Waverley Borough Council Home Page Waverley Borough Council Home Page

Waverley Borough Council Committee System - Committee Document

Meeting of the Environment Overview and Scrutiny Committee held on 14/11/2001

A Procurement Strategy


Definition of procurement

Procurement is the process by which the Council acquires resources to be employed in the delivery of services to the public. This process does not simply include the letting or award of a contract; it starts with the establishment of service needs and finishes with the end of the useful life of an asset or the end of a contract for service delivery.

The need for a Procurement Strategy

DETR circular 10/99 states that, under Best Value, all local authorities should have a Procurement Strategy. It is also an expectation of the Audit Commission, including the Best Value Inspectorate.

In order to meet the requirements of Best Value, the Council will need to demonstrate that it has considered all relevant options for the future procurement of a service and has chosen the option that presents the best combination of a number of factors so as to give the best value option. The Council's Procurement Strategy sets out how the organisation will go about making and implementing such choices.

Amongst other things, a Procurement Strategy should describe the contribution which procurement will make to the fulfilment of an organisation’s Corporate Strategy. The Strategy therefore sets out the values and issues to be taken into account when a procurement decision is taken.

Several key Council services are currently provided by external contractors. Contractors need to be made aware of Council policies and aims and must be encouraged to work with the Council in achieving them. Around 9m of the revenue budget is spent on contracts or in support of voluntary and community organisations in the direct provision, or support thereof, of services to the public. Additionally the capital programme contains projects which are to be the subject of contracts with private companies.

This Strategy is therefore intended to bring conistency in decisions on how the Council will procure and manage services in order to demonstrate good practice.

The Strategy is to be backed by a series of detailed guidance notes and matrices, which will be acknowledged by Contract Standing Orders with Respect to Contracts. A regular review of guidance notes will take place, and a change will not require a change to Standing Orders.

Objectives of the Council's Procurement Strategy

The Council’s Strategy will ensure that:

o procurement choices reflect Council policy objectives
o the best value option is identified
o current best ethical and contractual procurement practice is followed at all levels within the Council
o resources are used effectively, efficiently and economically
o there is a consistency in the Council's procurement decisions and all Council policies are taken into account e.g. sustainability and environmental issues
o services are reviewed using consistent evaluation factors
o procurement skills are identified and used effectively, taking account of training needs
o procurement is seen as an integral part of the Council’s activities
o external procurement rules are complied with e.g statutory provisions, EC rules.

What the Strategy isn’t…

The Procurement Strategy is not intended to be a procedure manual. Rather, it gives an overview of policy and strategy. Other documents provide the detail: * Documents marked are available on Lotus Notes Databases.

The Strategy is not designed to be overly prescriptive. It seeks to recognise that the nature of Council procurement is diverse and choice and judgement will be required by service managers.

The Procurement Strategy and Council objectives

The Council’s approach to procurement will reflect our corporate values and objectives. Table One illustrates the relationship between specifiic Council objectives and the Procurement Strategy. This is not the limit of the importance of procurement; indivdual procurement exercises will also need to reflect specific service objectives and issues of:

o quality
o price
o environment and ethics.

Table One: Council objectives and procurement

Council objectiveImplications for procurement
Consultation will be used in order to consider priorities and performance targets.Contracts, partnership agreements and other forms of agreement will contain performance targets and will contain agreement as to how performance is to be measured and monitored. Advice from appropriate sources may be required e.g. consultants.
The Council will ask basic and challenging questions as part of each Service Review including “who can best provide the service?”.Procurement decisions will have to take account of a variety of factors which will lead to identification of the best value option, including market research. The Council’s Guidance on the Conduct of fundamental Service reviews must contain adequate and clear guidance.
The Council will work with Social Services, the health authorities and the voluntary sector to provide better co-ordinated service delivery and to improve services.Procurement decisions need to encompass co-ordination issues, and contract documents and agreements need to specify requirements whilst protecting the interests of the Council.
Council homes will continue to be repaired promptly and to a good standard.Contracts and purchasing decisions need to take account of quality as well as price, but must also take account of legal liabilities.
Waverley’s LA21 Strategy sets out sustainability-related policies, including environmental, social and economic factors to be considered when making decisions, looking at procurement from the “whole life” perspective.Procurement decisions must include consideration of environmental, social and economic implications throughout the whole life of the project. Products acquired should be looked at in terms of “the cradle to the grave”, taking account not just price but efficiency e.g. energy efficiency.

