policy and procedures april2011

7/29/2019 Policy and Procedures April2011

1/77

PURCHASING PROCEDURES

INTRODUCTION

PURCHASING PHILOSOPHY

PURCHASING POLICY

PROCEDURES Last amended

1. - Services (March 2010)

2. - Primary Budget Holder (March 2010)

3. - Authority to Order (March 2010)

4. - Selection of Potential Suppliers (March 2010)5. - Invitations to Tender/Quote (March 2010)

6. - EC Procurement Legislation (March 2010)

7. - Use of Purchase Orders (March 2010)

8. - Dealing with Suppliers (March 2010)

9. - Use of Specifications (March 2010)

10. - Expediting (March 2010)

11. - Contracts (March 2010)

12. - Purchasing Consortium (March 2010)

13. - Equality Statement (April 2010)

14. - Buyers Guide (March 2010)

15. - Financial Health Checks (March 2010)16. - Supplier Appraisal (March 2010)

17. - Approved Suppliers (March 2010)

18. - Purchasing Cards (March 2010)

19. - Negotiation Briefing Notes (March 2010)

20. - Purchasing Guidance Notes (March 2010)

(when bidding for funds)

21. - Consultancy (March 2010)

22. - Environmental Statement (May 2010)

23. - Purchasing Flowchart (March 2010)

24. - IT Policy (January 2011)

25.- Community Benefits (March 2011)


2/77

INTRODUCTION

The purpose of these procedures is to advise and assist those staff within the

University who undertake purchasing duties as part of their overall responsibilities.

Purchasing Services is part of Financial Services and its primary purposes are to

formulate Purchasing Policy, co-ordinate purchasing activities within the University

and to provide professional purchasing advice and assistance to all parts of the

University Group. A more detailed description of the role of Purchasing Services can

be found under the Service Standards section of these procedures.

All purchasing procedures are derived from the Purchasing Policy of the Universityand the Policy Statement now forms part of the Financial Regulations of the

University Group.

To assist with the location of Purchasing Policies within the regulations of the

University Group the following details are supplied:

Financial Regulations

The Financial Regulations of the University establishes approved practices governing

the purchasing process. The Purchasing Procedures cover the operational detail and

standard documentation which implement the Financial Regulations.

Purchasing Policy

Section E (46) of the Financial Regulations sets out the University's approved

Purchasing Policy.

Tendering Procedure

Section E (49) of the Financial Regulations sets out the University's procedures for

purchases valued in excess of 50,000.


3/77

PURCHASING PHILOSOPHY

The University aims to establish an effective and efficient organisational structure for all its

purchasing activities to ensure the promotion and achievement of value for money.

The established organisational structure seeks to secure the management advantage of devolved

budgets and decentralised purchasing with arrangements to secure best price, to promote good

practice in purchasing and ensure co-ordination of all buying activity across departments.

To achieve these aims, the University has a central Purchasing Office responsible for the

development of a purchasing strategy, the implementation of good purchasing practice, and the

provision of professional purchasing advice across the University.

Within each faculty and service, the University has finance officers to focus on the purchasing

activities and to develop a common approach to purchasing. These people are assisted by the

central Purchasing Office in areas such as contract compliance, purchasing procedures, and the

negotiation of standard item goods/services for use across all faculties and services.

The purchasing philosophy underpins the purchasing policy of the University, and the

implementation of the policy is detailed in the following procedure notes.


4/77

PURCHASING POLICY

The University's Views on Purchasing

The University seeks to ensure that its operational activities are consistent with, and supportive of,

the Mission Statement and its associated values and aims, and are consistent with the policy stances

taken by the institution on equal opportunities, regional affairs and environmental issues. The

University, therefore, wishes to ensure that the process of the purchasing of goods for the

University is sensitive to environmental factors, that it shows commitment to the region by,

wherever possible, procuring goods from local firms, and that it facilitates equality of opportunity

through contract compliance measures. These principles of purchasing will only be adopted,

however, where value for money can be achieved.

Policy Statement on Purchasing

The University's Purchasing Policy consists of a number values and aims. The Purchasing Policy

will also operate within the wider framework of the Financial Regulations and legislative

requirements.

The Purchasing Policy is as follows: -

1. The University will seek to achieve value for money in all purchases.

2. Environmentally friendlier products will be purchased, wherever possible.

3. Wherever possible, the University will not deal with companies who are known to operate

discriminatory practices. All University contracts will include a clause upon which contract

compliance will be sought.

4. Subject to European directives, products will normally be purchased within the North West

of England.

5. Goods and Services will be purchased from within approved contracts and ranges where

available.

6. Purchasing will be on the basis of "just-in-time" to prevent unnecessarily large levels of

stock being maintained.

Principles of Implementation

All contracts for standard items and environmentally friendlier products (as defined in the

purchasing procedures) will be negotiated by the Head of Procurement. Major items and group

purchases (as defined in the purchasing procedures) will be technically specified by the specialist

staff, and the Head of Procurement will undertake all contract negotiations.


5/77

PURCHASING PROCEDURES

1: SERVICES

The role of Purchasing Services within the University is to formulate Purchasing Policy, co-ordinate

purchasing activities within the University, provide professional purchasing and insurance adviceand assistance to all parts of the University Group.

In general, Purchasing Services shall be responsible for the following on behalf of the University

Group:

Central Role - Purchasing Services has a responsibility for all major purchases of

non-pay expenditure, including Capital.

Contract Development - Commodity Research; Contract Strategy; Supplier Appraisal; Contract

Reviews; Supplier Management.

Tender Process - Production and issue of documents; Supplier Appraisal; Commercial Evaluation;

Contract Award.

Operational Issues - Professional Purchasing advice and guidance relating to: acquisition of goods

and services; assistance with compilation of Specifications; obtaining quotations; commercial

negotiations; sourcing of Suppliers and commodities.


6/77

2: PRIMARY BUDGET HOLDER

The Financial Regulations of the University Group (see Section E (42) detail budget policy and

budgetary control.

Primary Budget Holders are authorised to approve expenditure, ensuring:

- the goods and/or services are necessary and the expenditure which will be incurred can

be contained within that part of the budget for which they are responsible;

- established contracts or supply arrangements as contained in the Buyers Guide are

utilised wherever possible;

- where alternatives are available, the purchase represents economy(using the whole life

costing method) and operational efficiency, and the advice of Purchasing Services has

been sought where necessary;

- action is taken on incorrect or poor quality deliveries and/or services, and that

Purchasing Services is advised of such instances;

- the correct purchasing route has been taken in accordance with the specified purchasing

limits, (see Section E ( 49.2) Financial Regulations).


7/77

3: AUTHORITY TO ORDER

Purchase Orders to be issued for any goods or services necessary may be authorised by a Budget

Holder with the following exceptions:

The Supplier attempts to impose terms and conditions which conflict

with the University's Standard Conditions (especially payment

terms); only the Head of Procurement, as nominee of the Director of

Finance, may vary the Standard Conditions under which the

University trades;

The single or cumulative value is in excess of 5,000 and three

quotations have not been obtained;

The single or cumulative value is in excess of 50,000 and has not

been subject to the Tendering procedure;

If there are any doubts or concerns with regard to the authority necessary to make a particular

purchase, please go to http://intranet.salford.ac.uk/finance/cms/pages/category?id=23 where the

document Delegated Financial Authority is held.

