Agenda item

Officers had submitted a report seeking the Governance’s Committee’s approval to a revised set of Contract Procedure Rules and an updated Procurement Strategy. The current Contract procedure Rules had been agreed in 2012 and so were overdue for revision whilst the Procurement Strategy had been agreed in 2011 and had expired in 2014. In introducing the report officers apologised that the wrong Glossary of terms had been appended to the Contract Procedure Rules.

The recent changes in the European Union thresholds and the introduction of the Public Contract Regulations in 2015 had also been reflected in the revised documents.

Officers maintained that the new Contract procedure Rules and procurement Strategy would achieve significant savings through improved procurement management. Collaboration was at the very heart of this as officers had sought to maximise the efficiencies identified through oneSource and through work with other councils and public bodies.

Officers had highlighted the following key areas of change.

·         Procurement Strategy

·                      Value for money; through efficient contracts that deliver high quality goods and services at a competitive price;

·                      Using the Council’s purchasing power to boost Havering’s economy and long term economic sustainability, through maximising the opportunities for local businesses to provide services and helping ensure that where possible contractors actively seek to employ and train local residents;

·                      Community benefit; to ensure opportunities for local economic, social and environmental benefits are achieved through our contracts to meet local resident’s priorities. The specification for our contracts can play a key part in helping to ensure contractors are fully contributing to delivering our vision for Havering;

·                      Innovation and partnerships; to ensure in the right circumstances joint working can deliver efficient, cost effective, risk-sharing solutions and new and better models of service delivery.  We are working to develop different ways of providing and buying goods and services so that we can continue to improve value for money while not reducing quality. Local authorities often contain many different departments or business units which have their own purchasing challenges. It can be difficult to ensure that all buyers purchase the best products and procure them at the best price. In the retail sector, innovators like Amazon, set up digital marketplaces that help buyers to access catalogues of products. In these systems, suppliers openly compete against each other in a controlled environment, which was why we are pioneers in helping to develop such a solution and integrating it into other local authorities.

(b)  Contract Procedure Rules

·                The introduction of e-tendering (CPR 2)

·                Introduction of the pilot Checkpoint process for all procurements above EU Threshold (CPR 8)

·                The publication of opportunities on Contracts Finder (CPR 9.10)

·                An increased emphasis on e-auctions to secure additional savings (CPR 9.11 – 9.12)

·                The use of Constructionline (CPR 13), collaborations and joint commercial enterprise and public sector spin-outs (CPR 23)

·                The introduction of the Social Value Act 2012 (CPR 15)

·                70:30 cost:quality considerations in awarding contracts (CPR 18.4)

·                An increased focus on Contract Management (CPR 21)

·                The introduction of European ‘State Aid’ Rules (CPR 26)

·                The introduction of the Public Contracts Regulations 2015

Changes had been made to the CPRs and Procurement Strategy to ensure compliance with the Public Contract Regulations 2015 and with the new EU Thresholds for Supply, Services and Works.

Officers had pointed to the savings made by the London Borough of Newham through the use of e-auctions. £4.5m of savings had been delivered in the past year.

In answer to questions from the Committee officers ran through the contract monitoring procedure to give the committee an assurance that best practice was followed. It was explained that under EU rules Councils could not carryout pre-contract checks for contract below £164k. Officers still carried out due diligence checks to protect the Council.

The Committee had questioned the change from 60:40 split to 70:30 split on cost:quality seeking an assurance that the Council would still receive the quality it desired in services and goods provided. Officers gave an assurance that quality would not drop as we would only get bids from suppliers who wish to deliver the level of quality desired.

Officers advised that at Newham the Checkpoint system was used very effectively and once fully introduced in Havering the full benefits would become available. In Newham it allowed members to check on the level of saving s produced by new contracts.

Concerns were raised about the Council’s inability to control the use of sub-Contractors. Officers had explained by good and strong contract management the problems previously experienced could be eliminated.

The Committee questioned why paragraph 1.6 had not been updated to take account of the Governance Committee’s decisions of 13 January 2016.

The Chairman called for a vote on whether to accept the recommendations

of the report as amended.

In favour of the motion to accept the recommendations:

Councillors Meg Davis, Melvin Wallace, Roger Ramsey, Damian White, Osman Dervish, Clarence Barrett, Darren Wise and Keith Darvill 

Against the motion: Councillor David Durant

Abstained: Councillors Ray Morgon, Barbara Matthews, Barry Mugglestone and Lawrence Webb

The motion was CARRIED by eight votes to one with four abstentions.

The Committee resolved to recommend to Council that:

1.    The Contract Procedure Rules set out in Appendix A to the report and amended to take account of the Committee’s amendment’s, be adopted with immediate effect and authorise the Monitoring Officer to make any such changes as may be necessary to the Council Constitution;

2.    The Procurement Strategy set out in Appendix B to the report be accepted.