Finance Department

Procurement

Procurement exist to help the University achieve our objectives and deliver the best results for the best value expenditure. Our role is to assist our staff in dealings with suppliers and to work with them to help source the goods and services needed to do their work.

Procurement do not just provide value for money, but also ensure an operational fit between the needs of the University, our students and staff, and the solutions available from the market. 

In the current day and age, there is high scrutiny of expenditure and a need to reduce costs. Procurement therefore:

  1. Provide procurement services and advice for all spend
  2.  Work collaboratively to ensure we get best value for money
  3.  Analyse spend and risk
  4.  Select suppliers to reduce risk
  5.  Review pricing, costs, terms and conditions and performance
  6.  Work collaboratively to drive performance and value for money
  7.  Deliver operational support
  8. Review how the University works with our suppliers

Approximately £54m a year is spent with external suppliers and contractors. Procurement exist to ensure that that money is spent in a manner that is demonstrably best value in terms of performance, delivery of outcomes, reduced cost and customer satisfaction. 

This includes involvement at every step of a requirement, from the early stages where a need is identified, to the last day of a multi-year contract, and the subsequent arrangement of a new contract. Our intention is to deliver a co-ordinated, business wide approach that meets the aims of the corporate plan.

The Procurement team at the University use an online tender portal, eu-supply.com to publish all our procurement opportunities over the value of £25,000. Suppliers should register their details at: https://uk.eu-supply.com/login.asp

If you wish to become a supplier to us, please use the Contact tab and we will respond if there is a requirement we may wish to pursue.

FAQs

Our work

Procurement's aims are achieved by the following:

  • Making Procurement a key business activity
  • Carrying out procurement at the right time with the right processes by the right people
  • Delivering performance
  • Maintaining a supplier database
  • Working with suitable suppliers
  • Using appropriate technology (such as a purchase to pay process and a purchase card process)
  • Getting the best from the market
  • Reducing repeated activity

In practical terms, this involves working with Procurement whenever there is:

  • A need for a new contract or requirement (above a set value)
  • Issues with any existing supplier
  • Reviewing supplier performance
  • When any existing contract is nearing expiry or end of the project

Procurement will work with our staff internally to ensure that our requirement is specified correctly. We will calculate a realistic project timeline and guide the University through the legislation and regulations. In addition risk, while it cannot be eliminated, is mitigated and controlled through Procurement involvement.

Procurement also provide a toolkit of documents and processes that allows us to practically award contracts in a legally compliant manner. This includes using the best route to market, selection of suitable suppliers, bid documents and the solution, evaluation, and financial modelling so proposed savings and other benefits can be judged.

Finally, Procurement also gather intelligence regarding suppliers and the wider market, as well as providing specialist guidance on pre-award and post-award activity, reviewing contracts and working to create valued longstanding relationships.

Please note: The University is bound by Public Sector Procurement Regulations. The University will use Frameworks and Supply Contracts that are compliant with UK PCR Legislation, and follow established Tender processes. Suppliers may have to complete Qualification Documentation before being invited to tender for our requirements.

Why procurement?

Our role is to provide a service to the rest of the University in choosing the correct solution to meet business requirements. A large percentage of our spend is with external parties providing services to us, and the role of Procurement is to manage and package this spend and our requirements in the way that provides the most advantage to us.
One of our roles is to ensure that wherever practicable, spend with external suppliers occurs in a way that:

  • Delivers successful outcomes
  • Delivers customer satisfaction (to the University and our students)
  • Delivers best value for money

Not following the requirements of legislation, regulation and internal governance could have a high profile, and detrimental, effect on the University. This could include:

  • Contracts being cancelled through legal action
  • Payments for lost profits to unsuccessful suppliers
  • Breach of Health & Safety laws in event of an incident or near miss
  • Prosecution for breach of the law
  • Poor performance
  • Expensive and / or unnecessary works
  • No transparency in decisions to use suppliers
  • No spend controls
  • False invoicing by fraudulent suppliers

In practical terms, the University could, if not operating co-ordinated Procurement, have multiple suppliers for common items, be paying a wildly varying price for thousands of items, and running multiple projects in short succession by not co-ordinating works.