.

Summary of Purchasing Limits

Financial Regulations establish a Purchasing Limit of 20,000 - 50,000 where the requirement is

for 3 written quotations (i.e. formal offers with fixed pricing). Purchasing Office involvement may

be sought within this limit to assist in this process.

Value of Order/Contract

(Exclusive of VAT)

Purchasing requirements

Up to and including 1,500 Purchase Card to be used1,001 - 5,000 The Budget holder to obtain value for

money

5,001 - 19,999 Minimum of 3 written quotations

20,000 - 49,999 EG2 process

50,000 156,000 University Tender procedure

156,000 and above EU Tender Procedure

Low Value Orders

The process of issuing Purchase Orders has a significant administrative resource cost (time spent in

raising order, actioning copies, processing invoice, processing cheque, impact on finance system,

etc.). Therefore, for low value purchases, the University purchasing card should normally beutilised.
http://intranet.salford.ac.uk/finance/cms/pages/category?id=23http://intranet.salford.ac.uk/finance/cms/pages/category?id=23


8/77

4: SELECTION OF POTENTIAL SUPPLIERS

In line with good purchasing practice, the University needs constantly to monitor and limit its

established Supplier base in order to minimise administration resource costs and maximise bulk

purchasing power.

Details of existing supply agreements are listed on Purchasing Services website under the Buyers

Guide. This is constantly updated as contracts are renewed and new contracts are established.

All suppliers must be set up on Agresso before purchases can be made unless the University

Purchasing Card is being used to place the order.

During Quotation or Tender exercises, user Departments may recommend Suppliers to Purchasing

Services for technical reasons. There is no guarantee that such Suppliers will be successful or

acceptable once Purchasing Services has undertaken a commercial evaluation. Where strong

technical recommendations prove commercially unsound, Purchasing Services will liaise with the

User Department to reach an acceptable solution.

The Head of Procurement will evaluate the level of input for the University necessary to balance the

costs of obtaining further quotations against the likely benefits or value for money issues. The

Head of Procurement will make recommendations, where necessary, to the Director of Finance.


9/77

5: INVITATIONS TO TENDER/QUOTE

The University will seek to achieve value for money in all purchases.

Tenders

Any single or cumulative (over any 12 month period) purchase likely to be in excess of 50,000

(excluding VAT) may be subject to the University's formal Tendering Procedure. The Head of

Procurement will make recommendations to the Director of Finance regarding any necessary

Contract Strategy.

A copy of the Tendering Procedure may be obtained from Purchasing Services from

http://www.purchasing.salford.ac.uk/internal/documentation/tendering_procedures.php

Quotations

It is recognised that for most purchases of goods or services below 5,000 (excluding VAT), it is

unlikely that the purchaser within the department will require specialist or professional purchasing

input. Quotations for these purchases are still likely to generate savings for the purchaser.

Standard Conditions have been developed (please refer to the website

http://www.purchasing.salford.ac.uk/terms_conditions) which will apply to all purchases made by

the University, thereby reducing commercial risk in the procurement process.

Where it is intended to make a purchase from a Supplier not set up on Agresso, the procedure

outlined in Approved Suppliers must be followed before issuing a Purchase Order.

For purchases, which are greater than 5,000 in value (over any 12 month period ) but below the

Tendering threshold, an email, detailing requirements should be created if Purchasing Services is

to be involved in obtaining quotations. Quotations may be obtained by departments but must then

be forwarded to Purchasing Services for confirmation / clarification.
http://www.purchasing.salford.ac.uk/internal/documentation/tendering_procedures.phphttp://www.purchasing.salford.ac.uk/terms_conditionshttp://www.purchasing.salford.ac.uk/internal/documentation/tendering_procedures.phphttp://www.purchasing.salford.ac.uk/terms_conditions


10/77


11/77

highest value determines whether it is to be treated as a public supply contract or public

service contract.

1.3 Design contests

Design contests are procedures for obtaining plans or designs which are intended to lead to

the award of a public service contract, often including the offer of a prize or payment to the

participants. The value of the contest for the purposes of assessing whether it exceeds thethreshold is the value of the resultant public services contract plus the value of the prize.

1.4 Public Works Contracts

A public works contract is one for the execution, or design and execution, of civil

engineering or building works. A list of these works appears as an annex to the legislation.

The list is surprisingly wide-ranging; including such activities as demolition work, test

drilling, plumbing, wiring, installation of fixtures and fittings, painting and wallpapering and

renting of construction or demolition equipment with an operator. Where the contract

involves supplies and/or services as well as works, it should be classified according to its

predominant purpose.

A public works concession is a contract where the consideration (payment) for the works is

wholly or partly the granting of a right to exploit the works.

Subsidised works contracts are works contracts to which public authorities (which includes

universities) contribute more than 50% of the cost. Even though the contract might be

awarded by a private sector body, the public authority must ensure that the Regulations are

complied with. Note that the threshold value applies to the total contract value, not the

value of the subsidy.

1.5 Framework Agreements

A framework agreement can be made with one or more than two suppliers. Its purpose is

to establish the terms governing multiple purchases to be made over a particular period.

Special rules apply to the formation and operation of framework agreements; these are

described in more detail below.

1.6 An electronic auction can be used after full evaluation of initial tenders, where final bids are

ranked automatically, usually on the basis of price. The process is unsuitable for many

services and works contracts. Specialised software is required to undertake electronic

auctions, and there are special EU rules governing their conduct which are outside the scopeof these procedures.


12/77

2 VALUATION OF A CONTRACT

The proposed tender will fall within the Regulations if its estimated value is greater than the

prescribed thresholds. These have been summarised in Table 1 below.

The Regulations provide guidance on how to estimate the value of proposed tenders. If,

after calculation, the value of the contract exceeds the appropriate thresholds, it will fall

within the scope of the Regulations. The method of calculation used depends upon the typeof purchase to be undertaken.

Regulations Threshold European Threshold Equivalent UK*

Supply Contracts 193,000 Euros 156,442

Service Contracts 193,000 Euros 156,442

Works Contracts

inc. Subsidised Works

Contracts

4,845,000 Euros 3,927,260

* Calculated 1 January 2010, revised every 2 years

Table 1: Relevant Thresholds for Public Procurement Regulations

(VAT and Insurance Premium Tax are excluded)


13/77

2.1 Public Supply and Public Service Contracts

2.1.1 If the contract is for a one-off purchase, estimate the total value including all component

parts, transport costs, installation and commissioning.

2.1.2 The value of a series of contracts, or repeat orders, for the same or similar products, should

be estimated over a reasonable period (e.g. expected length of requirement.) This can be

either historically or in the future. Note, however, that requirements cannot bedisaggregated in order to avoid the Regulations.

2.1.3 Fixed term contracts for services or for the lease, rental or hire purchase of products should

be estimated for the duration of the contract. Where the contract is part of a series, the

whole series should be estimated over a 12 month period or longer, if appropriate. If a

contract is for a fixed period, say one year, but has an option to extend for up to two

additional years, then regardless of whether or not there is uncertainty about exercising the

extension option, the duration has to be taken as 3 years (the maximum duration in this

example) when estimating its value.

2.1.4 If a contract, or series of contracts, for services is for an indefinite or uncertain period, or the

total price is not known but the contract period exceeds 48 months, then its total value

should be calculated by multiplying the estimated monthly value by 48.