Procurement decisions and documentation must reflect the Council’s targets.
Services will be improved or costs reduced where studies show that service or financial benefits can be achieved.Procurement decisions must pay regard to the future impact upon the Council’s budget and give the best value solution, taking into account of any efficiency savings targets.
The Council will improve practice in procurement and contract management so as to obtain value for money from its suppliers and service providers.Procurement practice needs to keep abreast of current developments and needs to be realistic and practical. It should provide scope to act in emergencies in ways commensurate with how the Council’s private sector contractors operate.

Best practice in procurement and contract management must be applied consistently with adequate back-up in the form of training, and advice from Legal Services and Internal Audit.

Contract documentation must be clear, and standardised specifications and contract conditions should be used which provide for monitoring and management by the Council during the currency of the contract.
The Council will review, reassess and evaluate regularly its property portfolio.Property acquisitions and disposals, together with contracts for building/alterations, need to take account of the effect upon the Council’s finances.

The Procurement Strategy and Best Value

Procurement is essential to the delivery of best value:

o it will play a major part in delivering the plans and strategies set out in Waverley’s Corporate Strategy “Waverley – A Fresh Future – The Four-Year Plan 1999-2003” and its successor
o it is fundamental to the "Compete" element of Fundamental Service Reviews which must be addressed as part of such reviews
o effective procurement should ultimately result in improved service performance.

Procurement needs to be incorporated as a central component in the management of the Council’s services.

Performance Indicators and targets

Contracts and service agreements will include relevant performance indicators and targets.

An annual review will be undertaken to ensure that this Strategy is being consistently applied.

Fundamental Service Reviews may result in recommendations for action and set targets for economies and value for money improvements that may only be addressed through procurement activities.

Communication of the Procurement Strategy

The Strategy will be communicated through the following means:

a statement in the Best Value Performance Plan (BVPP)
statements in service plans
on the databases on Lotus Notes and the Council’s Web site
J Standing Orders with Respect to Contracts and Financial Regulations
J a Green and Ethical Procurement Guide
training (the need for which will be considered as part of the Fundamental Service Review programme)
auditing and monitoring processes.

Review of the Procurement Strategy

The Procurement Strategy must be reviewed annually for its suitability and usefulness:

J initially the Strategy will be a first release, and may be reviewed in the light of experience aising from Fundamental Service Reviews and in the light of achievement of, and changes to, Council policies
J through the BVPP and, in future years, the Community Plan
J through the appraisal process for relevant officers.

This review will be undertaken by (TO BE DECIDED).

The Council will also subscribe to any professional organisations from which it will be able to keep abreast of current developments and best practice.


Roles and responsibilities

Procurement decisions need to take account of Council policies and procedures, and will affect people at all levels within Waverley.

Member involvement

The Council will approve not only the Procurement Strategy but also Standing Orders with Respect to Contracts and Financial Regulations and the Green and Ethical Procurement Guide.

Members will determine the Council’s overall approach to procurement, reflecting their three roles:

J executive role: the executive is tasked with implementing Council policy, and procurement is a key implementation process
J scrutiny role: members will consider the performance of the procurement process and of procured works, goods and services; the Standards Committee will monitor adherance to codes and rules
J representative role: members are key stakeholders in local services and will be consulted on contract strategy and service delivery as part of the best value process
J the reports prepared at the end of Fundamental Service Reviews will be presented to Members for consideration and ultimately approval.