Please note that all the financial values and thresholds, including the UK PCR Legislation, are net of VAT and VAT does not apply in calculating these figures.

How does Public Sector Procurement differ from the Private Sector?

Public Sector Procurement is bound by a different set of legislation and regulation from the Private Sector. A public sector organisation has as its primary purpose the intention to serve the public good; a private sector organisation has as its primary purpose to deliver value and revenue to shareholders and owners.

The University needs to act in a way that is fair and transparent as it is responsible to the taxpayer and the public for its actions. In practical terms, this means that:

  • Specifications must be well written
  • We must clearly state how we will make a decision
  • We cannot change the criteria / specification during a project
  • We cannot negotiate on price
  • We can clarify the proposal and if necessary explore options
  • Lowest price is not the only factor in a decision
  • Large requirements must comply with PCR legislation
  • Unsuccessful bidders have the right to know why they did not win
  • Instead of being accountable to shareholders we can be accountable not only internally but to the public through the Freedom Of Information Act

The UK PCR legislation exists to provide open and transparent processes so that suppliers have a fair and equal opportunity to apply for the work. It is not optional, but is a mandatory piece of legislation with considerable penalties for non-compliance.

The University takes these responsibilities very seriously and a breach of them could result in serious disciplinary action.

What are the PCR / FTS procedures?

UK Legislation mandates certain processes to follow once spend reaches certain limits. The limits are calculated over a likely four year spend.

The limits are currently:

Goods & Services - £189,330

Works - £4,733,252

They are reviewed on a regular date and likely no earlier than 31st August 2021. Works can be defined as work that adds, alters or changes the fabric of a building, including construction and redevelopment.

The value of the contract is not the same as our spend. A parking contract may only cost us £1,500 a year, but the total value to the Parking provider including clamping fines, fees, tickets, and towing / release costs may be £200,000 worth of business a year – necessitating a UK FTS process.

As a general rule, if the spend is in all likelihood to exceed around £175,000 during the lifespan of the project, all bodies covered by Public Sector Law are required to run an FTS compliant process. These processes can be time-consuming and demand considerable resources, so existing contracts can often be used as a basis for swifter, less intensive competitions that comply with the regulations through the use of existing Frameworks and contracts established by other bodies.

How long does an FTS process take?

The FTS system was introduced at 11pm on 31st December 2020. An FTS process is not necessarily quick, and there are minimum timescales mandated by the procedures. It is therefore important to plan ahead and sometimes years in advance if an FTS compliant Procurement exercise needs to occur.

We can award contracts outside of this process by use of a pre-existing Framework Arrangement. Procurement will work with you to select the most appropriate route through the legislation which complies with our internal governance processes and best practice. For all spend over £100,000 you should prepare a Procurement Plan detailing your intended project.

The Four FTS Routes:

Please note this guidance is preliminary on the basis of just-implemented legislation and may be reviewed over time.

Open Procedure: This procedure allows any and all interested parties an opportunity to bid for the requirement, without any element of vetting, checking, or other due diligence requirements being satisfied. It is generally not recommended. There is no limit to the number of interested parties we will have to consider.

Restricted Procedure: This is used in most cases. An advert is placed on Find A Tender requesting Expressions Of Interest (EOIs) from potential providers. All interested parties are then sent a Suitability Questionnaire (SQ). An SQ will be assessed and if the supplier meets our required standard, an ITT / RFQ (Invitation To Tender / Request For Quote) is issued.

The RFQ informs the supplier of our requirements / specification, and they submit a clear and transparent proposal that offers demonstrable value for money. The tender is evaluated and a successful bidder chosen.

Competitive Dialogue: A procedure to be used for complex contracts where other procedures cannot deliver results. Potential suppliers responding to a notice in FTS are subject to a Suitability Questionnaire. Shortlisted suppliers are invited to participate in a competitive dialogue. The University will discuss potential solutions with the suppliers to explore what could be possible. When the dialogues are completed the suppliers are invited to submit final tenders. Following submission of the response no further negotiation with the contractors can take place. This is not normally used.