Note: Where the proposed contract includes more than one of the above elements, the

value must be determined by calculating the highest possible value.

2.2 Specific types of Public Service Contract

For the following types of services, the values to taken as a basis for calculating theestimated contract values are:

- insurance services: the premium payable and other forms of remuneration;

- banking and other financial services: the fees, commissions, interest and other forms

of remuneration;

- design contracts: fees, commission payable and other forms of remuneration.

2.3 Public Works Contracts

2.3.1 Estimate the value of the whole works contract.

2.3.2 Where the contract is part of a series necessary to carry out a project, it is the total value of

the aggregated contracts, which will determine if the contract falls within the scope of the

Regulations.


14/77

2.4 Waivers for Small Lots

For Public Supply, Service and Works purchases where the contracts are awarded at the

same time in the form of separate lots, it is the aggregated value of the lots which will

determine whether the Regulations apply. However, application of the threshold can be

waived in respect of lots below the Small Lots thresholds identified in the above table,

provided that the aggregate value of those lots does not exceed 20% of the value of the

overall aggregate value of the lots as a whole.

Example: Public supply contracts for a particular commodity will be let in five lots: three of

an estimated 20,000 each and two of 130,000 each. Thus the aggregate value of the

contracts is 320,000 which clearly exceeds the EU threshold. However, each of the three

small contracts falls below the Small Lots threshold. In aggregate, they comprise slightly

less than 20% of the overall value of the five lots (18.75% to be precise). Therefore the

three small contracts are not subject to the EU tendering process. The two larger lots still

collectively exceed the threshold, and must therefore be subjected to an EU tendering

process.

Note: Where the proposed contract includes more than one of the above elements,

the value must be determined by calculating the highest possible value.

3 SPECIFIC EXCLUSIONS

Contracts for the following types of purchase are excluded from the procedures:

a) Land, existing buildings or other immovable property or rights thereon. However,

financial services associated with the acquisition are subject to the procedures.b) Programme material for broadcast, and contracts for broadcasting time.

c) Arbitration and conciliation services.

d) Transactions relating to securities or other financial instruments (particularly where

these are to raise capital), and central bank services.

e) Employment contracts.

f) Research and development services, providing the service is wholly paid for by

University of Salford. However, where the benefits accrue exclusively to University

of Salford for use in its own affairs, the EU procedures do apply.


15/77

4 TENDERING PROCEDURES

Tenders may be sought by one of four procedures: Open, Restricted, Negotiated or

Competitive Dialogue. Open and Restricted are by far the most commonly-used procedures.

4.1 Open Procedure

A notice is published in the OJEU stating that tenders will be sought under the Open

Procedure. All potential suppliers requesting tender documentation by the deadline stated in

the notice must be sent the documentation within 6 days of their request. Alternatively the

documentation can be made available to all interested suppliers on the internet. The

advantage of the Open Procedure over the Restricted Procedure is that minimum timescales

are shorter. However, if there are a large number of potential suppliers in the marketplace,

use of the Open Procedure can result in a large number of tender submissions, which in turn

increases the assessment workload. One way of attempting to control the number of tenders

is to stipulate minimum levels of economic and financial standing or technical/professional

ability in the contract notice. Care must be taken to ensure that the minimum levels are

related to and proportionate to the subject matter of the contract, and that the levels used do

not exclude smaller companies unreasonably.

4.2 Restricted Procedure

A notice is published in the OJEU stating that tenders will be sought under the Restricted

Procedure. Firms communicate, in response to the notice, their interest in tendering for the

contract. The contracting authority, using criteria stated in the notice (e.g. legality to

operate, financial and economic standing, and technical/professional ability) which must be

drawn from a list provided in the legislation, selects firms who will be invited to submit a

tender.

It is permitted to state the number of firms the contracting authority intends to invite to

tender, sometimes expressed as a range. This is the main advantage of the Restricted

Procedure over the Open Procedure, since it restricts the number of tenders and

consequently reduces the amount of effort required to evaluate them. The range must be

stated in the contract notice and in any event the minimum number permissible is 5. If the

number of eligible respondents falls below 5, the process may continue, providing there is

still genuine competition. However no new candidates can be introduced at this stage and

the selection criteria cannot be artificially relaxed to allow more firms to pass to the tender

submission stage.

The criteria stated in the notice cannot deviate from those set out in the legislation. Thus it

can often be very difficult to differentiate suppliers so that enough of them can be eliminated

at the first (often called the prequalification) stage even after minimum levels of economic

and financial standing or technical/professional ability have been stipulated. Any exclusion

of a supplier at this point must be fully justifiable in terms of its failure to match the

selection criteria stated in the original contract notice.

If there is likely to be a large number of applications from interested firms, great care must

be taken to develop a prequalification questionnaire that has the desired effect of being able

to be used effectively and fairly to differentiate the firms capabilities, so that only the

required number of firms passes through to the tendering stage.


16/77


17/77

c) The goods are purchased on a commodity market.

d) The goods are being purchased on particularly advantageous terms because the supplier

is being wound up, is bankrupt or in receivership.

4.3.3 For public service contracts:

a) Where the contract follows a design contest and there is more than one successful

candidate. (Note that the Negotiated procedure cannot be used for a Works contract in

this manner.)

b) For insurance, banking and investment contracts, and intellectual services such as the

design of works, but only if the activities cannot be defined well enough for the Open

or Restricted Procedures to be used. The tender must be advertised in the OJEU.

4.3.4 For public works contracts:

Where the works are to be carried out solely for the purposes of research, testing or

development and not with the aim of ensuring profitability or recovering research and

development costs. The tender must be advertised in the OJEU.

4.3.5 For public works and public service contracts:

a) Additional works or services not included in the original contract where the need has

arisen through unforeseen circumstances, and where they cannot be technically or

economically separated from the original contract without major inconvenience to the

contracting authority, or where they are necessary for completion of the contract.

However, the Negotiated procedure cannot be used where the aggregate value of theadditional works or services exceeds 50% of the value of the original contract.

b) Where new works and services which repeat the initial contract are being carried out

by the same supplier, providing the original contract was awarded through the Open or

Restricted Procedure, and the original advertisement mentioned the possibility of

additional requirements. However this procedure may only be used during the three

years following the end of the original contract.

Note: A contract award notice must be published for every case where the Negotiated Procedure is

used regardless of whether the tender exercise was advertised or not. It is advisable to hold a report

on file should information be requested by HM Treasury on behalf of the European Commission.

4.4 Competitive Dialogue Procedure

This procedure is suitable only for particularly complex contracts, for example Public

Private Partnership (Private Finance Initiative) contracts where the contracting authority is

unable to specify its requirements at the outset without entering into detailed discussions

with potential suppliers. The aim of the discussions is to identify and compare possible

solutions before requesting final tenders.

A contract notice must be published in the OJEU setting out the needs and requirements ofthe contracting authority. A dialogue may then commence between the contracting


18/77


19/77

6 TIMESCALES

In each of the procedures, there are timescales laid down regarding publication of notices,

invitations to tender, receipt of tender submissions etc. These timescales vary with the

procedure used and are summarised in Table 2 below.

The publication of a Prior Information Notice (PIN) enables the time periods for the Openand Restricted procedures to be shortened. The PIN is intended to give potential suppliers a

brief overview of the forthcoming tender requirement. The PIN is only permissible as a

means of shortening timescales if it is sent for publication between 52 days and 12 months

before the date the actual contract notice is sent.