The forthcoming review of Standing Orders with Respect to Contracts will define the role of Members and Directorss in the procurement process. The Scheme of Delegation sets out the powers of officers and members alike.

Codes of Conduct for Members and Council staff set out the standards of behaviour and conduct expected, and in particular requires for the disclosure of interests in respect of contracts or contractors.

For major contracts, Directors will report to members at key milestones of the procurement process, in accordance with Standing Orders with Respect to Contracts and the Council’s Financial Regulations.

Service/Contract Managers will manage the procurement process in line with the Procurement Strategy and other internal and external procurement rules

Best Value Review lead officers will critically evaluate alternative service delivery options within best value reviews.


The following “roles” have been identified as supporting/implementing this Strategy.

Management Board will consider any proposed revisions to the Procurement Strategy and Standing Orders with Respect to Contracts and the Council’s Financial Regulations. Directors will bring any procurement issues with a corporate dimension to the attention of Board.

Any relevant support services will need to be involved at an early stage in the revision of the Strategy and supporting guidance notes.

Legal Services will provide assistance and advice on legal matters relating to the procurement process, including advice on contract documentation and relevant legislation. Advice may be given either by Waverely’s own legal staff or by external legal specialists as engaged by the Head of Legal Services.

The Finance Department will ensure Standing Orders with Respect to Contracts and the Council’s Financial Regulations are reviewed and recommended amendments are reported to Board for approval before being presented to Members for adoption, and will provide financial analysis and advice at short-listing and evaluation stages. Such advice will include, but will not be limited to, matters over sureties and insurance.

The Council’s Monitoring Officer has a responsibility to ensure that contracts are entered into in a correct and appropriate manner. Through reporting arrangements, this Officer will ensure that Members of the Council and Directors are made aware of any issues which require attention.

The Standards Committee also has a role to play in ensuring that procedures and practices are maintained and are appropriate. It will be able to make recommendations to the Council and/or the Executive Committee regarding the conduct of Council business.

Internal Audit will review procurement and contract systems and procedures as part of the Audit Plan.

The Environmental Co-ordinator will ensure that the Green and Ethical Procurement Guide is kept as up-to-date as possible and will be available to provide assistance on such matters.

Personnel will supply workforce information and advice, and facilitate training and development opportunities.
Training and Development

At present training on Standing Orders with Respect to Contracts is provided. In addition, Officers involved in procurement activities will require the following competencies for which training will be provided:

o negotiation skills
o cost projection
o analytical skills
o environmental and ethical implications for procurement
o an understanding of consultation and market research
o market development and management skills
o risk management skills
o legal skills
o cost/price/quality/sustainability management skills
o project management skills
o knowledge of different procurement options.


Procurement and Best Value

Under best value, local authorities need to make clear choices about how services are delivered and about who delivers them. The procurement of works, goods and services is therefore a key element of the Council's approach to securing best value.

The Council will…

o consider all relevant options for service delivery and competition
o challenge existing approaches to service delivery
o always seek to provide the best value option by seeking to maintain service standards whilst reducing the cost over time
o seek continuous improvement in performance (including the use of targets)
o keep abreast of current developments in both the public and private sectors.

Procurement and Corporate Governance

Corporate governance is about promoting fairness, transparency and accountability within the organisation.

The Council will…

o abide by internal and external procurement rules (European and UK law -including EU Directives, the Competition Act and Best Value legislation - and the Council's Procurement Strategy, Standing Orders with Respect to Contracts and Financial Regulations)
o undertake procurement in a fair, open and transparent way
o ensure decisions are evidence-based.

Procurement and Quality

Best Value is bringing a new impetus and a new discipline to the pursuit of quality in Council services.

The Council may ask for and consider the following in the evaluation of contracts (in so far as they relate to the service in question):

o equal opportunities
o access to buildings.
o customer standards
o financial health and stability
o environmental policies
o health and safety statements and policies
o complaints procedure
o quality standards
o staff code of conduct
o no smoking policy

Procurement and Equal Opportunities

Quality without equality is not a viable option. Practices of potential service providers in respect of equal opportunities can be relevant to their ability to deliver a contract.

