
APPENDIX A (Flow Charts)<br />
A.1 Purchasing Goods via Corporate Card<br />
Cardholder identifies purchasing requirement<br />
<br />
Purchase authorized by budget holder<br />
<br />
Transaction log or account 6516 checked to confirm credit available<br />
(if not and purchase urgent, limit may be increased temporarily by<br />
Purchasing Office)<br />
<br />
Proceed to order goods from supplier by phone/fax / web quoting all<br />
relevant numbers and confirming with the supplier the amount <strong>of</strong> the<br />
transaction. The transaction voucher is sent with the VAT receipt<br />
and the goods advice note, which is dispatched with the goods.<br />
Both item to be addressed to the cardholder and marked “Paid by<br />
Corporate Card”<br />
<br />
Input details onto Agresso and (optional) update Corporate Card<br />
Transaction Log with all purchase details.<br />
PostingCardTransaction<br />
<br />
Goods/service received - including VAT receipt<br />
<br />
Goods/service checked and reconciled to requirements<br />
<br />
Receive and verify monthly Corporate Card statement<br />
(follow procedure A.3)<br />
Purchasing Procedures December 2011
A.2.<br />
Problems with Supply <strong>of</strong> Goods<br />
Responsibility <strong>of</strong> the Cardholder<br />
Immediately contact supplier requesting a refund voucher be put through the<br />
Corporate Card Company and a VAT credit note<br />
<br />
Does the supplier agree to issue a credit?<br />
<br />
<br />
YES<br />
NO<br />
Detail on the Statement or (optional)<br />
Corporate Card Transaction Log and<br />
await receipt <strong>of</strong> credit.<br />
Pursue with supplier until agreement is<br />
reached or<br />
contact Barclaycard with complaint/problem<br />
<br />
On receipt <strong>of</strong> statement check credit has been included and update account on<br />
Agressso<br />
<br />
If credit has not been received, contact supplier to find out when the refund voucher<br />
was processed<br />
NOTE:<br />
If you experience difficulty in obtaining a credit after following<br />
these procedures please contact the Head <strong>of</strong> Purchasing.<br />
Online access is now available for all cardholders – contact<br />
Purchasing for details<br />
Purchasing Procedures December 2011
A.3.<br />
Dealing with the Corporate Card Statement<br />
Responsibility <strong>of</strong> the Cardholder<br />
On receipt <strong>of</strong> the statement, do you have all the VAT invoices?<br />
YES<br />
NO<br />
<br />
Check the details on the statement are the<br />
same as invoice details and the entries<br />
made on Agresso and (Optional)<br />
Corporate Card Transaction Log sheet<br />
<br />
<br />
Contact the supplier<br />
and request a copy<br />
invoice<br />
<br />
Await copy invoice<br />
<br />
Do the entries on Agresso and (optional) Corporate Card<br />
Transaction Log correspond to the statement?<br />
<br />
YES<br />
NO<br />
<br />
<br />
If discrepancy due to dates, carry<br />
forward the outstanding<br />
transactions to the following<br />
month<br />
If credit required, contact<br />
supplier or Purchasing Office<br />
<br />
Are the Corporate Card company statement details correct?<br />
YES<br />
<br />
NO<br />
<br />
<br />
Raise query with Barclaycard<br />
and advise Purchasing Office.<br />
Proceed with next step when<br />
queries resolved<br />
<br />
Obtain authorization from budget holder to sign and date the<br />
Statement and (Optional) the Corporate Card Transaction Log<br />
<br />
Attach all invoices and (Optional) copy <strong>of</strong> the Corporate Card<br />
Transaction Log or Agresso printout <strong>of</strong> 6516 to statement<br />
Purchasing Procedures December 2011
A.4.<br />
Dealing with the Corporate Card Transaction Log (now optional)<br />
Responsibility <strong>of</strong> the Cardholder<br />
On the face <strong>of</strong> your log sheet, enter the following:<br />
Name and staff number<br />
Department and Location<br />
Phone Number<br />
<br />
Enter each individual transaction detail onto the log as soon<br />
as purchase completed and has been entered on Agresso<br />
<br />
Make sure you get an itemised invoice/VAT receipt for each<br />
transaction; review weekly - chase suppliers for invoices not<br />
received<br />
<br />
Check invoice details against log details<br />
<br />
Put receipt/invoice into the log envelope and await receipt <strong>of</strong><br />
monthly statement<br />
<br />
Update Corporate Card Transaction Log with outstanding<br />
details, process paperwork as outlined in A.1.<br />
<br />
Return any invoices that do not appear on the statement to the<br />
log file and await the next statement<br />
Further information re posting the Corporate Card<br />
Transaction Log details onto Agresso can be found at:<br />
CardLogEntry<br />
Purchasing Procedures December 2011
A.5 Checking <strong>of</strong> the VAT Invoice<br />
Responsibility <strong>of</strong> the Cardholder<br />
On receipt <strong>of</strong> the invoice - is the following correct?<br />
Items<br />
Quantity<br />
Price<br />
<br />
YES<br />
Attach invoice to, and update, the<br />
Corporate Card Transaction Log<br />
<br />
NO<br />
Immediately<br />
contact supplier<br />
requesting a<br />
refund voucher<br />
be put through<br />
the Corporate<br />
Card company<br />
AND a VAT<br />
credit note<br />
Purchasing Procedures December 2011
APPENDIX B<br />
Quick Reference Guide for Internet Transactions<br />
Cardholder checks to<br />
make sure supplier<br />
has a secure site and<br />
purchases<br />
goods/services over<br />
the Internet. Enter<br />
the transaction onto<br />
Agresso and<br />
(Optional)<br />
Transaction log<br />
updated with details<br />
Supplier may<br />
acknowledge via e-<br />
mail that he has<br />
goods/services.<br />
Supplier then<br />
delivers<br />
goods/services with a<br />
receipt.<br />
Supplier processes<br />
transaction through<br />
Visa network<br />
Cardholder receives<br />
goods/services and<br />
updates transaction<br />
log (optional)<br />
Cardholder receives<br />
and checks monthly<br />
statement against log<br />
(optional) and<br />
receipts<br />
Statement,<br />
transaction log and<br />
receipts are signed<br />
<strong>of</strong>f by line manager<br />
and sent to accounts.<br />
When you buy online with Company Barclaycard you are not liable for unauthorised<br />
transactions. In the unusual event that unauthorised transactions do occur on your account,<br />
they will immediately suspend and investigate them for you. Whatever happens, you‟ll never<br />
have to pay for transactions you did not make.<br />
Purchasing Procedures December 2011
APPENDIX C<br />
Corporate card log<br />
Purchasing Procedures December 2011
20: NEGOTIATION BRIEFING NOTES<br />
Why negotiate<br />
As we are spending taxpayers money, we are publicly accountable and must ensure<br />
that value for money is obtained. Negotiation is one method <strong>of</strong> achieving this. Also<br />
savings made enable budget holders to gain more from typically decreasing budgets.<br />
When conducted with integrity and pr<strong>of</strong>essionalism negotiation is a perfectly logical<br />