In cases of extreme urgency it is possible to use accelerated Restricted or Negotiated

procedures. The circumstances under which the shortened time periods can be used are

strictly defined and must be justifiable. The cause of the extreme urgency must be outside

the contracting authoritys control. For example, having to spend funds before a specific

date would not be considered an appropriate reason.

Where a contract is voluntarily advertised, i.e. where it is not expressly covered by the

requirements of the Directives or Regulations, then the timescale requirements are not

binding in relation to the tender procedures. Thus, it may be beneficial for a contracting

authority to give wider exposure to its requirements by choosing to use the European forum

even where not absolutely necessary.

Table 2: Summary of prescribed time periods

Procedure Phase Days

Open Minimum time for receipt of tenders from

date contract notice sent

45

Reduced when PIN published to, generally

But never less than

36

22

Restricted Minimum time for receipt of requests to

participate from date contract notice sent

30

Minimum time for receipt of tenders from the

date invitation sent

35

Reduced when PIN published to, generally

But never less than

36

22

Restricted

Accelerated

Minimum time for requests to participate

from date contract notice sent

15

Minimum time for receipt of tenders from the

date invitation sent

10

Competitive

Dialogue and

Negotiated

Minimum time for receipt of requests to


37

Negotiated

Accelerated

Minimum time for receipt of requests to


15


20/77

Notes:

a) The time period starts on the day the notice is despatched to the OJEU, not the date

when it is actually published. If the last day is a Saturday, Sunday or public holiday then

the receipt or closing date will be the first ordinary working day thereafter.

b) PIN = Prior Information Notice.

c) Timescales for requests to participate may be reduced by 7 days (5 days for accelerated

procedure) when the OJEU notice has been submitted electronically in an approvedmanner.

d) Timescales for receipt of tenders can be further reduced by 5 days where the contracting

authority provides full and unrestricted electronic access to the contract documentation

from the date of publication of the contract notice, providing the notice contains the

internet address where the documents are made available.

7 CONTRACT DOCUMENTATION

Once the contracting authority has established that the proposed contract falls within the

remit of one of the Regulations, and has selected which procedure to use, the contract must

be advertised and documentation prepared, paying special attention to the technical

specification and selection criteria.

7.1 Advertising Requirements

The Open, Restricted and, where applicable, Negotiated procedures require that the

contracting authority places a notice in the OJEU, stating its intention to seek offers inrespect of the perceived need. The notice must take into account the timescales detailed in

Table 2 above.

It is important that the maximum anticipated duration of the contract is stated in the notice.

For example, if the expected duration is 3 years but there is a possibility that it could be

extended to 5 years, then state up to 5 years in the notice. The circumstances under which

a contract extension might be granted can then be described with more precision in the

invitation to tender document.

The contracting authority cannot advertise the contract in its local or national press

before the notice has been dispatched to the OJEU. The advertisement must not contain anymore information than is contained in the OJEU notice.

7.2 Technical Specifications

When preparing the documentation it is necessary to ensure that the specifications for the

product are non-discriminatory. In particular, the specification must not be based upon the

specification of an existing product from one supplier. This would be in breach of the

regulations and is likely to invite challenges from other suppliers. If the requirement can

only be expressed by reference to a brand or proprietary name, then the name must be

accompanied by the words or equivalent.


21/77


22/77

9 CONTRACT AWARD

9.1 Award Criteria

Having ascertained the suitability of the tenderers, the contracting authority must award the

contract to the submission which:

offers the lowest price, or

is most economically advantageous to the contracting authority in addition to price, this

includes factors like quality, technical merit, aesthetic and functional characteristics,

environmental characteristics, running costs, cost-effectiveness, after-sales service and

technical assistance, delivery date and delivery period or period of completion.

In most cases it would be extremely unwise to award the contract on the basis of price alone

without giving any consideration to other factors.

The award criteria must be listed in the contract notice and/or in the invitation to tender

document. The relative weighting given to each criterion must also be stated. This can beexpressed in terms of a range with an appropriate maximum spread. These criteria and

weightings must be used in the tender evaluation; they cannot be altered after publication.

9.2 Abnormally Low Tenders

Tenders may be rejected if they are abnormally low but only after the tenderer has been

given an opportunity to justify/confirm or withdraw the offer submitted.

10 NOTIFICATION OF CONTRACT AWARD

10.1 Contract Award Notice

The contracting authority must publish a contract award notice in the OJEU within 48 days

of the contract award or establishment of a framework agreement. This requirement also

applies to categories of public service contracts covered by Part B (see section 1.2 above). It

is important to observe the mandatory standstill period (see section 10.3 below).

10.2 De-briefing Unsuccessful Tenderers

There is now ne need to provide a verbal de-brief as under the regulations the standstill letter

already provides detailed reasons fro not being successful and the recipient should be able todetermine whether they wish to start legal proceedings. If, however a verbal de-brief is

granted the following should be observed.

Be careful of discrepancies between the written standstill letter and any verbal debriefing

Ensure that the debrief is carefully planned and do not volunteer information

Ensure that clear records are kept of who said what, if necessary the meeting could be

recorded if you feel the risk could be high

If issues arise following the verbal debrief the standstill period can be restarted and a moredetailed standstill letter written to the supplier


23/77

All answers to questions asked in a debrief must be given to all the suppliers involved in the

tender process, even if they did not request a debrief and the standstill period has to then be

restarted

10.3 Mandatory standstill period

The reasons for rejecting a supplier must be provided at the start of the standstill period in the

format of a personalised letter and must include the following:

Information on when the standstill period will end, this will depend on how the standstill

period was communicated:

Electronic method, via In-Tend, email or fax not sooner than 24:00

on day 10

Non-electronic not sooner than 24:00 on day 15 from date ofsending or day 10 after the last communication has been received by

all the recipients

Notes:

- The last day cannot be a Saturday, Sunday, Good Friday, Christmas Day or

English Bank Holiday

- The date the last standstill notification is sent is Day 0

A full reason for the decision which has to include and cover:

The Award Criteria

Characteristics and relative advantages, although difficult to write, it is

important to be objective and avoid subjectiveness.

The suppliers score which should be justified as to how they were

scored and why i.e. the characteristics and relative advantages of the

winning tender(s)

The successful suppliers score

Reasons why the supplier did not meet the technical specification

Name of the successful supplier

The standstill letter has to be sent to all suppliers who have not been previously advised, for

instance, if advised at PQQ stage that they were not successful with reasons why, the standstill letter

does not apply.

It is best practice, if not using In-Tend, to request proof of receipt from all suppliers at the time of

notification.

General Advice


24/77

The standstill letter has to be sent as soon as possible after the award decision, therefore it is

critical that enough time is allowed in the tender plan to write the standstill letters as the

information now required is detailed

The award criteria is critical to a successful tender and must be well thought through before

the tender is issued as you will have to explain in detail as to why the supplier did not meet

that criteria and how they were evaluated

It is important to record the decisions in detail during the evaluation process (as this will

form the basis of the detailed content of the standstill letter)

The award criteria should be objective and easy to understand

Obtain evidence of claims that the supplier can meet requirements

If using Environmental as a criterion, full details are required, of the reasons for its use (e.g.

energy efficiency, reduced carbon footprint etc.), its relevance to the procurement, and the

economic advantage it brings to the university

Scoring presentations should be avoided, presentations should be used only as a mechanism

for clarifying the tender response to ensure the correct scores have been allocated. If

presentations are scored, suppliers could express concern that not all suppliers had been

treated equally during the presentation process.

