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P2P

PURCHASING PROCEDURE

April 2012

Prepared by N Addison, Approved by R Dale, April 2012ESS revApril12

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ContentsPage

1 Introduction 3 2 Purchasing Requirements 3-7 3 Number of Quotes or Tenders Required 7

3.1 Use of Contract Suppliers – Goods and Services 73.2 Use of Contract Suppliers – Works 83.3 Use of Non-contract Suppliers – Goods and Services 83.4 Use of Non-contract Suppliers – Works 93.5 Single Quotes or Tender 9-10Purchasing Process Chart – Goods and Services 11Purchasing Process Chart – Works 12

4 Quotations 134.1 Quotation Procedure 134.2 Specifications 134.3 Quote Information Requirement 134.4 Value for Money and the Assessment Quotations 14

5 Tenders 5.1 Tender Procedure 14-155.2 Specifications 15-165.3 Terms and Conditions 16-175.4 Programmes 175.5 Taking Over 17-185.6 Pre-Qualification of Suppliers 18-195.7 Health and Safety 19-205.8 Insurance 205.9 Tender Costs 205.10 Liquidated Damages 21 5.11 Bonds and Guarantees 215.12 Contract Price Adjustment 215.13 Retentions 21-225.14 Amendment to Tender Documents 225.15 Tender Opening 22-235.16 Value for Money and the Assessment of the Tenders 23

6 Separation of Duties 24 7 Order Placement 24-26 8 Authorisations 26-27 9 Order Amendments 2710 Confirmations (Goods Receipts) 2711 Purchase Invoices 2812 Goods Returns 28-2913 Settlement Disputes 2914 Document Retention and Audit Records 29


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NEWCASTLE UNIVERSITY

PURCHASING PROCEDURE

1. Introduction

This Procedure sets out the mandatory process to be followed when purchasing all Works, Goods and Services however funded.

The aim of this Procedure is to ensure that the University purchases works, goods and services in a manner that is compliant with Financial Regulations; provides value for money for the University as required in the University’s Value for Money Policy; and meets all of the legal and funding requirements placed on the University.

Quotations for Purchase Orders with an estimated value below £50,000 should be obtained in accordance with the Quotation Procedure described in Section 4. Tenders for Purchase Orders in excess of £50,000 should be obtained following the Formal Tender Procedure described in Section 5.

Failure to comply with this Procedure may result in disciplinary action being taken against the person concerned.

ESS Policies and ProceduresNote 1ESS Procurement Procedures have been incorporated into this document. Any variances from this document will be highlighted in the ESS Policies and Procedures box at the end of each section.

2. Purchasing Requirements

Limits of Devolved Authority

i. Tenders for Goods and Services likely to be in excess of £50,000 (exc. VAT), and Works in excess of £250,000 (which may be conducted by authorised ESS staff), must be conducted with the involvement of Procurement Services staff.

ESS Policies and ProceduresNote 2The ESS Project Manager will decide on the appropriate procurement route and if the Due North e-tendering system is to be used.

ii. Where the contract value is in excess of the EU purchasing thresholds of £173,934 (ex VAT) for Goods and Services and £4,348,350 (ex VAT) for Works a formal EU tender should be conducted with the involvement of Procurement Services staff.


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It is the responsibility of Procurement Services to place an advert in the Official Journal of the European Union (OJEU). Contract notices should be sent to the OJEU using Achilles Themis system. A copy of the Notice should be kept on file by the Procurement Services Office.

ESS Policies and ProceduresNote 3The thresholds are recalculated in accordance with the EU Directives on Public Procurement and are adjusted every two years. The latest thresholds can be viewed at www.ojec.com/Threshholds.aspx Any projects with an estimated value of 90% of the thresholds will need to follow the OJEU route.

iii. All purchase orders with a value in excess of £1million (ex VAT) must be authorised by the Executive Director of Finance before they can be placed.

ESS Policies and ProceduresNote 4ESS Purchase orders authorisation levels;>£1m – Executive Director of Finance£250k to £1m – PVC or Registrar £50k to £250k – Director of Service £5k to £50k – Direct Report to Director of Service £500 - £5k – Service Nominee <£500 on catalogue – No approval required

Additional Procedures to be followed

iv. Tenders or Quotes involving the provision of on-campus Services such as maintenance or installation of equipment should be carried out in accordance with the ‘Guidelines for Engaging Contractors to Work in Academic Departments’. (See www.safety.ncl.ac.uk/uploads/GUIDE.DOC).

ESS Policies and ProceduresNote 5For all ESS projects refer to the ESS Management of Contractors and other documents. http://www.ncl.ac.uk/estates/healthsafety/Policy.htm For specific information or advice please contact please contact the ESS Health and Safety Officer Ext: 6847

v. Purchases made with a University Purchasing Card should follow the Purchasing Card Procedure.

vi. University approved contracts set up through the Procurement Services Office and detailed on the P2P-Marketplace or the Procurement Services website MUST be used. (See www.ncl.ac.uk/internal/purchasing- services/agreements/index1.php)


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http://www.ojec.com/Threshholds.aspx

http://www.ncl.ac.uk/estates/healthsafety/Policy.htm

http://www.safety.ncl.ac.uk/uploads/GUIDE.DOC

University contracts include those let by the NEUPC, National Working Parties, NEPO, and the GPS.

