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Waverley Borough Council Committee System - Committee Document

Meeting of the Council held on 21/02/2006
Proposed changes to Financial Regulations – From 1st April 2006



ANNEXE 2

Proposed changes to Financial Regulations – From 1st April 2006

New Regulations

A105a To coordinate Waverley’s submission of evidence for the annual CPA Use of Resources Assessment to the Audit Commission

Joint Responsibility

A108 To ensure that robust procedures are in place to provide the necessary assurance to the Council about the adequacy of the finance and governance arrangements in place as presented in the annual Statement on Internal Control.

A109 To maintain a comprehensive portfolio of evidence to support the annual Statement on Internal Control and the CPA Use of Resources, including the Value for Money judgement, in accordance with A105a and A108.

New paragraph to be included in the Scheme of Virement explanation on page 4 of the Financial Regulations:

Virements should be considered in conjunction with the budget monitoring process and, at the discretion of the Director of Finance, virements should be approved in accordance with the table below. In instances where a major item of expenditure or income is sensitive to movement in the year and/or it is the subject of specific monitoring, the Director of Finance may decide that a virement is not appropriate, provided that Members are kept informed through the budget monitoring and outturn process.

C111 To identify, evaluate and report on key risks associated with policy decisions and service developments, and in the preparation of service plans, in accordance with Waverley’s agreed risk framework agreed in the Risk Management Strategy.

C112 To identify and evaluate risks before entering any form of partnership with outside organisations or individuals.



Amended Regulations

B101 To advise on and supply the financial information for the Best Value Corporate Plan and Service Plans in accordance with statutory requirements and timetables.

B301 To advise the Executive and/or the full Council on prudent levels of reserves and balances in accordance with the requirements of the Local Government Act 2003, and to take account of the advice of the external auditor in this matter.

ANNEXE 3

Proposed changes to Contract Procedure Rules – From 1st April 2006
(Note: CPRs contain some typing errors, as the figures of 50,000 and 51,500 should have been replaced with 53,000 in April 2005.)

Index:
G. Method of tendering (all contracts) and seeking quotations for contracts up to and including threshold 3 Method of tendering – contracts up to 53,000
H. Method of tendering – contracts over threshold 3 in value Method of tendering – Contracts over 53,000

Definitions/Glossary Of Terms:
Quotations or tenders to be received in writing through the postal system
Contract Procedure Rules:

A101 Upon commencement of a procurement exercise, an assessment of the likely value of the contract must be made by the appropriate chief officer or nominated representative. If the estimate is within 90% and 100% of the upper limit of the financial threshold as contained in this CPR, the agreement of the Director of Finance should be sought to seek either quotations or tenders in accordance with the requirements of the threshold or those of the higher threshold. The financial thresholds to which reference is made throughout these CPRs will be reviewed annually, and revised as deemed appropriate, by the Director of Finance. The thresholds currently are as follows:

Note: these thresholds will be updated using the new figures contained in Annex C.

A102 Where the cheapest quotation or tender is 10% or more above the estimated contract value or any sum authorised by the Council for the procurement of the goods, works or services, the approval of the Director of Finance shall be sought to accept the tender or quotation, or if the variance is 10,000 or more then a report shall be made to the Executive seeking the approval. If either the Director of Finance or the Executive determine not to accept the tender or quotation, they shall indicate the course of action to be taken.

Contracts within threshold 1 up to 3,700 in value

A103 Where the estimated contract value does not exceed 3,700 is within threshold 1, subject to the approval of the relevant chief officer, one quotation may be sought unless market conditions suggest that it is feasible to easily obtain alternative quotations. If the purchase has been made using a procurement card, the details shall be recorded in the Council’s official log of such transactions.

Contracts over 3,700 and up to 10,700within threshold 2 in value

A105 Where the contract value is estimated to be over 3,700threshold 1 and up to 10,700 threshold 2 in value, a minimum of two alternative quotations shall be sought.