When scoring PQQs or tender documents set out a number of keywords which you would

expect to see in an answer and score accordingly

10.4 Reporting Requirements

Contracting authorities are required to report, for each public supply and services contract,

details of the value, procedure, type of goods and the nationality of the successful tenderer to

H.M. Treasury. Purchasing Office will collect this information annually and issue a report

on behalf of the University.

11 DISPUTES AND REMEDIES

If a legal challenge is made, the University must automatically suspend the award until the

challenge is resolved.

11.1 Exceptions to the need for a standstill period

Below EU threshold procurements, although it is considered best practice.

Where no obligation to advertise in OJEU, eg below threshold, Part B Services or

Negotiated without call for competition

Only 1 tenderer


25/77


26/77

The contract will be declared ineffective:

if the University fails to comply with the requirement to advertise in the OJEU

if the University misinterprets the law or misapplies the facts, eg, use of negotiated

procedures without competition or believes the contract is outside the scope such as not

thinking that the value would exceed the threshold

some sort of competition held but not through OJEU

awarded contract is outside of the scope of the original contract notice

existing contract is subject to variation

To help minimise the risk:

ensure compliance with advertising requirements, seek advice from the ProcurementManager

have high confidence in the reasons for not advertising in OJEU and obtain evidence as to

why non advertising was permitted by the Regulations

if a contract notice has not been placed in OJEU but is above the thresholds, publish a

Voluntary Ex Ante Transparency (VEAT) notice in OJEU and ensure that at least 10 days

are allowed between publication of VEAT and the signing of the contract. If there are no

legal challenges to the VEAT after this period the contract can be concluded and its

effectiveness can no longer be challenged

11.3.2.2 Ground 2 Combined breaches of rules

Breaching of the main procurement rules, eg:

Mixing up the selection and award criteria

Not publicising the relevant importance of the award criteria

Not complying with minimum timescales

Inappropriate specification standards

Breach of new review procedures:

Breach of standstill period

Breach of automatic suspension obligation


Ensure compliance with Procurement rules

Ensure compliance with Standstill period rules

Note: A procurement procedural breach may still result in damages being awarded.


27/77

11.3.2.3 Ground 3 The Call-off procedural breach

Only affects:

Above threshold call-off contracts from multi supplier frameworks that require a mini

competition

A Dynamic Purchasing System

Does not affect:

Single supplier frameworks

Multi supplier frameworks or DPS for Part B services

Multi supplier frameworks where no mini competition is required

Below threshold call offs

Ground 3 only applies if 3 aspects are present:

Call off is above EU threshold and

The University voluntarily choose not to apply the standstill period, in which case the risk of

ineffectiveness will apply, and

An infringement of either mini competition rules under a framework or procedures rules in a

DPS

If all three apply, then the Court could declare the call-off contract ineffective.


Apply the Standstill period voluntarily, this will cause some delay in awarding the contractbut does minimise the risk of ineffectiveness

Consider how confident the University is that call-off procedure followed is robust, if

minimising the risk is the priority rather than awarding the contract, apply the standstill

period, however best practice is to apply the standstill period

Send the standstill letter to all suppliers named in the framework or to all tenderers if a DPS

Any single purchase call-off using framework suppliers over 156k has to be led by the

Procurement Department.

12. Time Limits

Three months remains the starting point for legal challenges (apart from ineffectiveness which is 6

months). The challenges from participants in the procurement are to be brought promptly and, in

any case, within 3 months from the date when the grounds for bringing the proceedings first arose.

This has been further clarified by case law, and the 3 months will start when the complainant

understands the reasons for its exclusion not simply that it was unsuccessful. Thus, if the Restricted

Procedure has been used and suppliers have been informed at PQQ stage that they have not been

successful, then 3 months will start when they understand the reasons why and decide to start a

legal challenge.

The time limits for ineffectiveness has a default of six months from contract award (or the date wasreasonable for them to know of the award). The 6 months, may be shortened to 30 days by


28/77

correctly applying a standstill notice and then confirming the contract award using a second

notification.

It is important, therefore, to issue the following documents at the conclusion of a tender:

Standstill Letter containing the required information (see 5.1.2 above)

Final Confirmation letter to all suppliers whom the standstill letter was originally sent

advising them that the contract has now been awarded, (providing no legal challenges have

been instigated)

Publish a Contract Award Notice through OJEU

13 Penalties

Where a Court makes a declaration of ineffectiveness the contract will be cancelled and it must alsoorder an additional civil financial penalty which is effective, proportional and dissuasive.

The University will then need to re tender the requirement if still required, pay the civil financial

penalty and, probably, damages to the appointed contractor that has lost the contract and the

complainant. Remember, the complainant only has to prove it was unfairly treated and not that it

would or could have won the contract.

Where the Court saves the contract from ineffectiveness due to, e.g., overriding reasons relating to a

general interest or there has only been an infringement on the standstill procedures the Court must

order the shortening of the contract and/or a civil financial penalty (fine) to which there has been no

upper financial limit set by the EU and, again, damages would probably be awarded to theappointed contractor and the complainant


29/77

7: USE OF PURCHASE ORDERS

Purchase Orders are formal University documents which, when issued to an external party, commit

the University to expenditure and form a legally binding Contract with the external party. An ordermust be raised prior to the ordering of any goods or services (unless the University Purchasing card

is being used.) Failure to do so will result in a breach of Financial Regulations.

Purchase Orders are individually numbered and are obtained through Agresso.

In order to reduce the commercial risk in the use of such documentation, Purchase Orders must

always be approved by the Budget Holder and any over 20,000 are approved by Purchasing

Services. The Universitys Terms and Conditions are available as stated on the Order Form. Only

the Head of Procurement, as nominee of the Director of Finance, may vary the Standard Conditions

under which the University trades.

Where Suppliers issue an 'order acknowledgement', then User Departments should check quantity,

price and delivery details against the original Order and discrepancies taken up with the Supplier

immediately. Of particular importance is the need to check whether the acknowledgement

attempts to enforce the Suppliers Conditions of Sale. If so, this must be challenged by fax or

letter before receipt of goods or services: please contact Purchasing Services for assistance, if

necessary.


30/77

8: DEALING WITH SUPPLIERS

All dealings with Suppliers must preserve the highest standards of honesty, integrity, impartiality

and objectivity, while remaining fair, efficient, firm and courteous.

Most transactions between the University and external Suppliers - although forming a legally-

binding contract - usually operate and conclude with relatively few incidents or disputes.

The following guidance points will help to ensure consistency of commercial activity, raise

awareness of contractual issues, and thereby lessen the risk of potential disputes.

1. Please ensure familiarity and compliance with the following:

- Selection of Potential Suppliers ( Section 5)

- Buyers Guide (Section 14)

-Terms & Conditions http://www.purchasing.salford.ac.uk/terms_conditions

2. It is not a policy of the University to pay for goods/services in advance: contact Purchasing

Services for advice.