Use of a non contracted supplier must be avoided as the purchase order could be in breach of the EU directives on aggregation of demand, non compliance within the scope of the EU directives (Supplies 93/36/EEC, Services 92/50/EEC and Works 93/37/EEC) or breach of an existing contractual term.

Whenever a purchase order is to be placed outside of an approved University contract permission to place the order must be obtained from the Procurement Services Office.

ESS Policies and ProceduresNote 6 ESS Contracted Suppliers are suppliers that have tendered their particular service for a specified cost and a specified time period. Please see current list of ESS contracted suppliers

Purchase Orders Requiring Additional Approval

vii. Tenders for Consultancy Services MUST follow the Engagement of Consultants - Regulations and Procedures. (See http://www.ncl.ac.uk/internal/purchasing-services/regulations/index.php)

ESS Policies and ProceduresNote 7This process is not necessary when consultants are appointed from a framework panel. ESS has consultants frameworks for the following disciplines:

Architects Cost Consultants Structural Engineers Project Managers Mechanical & Electrical Engineers Building Surveyors Landscape Architects CDMC

Consultants are to be selected using a mini-competition as detailed on capital procedures.

viii. The provenance of the goods being purchased should be known. Web sites such as ebay or any type of auction website shall not be used without the approval of the Procurement Manager.


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http://www.ncl.ac.uk/internal/purchasing-services/regulations/index.php

http://www.ncl.ac.uk/internal/purchasing-services/regulations/index.php

ix. All purchases of telecommunication services and equipment (e.g. telephone and data lines, mobile phones, telephone handsets) must be procured through ISS.

x. All purchases of computers should be approved by the faculty, school or services Computing Officer before any orders are placed.

xi. All purchases of photocopiers should be approved by Procurement Services before any order is placed.

xii. All requirements for on-campus hospitality and catering provisions should be made to the University’s delivered hospitality service ‘Food Chain’.

In the event that Food Chain are unable to supply the requirement suppliers on the approved external catering contractors list as detailed on the Procurement Services website may be used. (See http://www.ncl.ac.uk/internal/purchasing-services/agreements/RegisteredFoodCateringContractors.php)

xiii. All purchases of Vehicles should be approved by the Procurement Manager before any order is placed.

xiv. All purchases of radioactive materials and x-ray generating equipment must be approved by the Radiation Protection Adviser. All purchases of Unsealed (Open) sources of radioactivity must be routed via the Radiation Protection Office using the approved forms. (http://www.safety.ncl.ac.uk/opensourceuse.aspx).

Standards for Purchasing

xv. Suppliers requested to provide quotations should be known to be capable of providing the works, goods or services required, they should be competitive and commercially sound.

xvi. Any contract with the University should not exceed 25% of the Supplier’s annual turnover unless approved by Procurement Services.

xvii. A member of Council or a member of staff having a personal, financial or any other beneficial interest in any transaction between a third party and the University must disclose this interest to the Procurement Manager prior to commencing any tender process.

xviii. No person may communicate, or allow to be communicated to a tenderer any information that may give the Supplier a commercial advantage (all tenderers must be aware of all of the same information and be able to bid in full knowledge of all of the facts).

xix. The University is entering into a legally binding contract which is enforceable by a Court of Law. All correspondence (verbal or written) and actions can be included


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http://www.safety.ncl.ac.uk/opensourceuse.aspx

http://www.ncl.ac.uk/internal/purchasing-services/agreements/RegisteredFoodCateringContractors.php

http://www.ncl.ac.uk/internal/purchasing-services/agreements/RegisteredFoodCateringContractors.php

in any case against the University should it reach such a stage, therefore members of staff must always ensure they conduct themselves with this in mind.

xx. No person shall seek or accept any gift or hospitality that could be construed to be an inducement to award an order or contract.

3. Number of Quotes or Tenders Required

Purchase Orders less than £25,000 raised using the Parabilis Market Place catalogues or Punch Out do not require a quotation where the lowest priced item or shopping basket has been selected (the basket comparison facility should be used to determine this). It is the responsibility of the Procurement Services Office to ensure that only goods and services from contracted suppliers are included on the Market Place.

For all other purchases where the Parabilis Market Place is not used competitive quotes should always be obtained where possible by following the Quotation or Tender Procedure. The number of quotes or tenders required is detailed below. All Values are exclusive of VAT.

ESS Policies and ProceduresNote 8Please note the special arrangements for the Measured Term Contract (MTC) and the Consultants Framework.NB. Any savings from mini-competitions provide an opportunity to demonstrate value for money savings and should be recorded.