The Council will ensure that specifications will include relevant equality objectives.

Procurement and Health and Safety

The Council has a statutory duty with regard to the health and safety of its employees and others who may be affected by its activities, regardless of whether the service is contracted out or not.

The Council will…

o clearly specify its requirements for health and safety
o maintain and update its health and safety rules for contractors
o include heath and safety questions in questionnaires for firms applying for entry onto select lists
o make health and safety a key condition in the selection of suppliers.

Procurement and the Environment and Ethics

Included in the themes within “Waverley – A Fresh Future” is the provision of a quality, safe and sustainable environment. Procurement has a direct impact on the environment, whether it is through the source and nature of goods purchased or the use of resources in service delivery, or the disposal of such products at the end of their useful life.

The Council will…

o ensure that its procurement processes are consistent with its Local Agenda 21 Strategy
o include appropriate environmental standards in all contracts and service agreements
o consider any special considerations for certain contracts e.g. waste minimisation or energy efficiency policies
o seek to reduce the environmental impact of its purchases and activities e.g. by looking at the whole-life of products to be used (from the raw material stage through manufacture, delivery and use to disposal)
o formulate and keep as up-to-date as possible a Green and Ethical Procurement Guide to assist decision-making
o evaluate procurement decisions on a whole life methodology
o draw up and keep current schedules of products and substances whose purchase is banned on grounds of environmental damage.


On-line ordering, invoicing and payments have the potential to make the Council significant cost savings and reduce paper useage. The Council has adopted an Implementing Electronic Government Statement, and this should be used as guidance on appropriate, cost-effective, secure and integrated use of information technology including on-line procurement systems.

Procurement and staff

Effective staff communication, consultation and involvement are at the heart of best value in general and procurement in particular. The Council will ensure that there is appropriate staff communication and consultation within procurement projects and that appropriate staff are involved at appropriate stages.

Procurement and Partnerships

A partnership is a relationship between two (or more) organisations that commit to working together and achieve their own and each other's objectives. This involves sharing both the successes and the risks and failures.

Experience and the Council’s Performance Plan “Waverley – A Fresh Future” show that it

o is committed to partnership working with public, private and voluntary sector providers where this delivers Best Value
o considers, where/when appropriate, partnership agreements for service delivery

provided that is in the Council’s best interests so to do.

Procurement and Consultants

Consultants are best used to provide specialist expertise and resources not available within the Council, to complete projects subject to tight deadlines and to provide the Council with an independent view.

The Council will…

o always seek to obtain best value from the use of consultants
o apply best practice guidelines in the procurement and management of consultants
o ensure consultants are aware of its aims.


The steps to be taken to arrive at a procurement decision involve a proper, full and open analysis of a wide range of factors. These are set out in the following paragraphs.

1. Identification of Stakeholders

It is important to identify who the stakeholders for a service are. The common definition of a stakeholder is someone who has an interest in the service; this may be a a user of the service, or as a provider of the service, as a member of the public whose Council Tax pays for the service, a Council Member or a fellow officer who has dealings with the services. This list is not exhaustive, but is intended to illustrate that careful thought is needed to identify stakeholders.

There may be unique classes of stakeholders which are relevant to specific services.

In some instances, stakeholders may be defined to include those who currently do not use the service but may do so under different circumstances or if they had better and/or clearer information about it.

2. Stakeholder Consultation

The views of stakeholders will be considered throughout the procurement process, especially when deciding on contract packages and setting service standards. Key stages in stakeholder consultation are:

J before embarking on a consultation exercise, considering whether there is any existing information on stakeholder views
J ensuring the most appropriate approach to consultation is taken - considering likely costs, the complexity of issues to be raised, the type of information required and the reliability of that information
J ensuring that consultation fits in with the rest of the Council's corporate programme of consultation, details of which are available from the Best Value Officer.