3. When requesting quotations careful consideration should be given to the following areas:

- Specification or Operational Requirements

- Usage figures

- Quality standards

- Specified terms/conditions

- Delivery requirements

4. All Supplier agreements requiring the signature of a University representative (e.g.

service/rental/maintenance contracts) must be authorised by the Head of Procurement.

5. In the event of any legal, contract, or general supply dispute arising or likely to arise, advice

from Purchasing Services should be sought at the earliest opportunity. At all times, a

careful record must be kept of communication with Suppliers, particularly those by

telephone.
http://www.purchasing.salford.ac.uk/terms_conditionshttp://www.purchasing.salford.ac.uk/terms_conditions


31/77

9: USE OF SPECIFICATIONS

In general, a Specification is a description of the product or service required. An effective

Specification should enable Suppliers to tender or quote to the University on an equal basis andmust not show bias towards any one product, brand or Supplier.

Specifications are more likely to be used where the purchase is of significant value (e.g. during the

tender process), but can be utilised in the procurement of complex or specialised low value

commodities.

Guidance for the preparation of Specifications is detailed below:

Drafting checklist

use simple language, avoid using jargon;

define terms, symbols and acronyms;

do not expect the specification to be read by experts; write it so that a layman will understand;

use a logical structure;

be as concise as possible, but keep the meaning clear;

plan and analyse your needs;

arrange the components of the requirement into a logical form matching the evaluation model;

a good way of doing this is to set out a skeleton structure with the main headings and then add

in sub-headings as necessary;

do not embed requirements in background information - suppliers may miss them - keep

requirements in their own sections;

list the most important elements of the requirement first and work through to the least

important; and

discuss the requirement with colleagues, other users and procurement staff. During this

process you may also identify other topics you need to include.

endeavour to reduce costs (economy), and increase effectiveness and efficiency to contribute to VFM

endeavour to improve our carbon footprint by considering more environmentally friendly methods of

production/servicing etc.

Review checklist

A good specification should:

state the requirement specification completely, clearly, concisely, logically and

unambiguously;

focus on outputs not how they are to be met;

contain enough information for potential suppliers to decide and cost the goods or services

they will offer, or in the case of negotiated route arrive at realistic budgetary costs; permit offered goods or services to be evaluated against defined criteria by examination, trial,


32/77

test or documentation;

state the criteria for acceptance by examination, trial, test or documentation;

contain only the essential features or characteristics of the requirement;

provide equal opportunity for all potential suppliers to offer a product or service which

satisfies the needs of the user and which may incorporate alternative technical solutions; and

comply with any legal obligations e.g. under UK law, the EEC Treaty, an EC Directive or the

GATT Agreement on Government procurement.

A good specification should not:

over-specify requirements;

contain features that directly or indirectly discriminate in favour of, or against, any supplier,

product, process or source. Discrimination on grounds of nationality is illegal in the EC,

contrary to the GATT Agreement, where applicable, and may not achieve value for money.

Leading Edge Technology

Where equipment is specified at or near the leading edge of technology, it is common for the

specification to be developed in conjunction with one or more suppliers. It is important that

this process does not result in a specification which is so detailed as to eliminate any

effective competition. The focus should be on what the department or research project needs

rather than specifying what the supplier can supply. The approach should be to specify

performance rather than technical details. In the latter case, there is the risk that the final

product will be technically superb but does not do what is required.

In discussing specifications with suppliers it is essential that no commitment is entered into

prior to seeking tenders and quotations.

Include Extras

Consider specifying what is wanted on the basis that everything is negotiable. The specification could include:

provision for on-site tests, and pre-negotiation trials if these are desirable;

a price which is fixed and firm, irrespective of inflation or exchange rate fluctuations;

free delivery, installation and commissioning;

maintenance cover for however long the department needs it;

the price of consumables;

details of spare parts availability for the life of the equipment, together with contractual notification before the

supplier ceases manufacture of spare parts;

handbooks with full maintenance instructions, including circuit diagrams; training.


33/77

10: EXPEDITING

Expediting is 'progress chasing'. Once a Purchase Order has been issued, a check to determine

progress on the delivery of the products or services may be required (either before or after the

specified date). The responsibility for progress chasing rests with the Budget Holder/User

Department issuing the Purchase Order.

Any unreasonable delays or erroneous deliveries from a Supplier who is listed in the Buyers Guide

must be made known to Purchasing Services so that appropriate action can be taken.

Required delivery dates must be stated when raising Purchase Orders so that progress can be

checked against such dates. The use of 'Urgent' or 'ASAP' are not acceptable terms for

delivery dates.


34/77

11: CONTRACTS

.

Contracts will often take the form of 'standing offers', i.e. a firm price quotation which remains open

for a specified period (usually 12 months), so that Purchase Orders can be placed against the

standing offer as need arises. The Suppliers' prices are usually based on the University's 'best

estimate' of usage.

Once a contract or standing offer is in place, User Departments must ensure that those goods or

services are not purchased elsewhere, since the University will normally have entered into a legal

agreement for exclusive business with the contracted Supplier.

Minor or temporary price advantages are occasionally offered to User Departments from other

Suppliers. These should be advised to Purchasing Services but not taken advantage of, since theywould normally jeopardise greater advantages from the established Supplier.

Contracts or standing offers should be placed for a period appropriate to the value and effort

involved in their award process. The Purchasing Office can give advice regarding this issue.

Contracts/supply arrangements should be subject to regular review and a note of the review retained

on the contract file held in Purchasing Services.


35/77

12: PURCHASING CONSORTIUM

The University of Salford is a member of the North Western Universities Purchasing Consortium(NWUPC).

The Consortium consists of a number of commodity/service based user groups, representing most

University or Higher Education institutions in the North West of England and North Wales.

The Commodity Groups are:

Admin & Professional Services

Laboratory Supplies

Estates

Computer Supplies/Equipment

Catering

Domestic Supplies & Services

Stationery & Office Equipment

Furniture & Soft Furnishings

Audio-Visual Equipment

Telecommunications

Advantages of membership of the Consortium are:

- increased value for money because of bulk purchasing power;

- consistency of supply arrangements within the sector;

- 'networking' of best practices within user Departments;

- administration resource savings due to unnecessary tender or quotation exercises.

Details of Consortium contracts or supply arrangements are included in the Purchasing Buyers

Guide.

Further information relating to the Consortium appears on the website atNorth Western

Universities Purchasing Consortium
http://www.nwupc.ac.uk/http://www.nwupc.ac.uk/http://www.nwupc.ac.uk/http://www.nwupc.ac.uk/http://www.nwupc.ac.uk/


36/77


37/77

14: BUYERS GUIDE

Purchasing Services has a Buyers Guide on the Purchasing Web site with a listing of all current

contracts or supply arrangements (http://www.purchasing.salford.ac.uk/internal/buyers_guide/)

The Guide covers a large proportion of goods and services purchased by the University. Where any

necessary or regular items are purchased but not contained within the Guide, please advise

Purchasing Services.

Standard Items and Contracts

As defined in the Buyers Guide these are items normally used and purchased by all user

Departments although some items are ordered via Estates.

Purchasing Services will update the web page (additions, new contract details, etc.) to ensure that

the Guide remains current.
http://www.purchasing.salford.ac.uk/internal/buyers_guide/http://www.purchasing.salford.ac.uk/internal/buyers_guide/


38/77

15: FINANCIAL HEALTH CHECKS

Purchasing Services has the responsibility of carrying our financial appraisals on new and existing

suppliers.