3.1 Use of Contract Suppliers – Goods and Services

i. A tender exercise must always be carried out in accordance with EU Procurement

Directives and involving Procurement Services where the purchase order is above £173,934 (ex VAT). Procurement Services will ensure that the contract complies with EU procurement Directives.

ii. For all other purchase orders placed through an approved University contract set up

through the Procurement Services Office and detailed on their website (see www.ncl.ac.uk/internal/purchasing-services/agreements/index1.php), the requirements are:


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http://www.ncl.ac.uk/internal/purchasing-services/agreements/index1.php

Value of purchase order (ex VAT)

Quotes required

< £25,000 A single quote is required£25,000 to £49,999 Quotes from all appropriate suppliers should be

obtained£50,000 to £173,934 A tender exercise involving Procurement Services

should be used

3.2 Use of Contract Suppliers – Works

A tender exercise must always be carried out in accordance with EU Procurement Directives and involving Procurement Services where the purchase order is above £4,348,350 (ex VAT). Procurement Services will ensure that the contract complies with the EU Procurement Directives.

For all other purchase orders placed through an approved University contract set up through the Procurement Services Office and detailed on their website (see www.ncl.ac.uk/internal/purchasing-services/agreements/index1.php), the requirements are:


Quotes required

< £25,000 A single quote is required as a minimum£25,000 to £249,999 Quotes from all appropriate suppliers should be

obtained£250,000 to £4,348,350 A tender exercise involving Procurement Services

should be used

Quotes and tenders for Works contracts may only be obtained by authorised ESS staff.

3.3 Use of Non-contract Suppliers – Goods and Services

Where the value of the purchase order is above £173,934 (ex VAT) a tender exercise shall be carried out by Procurement Services in compliance with EU Procurement Directives. Procurement Services will ensure that the contract complies with the EU Procurement Directives.

For all other goods, services or works obtained outside of an approved University contract set up through the Procurement Services Office and detailed on their website (see www.ncl.ac.uk/internal/purchasing- services/agreements/index1.php) or a contract approved by Procurement Services, the number of quotes or tenders required is as follows:


Quotes required

< £100 Quotes not required


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http://www.ncl.ac.uk/internal/purchasing-%20services/agreements/index1.php


£100 to £1,000 A single quote is required as a minimum£1,000 to £9,999 Two quotes should be obtained as a minimum.£10,000 to £49,999 Three quotes should be obtained as a minimum.£50,000 to £173,934 A tender exercise involving Procurement Services

should be used

3.4 Use of Non-contract Suppliers – Works

Where the value of the Works is above £4,348,350 (ex VAT) a tender exercise shall be carried out by Procurement Services in compliance with EU Procurement Directives. Procurement Services will ensure that the contract complies with the EU Procurement Directives.

For all other Works being obtained outside of an approved University contract set up through the Procurement Services Office the number of quotes or tenders required is as follows:


Quotes required

< £1,000 A single quote is required as a minimum£1,000 to £9,999 Two quotes should be obtained as a minimum.£10,000 to £249,999 Three quotes should be obtained as a minimum.£250,000 to £4,348,350 A tender exercise involving Procurement Services

should be used

Quotes and tenders for Works contracts may only be obtained by authorised ESS staff.

3.5 Single Quotes or Tenders

Single quotes or tender should only be obtained in the following circumstances:

i. Where the purchase is made from the P2P marketplace and the total value is less than £25,000.

ii. Where the value of the Works, Goods or Services is below £1,000 (ex VAT) when purchased from a non University contract.

iii. Where the value of the Works, Goods or Services is below £25,000 (ex VAT) and where the purchase is made from a University contract set up through the Procurement Services Office and detailed on the P2P Marketplace or the Procurement Services Website. (See www.ncl.ac.uk/internal/purchasing-services/agreements/index1.php).


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iv. Where there is a clear absence of alternative sources of supply and approved by Procurement Services.

v. Where it is necessary to extend, repair or refurbish proprietary or specialist equipment or where a particular expertise is required and approved by Procurement Services.

vi. Where it is necessary to continue the use of specialist professional skills and approved by Procurement Services.

vii. In an emergency situation where there is a risk to health and safety or the continuing operations of the University.

viii. Where it is in the interest of the University and approved by the Director of Finance.

A record of the reason for single tender should be retained for audit purposes.

ESS Policies and ProceduresNote 9

Approval required in writing from Procurement and this approval should be retained for audit purposes. Also this document should be provided as background documentation with any requests for signature from the Director of ESS.


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NEWCASTLE UNIVERSITY PURCHASING PROCESS GOODS AND SERVICES

Aggregate value is the expected value of orders for the same or similar nature goods / services, over the intended contract period, excluding VAT


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NEWCASTLE UNIVERSITY PURCHASING PROCESS FOR WORKS


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4. Quotations

Purchase Orders raised using the Parabilis Market Place catalogues or Punch Out do not require a quotation where the lowest price item or shopping basket has been selected. (The basket comparison facility should be used to determine this.)

It is the responsibility of the Procurement Services office to ensure that only goods and services from contracted suppliers are included on the Market Place.

Copies of all quotations obtained should be uploaded to SRM with the Purchase Order.

4.1 Quotations Procedure

Written quotes should be obtained for Purchase Orders with an estimated value of less than £50,000 (ex VAT) from suppliers. This can be in the form of an official quotation, letter, fax, email, or pricing information from the suppliers’ web site.