A106 Where a quotation is sought, competitive prices may be received by fax, e-mail or in writing through the postal system. Where they are received by fax or e-mail, the officer seeking them shall maintain a log showing:
a) the date the quotation was requested;
b) a brief description of the goods required;
c) the name and address of the supplier;
d) the date the quotation was received;
e) the price quoted;
f) the quotation accepted and the reason;
g) the reference number of the order placed; and
h) his/her name, signature and the date.

A107 Where a tender is appropriate, owing to the nature or complexity of the contract, the tendering methodology should be discussed and agreed with the relevant chief officer and the Director of Finance, with reference to CPR J. In no instance where a tender is sought shall the provisions of CPR A106 apply; tenders shall be received in accordance with CPR J102.

Contracts over 10,700 and up to 51,500 within threshold 3 in value

A108 Where the contract value is estimated to be over 10,700 threshold 2 and up to 51,500 threshold 3, a minimum of three alternative quotations shall be sought in accordance with CPR J101. Where a tender is appropriate, CPR A107 and CPR J102 shall apply.

Contracts over 51,500 and up to 106,000 within threshold 4 in value

A109 Where the contract value is estimated to be over 51,500 threshold 3 and up to 106,000 threshold 4, a minimum of three tenders shall be sought in writing through the postal system.

Contracts over 106,000 within threshold 5 in value

A112 Where the contract is estimated to be within threshold 5 in value, a minimum of four tenders shall be sought in writing through the postal system.

Contracts for professional services

A113 Where the professional services of consultants are required urgently due to unforeseen circumstances, a contract for a value not exceeding 10,700 threshold 2 may be placed without the need to obtain alternative quotations or tenders provided that the relevant chief officer obtains the agreement of the Director of Finance. In all other cases, the above contract thresholds apply to the procurement of professional services.

B102 Contracts up to 106,000 valued at up to threshold 4 in value shall be the subject of an official order unless a tender has been received, in which case a formal contract shall be prepared in accordance with the requirements of the Solicitor to the Council and signed by the relevant chief officer. The requirement to issue an official order may be waived if the purchase has been made using a Waverley procurement card, in which case a record of the purchase must be made using the official log of purchases.

B103 All contracts over 106,000 within threshold 5 in value shall be the subject of a formal contract under seal prepared by the Solicitor to the Council and signed by the Chief Executive. Contracts below 106,000 threshold 5 may be under seal if the Solicitor to the Council advises that it is appropriate.

C. JOINT COMMISSIONING, CONSORTIA, and TERM TENDERS AND FRAMEWORK AGREEMENTS (“CALL-OFF” CONTRACTS)
Note: this is a change to the heading only.

E107 If it is considered that there is a ready market for the item(s) in question, then sealed bids shall be invited from contractors or organisations that are identified as having a potential interest. The minimum number of bids sought shall be determined in accordance with the thresholds contained in CPR A101.
Note: this CPR refers to the disposal of assets other than land and buildings.

F. ASSESSMENT OF CONTRACTORS

F101 Before inviting tenders or quotations for contracts estimated to be over 51,500 threshold 3 in value, or where a contractor has expressed an interest in being included in a standing list compiled under CPR H, an assessment should be made of a contractor’s
a) financial stability and resources
b) technical and other relevant references
c) insurances
d) qualifications and experience
e) environmental, ethical and employment policies
f) previous experiences of dealings with the contractor

G. METHOD OF TENDERING (ALL CONTRACTS) AND SEEKING QUOTATIONSFOR CONTRACTS UP TO AND INCLUDING THRESHOLD 3 UP TO 50,000

G101 All invitations to tender, or provide a and any quotations for a contract up to and including 51,500 estimated to be up to and including threshold 3 in value shall be sought in writing through the postal system accordance with CPR J from contractors selected at the discretion of the relevant chief officer, subject to any specific requirement to advertise at the instruction of the Executive in accordance with CPR H below.

G102 The relevant chief officer may, at his discretion, maintain a standing list of contractors for contracts up to 51,500 and including threshold 3 in value. Such a list shall be maintained and operated in accordance with the requirements of CPR H, and the relevant chief officer shall maintain a log of contracts placed using the list including a list of those contractors invited to tender and the successful contractor.