step in the procurement process. It must be carefully planned and managed so that<br />
confidence and trust in the purchaser (which in the longer term translates into better<br />
value for money) are always retained. Suppliers who realise that their customer always<br />
wishes to negotiate will invariably add a little on to their price to compensate.<br />
Conducting a basic negotiation<br />
A negotiation strategy should be developed prior to the negotiations taking place.<br />
Analysing information, identifying objectives, formulating a strategy and ensuring that<br />
you are authorised to conduct the proposed negotiations will help you to negotiate<br />
from a position <strong>of</strong> strength and achieve an effective result. Ensure you differentiate<br />
from facts and assumptions.<br />
1. Pre-Meeting Strategy Development<br />
When creating your strategy consider all potential items for negotiation and ways<br />
in which the <strong>University</strong>‟s needs may be met. Consider also the current market<br />
trends and the suppliers current and future business situation e.g. seasonal<br />
variations, current financial standing and market strategies. Analyse the faults <strong>of</strong><br />
suppliers products, even if they are unimportant to the purchaser, getting the<br />
supplier to identify / confirm weaknesses can put the balance <strong>of</strong> power on your<br />
side. Considering many options will allow you to change tack during negotiations if<br />
necessary.<br />
1a. What to negotiate<br />
Price (except in EU contracts)<br />
supply and cost <strong>of</strong> spare parts<br />
earlier delivery/completion dates<br />
warranties/guarantees/maintenance/repair/after sales service<br />
compensation for failure to meet specified requirements.<br />
quantity/educational discounts. This list is not exhaustive, it is a concept <strong>of</strong><br />
purchasing that “everything is negotiable”.<br />
2. Meeting - Introduction<br />
Home „turf‟ is always useful, familiarity with environment and information to hand<br />
<strong>of</strong>fers a position <strong>of</strong> strength from which to conduct proceedings. The meeting<br />
should commence with an introduction, giving background information and gently<br />
leading up to points to discuss. Allow suppliers time to talk, you can pick up useful<br />
information prior to negotiating.<br />
Purchasing Procedures December 2011
3. Meeting - Discussion<br />
Commencing the process <strong>of</strong> discussion, start with items you will find easy to agree<br />
on to build a relationship. Suggest a break if things become difficult or<br />
deadlocked.<br />
4. Tactics<br />
Ask suppliers what you could do to improve your dealings with them, there may be<br />
something important to them which involves little effort on your part. Such<br />
concessions can dramatically improve a supplier‟s impression <strong>of</strong> the <strong>University</strong> as a<br />
customer.<br />
Salespeople are highly trained and motivated to fend <strong>of</strong>f their competitors and win<br />
your custom so be on your guard.<br />
Avoid situations where a supplier knows they will get an order. This can occur<br />
when they have the best product to meet our needs, deadline date or because an end<br />
user has advised them!<br />
When undertaking team negotiations ensure that all members are aware <strong>of</strong> their<br />
role in the negotiations and the tactics to be deployed.<br />
Ask for cost breakdowns to include the pr<strong>of</strong>it margin, labour and various product<br />
components. This enables comparison between suppliers, which you can then use<br />
to query any anomalies.<br />
Recognise suppliers strengths and weaknesses in relation to your requirements.<br />
Ensure that your weaknesses are played down, put in a positive light, or not<br />
disclosed at all. Make more <strong>of</strong> the suppliers weaknesses and less <strong>of</strong> their strengths.<br />
Make more <strong>of</strong> your strengths. Think not <strong>of</strong> how little your concessions mean to you<br />
but <strong>of</strong> how much they may mean to the supplier.<br />
Reserve your position until you see the full scope <strong>of</strong> the proposed deal. Never agree<br />
point by point. Using conditional language e.g. if... then perhaps ... can assist you in<br />
this. Try not to concede without gaining a concession from the supplier, always<br />
SOMETHING FOR SOMETHING! Observe how the supplier negotiates and<br />
adjust your tactics accordingly, or choose to take the lead.<br />
5. Meeting - Close<br />
Once agreement has been made summarise the points and method <strong>of</strong><br />
implementation. Make an effort to leave the supplier with some satisfaction at the<br />
completion <strong>of</strong> a negotiation. Such satisfaction may be nothing more than<br />
understanding why it has been necessary for him to make concessions. Aim for a<br />
„win win‟ situation.<br />
Purchasing Procedures December 2011
6. Ethics<br />
Contracts for the supply <strong>of</strong> goods and services do not have to be in writing to be<br />
legally enforceable and so great care must be taken during any negotiations to avoid<br />
entering contracts orally.<br />
Negotiation should not be conducted in ways, which put suppliers at a<br />
disadvantage, distort competition or adversely affect trust in the procurement<br />
process. Avoid Dutch auctions and empty threats and ensure suppliers are treated in<br />
an honest, fair and ethical manner whilst retaining confidentiality <strong>of</strong> their bids.<br />
Exercise <strong>of</strong> control on all types <strong>of</strong> information, only partially revealing or choosing<br />
only that which is suitable for your purpose, is a perfectly legitimate tactic. Care<br />
should be taken however to avoid leaving bidders with a misleading impression,<br />
otherwise the failure to supply the information may be held to be a<br />
misrepresentation by omission.<br />
If discussions regarding bid clarification result in an exchange <strong>of</strong> further<br />
information to one or more <strong>of</strong> the suppliers it is imperative that the same<br />
information is given to all bidders.<br />
Negotiations must be fully documented so that a clear audit trail is left.<br />
Those suppliers who have been unsuccessful should be given constructive feedback<br />
to assist them in becoming more competitive for future requirements in the interest<br />
<strong>of</strong> market forces.<br />
For negotiation to be effective both parties must foster a relationship that is based<br />
on trust, fair dealing and respect for each others viewpoint.<br />
7. Post Tender Negotiation<br />
Post Tender Negotiation must only be undertaken with a member <strong>of</strong> the Purchasing Office.<br />
Purchasing procedures December 2011
21: <strong>PURCHASING</strong> GUIDANCE NOTES WHEN BIDDING FOR FUNDS<br />
Below are a number <strong>of</strong> „key‟ points that will have to be considered and acted upon when<br />
<strong>University</strong> staff are bidding for funds to purchase equipment and services. It is important for<br />