The P2P Market Place, Due North e-tender system or a university Enquiry Form (see www.ncl.ac.uk/internal/purchasing-services/regulations/documents/ENQUIRYForm.doc) may also be used.

4.2 Specifications

A specification should be provided for the supplier to quote against. This should be sufficiently detailed to allow the supplier to quote an offer which fully meets the University’s requirements. The specification should be in the following form:

i. a description of the goods or services requiredii. a description of the output of the goods or services requirediii. a manufacturer’s part number or equivalent reference number.

4.3 Quote Information Requirement

The quote should include the following as a minimum:

i. A university Reference Number ii. Name, address, contact details of the supplier issuing the

quotationiii. A description of the Goods or Services to be providediv. The quantity of the Goods or Services to be providedv. The price and details of all other costs associated with the offervi. The delivery point for the Goods or the place of performance for

ServicesPrepared by N Addison, Approved by R Dale, April 2012ESS revApril12

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http://www.ncl.ac.uk/internal/purchasing-services/regulations/documents/ENQUIRYForm.doc

http://www.ncl.ac.uk/internal/purchasing-services/regulations/documents/ENQUIRYForm.doc

vii. The delivery date or time for completion of the services.

4.4 Value for Money and the Assessment Quotations

i. All quotes should be assessed to determine the most suitable offer to the University. This should be the offer that provides the University with the best Value for Money and in accordance with the University’s Value for Money Policy. This will normally be determined by the Price to be paid, the Quality of the goods or services offered, suitability of the Specification of the offer to the needs of the University, and the delivery timescales. The suitability of the specification should take into account of environmental and sustainability factors which should be weighted highly in the assessment criteria.

ii. Where items and equipment are assessed to be equal in the assessment the item which scores highest for environmental and sustainable factors should always be purchased.

A record of the assessment should be retained for audit purposes.

ESS Policies and ProceduresNote 10Tender assessment reports are to be provided by the Project Manager. The assessment should include scoring against each award criteria.

5. Tenders

5.1 Tender Procedure

Tenders for Goods and Services with an estimated value in excess of £50,000 (ex VAT) and works with an estimated value in excess of £250,000 (ex VAT) should be carried out with the involvement of Procurement Services.

Where the estimated tender value for Goods and Services is over £173,934 (ex VAT) and Works over £4,348,350 (ex VAT) a formal EU Tender process should be followed by Procurement Services.

Tenders should normally be obtained following a formal tender procedure. Tenders should be requested from Suppliers using any of the following methods; the SAP Request for Quotation functionality, Due North etender system, A University approved emarket place, or a formal Invitation to Tender document.

The SAP Request for Quotation or a hard copy of the Invitation To Tender should be sent to the Supplier by Post, fax, or email, or e-tendering system.


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The tender should contain all of the information necessary for the Supplier to provide a quotation in the appropriate fields. Where possible, this should include the following as a minimum:

i. The tender Reference Number ii. Name, address, contact details of the person issuing the

tenderiii. Address of the Supplieriv. The quantity of the Works, Goods or Services requiredv. A description of the Works, Goods or Services requiredvi. The delivery point for the Works, Goods or the place of

performance for Servicesvii. The tender return date and time

When a tender is issued it may only be amended with the approval of the Procurement Manager or authorised ESS staff.

If a tender is amended all Suppliers must be informed in writing of the amendment at the same time and they should be given sufficient time reflect the amendment in their offer to the University.

ESS Policies and ProceduresNote11Approval is not required for ESS projects; however any amendments must be recorded and circulated to all tenderers.

5.2 Specifications

The specification should cover:

1. Technical RequirementsThis should state or ask the Supplier to provide some or all of the following:

i. Functional, performance and reliability requirement.

ii. Any Licensing or safety requirements.

iii. Any Environmental or Hazard considerations.

iv. Any Design Standards or Codes of Practice to be adhered to.

v. Any Operational or Maintenance requirements.

vi. Any specific tests or inspections to be completed before Taking Over.

vii. Any installation requirements.

viii. Quality assurance requirements.


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2. Quality Plans and ApprovalsAny Quality Plans or Approvals required of the Supplier should be detailed including details of the format to be submitted and the persons authorised to make such approvals.

3. Health and SafetySuppliers should asked to provide a Health and Safety document as part of their tender detailing all the health and safety hazards associated with the use of the equipment and any recommended safety measures to be adopted by the user to ensure safe operation of the equipment.

4. Drawings and DocumentsAny drawings and documents including Operate and Maintain manuals to be provided by the Supplier including the quantity and format to be provided in should be stated.

5. MaintenanceDetails of any maintenance contracts including service levels required, the location that the maintenance is to be carried out and the duration of the maintenance agreement should be detailed or requested.

ESS Policies and ProceduresNote 12Item 5.2 Specifications; ESS projects standard documents and specifications may be substituted for or added to items 5.2 1 to 5 inclusive. The above list can be used as an optional check list.