H. METHOD OF TENDERING – CONTRACTS OVER 51,500 THRESHOLD 3 IN VALUE

H101 All contracts over 51,500 threshold 3 in value, or in any other instance where the Council, Executive or other responsible committee shall determine, shall be tendered in accordance with one of the options as set out in this CPR.

H107 If fewer than the required minimum number of contractors either meet the minimum requirements or express an interest, the relevant chief officer should be consulted to agree whether to seek additional tenderers or to obtain approval from the Chief Officer Group to seek fewer than four the minimum required number of tenders.

I. DISPATCH OF INVITATIONS TO TENDER

I101 Invitations to tender or submit a quotation shall include details of the:
a) person to whom the completed tenders should be submitted
b) address to which they should be sent
c) date and time by which they should be received
d) an instruction to return the tender in a plain, securely-sealed envelope that bears the word “Tender”
e) title of the contract in question.

J. RECEIPT AND CUSTODY OF TENDERS AND QUOTATIONS SOUGHT IN WRITING

J101 Quotations sought in writing through the postal system in respect of contracts up to and including 51,500 threshold 3 in value shall be returned to the relevant chief officer. They shall be kept in a secure manner and shall not be opened until the agreed date and time for their opening and recording.

J102 Quotations sought in writing through the postal system for contracts estimated to be over 51,500 threshold 3 in value and all tenders shall be returned to the Chief Executive, who shall arrange for their secure keeping until the agreed date and time for their opening and recording.

K. OPENING OF QUOTATIONS AND TENDERS

K101 The relevant chief officer shall nominate two representatives to open quotations sought in writing for a contract of 51,500 estimated to be up to threshold 3 in value. The quotations shall be opened together at one time. The relevant chief officer shall arrange for a record to be maintained in accordance with CPR K104.

K102 All quotations sought in writing for contracts and all tenders for contracts estimated to be over 51,500 threshold 3 and up to 106,000 threshold 4 in value shall be opened together at one time in the presence of the relevant chief officer and the Chief Executive or their nominated representatives. The Director of Finance shall also be invited to attend (or nominated representative). The Chief Executive shall arrange for a record to be maintained in accordance with CPR K104.

K103 All quotations sought in writing for contracts and all tenders for contracts over 106,000 estimated to be within threshold 5 in value shall be opened together at one time in the presence of the relevant chief officer, the Chief Executive and the Director of Finance or their nominated representatives. The Director of Finance shall also be invited to attend (or nominated representative). The Chief Executive shall arrange for a record to be maintained in accordance with CPR K104.

K107 A copy of the relevant register folios shall be forwarded to the relevant portfolio holder in respect of contracts over threshold 5.

L. EVALUATION OF QUOTATIONS AND TENDERS

L101 The normal practice shall be to accept the offer from the contractor who, having satisfied the Council’s minimum requirements, has offered the lowest price. This approach may be waived if the relevant chief officer considers in advance of seeking quotations or tenders that there are other issues that should be taken into account and that the best value solution should be sought. An assessment of the most cost-effective product may be undertaken in advance of seeking and accepting the lowest price quotation or tender without recourse to using the full best value solution option as contained in CPR L102 to L105 provided this assessment is approved in advance by:
a) the relevant chief officer where the contract is estimated to be up to 51,500 and including threshold 3 in value; or
b) the Director of Finance where the contract is estimated to be over 51,500 and up to 106,000 within threshold 4 in value; or
c) the Chief Officer Group where the contract value is over 106,000 estimated to be within threshold 5 in value.

L102 Where there are such other matters, the assessment criteria shall be determined during the preparation of the contract specification. These criteria, the scoring mechanism and the weightings to be applied to each criteria, shall form the basis of an evaluation matrix as defined in the definitions/glossary of terms above, and shall be referred:
a) where the contract is estimated to be within threshold 5 over 106,000 in value, to the Council’s Chief Officer Group for approval. The Chief Officer Group shall also be asked to approve the names of the officers and any members who shall form the evaluation panel; or
b) where the contract is estimated to be within threshold 4 over 51,500 and up to 106,000 in value, to the Director of Finance for approval. The Director of Finance shall also be asked to approve the names of the officers and any members who shall form the evaluation panel; or
c) where the contract is estimated to be up to and including threshold 3 51,500 in value, to the relevant chief officer for approval, who shall approve the names of the officers who shall form the evaluation panel.