3. Market Analysis

It is important that the Council understands the market environment in which a service operates prior to any decisions on contract strategy. Market analysis will identify:

elements of the market
what the market can offer the Council
what the Council can offer the market
the extent of the market
J key information on leading suppliers and
J supplier apparaisal.

Where markets appear to be unresponsive or even non-existent, consideration will be given as to whether it is possible to develop a market and/or encourage providers to enter markets. It may be necessary to take specialist advice on how a market may be developed.

4. Option Appraisal

A range of alternative service delivery options must be considered. The main options are:

o pull out or withdraw from the activity
o re-align, re-organise and improve the in-house service
o create an in-house provider where none already exists
o renegotiating with existing providers
o joint working
o transfer of an activity to another organisation, private, public or voluntary sector
o partnership with other public organisations.

A systematic approach will be taken to appraising service delivery and competition options, including an analysis of potential risks and benefits. This will usually be undertaken as part of a Fundamental Service Review, but may also be undertaken as and when circumstances dictate. The approach needs to reflect the extent of the market and the value and nature of of the service.

5. Contract Strategy

The following issues will be considered when devising a contract strategy:

o where responsibility for the competition process lies
o service objectives and standards
o packaging
o how to secure the best market response
o length of contracts
o size and value of work
o timetable with key stages
o the criteria to be used in evaluating bids.

An assessment as to who should be involved at each stage of the process should also be made so that all concerned are able to plan their work programmes as they are best able. Consultation with other officers should be made to ensure that interested parties are not overlooked.

The requirements of Standing Orders with Respect to Contracts, and EU Directives, must be met throughout the process. Environmental and ethical implications also need to be taken into account.

The Council’s Monitoring Officer will undertake periodic reviews of procedures and practices in respect of contracts in accordance with the statutory powers of monitoring officers.

6. Partnering

Effective partnerships will be sought wherever appropriate. The process involves the partner organisation in:

o development of service specifications
o specifying service improvement throughout the contract
o seeking innovative approaches to service delivery
o agreeing to share in the successes and the risks
o giving agreement to output based specifications
o signing partnership agreements setting out how all organisations involved will collaborate to deliver best value.

The requirements of Standing Orders with Respect to Contracts, and EU Directives, must be met throughout the process. Environmental and ethical implications also need to be taken into account.

7. Quality

A comprehensive and integrated approach to incorporating quality into the tendering process will be taken by:

o reviewing and revising standards and objectives in the light of service requirements, financial constraints and Council policies
o incorporating standards and objectives into contract documents (including local and statutory PIs)
o establishing selection and evaluation criteria based upon a combination of contract, tender or partnership documents as appropriate
o establishing a system of performance monitoring to ensure service standards and objectives are met
o developing systems and procedures to ensure continuous improvement in service delivery.

8. Contract Procedures

Services subject to tender will:

J comply with all rules/legislation in accordance with advice from Legal Services, Internal Audit and others
J use service specifications to set out the Council's objectives for the service to be provided
J prepare tender documents and contracts in consultation with the Head of Legal Services
J specify requirements in terms of output and performance
J follow, where appropraite, a pre-qualifiaction process (to achive a short-list of organsiations that have the capacity ot perform the contract)
J ensure tender evaluation is systematic, objective and well-documented

Either Member or Director acceptance of winning tenders (depending on particular conditions) will be required where a tendering exercise has been undertaken.

These activities must accord with Standing Orders with Respect to Contracts.

9. Contract Management

Contracts or agreements will be managed effectively by the Council through:

o regular monitoring of the supplier's performance against pre-determined, clear and agreed criteria set out in the contract
o clear procedures setting out how to resolve disputes
o remedial action taken as soon as possible in event of poor performance
o regular customer satisfaction surveys
o contract reviews undertaken on completion of each contract, or in the case of long-term service contracts, on at least an annual basis.

10. Record keeping

All records relating to the procurment process and contracts must be retained. This is for audit purposes and to ensure that any decisions made can be substantiated.