„bidders‟ to recognise any mandatory requirements as they could affect the timeframe and<br />
procurement process if the bid were to be successful.<br />
<strong>University</strong> Financial Regulations<br />
All purchases for equipment and services are subject to the <strong>University</strong>‟s Financial<br />
Regulations.<br />
Headline Regulations are,<br />
<br />
<br />
<br />
<br />
<br />
Purchases up to £5k – estimated price<br />
Purchases £5k to £50k – a minimum <strong>of</strong> three written quotations<br />
Purchases £50k to £100k – a minimum <strong>of</strong> four tenders – allow a minimum <strong>of</strong> four<br />
months for this process<br />
Purchases £100k to £156k – a minimum <strong>of</strong> six tenders<br />
Purchases greater than £156k, subject to EU Procurement (tender) Regulations (see<br />
below). – allow a minimum <strong>of</strong> six months for this process<br />
Statutory Requirements<br />
All purchases for equipment and services over the value <strong>of</strong> £156k that could be aggregated<br />
or purchased from a single supplier will be subject to EU Procurement Regulations.<br />
What does this mean?<br />
Each procurement is subject to statutory regulations and timetables.<br />
For an „open‟ tender all applicants must receive a tender pack. The tender timeframe<br />
is a minimum <strong>of</strong> 52 days.<br />
The specification must be generic and must not include any artificial „lock out‟<br />
barriers to competition within the specification i.e. quoting any „brand names‟.<br />
Every supplier must be treated equally and fairly.<br />
If the EU Tender Regulations are NOT followed precisely then the <strong>University</strong> may be<br />
challenged in a court <strong>of</strong> law and if found guilty could be fined up to the value <strong>of</strong> the potential<br />
contract.<br />
External Requirement and Good Practice Purchasing<br />
Most external funding agencies now impose procedures on bidding institution. These will be<br />
a combination <strong>of</strong> strict procedures or good practices. Organisations such as HEFCE, the<br />
Research Councils and the Wellcome Trust all insist the proper tender regulations are<br />
observed and „whole life costings‟ are included within the bid and procurement process.<br />
Most agencies now insist the institution Purchasing Office is included within the process and<br />
sign <strong>of</strong>f the bid/procurement documentation. Failure to do so may result in the bid not being<br />
accepted or funds being denied.<br />
Purchasing procedures December 2011
What is „whole life costing’?<br />
Whole life costing asks that the purchase <strong>of</strong> equipment or a service be costed through to the<br />
end <strong>of</strong> the expected life <strong>of</strong> the equipment or project. This will include but not limited to,<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
Initial purchase cost<br />
Delivery and implementation costs<br />
Consultancy, manuals and Training<br />
Annual maintenance and licensing costs,<br />
Consumables and spares<br />
Upgrades<br />
Insurance<br />
Resale or trade in value<br />
It is important that the Purchasing Office is included early on in the bid process as they can<br />
advise in more depth, the various requirements involved in a „high value‟ purchase. The<br />
Purchasing Office has an extensive website which includes guidance notes on most topics<br />
involved with purchasing equipment (goods) and services.<br />
This can be found at - Purchasing Office<br />
or alternatively contact the Purchasing Office on extension 2220.<br />
Purchasing Procedures December 2011
22. CONSULTANCY<br />
GUIDANCE FOR THE PROCUREMENT OF CONSULTANCY<br />
CONTENTS<br />
1. FOREWORD<br />
2. PRINCIPLES<br />
3. FINANCIAL REGULATIONS<br />
4. THE PROCESS<br />
5. GUIDELINES<br />
6. METHODS OF PAYMENT<br />
APPENDIX 1:<br />
CONSULTANTS TRAVEL EXPENSES<br />
APPENDIX 2:<br />
ADVICE ON DIFFERENTIATION BETWEEN EMPLOYEE<br />
AND SELF-EMPLOYED STATUS<br />
Purchasing Procedures December 2011
1. Foreword<br />
The purpose <strong>of</strong> this document is to provide guidance to those members <strong>of</strong> staff involved in<br />
the difficult task <strong>of</strong> hiring external consultants to undertake work on behalf <strong>of</strong> the <strong>University</strong>.<br />
The following check lists, procedures and principles will provide complete assurance in the<br />
safety <strong>of</strong> the placement <strong>of</strong> a consultancy contract (legal contract “Standard Contract for the<br />
Purchase <strong>of</strong> Consultancy” available from<br />
www.uclan.ac.uk/information/services/finance/purchasing/terms_and_conditions.php. Do<br />
please note that travel expenses listed under Appendix 1 are intended as a guideline only and<br />
should be checked for any revisions.<br />
Please remember the Purchasing Office are always available to assist and contact should be<br />
made with the Head <strong>of</strong> Purchasing on ext. 2220 in the first instance if any member <strong>of</strong> staff<br />
wishes to take advantage <strong>of</strong> their expertise in this matter.<br />
The aim <strong>of</strong> this document is to improve the quality <strong>of</strong> consultants‟ reports as a management<br />
tool by laying out the <strong>University</strong>‟s expectations, highlighting best practice and documenting<br />
the risks associated with consultant reports and presentations.<br />
In general terms, as part <strong>of</strong> a broader management framework, consultant reports, like all<br />
other elements <strong>of</strong> such a framework, must be subject to and demonstrate value for money,<br />
risk awareness, audit ability and a connectedness to corporate planning and strategic<br />
priorities.<br />
In specific terms the outputs <strong>of</strong> such consultant contributions should demonstrate objectivity,<br />
rigour, validity, reliability, coherence and focus.<br />
These general and specific considerations are directly related. A consultant‟s report which<br />
lacks validity will lack value for money. Similarly a review which lacks objectivity is<br />
unlikely to contribute satisfactorily to risk assessment or mitigation processes.<br />
The cost <strong>of</strong> ineffective or flawed consultancy is potentially not just the fee paid for the<br />
consultancy work but the business cost <strong>of</strong> poor decisions made on the basis <strong>of</strong> such<br />
consultancy.<br />
All consultants‟ reports are different and the commissioning conditions and briefs can vary<br />
significantly. There is no single correct way to carry out effective consultancy. However, the<br />
<strong>University</strong> is committed to maximising the quality <strong>of</strong> decision making generally and is<br />
focused therefore on establishing best practice in relation to those reports it commissions.<br />
The following set <strong>of</strong> principles indicates a set <strong>of</strong> expectations to which all consultants and<br />
commissioning mangers should adhere. Promotion <strong>of</strong> these principles and raising awareness<br />