Financial appraisals will take the form of a credit report via N2Check.

Although credit reports and audited accounts provide a good indication of Suppliers financial status

or health, care must always be taken as the information can be up to 12 months out of date.

Due to the diversity and volume of University business it is not appropriate to carry out financial

appraisals on all Suppliers this will depend on the contract value but is mandatory for all new

purchases / contracts that have been through the tender process.


39/77

16: SUPPLIER APPRAISAL

It is an objective of the University to continually improve the quality of goods and services

delivered into the University by external suppliers.

Any problems arising with the supply of goods and services should always be notified to

Purchasing Services immediately to ensure they are dealt with promptly and are not allowed to

escalate. Staff in Purchasing Services are skilled in dealing with suppliers and should always be

involved in any discussions that take place.

Supplier performance on University contracts are regularly reviewed through the Contract

Monitoring process. Where appropriate, contracted suppliers will attend regular review meetings

throughout the life of the contract. The timings of the meetings will depend on the type of contract,

frequency of issues etc and will be decided between Purchasing Services, the user department and

the Supplier. Meetings may include discussions regarding the suppliers performance and adherenceto the service Level Agreement / contract terms.


40/77

17: APPROVED SUPPLIERS

1. Approved Suppliers

An approved supplier is one who has been authorised by the Head of Procurement to supply

goods and/or services in accordance with Purchasing Procedures; Selection of Potential

Suppliers (section 5) and Dealing with Suppliers (section 9).

University personnel are required to utilise the existing Supplier base for the supply of goods

and services. In considering a variation of supply a user must indicate their intention before

placing an orderby completion of a New Supplier Form ( LINK) Purchasing Services will

then consider the requirements of the user, evaluate the supplier and will confirm their

decision within TWO working days. Purchasing Services will then inform the Creditors

Office within Financial Services of their decision by authorising the Application.

Purchase Orders must not be placed with Suppliers until approved by Purchasing

Services. If the user has already placed an order they must be considered in breach of

Financial Regulations.

User concerns/problems should be directed in the first instance to Purchasing Services.

The payment of Approved Suppliers shall be in accordance with the Creditor PaymentBusiness Rules. Purchasing Services can negotiate special terms subject to the cash flow

requirements of the University to ensure the availability of funds. Special payment terms

must then be communicated to the Creditors office before the invoice is received.

O


41/77

18: PURCHASING CARDS

1. Chapter 1 - The Purchasing Card

2. Chapter 2 - Purchasing

3. Chapter 3 - Safeguarding the Use of the Card

4. Chapter 4 - Contacts and Useful Telephone Numbers

5. Chapter 5 - Processing Purchasing Card Transactions

6. Chapter 6 - Procedure for the Introduction of Suppliers to the Purchasing Card System

7. Appendix 1 - University Instructions for On-Line Auctions

Chapter 1 - The Purchasing Card1.1 Why the Purchasing Card?

The Purchasing Card offers the University of Salford the opportunity to involve both the

focus and the flexibility of its purchasing procedures. Card users will benefit by enhancing

their ability to make decisions which will directly affect and impact on their departments,

whilst there will also be a reduction in the volume of invoices and associated paperwork All

of this will be done without compromising our control of the Universitys money and, at thesame time, we will benefit from higher quality management information as supplied by the

service provider.

1.2 The Purchasing Card

The card looks like any normal credit card, embossed on the card is the following:-

The University name

The Card user Name and Cost Centre and Budget Code

Expiry Date

Card Number

A card user will not be allowed to breach the rules regarding the use of the card contained

within this document. Each card user will be notified of the credit limits applicable to thecard under their responsibility.

Chapter 2 - Purchasing

2.1 When a purchasing requirement has been identified, the card user should:-

2.1.1 Check to see if the total value of the purchase is within the transaction limit. If the item

is outside the limit, then the normal purchasing procedures are followed.

2.1.2 Check if it can be sourced by an existing supplier, who is able to accept Visa. You

should visit the Purchasing Services web pages first atwww.purchasing.salford.ac.ukto

check if you can use University approved suppliers.
http://www.purchasing.salford.ac.uk/internal/documentation/pcard_policy.php#1http://www.purchasing.salford.ac.uk/internal/documentation/pcard_policy.php#2http://www.purchasing.salford.ac.uk/internal/documentation/pcard_policy.php#3http://www.purchasing.salford.ac.uk/internal/documentation/pcard_policy.php#4http://www.purchasing.salford.ac.uk/internal/documentation/pcard_policy.php#5http://www.purchasing.salford.ac.uk/internal/documentation/pcard_policy.php#6http://www.purchasing.salford.ac.uk/internal/documentation/online_auctions.phphttp://www.purchasing.salford.ac.uk/http://www.purchasing.salford.ac.uk/http://www.purchasing.salford.ac.uk/http://www.purchasing.salford.ac.uk/internal/documentation/pcard_policy.php#1http://www.purchasing.salford.ac.uk/internal/documentation/pcard_policy.php#2http://www.purchasing.salford.ac.uk/internal/documentation/pcard_policy.php#3http://www.purchasing.salford.ac.uk/internal/documentation/pcard_policy.php#4http://www.purchasing.salford.ac.uk/internal/documentation/pcard_policy.php#5http://www.purchasing.salford.ac.uk/internal/documentation/pcard_policy.php#6http://www.purchasing.salford.ac.uk/internal/documentation/online_auctions.phphttp://www.purchasing.salford.ac.uk/


42/77


43/77

2.5 How to use the Card

The card can be used for:-

Telephone/verbal ordering

Point of sale (remittance slip / face to face) Booking forms

On-line purchasing

2.6 Purchasing with the Card

You should ensure that:

The card user identifies purchasing requirement.

Contact the supplier to ensure that they can accept the Visa payment.

Proceed to order goods / services quoting all relevant numbers and confirming with

the supplier the amount of the transaction.

The Visa voucher is sent with the goods advice note which is dispatched with the

goods or by post in the case of a services related purchase.

The VAT receipt must be under separate cover to the card user's address.

Both items to be addressed to the card user and marked "Paid by Visa"

Update card user log with all purchase details upon placement of order.

Goods/service received - including VAT receipt. Please ensure that you include the

actual receipt and not the credit card cardholder copy.

Goods/service checked and reconciled to requirements.

Receive and verify monthly credit card statement (see 2.7 below)

2.7 Problems with the Supply of Goods / Services

Responsibility of the Card user

If you find that the supplier cannot honour your order immediately contact the supplier

requesting a refund voucher is put through the purchasing card and aVAT credit note is

issued.

Does the supplier agree to issue a credit?

Yes No

Details on transaction log and await receipt ofcredit, update

transaction log.

Pursue with supplier until

agreement is reached.

On receipt of statement checkcredit has been included.

Ifcredit has not been received, contact supplier to find out

when the refund voucher was processed.

NOTE: If all else fails and a credit cannot be obtained contact the Head of Procurement.


44/77

2.8. Dealing with the Purchasing Card Statement


On receipt of the statement ensure that you have all the VAT invoices

IF YOU DO HAVE THE VAT INVOICES IF YOU DO NOT HAVE THEVAT INVOICES

Check that the details on the statement are the same as

invoice details and log sheet

Contact the supplier and request a

copy invoice

Await copy invoice

Does the transaction log correspond to the statement?