5.3 Terms and Conditions

i. It is the responsibility of the Procurement Officer or ESS Project Manager to ensure that the Terms and Conditions are appropriate for the requirements of the contract.

ii. The choice of which Terms and Conditions to use includes: The Newcastle University Conditions of Purchase, The Research Equipment Affinity Group Terms and Conditions of Purchase, Newcastle University Conditions of Contract for the Provision of Services, CIPS Conditions of Contract.

iii. The choice of other Terms and Conditions of Contract as issued by Professional Bodies should be considered as appropriate by the Procurement Officer or ESS Project Manager.

iv. The Invitation To Tender Document should always state the Terms and Conditions applicable to the contract.

v. Where the Terms and Conditions require the completion of an Appendix it is the responsibility of the Procurement Officer


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or ESS Project Manager to ensure that this is completed and communicated to the Supplier in the Invitation To Tender Document.

ESS Policies and ProceduresNote 13Item 5.3 Terms and Conditions; for ESS projects standard contract documents will be used and the standard terms and conditions will apply.

5.4 Programmes

i. The production of a contract programme should be made by the Procurement Officer or ESS Project Manager in consultation with the School, Faculty, Institute, or Service.

ii. Where the University has determined a Programme this should be detailed in the Invitation To Tender Document and the Supplier advised of the requirement to meet the Programme.

iii. Where a Programme is requested from the Supplier, the Procurement Officer or ESS Project Manager should request sufficient details to allow a realistic assessment of the proposed Programme. This may be split into sections covering areas such as: Order, Supply, Manufacture, Test, Delivery, Installation, and Training, as deemed appropriate by the Procurement Officer or ESS Project Manager.

iv. The Procurement Officer or ESS Project Manager and the School, Faculty, Institute, or Service should assess any proposed Programme to ensure that it is reasonable and achievable by both the University and the Supplier. The Procurement Officer or ESS Project Manager should take into account in the assessment that delays caused by the University which result in the Programme being extended could result in claims against the University by the Supplier.

ESS Policies and ProceduresNote 14Item 5.4 Programmes; for ESS projects the programme will be developed by the Project Manager in collaboration with the design team and the client.

5.5 Taking Over

Where the contract requires the Supplier to install the equipment and demonstrate that it is operating as per the contract the Invitation To Tender Document should state the mechanism, which will be adopted for the University to Take Over the equipment. This will normally involve the University issuing a Certificate stating it has taken over the equipment.


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The Certificate may be in the form of a letter from the University to the Supplier. The issue of a Taking Over certificate will allow the Supplier to invoice for the agreed contract amount.

ESS Policies and ProceduresNote 15Item 5.5 Taking Over; for ESS projects the industry standard certificates will be used all as specified in the standard tender documents.

5.6 Pre-Qualification of Suppliers

In certain circumstances it may be desirable to use a two stage tender process, with the use of a Pre-Qualification document to request management information and documents such as references, accounts, health and safety policy, COSHH data etc.

The information may also be obtained from a technical appraisal of the Supplier. Technical Appraisals should be used to determine that the Supplier:

i. has satisfactory previous experience of supplying similar goods or services

ii. has previous acceptable higher education performanceiii. has the appropriate quality systems or accreditation

where necessaryiv. has capacity to perform the contract

A formal scoring system with weightings shall be used to evaluate the returns and appraisals and to ensure that an audit record exists for the selection of the final Tenderers. The following information should be recorded as a minimum:

i. Companies initially considered for short-listing for tendersii. Criteria used in determining the short-list for tendersiii. Reasons for selection of short-listed companies for tenderiv. The scores given to each Supplier.

ESS Policies and ProceduresNote 16Item 5.6 Pre-Qualification; the assessment criteria will vary from project to project, typically the following criteria will be assessed;

Relevant Experience Quality assurance Resources Record of legal proceedings Environmental Financial Health and Safety


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The Due North e-tendering system has an excellent PQQ template together with a catalogue of stock criteria; this system provides a fully auditable process and storage facility. All PM should consider using the system.

5.7 Health and Safety

5.7.1 Where the contract requires the Supplier to install the equipment as part of the contract the installation requirement should be stated including the following information:

i. Details of the University’s working hoursii. Details of access to the Universityiii. Whether the Supplier will have sole possession to the

areaiv. Any permission from the University the Supplier may

have to obtainv. Details of any services the University will provide

5.7.2 Where the contract is for the Supplier to install the equipment the following should be requested:

i. A copy of the Suppliers Health and Safety Policy together with the appropriate codes of practice.

ii. A copy of the Suppliers policy for reporting and investigating accidents and dangerous occurrences.

iii. Prior to commencing any installation of the equipment the Supplier should be informed of the following requirements:

a. The requirement to agree with the University a Method Statement detailing how the installation and the associated Health and Safety risks will be managed.

b. They should ensure that they conform with the requirements of the University’s ‘CODE OF SAFETY PRACTICE FOR CONTRACTORS WORKING FOR ACADEMIC DEPARTMENTS’. The Code should be included in the Invitation To Tender Document as an appendix. (See http://www.safety.ncl.ac.uk/uploads/CODE.DOC).

c. They inform the School Safety Officer in writing the name of the person responsible for Health and Safety.

d. They present a Health and Safety Plan including a method statement for approval by the School safety Officer. The clause should say that ‘such approval does not relieve the Seller of their responsibilities under this contract’.