<strong>of</strong> the issues they address, both internally and to potential consultants, is designed to raise<br />
standards <strong>of</strong> consultancy reports and improve decision making.<br />
Purchasing Procedures December 2011
POLICY<br />
2.0 Principles<br />
2.1 All consultancies will be expected to adhere to a pr<strong>of</strong>essional Code <strong>of</strong> Practice<br />
This will be either the MCA (Management Consultancies Association) Code <strong>of</strong><br />
Pr<strong>of</strong>essional Conduct or equivalent 1 . Additionally all consultancies shall adhere to<br />
the <strong>University</strong>‟s policies on diversity and equal opportunities in all work and not just<br />
such work which has diversity as an explicit element <strong>of</strong> the brief.<br />
2.2 All consultancies will be appropriately commissioned.<br />
This means that all commissions will be consistent with the <strong>University</strong>‟s Financial<br />
Regulations and will normally incorporate the model contract for consultants issued<br />
by Financial Services.<br />
2.3 All consultancies will have a clear brief<br />
This means that all consultancies will have as a minimum a written statement <strong>of</strong><br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
The scope <strong>of</strong> the work with relevant terms appropriately defined<br />
The methodologies and instruments to be used (e.g. survey, interview, focus group<br />
etc)<br />
In the case <strong>of</strong> survey work the population from which the sample will be drawn and<br />
the sampling frame.<br />
A stated link to <strong>University</strong> Strategy (e.g. Corporate Plan, Risk Register, VFM<br />
schedule or equivalent), and previous relevant documents and research work where<br />
known.<br />
Who is commissioning the consultancy and to whom the outputs should be delivered<br />
in the first instance<br />
The nature <strong>of</strong> the outputs (reports, presentations etc)<br />
The time frame for final report and any intermediate drafts to be delivered<br />
Utilising the Standard Contract for the Purchase <strong>of</strong> Consultancy will cover all <strong>of</strong> the<br />
above requirements.<br />
2.4 All quantitative surveys will be reliable, valid and appropriately executed and<br />
reported.<br />
This means that<br />
<br />
<br />
<br />
Survey questions will adhere to social science good practice and questions or items<br />
should be both reliable and valid.<br />
Appropriate confidentiality and informed consent must be exercised.<br />
Statistical analysis should be decided prior to data collection.<br />
1 http://www.mca.org.uk/MCA/AboutUs/CodeOfConduct.aspx<br />
Purchasing Procedures December 2011
Samples used in surveys should be representative <strong>of</strong> the population defined in the<br />
brief. Large samples can still be unrepresentative. The sampling method should be<br />
clearly defined and will normally be randomly determined (involving stratification<br />
where appropriate). Where there is weighting <strong>of</strong> samples by key population variables<br />
to yield better population estimates, this should be clearly documented and justified.<br />
Where appropriate and feasible, new or bespoke question sets should be piloted prior<br />
to full survey.<br />
2.5 All statistical results reported in surveys should be accurate, comprehensible to<br />
the intelligent lay reader and should not be misleading or overstated.<br />
This means that statistical findings should be presented clearly and rooted in the<br />
actual data. Comparative statistical judgments should reflect normal standards<br />
associated with inferential statistics. Survey response rates and any significant issues<br />
in validity arising from unsatisfactorily low response rates or potentially skewed<br />
response rates must be foregrounded.<br />
Specifically this means that:<br />
<br />
<br />
<br />
<br />
<br />
Where comparisons are the focus <strong>of</strong> a sample survey, differences should normally<br />
only be highlighted where they are statistically significant (normally at 5% level <strong>of</strong><br />
significance but there will be exceptions).<br />
Tables which report means across groups (with or without claims <strong>of</strong> statistically<br />
significant differences) should also report measures <strong>of</strong> dispersion such as standard<br />
deviation.<br />
Nonparametric statistics should be used where more appropriate than parametric<br />
statistics. Parametric statistics should not be used where normal parametric<br />
assumptions are violated, with particular care and attention to Likert study data.<br />
Sub sample analyses should be reported with caution particularly where sub sample<br />
sizes are small.<br />
Statements which are only true <strong>of</strong> a sub sample should not be presented as being true<br />
<strong>of</strong> the sample as a whole. Equally, statements which are true <strong>of</strong> the sample as a whole<br />
should not be presented as true only <strong>of</strong> a sub sample.<br />
2.6 All surveys should be auditable and reproducible<br />
This means that raw data, appropriately anonymised, should be available for any other<br />
party nominated by the commissioning manager to check statistical assumptions,<br />
calculations and inferential assessments as appropriate. The <strong>University</strong> will normally<br />
carry out an „evidence trail‟ for a small number <strong>of</strong> selected specific conclusions in<br />
each final report (see below).<br />
Purchasing Procedures December 2011
2.7 All qualitative surveys and associated reports will be clearly identified as such<br />
and conclusions presented appropriately.<br />
Focus groups, interviews and desk (document) reviews can make a significant<br />
contribution to policy or organizational development and review. They are able to<br />
identify emerging themes, patterns, perceptions and narratives. Appropriately<br />
designed and executed they can provide thought-provoking suggestions and<br />
possibilities which other methods fail to identify. However, such methods by their<br />
very nature are open to the dangers <strong>of</strong> subjective interpretations, incomplete<br />
summation and „spin‟. There is no reason in principle why these difficulties<br />
cannot be overcome. Research suggests that such methods are least useful when the<br />
consultant is unfamiliar with the vocabulary, cultures and practices <strong>of</strong> the target<br />
population. This presents a particular challenge to consultants who can in principle<br />
add value through externality and disinterest. In practical terms such methods present<br />
further difficulties since (i) confidentiality and an ethical treatment <strong>of</strong> the participant‟s<br />
contribution are paramount (ii) participants are not anonymous to the consultant, (iii)<br />
the elicitation <strong>of</strong> the participant‟s views is conversational, (iv) in the case <strong>of</strong> focus<br />
groups, the participants‟ contribution can reflect peer pressure and (v) in some<br />
settings more vocal and more confident participants can generate more content and be<br />