Negotiated Procedure: This is reserved for the most complex of requirements, which require major innovation and where no previous similar solution exists. This Procedure can also be used when the other routes chosen have failed to provide a suitable solution. It is rarely used.

Exceptions:

There are two circumstances where the FTS procedures do not apply, being:

  1. Secret – where national security may be compromised
  2. Emergency – where an unforeseeable event such as a disaster has occurred and there is an urgent need to respond

If these circumstances may apply, only the Head of Procurement can approve the exemption from FTS circumstances.

What is Aggregation?

FTS Legislation mandates certain processes to follow once spend reaches certain limits. The limits are calculated over a likely four year spend but for more complex projects, such as a new build, PFI deal, or IT project the period may be longer. Always check with us if there is any doubt.

It is likely that the University will require energy, water, and IT for decades to come. However, given the nature of such markets, we should test the market regularly.

At the start of any contract, we are not just making a decision about how the business works for the immediate future, but also for the next few years and also the position the business is likely to be in for 10-20 years from now.

In determining the value, we also need to consider:

  • The type of works, service or goods being performed
  • Current and future organisational requirements

For example, dividing a contract into a smaller size with the implicit purpose of avoiding the rules is seen negatively. If your spend is £50k or more in any one year then in all probability an FTS process is necessary. If in doubt ask the team for advice.

Additionally, if it is practical to combine work together, or the same supplier may be able to provide multiple work streams, then consider doing so.

Please note these aggregation rules apply where the University is seen legally as one business / controlling entity.

For Works, purchasers are required to estimate the value of the whole works project, irrespective of whether or not it comprises a number of separate contracts for different activities.

For guidance on the product categories you can use, the EU published a directory of CPV (Common Procurement Vocabulary) codes available at simap.ted.europa.eu/cpv which covers all the product categories, from crustaceans (if you want to buy £175,000 worth of lobsters and crabs), to spaceships, space launchers, and satellites.

What is an SQ and an RFQ / RFP / ITT?

SQ stands for Suitability Questionnaire. An SQ exists to ensure we do not work with an incapable supplier who is a risk to the University. Questions include areas such as:

  • Financial Health
  • Licences to trade
  • Ability to deliver
  • Environmental and Sustainability
  • Equal Opportunities
  • Health and Safety
  • Insurances
  • Memberships of Professional Bodies
  • Past performance on similar projects
  • Any other matters relevant to the delivery of the requirement

An SQ is most often used as a tool for short listing businesses. Only the top scoring businesses make it to RFP / ITT. An SQ would be used:

  • When applying to join an approved / preferred supplier list
  • As the first stage in a restricted or negotiated tender process

The role of an SQ is to, in effect, create the ‘starting grid’ for eligible companies to compete for our work.

What is an ITT / RFQ / RFP?

ITT stands for Invitation to Tender. RFP / Q is a Request For Proposal / Quote.

This is a formal procedure for generating offers from different bidders looking to obtain a contract for the supply of goods, services or works. In a restricted or negotiated tender process the ITT follows the SQ and therefore forms one of the final parts of the tender process.

The ITT / RFQ / RFP differs from an SQ in that it asks for details of the pricing structure and asks for further information regarding the delivery of the contract. It is forward looking, exploring how they will meet our requirements.

Its role is also to ensure that the proposals can easily be evaluated, with a structure for pricing that is transparent and equal between different companies.

It will generally contain:

  • Introduction
  • Scoring and Evaluation information
  • Specification of requirement
  • Proposals to deliver requirement (completed by bidder)
  • Pricing structure (completed by bidder)
  • Additional information / supporting documents (completed by bidder)
  • Terms and Conditions

The University has a standard format ITT / RFQ / RFP document which is available on request.

 

 

 

 

Finance Department, The Registry, University of Kent, Canterbury, Kent, CT2 7NZ

Contact us - Students | Staff | External, or Fax: +44(0)1227 827024

Last Updated: 20/10/2022