Suppliers' guide
The aim of this guide is to give suppliers an insight into how the Department goes about buying its goods and services. It should also enables suppliers to identify potential opportunities to sell to the Department.
Contents
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Introduction
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About the Department
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Procurement organisation
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Main purchasing activities
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Procurement policy & strategy
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Public procurement rules
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Terms & conditions of contract
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Contract strategy & tender
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E-purchasing
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Contacts
The aim of this guide is to give suppliers insight into how the Department goes about buying its goods and services. Hopefully it also enables suppliers to identify potential opportunities to sell to the Department.
BIS champions business at home and abroad. It specifically helps companies by promoting enterprise, innovation and creativity. It invests in science and technology. It also stands for the rights of working people and for fair and open markets in the UK, Europe and the world.
In particular BIS provides the following guidance for businesses:
- helping small and medium-sized enterprises (SMEs) through both ACAS and Business Links;
- the launch of the Manufacturing Advisory Service;
- extending the Small Firms Loan Guarantee Scheme; and,
The future challenge for the Department is to:
- continue the improved transformation of business support;
- implement a new improved skills strategy; and,
- continue to promote the activities of the Small Business Service and U.K. Trade and Investment.
The BIS website provides a great deal more information on how the Department operates.
BIS has a mixed procurement organisation.
At the centre is the Procurement Policy and Services (PPS) branch. PPS is staffed by professionally trained people and provides a single and consistent approach to procurement within the department and its Executive Agencies. PPS is responsible for the provision of guidance to BIS procurement staff on all aspects of procurement. It has close links with the Office of Government Commerce (OGC) and promulgates procurement policy and strategy. PPS does no buying itself.
There are several “centres of expertise” that are the intelligent customers for specialised areas of procurement. These include Information Technology (IT) facilities, estate management, publicity and advertising.
There are also Management Units that make up the Department’s structure. There are about 65 Management Units and they have the authority to purchase in their own right. They also put in place Framework Arrangements for common goods or services that can be accessed by the entire Department.
The Department has offices and establishments throughout the United Kingdom. These not only include the offices of the Official Receivers (part of the Insolvency Services) but also Government Offices for the Regions, which are jointly staffed with officers from other Departments.
The Department and it’s Executive Agencies spends over £500 million each year on various activities.
Much of this, upward of 80%, is on services. Such services are very diverse in nature and cover activities such as management and consultancy services, cleaning, facilities and travel.
A great deal of this is achieved by devolving budgets to line management (including those centres of expertise referred to earlier) whereby they undertake the purchasing cycle on their own behalf.
BIS is currently adopting a new procurement strategy. It faces several challenges including the following:
- to realise savings from e-purchasing
- to raise the profile of Procurement within BIS
- to act on the findings of both the Gershon review and the Lyons report
- to improve Purchasing techniques and Contract management throughout BIS
- to implement the government's transparency agenda
The Department, in common with other central Government Departments, as well as many other public sector bodies, is subject to procurement legislation which implements European law. They are particularly important when the value of the items to be purchased is estimated to cost over EU threshold values (currently from £101,323 upwards).
The intention behind the Procurement Directives was to provide a single market with the following objectives:
- ensure the free movement of goods and services throughout the European Union;
- develop effective competition for public goods services and works;
- ensure transparency of purchasing procedures and practices; and
- adopt standardised technical specifications.
The estimated value of the goods, services or work being purchased, generally dictates whether the requirements to purchase are advertised in the Official Journal of the European Union (OJEU). These threshold values vary from time to time - usually every two years.
The Public Procurement rules (set out in the Public Contracts Regulations 2006) also dictate that certain timescales must be adhered to when advertising. Although there are a variety of routes that can be followed, the Department has chosen as a general policy to follow the restricted procedure. Expressions of interest are called for and following the evaluation of a pre qualification questionnaire a short list for inviting tenders is then drawn up. The probable number of companies to be invited to tender will be advertised within the original notice.