more influential. In some settings this can lead to some views from minority or less<br />
powerful respondents being excluded and undervalued. Consultants should<br />
demonstrate awareness <strong>of</strong> these limitations and put conclusions and recommendations<br />
in an appropriate context. Presentation <strong>of</strong> results <strong>of</strong> qualitative research is an area <strong>of</strong><br />
particular difficulty due to the role <strong>of</strong> subjectivity, individuality, and particular<br />
circumstances in which the views <strong>of</strong> participants are solicited. Normally, the<br />
<strong>University</strong> will expect such methods at the early stages <strong>of</strong> a review to identify the<br />
areas meriting further structured assessment through surveys or other methods.<br />
Qualitative methods can support a wide range <strong>of</strong> activities and can add value on<br />
topics during periods <strong>of</strong> change or which are subject to multiple stakeholder<br />
perspectives.<br />
This means that<br />
<br />
<br />
<br />
<br />
Data from interviews and focus groups should not be presented as though they had<br />
been collected via a quantitative survey.<br />
Summaries, conclusions and recommendations based wholly or principally on<br />
qualitative methods should normally indicate areas or issues for further systematic<br />
structured work or robust analysis rather than be <strong>of</strong>fered as definitive statements <strong>of</strong><br />
stakeholders‟ views in general.<br />
Consultant research involving qualitative methods should indicate how they have<br />
sought to ensure that issues around anonymity, „conversationalism‟, peer pressure and<br />
inclusion have been addressed. It is acknowledged that these issues can never be<br />
entirely eliminated but conclusions should reflect that fact.<br />
Conclusions in qualitative research should be derived from the data as systematically<br />
as with quantitative research. Clear contemporaneous notes should be made at the<br />
Purchasing Procedures December 2011
point <strong>of</strong> elicitation <strong>of</strong> participants‟ views such that they can normally be distinguished<br />
from any subsequent interpretative work done on such notes.<br />
<br />
<br />
<br />
<br />
<br />
It is good practice particularly in interview methods to allow the participant to check<br />
that the interviewer has correctly recorded the views expressed. This can be done by<br />
presenting a brief summary <strong>of</strong> main points.<br />
Consultants should be able to demonstrate how conclusions and recommendations<br />
follow from the data. The <strong>University</strong> will normally carry out an „evidence trail‟ for a<br />
small number <strong>of</strong> selected specific conclusions in each final report while respecting the<br />
confidentiality <strong>of</strong> the data.<br />
Vague or casual statements such as „The view was expressed that X” or “Some<br />
respondents did not wish to comment on topic Y” add little value and should be<br />
avoided. Ideally the percentage <strong>of</strong> respondents in interviews indicating a specific view<br />
should be highlighted where a precise question is asked and answer given. However,<br />
this should not be used to give the impression <strong>of</strong> quantitative rigour where this is not<br />
valid. Clear statements <strong>of</strong> “small minority”, “large minority” [i.e. less than half],<br />
“majority”, “large majority”, “almost all” or “all” should be used. If other<br />
conventions are used they should be clearly flagged up. Whatever conventions are<br />
used they should be used consistently.<br />
Reporting specific quotes from participants can be a good way a highlighting a key<br />
issue in a manner which captures attention and help the reader relate to a perspective<br />
other than their own. However there is a danger that these can skew perceptions<br />
inappropriately. „Illustrative‟ quotes should be used sparingly and should be<br />
representative. Report writers should avoid the temptation to foreground dramatic,<br />
extreme, witty or pithy comments when they are not representative <strong>of</strong> majority<br />
opinion 2.<br />
Statements which are only true <strong>of</strong> a sub sample should not be presented as being true<br />
<strong>of</strong> the sample as a whole. Equally, statements which are true <strong>of</strong> the sample as a whole<br />
should not be presented as true only <strong>of</strong> a sub sample.<br />
2.8 All consultancies will be evaluated and subject to audit<br />
As part <strong>of</strong> a commitment to continuous improvement, the <strong>University</strong> will assess the<br />
extent to which a consultancy brief has been met through a report from the<br />
commissioning manager normally to the commissioning managers own manger.<br />
2 Highlighting an unrepresentative but memorable quote early in a report but then presenting information that<br />
indicates the view expressed is not necessarily representative - to cover the author - is particularly poor practice<br />
Purchasing Procedures December 2011
3.0 Financial Regulations<br />
POLICY<br />
3.1 The Financial Regulations <strong>of</strong> the <strong>University</strong> apply to all consultancy contracts let by<br />
the <strong>University</strong>. Particularly important are those regulations pertaining to competition<br />
and pro<strong>of</strong> <strong>of</strong> value for money specifically:<br />
(a)<br />
Contracts over £5000 are let following at least three quotations being<br />
obtained.<br />
(b)<br />
Contracts over £50,000 are subject to a formal tendering process involving a<br />
minimum <strong>of</strong> four suppliers and the Group Executive Director <strong>of</strong> Finance‟<br />
approval<br />
(c)<br />
Contracts over £173,000 are subject to an EU tendering process and the<br />
<strong>University</strong>‟s approved authorisation levels.<br />
Where such conditions apply that compliance with a) or b) is not possible or<br />
impracticable then the approval <strong>of</strong> the Group Executive Director <strong>of</strong> Finance, via the<br />
Head <strong>of</strong> Purchasing must be obtained prior to the placing <strong>of</strong> any purchase order or<br />
contract (see 3.5). EU tenders are a legal requirement and as such the requirement<br />
cannot be waived.<br />
3.2 Contract signatures<br />
The <strong>University</strong> part <strong>of</strong> any resultant contract can be signed by the Faculty/Service<br />
approved signatory. For contracts greater than £5000, these can only be signed by the<br />
Group Executive Director <strong>of</strong> Finance. Contracts for signature should be forwarded in<br />
the first instance through the Head <strong>of</strong> Purchasing.<br />
3.3 Teaching Services, and Contracts Involving Members <strong>of</strong> Staff<br />
If it is proposed that existing staff members undertake additional duties outside their<br />
job description, then advice should be sought, in the first instance, via Human<br />
Resources, given that it is not <strong>University</strong> policy to engage existing staff on<br />