5.7.3 Where the contract is for Works the ESS Project Manager is responsible for ensuring the appropriate Health and Safety


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assessment of the contractor and the Works is completed before the Works commence.

ESS Policies and ProceduresNote 17Item 5.7 Health and Safety; all ESS projects must comply with the CDM Regulations 2007 and all other safety regulations. Projects will have appropriate risk assessments and method statements.

5.8 Insurance

i. It is the responsibility of the Procurement Officer or ESS Project Manager to ensure that the Suppliers used by the University are adequately insured for the contract. The University generally requires Suppliers to be covered by Contractors All Risks Insurance, Public Liability Insurance and Employers Liability Insurance.

ii. Contractors All Risks Insurance covers the property the Supplier is working on or building and the University would typically require cover of up to £5million as a minimum.

iii. Public Liability Insurance insures the Supplier for damage, loss or injury for which the Supplier is liable. The University would typically require cover of £1million as a minimum.

iv. Employers Liability Insurance provides cover for the employees of the Supplier and the University would normally require cover of £1million as a minimum.

v. Depending on the requirements of the contract the University may require the Supplier to provide Professional Indemnity Insurance. This may be required where the Supplier is carrying out a design. The cover required would be dependent on the Design but in most cases should not be less than £1million as a minimum.

ESS Policies and ProceduresNote 18Item 5.8 Insurance; see standard forms xxx Hyperlink to shared drive. Also need to rearrange process for assessing and recording contractor’s insurance details – DS to resolve NB. Copy of document to be forwarded to Angela Collins who will monitor the insurance period and inform PM’s when the insurance certificate is about to expire.

5.9 Tender Costs

The Invitation To Tender Document should clearly state the University shall not be responsible for the payment of any costs or expenses incurred by Supplier in the preparation and submission of tender offers or for costs or expenses incurred in submitting or delivering any presentations or demonstrations to the University.


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5.10 Liquidated Damages

i. It is the responsibility of the Procurement Officer or ESS Project Manager in consultation with the School, Faculty, Institute, or Service to determine if Liquidated Damages are to be applied to a contract.

ii. All Liquidated Damages are to be a genuine pre-estimate of the loss suffered by the University if the Suppliers breach the contract.

iii. Liquidated Damages are usually calculated as a percentage of the contract Price with a maximum percentage payable by the Supplier stated.

ESS Policies and ProceduresNote 19Item 5.10 Liquidated Damages; for ESS projects the Project Manager in collaboration with the design team will determine the rates for Liquidated Damages.

5.11 Bonds and Guarantees

i. It is the responsibility of Procurement Services or ESS Project Manager to obtain a Parent Company Guarantee or Performance Bond where required.

ii. Parent Company Guarantees and / or a Performance Bond should be obtained where Procurement Services or the ESS project manager has assessed a material risk to the University resulting from the contract.

ESS Policies and ProceduresNote 20Item 5.11 Bonds and Guarantees;

5.12 Contract Price Adjustment

Where the contract is to supply over a long period Procurement Services should determine if a Contract Price Adjustment clause is appropriate. If the Procurement Officer or ESS Project Manager decides that a Contract Price Adjustment clause is appropriate this should be clearly defined including the mechanisms to adjust the price. Mechanisms may include as examples: Rate of inflation, Currency fluctuations, BEAMA Indices.

5.13 Retentions

i. It is the responsibility of Procurement Services or ESS Project Manager to determine if a Retention is required as part of the contract. Retention should be requested where the University requires surety that Supplier has fully met the requirement of the contract.


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ii. The amount of the Retention and the period it is to be held should be determined by the Procurement Officer in consultation with the School, Faculty Institute, or Service.

iii. The Invitation To Tender Document should clearly state that the University will be withholding a Retention. This should either be as a clause within the Commercial Specification or it may be explicitly stated in the Terms and Conditions of contract.

iv. The Invitation To Tender Document should clearly state the form the Retention will take, such as an amount or percentage of each payment due or an amount or percentage of the contract Price, the duration of the retention, and the manner the Supplier should invoice for the release of the Retention.

ESS Policies and ProceduresNote 21Item 5.13 Retentions; for ESS projects the Retention policy will be as specified in the appropriate standard building contract.

5.14 Amendment to Tender Documents

When a tender is issued it may only be amended with the approval of the Procurement Manager or ESS Project Manager. If a tender is amended all Suppliers must be informed in writing of the amendment at the same time and they should be given sufficient time reflect the amendment in their offer to the University.

ESS Policies and ProceduresNote 22Item 5.14 Amendment to Tender Documents; Project Manager is responsible for approving any amendments. Any amendments must be recorded and circulated to all tenderers.

5.15 Tender Opening

i. Tenders received through the Due North e-tender system should be accepted using Due North functionality by a person not involved with the tender exercise. These tenders are automatically time stamped by the system.

ii. Tenders not received through the Due North e-tender system should be opened at the same appointed time after the tender return date and time indicated in the tender document and should be date stamped, and endorsed with the name of the person opening the tender and the time it was opened and recorded on a Tender Opening Sheet. Tenders should be opened and witnessed by 2 people not involved with the


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tender exercise. The names and signatures of the person opening and witnessing the opening of the tender should be written on the tender opening form.

iii. Tenders estimated to be over £50,000 (ex VAT) should be opened in the presence of a Procurement Officer or member of the ESS Management Accounts team.

iv. The University does not undertake to accept late tenders. Late tenders should only be opened or accepted on Due North with the approval of Procurement Services. A record detailing why a late tender was opened should be made and kept on file for audit purposes.