Notices are published electronically in Tenders Electronic Daily (TED) as well as appearing in the Business Information Publications magazine Government Opportunities (GO).
Transparency Agenda
The government has set out the need for greater transparency across its operations to enable the public to hold public bodies and politicians to account. This includes commitments relating to public expenditure, intended to help achieve better value for money.
As part of the transparency agenda, government has made the following commitments with regard to procurement and contracting
- all new central government ICT contracts over the value of £10,000 have been published in full online from July 2010
- all new central government tender documents (including advertisements, pre qualification questionnaires, invitations to tender and contract terms and conditions) for contracts over £10,000 are to be published on a single website from September 2010, with this information being made available to the public free of charge
- new items of central government spending over £25,000 are to be published online from November 2010
- all new central government contracts are to be published in fill from 1 January 2011
Suppliers and those organisations looking to bid for public sector contracts should be aware that if they are awarded a new government contract the resulting contract between the supplier and the government will be published. In some circumstances limited redactions will be made to some contracts before they are published in order to comply with existing law and for the protection of national security.
The Department has two sets of standard terms and conditions, which it contracts to. These are designated in the following documents:
Both sets can be found on the Department’s Procurement website pages. It is the Department’s policy to contract only using these Terms & Conditions except when a bespoke set is drafted by Departmental lawyers for particular circumstances.
When invited to submit a bid or quote by the Department this invitation will be accompanied by the Departmental set of terms and conditions for the type of contract to be awarded. In addition, a specification and invitation to bid/tender letter will be included. Bidders are expected to accept the Departmental terms. An objection in any way to these or any part of them risks causing a bid to be rejected.
It is important to stick to the deadline given in any tender invitation. Bids which miss the deadline will be rejected.
The BIS procurement strategy dictates that procurement should be carried out by the business unit best placed to act as the Intelligent Customer. As described earlier, common areas of specialist requirements such as Information Technology (IT) are dealt with centrally and items such as stationery are purchased through Framework Arrangements. Other requirements are dealt with directly by units although the intention is to place more requirements on central Frameworks wherever this is practicable.
This mixture of centralised and de-centralised procurement enables the Department to take advantage of economies of scale without the need for a centralised procurement bureaucracy.
The main principle of government procurement is to obtain value for money through competition. The current rules we operate under, described in detail in the Department’s Procurement Manual, are that small value items i.e., less than £500 can be purchased without competition. The Department operates a Procurement Card which is a VISA badged card enabling purchases to be made from VISA compliant firms. Anything estimated to cost between £500 and £10,000 can be purchased provided that three or more written quotations are considered prior to a procurement decision being made. For amounts above £10,000 formal tendering normally applies. Where the total estimated cost is over the current European Union (EU) Threshold (currently from £101,323) the rules in the Public Contracts Regulations 2006 are followed.
All units will adhere to a tendering policy that meets the following criteria:
- avoids over-specifying a requirement
- defines specifications wherever possible in terms of output
- invites a sufficient number of tenderers to ensure fair competition but allowing those tenderers a fair chance of winning
- provides that all tenderers will be treated equally and in a non discriminatory way and that the Department acts in a transparent way
A bid will be successful if it is the one that offers the Department overall best value for money (the most economically advantageous offer). Part of the specification should contain the evaluation criteria used for assessing bids. All bids will be judged against the same criteria.
A contract will be awarded as soon as possible after the evaluation process is completed. The assessment process may involve an interview whereby the potential supplier has the opportunity to provide greater details and respond to questions by a panel of officials.
BIS will provide unsuccessful bidders with the reasons as to why a bid failed.
The Department carries out electronic trading. It has used the Government Procurement Card for the last seven years as a first step in this direction. Online purchasing from catalogues is in place. This covers a limited user base within the Department and includes items such as stationery, IT, mobile phones and training.
For all procurement related enquiries please email: procurementpolicy@bis.gsi.gov.uk.