consultancy contracts.<br />
3.4 Standard Contract<br />
The‟ Standard Contract for the Purchase <strong>of</strong> Consultancy‟ must be used for all<br />
consultancy contracts over £1,000 in total value (repeat contracts where the sum <strong>of</strong><br />
the parts is over £1000 also require use <strong>of</strong> the contract). Requests for assistance with<br />
variations or prospective alternative contracts should be addressed initially through<br />
the Head <strong>of</strong> Purchasing.<br />
Purchasing Procedures December 2011
3.5 Single Source Tenders or Quotations<br />
The Financial Regulations require that all contracts let between £5,000 and £50,000<br />
are subject to the three-quotation rule. In the unlikely event <strong>of</strong> only one quotation<br />
being obtained, a full written explanation stating the reasons for this should be sent to<br />
the Head <strong>of</strong> Purchasing prior to any contract or order placement. The Head <strong>of</strong><br />
Purchasing will approve such contracts upon receipt <strong>of</strong> valid explanations.<br />
3.6 Relationship with Prospective Suppliers<br />
All members <strong>of</strong> staff are reminded <strong>of</strong> the <strong>University</strong> requirement for full disclosure <strong>of</strong><br />
any personal relationships with prospective suppliers at the earliest possible juncture.<br />
Purchasing Procedures December 2011
4.0 The Process: Hiring <strong>of</strong> Consultants<br />
Prepare<br />
Specification<br />
Check if internal<br />
resources are available<br />
No<br />
OVER<br />
£50,000?<br />
Yes<br />
Send specification to prospective<br />
consultants requesting quotation<br />
(minimum <strong>of</strong> 3 written quotes<br />
required)<br />
Receive and Assess<br />
Responses<br />
Contact Purchasing Office to<br />
Arrange formal tender<br />
Meet with successful<br />
candidate to discuss<br />
aspects <strong>of</strong> contract<br />
Prepare contract and<br />
send to Head <strong>of</strong> Purchasing<br />
if over £5k<br />
Send signed contract to<br />
consultant for signature<br />
Once returned raise<br />
PURCHASE ORDER ON<br />
AGRESSO<br />
Monitor contract against<br />
deliverables, cost and timescales<br />
As part <strong>of</strong> a commitment to continuous improvement, the <strong>University</strong> will assess the extent to which a<br />
consultancy brief has been met through a report from the commissioning manager, normally to the<br />
commissioning managers own manager.<br />
Purchasing Procedures December 2011
GUIDELINES<br />
5.1 Introduction<br />
The process <strong>of</strong> hiring external consultants can be difficult and resultant success <strong>of</strong> the<br />
consultancy can hinge on the strength, accuracy and arrangement <strong>of</strong> detail in the<br />
contract and contracting process.<br />
5.2 Specification<br />
The specification is a crucial part <strong>of</strong> any consultancy contract. This should contain:<br />
1. A full brief for the prospective consultants outlining the <strong>University</strong>‟s<br />
problem/needs/requirements.<br />
2. Detail <strong>of</strong> the scope and type <strong>of</strong> advice required from the prospective<br />
consultants.<br />
3. Detail <strong>of</strong> any constraints which the <strong>University</strong> wishes to place on the<br />
preferred solutions.<br />
4. Lists <strong>of</strong> tasks which must be performed by both <strong>University</strong> and prospective<br />
consultants.<br />
5. Timescales for the consultancy contract including expected start and<br />
completion dates.<br />
6. A list <strong>of</strong> expected tangible deliverables from the prospective consultancy<br />
(see points 4.7.1 and 4.9.1 for further details)<br />
7. References where appropriate.<br />
5.3 Internal Resources<br />
Once the specification document is complete, it is very important to consider the<br />
possibility <strong>of</strong> internal <strong>University</strong> resources providing solutions to the consultancy<br />
requirement.<br />
5.4 Preparation for Invitation to Quote/Tender<br />
5.4.1. The Financial Regulations <strong>of</strong> the <strong>University</strong> dictate the route that should be<br />
followed as the next step. Requirements where expected expenditure will be<br />
less than £50,000 can be covered by an invitation to quote. Requirements<br />
above this figure are subject to a formal tendering requirement.<br />
5.4.2. Invitation to quote will normally be instigated by letter. A copy <strong>of</strong> the<br />
specification and a copy <strong>of</strong> the standard consultancy agreement should always<br />
be sent with the letter. (See Standard Contract for the Purchase <strong>of</strong><br />
Consultancy)<br />
The letter should also contain the following statement:<br />
Purchasing Procedures December 2011
“Any contract for consultancy resulting from this invitation will be covered<br />
only by the terms and conditions attached. Other terms and conditions will<br />
not be accepted.”<br />
This has the effect <strong>of</strong> imposing the <strong>University</strong> contract at the earliest possible<br />
stage and responses can then only be sent subject to our terms and conditions.<br />
5.4.3. The letter should also formally request that the prospective consultant sets out<br />
in full all charges for undertaking the work including:<br />
1. A basis for the quoted fees.<br />
2. A statement <strong>of</strong> total fees<br />
3. Expenses: wherever possible all expenses should be an inclusive item<br />
<strong>of</strong> the total fees. Wherever this is not possible, see note 4.11.1 for<br />
further advice.<br />
5.4.4 When engaging with an external consultant it is important to establish whether<br />
he/she is VAT registered. If the consultant is VAT registered, VAT at the<br />
current rate will be incurred on the services supplied to the <strong>University</strong>, in most<br />
circumstances. In most cases the VAT will be a cost to the <strong>University</strong> (as the<br />
<strong>University</strong> cannot recover all <strong>of</strong> the VAT it incurs), and therefore this needs to<br />
be considered when determining the cost <strong>of</strong> a project. It is important to check<br />
the service contract with the consultant to determine whether the fees charged<br />
are VAT inclusive or exclusive. Where the consultant is not VAT registered,<br />
no VAT will be charged on their services to the <strong>University</strong>.<br />
5.4.5. Formal tenders are dealt with exclusively by the Purchasing Office and the<br />
Head <strong>of</strong> Purchasing will have responsibility for ensuring the contract is sound<br />
and complete i.e. minimising risk whilst ensuring expected benefits are<br />
delivered. Contact should be made at the earliest possible opportunity<br />
(extension 2220) to commence the tendering process, which can take up to 6<br />
months.<br />
5.5 The Tendering Process<br />
There are several advantages and some misconceptions regarding the tendering<br />
process where some clarification is beneficial:<br />
1. The actual tendering process need not be a long process, and indeed can be faster<br />
