Agenda item

To receive an update on the activities of the Council’s Procurement function including  proposed changes to the Contract Standing Orders and following a review relating to  changes to Procurement legislation.

The Panel received a report on the Council’s updates to Contract Standing Orders following a review in alignment with the upcoming changes to procurement regulations.

The Strategic Procurement Manager summarised the report and explained that the UK’s public procurement regulations were being replaced with one set of regulations under the Procurement Act 2023 and that a new regime would come into force, following a delay from government, in February 2025. The Council’s current Contract Standing Orders document was introduced in March 2018 and had not been subject to major scrutiny or review since, therefore the Panel were now asked to consider the proposed changes to the Contract Standing Orders and provide their comments to Cabinet.

The Panel were informed that the key proposed changes to the Contract Standing Orders were to Increase the transparency threshold (at which we advertise contracts openly to the market) from £50,000 to £100,000. To require all requests for quotation to include at least one supplier from the local and surrounding areas. To increase scrutiny through a Breaches order, in which all known or discovered breaches of the Contract Standing Orders are reported to the Statutory Officers Group and the Audit Committee.

It was explained, on the requirements for quotations to include at least one local supplier, that these suppliers would be sought from the BH, SO and SP postcodes and that ‘where possible’ these local suppliers would be used.

On quality control and prevention of corruption, the Panel heard that the procurement team run spend analysis reports three times a year whereby all service managers scrutinise expenditure within their services. When the new regulations go live, the Council will legally be required to complete conflict of interest assessments for procurement above the national threshold. Furthermore, there are quarterly contract reviews of contractors undertaken and these are measured alongside the Council’s Key Performance Indicators.

Following a question on the new maximum percentage value of contract modification, the Strategic Procurement Manager relayed the percentages permitted by the regulations, and explained that all contract modifications must go back through the service manager, be signed and recorded and meet all of the relevant financial regulations. It was requested that, should a contract modification result in the contract value exceeding the next threshold, the relevant authorisation for that threshold should be obtained. 

On breaches, it was reported that these, along with waivers, will be reported annually through the Audit Committee for transparency and would form part of the internal audit work programme, if approved. From this, the reporting of breaches would be firmed up and regularised, starting with reports to senior officers.

On the proposed thresholds for works, goods and services between £25,000 to £100,000, it was heard that this would be undertaken, as a minimum, by way of an e-quotation from three suppliers, via procurement, where a panel would then score the bids alongside a scoreboard. This would enable more time and focus to be given on the higher risk contracts of over £100,000.

On emergency works, the Council has a number of framework agreements set up, whereby the procurement process has been complete but the Council can call off from that framework agreement at any time depending on emergency work requirements.

Following a question on indemnity, the Panel were reassured that as part of the evaluation stage, a financial health check is undertaken on the supplier, whereby they must ensure that they have appropriate assurances in place. Also, a contract could be terminated if the contract managing process finds that the supplier fails to meet its KPI targets for two quarters. Feedback on suppliers from staff and residents would also be captured and evaluated.

The Panel were reassured that the Council had indemnity clauses in place. 

Following a question from a Panel member, it was heard that contracts issued under the value of £15,000 would fall under the review of the normal, annual cycle through the accountancy team and all budget holders who sign off the contracts.

The Panel were informed that those staff members who were nominated as contract administrators, who undertake both the procurement and management of contracts, would receive further training to understand and deliver the changes in the legislation.