P. SECURITY TO BE PROVIDED BY THE CONTRACTOR

P101 Adequate financial security shall be sought from the successful contractor. Appropriate financial security and/or a performance bond shall be required for all contracts over 106,000 within threshold 5 in value unless after a comprehensive analysis of the risks and their financial impact is submitted to the Director of Finance who may approves a waiver of the requirement. Where a bond is to be sought, this shall only be in a form and from a bondsman approved by the Solicitor to The Council.

P102 For contracts below 106,000 up to and including threshold 4 in value, the relevant chief officer shall discuss with the Director of Finance to agree what assessment of the risks associated with the contract shall be undertaken. A bond or other form of appropriate security shall be obtained if, after this assessment has been considered by the Director of Finance determines that the circumstances and nature of the contract warrant it.

Q. EXCEPTIONS TO CONTRACT PROCEDURE RULES

Q101 Contract Procedure Rules shall not apply in the following circumstances:
a) extensions to the duration and/or value of an existing contract, provided that the extension is within the terms and conditions of the original contract, to a maximum of 3 years unless otherwise required by EC Directives, subject to
the provisions of CPR Q103, and
no contract may be extended more than once unless the approval of the Executive is obtained;
b) proprietary goods, works or services that are necessary to maintain proprietary equipment owned or hired by the Council and the Council is responsible for the maintenance and repair;
c) proprietary goods which can only be obtained from one contractor;
d) goods, works or services required urgently, except for professional services which are subject to CPR A113, due to unforeseen circumstances, provided the estimated cost does not exceed 10,700 and the expenditure is reported to the Chief Officer Group at the earliest opportunity. These circumstances should be documented and this documentation retained on the contract file. The relevant officer should append his/her signature to the document(s);
e) contracts for the acquisition of property, in which circumstances the Asset Management Team shall advise and seek the approval of the Executive as to the procedure to be followed;
f) where, subject to an assessment of the associated risks undertaken in consultation with the Solicitor to the Council, the Council is letting a contract on behalf of another public body or partner organisation under the tendering and contract-letting rules and requirements of that other body or organisation;
g) where there is insufficient credible competition;
h) variation (additional work) to an existing contract where the variation is outside the scope of the contract but the circumstances are such that it would be inappropriate to offer the additional work to competition. These circumstances should be documented and this documentation retained on the contract file. The relevant officer should sign the document(s).

U. REGISTER OF CONTRACTS

U101 The relevant chief officer shall ensure that any contract over a value of 51,500 threshold 3 in value shall be recorded in the Council’s Register of Contracts, maintained by the Chief Executive.

V. CONTRACTS INVOLVING STAGE PAYMENTS

V102 All contracts over the threshold as determined by CPR A112, all payments made under such a contract within threshold 4 and above in value shall be recorded in the contracts register. Where the contract value falls within threshold 3, but is not less than 40,000, the contract is over the value of the threshold as determined by CPR A109, but less than that determined by CPR A112,the Director of Finance shall be consulted as to whether the contract shall be recorded in the contracts register. The relevant chief officer shall ensure that payment details are submitted for recording in the register prior to payment being made.

X. NOVATION OF CONTRACTS

X101 When a request is received from a contractor to novate or otherwise re-assign their contract, the relevant chief officer shall make arrangements to assess the options open to the Council. If it is considered that the best option is to agree to the novation, the relevant chief officer shall make such enquiries as set out in CPR H106 to assess the suitability and standing of the proposed new contractor. The agreement of the Director of Finance to the novation shall be sought. The Solicitor to the Council shall be requested to undertake the necessary legal processes to effect the novation.



Comms/council/2005-06/070