in some cases than a quotation exercise.<br />
2. After the production <strong>of</strong> the specification, the Purchasing Office will undertake all<br />
the work up to the point <strong>of</strong> assessing tender responses.<br />
3. The formal tendering process can be used for any value <strong>of</strong> contract over £50,000<br />
and can in certain instances be used for values below this amount.<br />
Purchasing Procedures December 2011
4. There is greater security and safety in the tendering process in that it forces<br />
suppliers to be very exact in their response.<br />
Please consult with the Head <strong>of</strong> Purchasing who can advise upon the Tendering Procedures<br />
(which can be found on the Purchasing Offices web site) for further information and assistance.<br />
5.6 Assessment <strong>of</strong> Responses<br />
5.6.1. Assessment <strong>of</strong> responses to either a tender or quotation exercise should be<br />
carried out against standard value for money criteria or technical merit as<br />
detailed within the specification.<br />
5.6.2. It may be necessary and in some cases advisable to request the potential<br />
supplier to undertake a verbal presentation regarding their submission, in order<br />
for both parties to clarify points and aspects <strong>of</strong> the intended contract. This is<br />
however entirely up to the individual or working party overseeing the<br />
assessment part <strong>of</strong> the process.<br />
5.7 Making a contract<br />
Prior to award <strong>of</strong> contract, it will be necessary to undertake some final negotiation<br />
with the prospective consultant. Points which require address could include:<br />
1. Method <strong>of</strong> authorisation for any additional work above the billing (invoicing)<br />
agreed for the original contract (if necessary).<br />
2. Method <strong>of</strong> payment and billing.<br />
3. Agree firm deliverables with the prospective consultant against which the success<br />
<strong>of</strong> the consultancy can be measured (see Schedule A <strong>of</strong> the Consultancy<br />
Agreement).<br />
4. Confirm timescales (see Schedule A <strong>of</strong> the Consultancy Agreement)<br />
5. Do you require the consultant to be exclusive to the <strong>University</strong> or to prevent them<br />
from supplying similar services elsewhere? If so contact the Purchasing Office<br />
who will obtain legal advice on your behalf.<br />
5.8 Contract and Signature<br />
5.8.1. Once both parties have agreed to all aspects <strong>of</strong> the consultancy and prior to<br />
raising a purchase order, a consultancy agreement should be completed and<br />
sent to the Head <strong>of</strong> Purchasing (See Standard Contract for the Purchase <strong>of</strong><br />
Consultancy) who will arrange Group Executive Director <strong>of</strong> Finance signature<br />
(refer to „Authorisation Levels‟).<br />
5.8.2. Once signed the contract should then be sent to the supplier for signature and<br />
following return a purchase order can be raised and issued.<br />
Purchasing Procedures December 2011
5.9 Monitoring <strong>of</strong> Consultancy<br />
It is important at stages <strong>of</strong> consultancies (particularly those <strong>of</strong> length in time) to assess<br />
progress against deliverables, timescales and costs. It must be remembered that the<br />
consultant has contracted to provide a timely and full service and any payment for<br />
service rests and should be linked to your satisfaction with the results. A timely<br />
warning if it is felt that targets are not being achieved may well rescue a situation,<br />
turning a poor result into something more acceptable. Critical but constructive<br />
honesty should be welcomed by most consultants. Therefore, monitoring or contract<br />
review meetings should always form part <strong>of</strong> the contract.<br />
5.10 Contract extension<br />
Any contract extension will necessarily change the terms and/or circumstances <strong>of</strong> the<br />
original contract. The change could be in respect <strong>of</strong> payment, fees, agreed delivery<br />
time, agreed deliverables, reporting mechanisms etc. The safest way <strong>of</strong> dealing with<br />
this on a contractual basis is to agree and raise a new contract stating the new<br />
arrangement. Any contract extensions shall be in compliance with the <strong>University</strong>‟s<br />
Financial Regulations and EU Tender Regulations.<br />
5.11 Travel expenses<br />
Travel expenses should always be negotiated into the contract sum agreed to be paid<br />
to the Consultant. On rare occasions this is not possible and it will be necessary to<br />
agree to pay daily travel and subsistence expenses on top <strong>of</strong> the contract sum. Staff<br />
are advised to use the current <strong>University</strong> travel expense allowances for staff as a<br />
guideline to what can be considered a reasonable basis for negotiations (Appendix 1<br />
for current rates), noting that expenses are revised annually. It is also important to<br />
constantly monitor all Consultant expense claims insisting that receipts are rendered<br />
with each invoiced claim<br />
5.12 Assistance<br />
Every form <strong>of</strong> assistance with any and all aspects <strong>of</strong> this contracting process is always<br />
available from any member <strong>of</strong> the Purchasing Office.<br />
6.0 Methods <strong>of</strong> payment<br />
There are only two methods which should be used to facilitate payment to suppliers,<br />
these being an Agresso purchase order / invoice or Procurement Card. When<br />
contracting with Consultants the preferred method <strong>of</strong> processing a payment will be<br />
through the Agresso Purchasing/Finance system, by the receipt <strong>of</strong> an invoice from the<br />
Consultant.<br />
Purchasing Procedures December 2011
Appendix 1 (see point 5.11)<br />
Current <strong>University</strong> staff rates are available on the Travel Office web site and are<br />
revised annually<br />
Travel Subsistence Rates<br />
Please note that consultant‟s travel expenses should be negotiated as part <strong>of</strong> the<br />
overall price package <strong>of</strong>fered for the contract <strong>of</strong>fered. Use <strong>of</strong> the above as an extra to<br />
a consultancy contract should only be considered as a “special” or where extra work<br />
is to be undertaken outside the contract. The above rates are presented as a guideline<br />
only, any rates agreed should be “gross” and inclusive <strong>of</strong> VAT.<br />
Purchasing Procedures December 2011
Appendix 2<br />
Advice on Differentiation Between Employee and Self-Employed Status<br />
Firstly, it must be emphasised that the distinction between a contract <strong>of</strong> employment and a<br />
contract for services is very important. It affects whether a person is liable to pay income tax<br />
under PAYE, the level <strong>of</strong> National insurance contributions paid, whether a person is entitled<br />
to Statutory sick pay and whether the person has the employment protection and other rights<br />