ESS Policies and ProceduresNote 23Item 5.15 Tender Opening; ESS tenders will be opened by the ESS Management Accountant (ESS MA). All PM’s should inform the ESS MA of the tender return dates, tender list and pre-tender estimates. Once opened the ESS MA will summarise the tenders and provide reports to the Director of Estates and the PM. When PM’s are using the Due North e-tendering system the following people need to be added as verifiers to allow them to open tenders; Keith Patrick, Vicky Craney and Angela Wylie. Once opened the ESS MA will summarise and report as above.

5.16 Value for Money and the Assessment of the Tenders

i. All Tenders should be assessed to determine the most suitable offer to the University. This should be the offer that provides the University with the best Value for Money and in accordance with the University’s Value for Money Policy.

ii. This will normally be determined by the Price to be paid, the Quality of the goods or services offered, suitability of the Specification of the offer to the needs of the University, and the delivery timescales.

iii. The suitability of the specification should take into account of environmental and sustainability factors which should be weighted highly in the assessment criteria.

iv. Where items and equipment are assessed to be equal in the assessment the item which scores highest for environmental and sustainable factors should always be purchased.

v. A record of the assessment should be retained for audit purposes.


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6. Separation of Duties

i. All Heads of Schools, Institutes and Central Services must ensure that there is a segregation of duties in making financial commitments in accordance with the delegations of financial authority as approved by Council and also the SAP SRM Authorisations structure. TP2P roles assigned may be as follows:

ii. Staff with access to the P2P system can create a Shopping Cart for approval, and process the confirmation (goods receipt) as the invoices are routed to a third party for scanning/data extract and then processed via the Accounts Payable Workbench. It is good practice to ensure that more than one person is involved in the purchasing and receipt of goods / services.

iii. Staff with access to the P2P system should not complete the web requisition to the Expert Buyer.

iv. Unit Nominee, Unit Manager, and Heads of Unit must not approve carts that have been created on their behalf by an Expert Buyer.

7. Order Placement

i. Purchase Orders must be placed for all works, goods and services required by a School, Faculty, Institute, or Service with


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the exception of utilities, telephone charges and vehicle taxes. These will be paid centrally by ESS or ISS as appropriate and the charge distributed to the School, Faculty, Institute, or Service.

ii. All Purchase Orders should be placed through SAP SRM. Staff create a Shopping Cart that is then authorised and converted to a Purchase Order. A separation of duties should be maintained for staff processing and authorising Purchase Orders as per Section 6.

iii. SAP SRM offers a variety of possible solutions to create a Shopping Cart. The recommended order to consider the solutions is:

a) By selecting items from the P2P-Marketplace

b) Limit OrderNot to be used for items available from the P2P-Marketplace.For regular repeat orders with variable invoice values, but which can be budgeted for a time period. e.g. photocopier charges, gas rentals, taxis, glaziers, locksmiths.For individual orders where the final cost is unknown. e.g. equipment maintenance/repairs with unknown final labour/parts cost.

c) Free Text / With Free DescriptionFor individual requirements where the final cost is known and fixed in advance of creating the order. Needs to be supported by the appropriate number of quotes as per Section 3.

Free text Shopping Carts should include or contain references to the following information where appropriate:

Details of the works, goods or services ordered. The contract price The contract period The delivery requirements and date The payment terms The maintenance terms The Warranty period

The quotation reference number should be entered in the SAP SRM Purchase Order Header text or Supplier text in the shopping cart.

Where a Shopping Cart is not raised through the P2P-Marketplace copies of supporting quotes and a record of the assessment of the suppliers offer stating why the supplier was selected should be attached or detailed in the Shopping Cart on SRM.


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iv. Staff can request new vendors to be added to SAP using the online form to request a new vendor account can be found on the following link: http://www.ncl.ac.uk/internal/purchasing-services/sap/

The Procurement Manager may reject the request where the vendor already exist on SAP or there is an existing university contract or approved framework agreement in place or the Procurement Manager deems the vendor to be unsuitable to the University.

8. Authorisations

i. All purchase orders shall be approved in accordance with the University’s Delegations of Authority prior to be sent to the supplier.