<strong>of</strong> an employee. The difficulty for employers in making this distinction is that even when<br />
both parties explicitly agree that the contractual relationship between them is to have the<br />
status <strong>of</strong> a contract for services rather than be governed by a contract <strong>of</strong> employment, this<br />
agreement could be challenged by HMRC. Such a challenge could involve HMRC imposing<br />
expensive financial penalties. In some purported self-employment cases the HMRC has<br />
claimed arrears <strong>of</strong> PAYE from the employer on the grounds that the reality <strong>of</strong> the relationship<br />
was that <strong>of</strong> employer and employee under a contract <strong>of</strong> employment. The <strong>University</strong> wishes<br />
to minimise the risk <strong>of</strong> this situation arising and, accordingly, wishes to ensure that the<br />
contractual arrangements entered into correctly reflect the status <strong>of</strong> that relationship as either<br />
one <strong>of</strong> employment or self-employment.<br />
This issue is not merely <strong>of</strong> hypothetical interest. In a recent case a <strong>University</strong> had to defend<br />
itself at an Industrial Tribunal case brought by a person formerly engaged by that <strong>University</strong><br />
on a self-employed basis who claimed that in reality he was an employee <strong>of</strong> the <strong>University</strong><br />
and should, therefore, enjoy specific employment rights and protections. Correspondence was<br />
also issued to the same <strong>University</strong> from the HMRC querying the self-employed status <strong>of</strong><br />
another individual paid by the <strong>University</strong> on a consultancy basis.<br />
Unfortunately, there is no simple checklist <strong>of</strong> factors which allow the distinction between the<br />
two categories <strong>of</strong> contractual relationships to be safely made. The courts have made<br />
judgements on individual cases based on an overall assessment <strong>of</strong> all the relevant factors in a<br />
particular case, accepting that not all the relevant factors are <strong>of</strong> equal weight or importance in<br />
any given situation.<br />
Being employed or self employed in one job does not mean that a person will have the same<br />
status in another job. A consultant could be employed and self employed at the same time. It<br />
is the responsibility <strong>of</strong> those engaging consultants to ascertain the correct status.<br />
The HMRC do have a useful online tool to try;<br />
https://esi2calculator.hmrc.gov.uk/esi/external-cod.html which provides a series <strong>of</strong> questions<br />
for you to answer, and then provides a guide to the consultants status.<br />
Employed or self-employed?<br />
A consultant answering „Yes‟ to all <strong>of</strong> the following questions may indicate employee status.<br />
1. Do you have to do the work yourself?<br />
2. Can someone tell you at any time what to do, where to carry out the work or when and<br />
how to do it?<br />
3. Do you work a set amount <strong>of</strong> hours?<br />
Purchasing Procedures December 2011
4. Can someone move you from task to task?<br />
5. Are you paid by the hour, week or month?<br />
6. Can you get overtime pay or bonus payment?<br />
A consultant answering „Yes‟ to all <strong>of</strong> the following questions may indicate self-employed<br />
status.<br />
1. Can you hire someone to do the work for you or engage helpers at your own expense?<br />
2. Do you risk your own money?<br />
3. Do you provide the main items <strong>of</strong> equipment you need to do your job, not just the small<br />
tools many employees provide for themselves?<br />
4. Do you agree to do a job for a fixed price regardless <strong>of</strong> how long the job may take?<br />
5. Can you decide what work to do, how and when to do the work and where to provide the<br />
services?<br />
6. Do you regularly work for a number <strong>of</strong> different people?<br />
7. Do you have to correct unsatisfactory work in your own time and at your own expense?<br />
The general advice is that wherever there is an element <strong>of</strong> ambiguity about the status <strong>of</strong> a<br />
proposed contractual relationship the <strong>University</strong> should commission the work under a<br />
contract <strong>of</strong> employment so as to eliminate vulnerability to subsequent challenge by either the<br />
HMRC or the DSS in respect <strong>of</strong> PAYE contributions or National Insurance contributions<br />
respectively. Please do not hesitate to contact Margaret Good, the Payroll Manager (x 2213 /<br />
MEGood@uclan.ac.uk) whenever you are in need <strong>of</strong> advice as to the appropriate nature <strong>of</strong><br />
any proposed contractual relationship.<br />
Finally,<br />
All formal <strong>of</strong>fers <strong>of</strong> employment and contracts <strong>of</strong> employment may only be issued by Human<br />
Resources (with the authority <strong>of</strong> the Head <strong>of</strong> Service).<br />
and<br />
When you propose to enter into a contract for services you must first send a new supplier<br />
account request to the Purchasing Office.<br />
Purchasing Procedures December 2011
Purchasing Procedures December 2011
23: <strong>PURCHASING</strong> FLOWCHART<br />
Does a contract exist for the goods/services you wish to purchase?<br />
Yes<br />
Place your order by<br />
Purchasing Card or on<br />
Agresso<br />
Don‟t know<br />
Check on the Purchasing Office website<br />
buyers guide<br />
Buyers Guide<br />
or call 2223/5 for advice<br />
No<br />
How much are you<br />
spending singly or<br />
cumulatively<br />
excluding VAT?<br />
Purchasing Card<br />
Typically used for<br />
stationery, mobile<br />
phones and any “low<br />
value, one-<strong>of</strong>f”<br />
purchases. Generally<br />
limited to £1000 per<br />
transaction and £5000<br />
per month<br />
Agresso<br />
Ensure supplier set up on Agresso before ordering. To set a supplier<br />
up complete form 1 and email to purchasing.<br />
Your order should contain:<br />
Price<br />
Delivery date<br />
Delivery charge if any<br />
Delivery address<br />
Detail your name and tel no for queries<br />
Anything the supplier wishes you to quote on your order eg<br />
ref no‟s.<br />
Ensure that you only trade on the <strong>University</strong>‟s terms and conditions.<br />
If a supplier wishes you to accept their conditions contact<br />
Purchasing.<br />
Up to £30 £31 - £5,000 £5,001 - £50,000 £50,001<br />
upwards<br />
Petty cash<br />
or the<br />
Purchasing<br />
Card<br />
should be<br />
used.<br />
Obtain an<br />
estimated price<br />
from the supplier<br />
or contact<br />
Purchasing to<br />
obtain prices on<br />
your behalf<br />
Obtain 3 written<br />
quotations on the<br />
UCLan quote<br />
form or complete<br />
Purchasing<br />
request form and<br />
Purchasing will<br />
obtain on your<br />
behalf<br />
Tender<br />
procedure<br />
contact<br />
Purchasing<br />
Office<br />
as soon as<br />
possible for<br />
advice<br />
Purchasing Procedures December 2011
Purchasing Procedures December 2011