Cost of purchase Authorisation by Concurrence required from

Up to £5,000 Unit Nominee Not required £5,001 to £25,000 Unit Manager Not required £25,001 to £50,000 Unit Manager Procurement Services £50,001 to £250,000 Head of Unit Procurement Services £250,001 to £1,000,000

Faculty PVC/Registrar Procurement Services plus FMBSG if >£500k

£1,000,001 to £2,000,000

Vice-Chancellor Executive Director of Finance plus FMBSG

Over £2,000,000 Council

Purchase orders with a value under £500 where all the items are from the P2P-Marketplace are auto approved.

ii. All orders exceeding £25,000 (exc. VAT) – or equivalent currency – will be routed to the Procurement Manager (or their authorised deputy) to review the tender / quotation documents and to ensure the Purchasing Procedure has been followed and the order represents value for money, any reasons for not accepting the most economically advantageous bid is satisfactory and sufficient evidence is available to satisfy Audit requirements.

iii. The Procurement Manager has delegated authority to stop a Shopping cart raised on SAP SRM if it can be shown that an identical product or service can be obtained from an alternative source of supply at a lower cost, given the same or better guarantees of delivery, price stability, training, customer support, etc., and subject to any pre-existing contractual liability.

The Procurement Manager must inform the School, Faculty, Institute or Service if a Shopping Cart has been stopped. In the event of disagreement between the Procurement Manager and


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http://www.ncl.ac.uk/internal/purchasing-services/sap/

the School, Faculty, Institute, or Service about a proposed order, the Director of Finance must be consulted.

iv. All Shopping Carts with a value in excess of £1million (ex VAT) must be authorised by the Director of Finance before they can be placed.

9. Order Amendments

i. Once a Purchase Order is placed, the quantities and values as stated on the Purchase Order should not be increased, extended or otherwise amended:

For goods a new Shopping Cart should be raised and authorised as per the SAP SRM Authorisation Structure for any additional items or quantities required.

For services the invoice will be sent to the Shopping Cart creator for review and acceptance and authorisation as per the SAP SRM Authorisation Structure. If the invoice needs to be reviewed and accepted by a member of staff other then the Shopping Cart creator this should be conducted by email and details should be added to the notes section of the WIA communication before approving.

ii. Where an increase to the quantities or values would take the total value of the orders above one of the purchasing thresholds as detailed in Section 3, additional quotes may need to be obtained before the additional cart is created, or the additional invoice is approved.

10. Confirmations (Goods Receipts)

i. Goods Receipts Notes should be obtained for the receipts of goods. Whenever possible the Goods or Services must be inspected before signing the goods receipt note as accepted. If this is not possible then the signature must include the wording “received unchecked".

ii. In the event of Goods being delivered with a shortage (e.g. 9 delivered but 10 on delivery note) then the Supplier must be notified via either the delivery note being manually altered or the correct quantity being signed for, or in writing within three working days.

iii. Only the quantity delivered must be entered onto the Management Information System.


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11. Purchase Invoices

i. The invoice details (quantity, price, discount, etc.) must be in accordance with the originating order.

ii. Any invoice not correct must be notified to the supplier within three days of receipt, and held until such time as a corrected invoice, or part credit note is received.

iii. The invoice should contain the following information as required by HM Revenue and Customs:

an invoice number the seller's name or trading name, and address the seller's VAT registration number the invoice date the tax point if this is different from the invoice date the University’s name or trading name, and address a description sufficient to identify the goods or services

For each different type of item listed the invoice must show the:

unit price or rate, excluding VAT quantity of goods or the extent of the services rate of VAT that applies to what's being sold total amount payable, excluding VAT rate of any cash discount total amount of VAT charged

If the VAT invoice includes zero-rated or exempt goods or services, it must:

show clearly that there is no VAT payable on those goods or services

show the total of those values separately

iv. Any expenditure in excess of the order amount for goods a new Shopping Cart should be raised and authorised as per the SAP SRM Authorisation Structure for any additional items or quantities required.

Any expenditure in excess of the order amount for services the invoice will be sent to the Shopping Cart creator for review and acceptance and authorisation as per the SAP SRM Authorisation Structure.

12. Goods Returns

i. Any goods received that require return to the supplier/sender must be recorded on the original delivery note.


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ii. Contact the supplier and ask for clarification of their returns procedures.

iii. If goods are to be sent to an overseas address for inspection, or repair etc and then returned – ask the supplier which courier they will use to ship back, book return with same courier and ensure they complete or advise necessary customs paperwork to ensure VAT and Duty isn’t charged on re-import.

iv. The goods should be returned, wherever possible, in the original packaging, including a copy of the original delivery note, with an accompanying letter explaining the reason for return (a copy should be retained with the original paperwork).

v. If a delivery has been entered onto SAP SRM then the return must be processed as a ‘Return Delivery’

13. Settlement of Disputes

The School, Faculty, Institute, or Service should take these up with the supplier in the first instance. Where the dispute can not be resolved by the School, Faculty, Institute, or Service then the dispute should be referred to the Procurement Services Office.

ESS Policies and ProceduresNote 24Item 12. Settlement of Disputes. For ESS projects the settlement of disputes will be as specified in the standard contract documents.

14. Document Retention and Audit Records

All tenders and quotations received should be retained for inspection by Audit. A record saying why the successful Supplier was selected should be made and kept on file. Records should be kept in accordance with the University’s ‘Document Retention Policy’.

The following are examples of documents in relation to the purchase which should be retained:

1. Quotes2. Tender assessments3. Goods receipt notes4. Invoices5. Credit notes6. Returns authorisations7. Tender opening forms8. Any other documentation relevant to the tender and order

placement process


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