YES

Are the statement details correct?

YES

Get your authorising person to sign and date the transaction log

Send the transaction log to creditor payments within 21 working days Keep all invoices, receipts and statements within department.

Purchasing Services check the monthly statements for all purchases via the purchasing Card.

If you receive a query from Purchasing Services you should respond as a matter of urgency to

satisfy audit requirements.

2.9 Dealing with the Transaction Log


On the face of your log sheet, enter the following: Name, Department and Extension

Number

Enter each individual transaction detail onto the log Make sure you get a receipt/invoice for each transaction.

Review weekly and chase suppliers for invoices not received

Check invoice details against log details

Keep receipt / invoice and await receipt of monthly statement

Update transaction log with outstanding details, and keep a record of any invoices that

do not appear and await the next statement

2.10 Checking the VAT Invoice


On receipt of the invoice - is the following correct? (Check against entry on the log sheet):

Items

Quantity

Price

On receipt of the invoice is the following correct?

Yes No

Attach invoice to, and

update, the log sheet

Immediately contact supplier requesting a refund voucher is put

through Purchasing Card and a VAT credit note.


45/77

Chapter 3 - Safeguarding the Use of the Card

3.1 The Card user

The card user ONLY may use the card and is responsible for the card details.

Your purchasing card must be stored in a locked fixed (not mobile) safe at all times. Ifyou do not have access to a fixed safe your card must be retained by the Finance

Division.

It is essential that your card remains on University property at all times and is not

stored in your purse or wallet.

3.2 Credit Limits

The card user will be advised of their overall credit limit.

The maximum spend on a single transaction value including VAT is 1500.00.

You must not split transactions to avoid the single transaction limit.

Disaggregation of spend will be reported to internal audit.

The monthly limit for your card is 7,500 The reporting period for this is 29th of each calendar month.

Occasionally you may need to increase your limit which can be done almost instantly

if the request is approved. Should the need arise please contact Purchasing Services

directly to arrange.

3.3 Procedures

The procedures shown in this manual must be followed at all times.

If the card user has any concerns regarding the use of the card, advice can be sought from anyof the contact people in 4.0 below.

3.4. Administration Centre (Finance Division)

Finance Division will maintain a register of all card users, card numbers and locations. Any

change of location or bucket code must be notified in writing immediately.

All statements will be checked for misappropriation of University funds. Detailed analysis

data is available and will be used for control purposes by the Finance Division.

For procedure regarding misuse of the card, please refer to 3.7. For internal regulationsregarding use of the card, please refer to 3.8.

3.5. Leavers

It is the card user's responsibility to ensure that notice of their leaving is given to Purchasing

Services at the earliest opportunity. It is the responsibility of the immediate manager of the

leaver to ensure that the above information is passed to Finance Division in writing.

3.6. Unauthorised use of the Card Details.

In the event of unauthorised personnel obtaining card details


46/77

The authorised card user must inform Purchasing Services immediately.

The card will be stopped immediately.

A replacement card number will be arranged and provided as soon as possible.

3.7. Misuse of the Card

The card MUST ONLY BE USED to procure goods / services on behalf of the University of

Salford by the cardholder.

Any misappropriation of University funds will be treated as GROSS MISCONDUCT and

dealt with in accordance with the University's disciplinary procedures.

3.8. Financial Regulations and Purchasing Policy

1. The purchasing card facility must be used in conjunction with the University's

Financial Regulations and Purchasing Policy.

2. It is mandatory that card users will continue to place their business with University

approved suppliers wherever possible. Internal audit will check regularly for non-

compliance and checks will also be made against reports provided by the purchasing

card company. Should failure to comply be detected, card users will be asked to

officially explain their actions.

3. The minimum penalty for continued non-compliance with either 3.8a or 3.8b will be a

suspension of card privileges. Other sanctions may also be imposed.

Chapter 4 - Contact People And Useful Telephone Numbers

Useful Contacts

Name Title Tel

General

Enquiries

Mon-Yee

LingFinance Assistant - Purchasing 57239

Liz Owen Accounts Manager - Purchasing 55017

Other Contacts

David Horton Head of Procurement 57983

Hilary Wright Creditor Payments - Finance 55159

Kelly

Millward Management Accounts - Finance 54219

Hazel Walne Creditor Payments - Finance 55043

Company Barclaycard* Help Desk

(Middlesborough)

0345

001001

* Quote card number, name and transaction query, date and amount.

Chapter 5 - Processing Purchasing Card Transactions

5.1 Making a Purchase

Purchases can be made using a "purchasing card" following the guidelines for this purpose.Please note that the provisions of the University's purchasing policy still apply.


47/77

5.2 Transaction log

Details of all purchases should be entered onto the transaction log at the time the purchase is

made.

A transaction log must be submitted to Creditor Payments within 21 from the date of thestatement.

The transaction log must be signed by the duly authorised signatory.

If transaction logs are not submitted within the required timescales the card will be

suspended.

5.3 Input on to AGRESSO

Transactions should be posted onto the Agresso system using one batch at month end.

The batch must be checked against the total on the statement to ensure it accurately reflects

the actual spend for the month.

Once the batch has been entered the batch number must be noted on the transaction log

before it is sent to the Creditor Payment department.

The 2228 purchasing card control account must be checked to ensure it has a zero balance

after the batch has been entered.

Any balance remaining in the 2228 account after the batch posting must be investigated andcleared within 21 days of the statement date.

5.4 Receipt of Goods/Services

When the goods or services have been received the "goods received" column of the

transaction log should be initialled.

Similarly, when the invoice arrives (by separate cover) the "invoice received" column should

be initialled. The invoice details should be checked against those entered on the transaction

log. If the invoice is incorrect a query should be raised immediately with the supplier. If the

transaction log is wrong it should be corrected.

Copies of invoices received in respect of purchasing card transactions should be attached to

the copy of the transaction log on which they are recorded.

NB Care should be taken to ensure that these invoices are not processed onto AGRESSO.

5.5 Statement check

The statement date is the end of the month. When the statement arrives it should be checked

against the transaction log. The statement date should be entered on the log for every

transaction listed on the statement.


48/77

Any items appearing on the statement which are not on this month's transaction log (or

brought forward from an earlier month) must be investigated immediately. If they are genuine

purchases they should be entered on the log and input to Agresso. If not they must be queried

with the supplier and a credit requested.

Any items on the transaction log which do not appear on the statement should have thestatement date left blank - they should appear on a later statement.

When the check is complete the statement should be initialed, the transaction log should be

signed by the card user and the designated authorised signatory. The transaction log should

be sent to Creditor payments, not the statements or receipts.

5.6 Payments

Payments of amounts spent using purchase card will be made monthly by direct debit. The

payment will be made 7 days after the statement date.

Payments will be processed in Creditor Payments Office. The total spent by each card user

will be charged to the department's purchasing card bucket code.

5.7 Agresso input of Purchasing Card Transactions

From the main menu select as follows:

Agresso Financials

Accounts payable

Payments Manual payments

You will now see the input screen

First Stage

For the first line of the transaction, use the following procedure:

Tab through the period and transaction date these are automatically generated

Transaction number - tab through (generated at the end)

The account code is 2228 (purchasing card account code) Cost centre - tab through

Project code - (F9 to search if not known) - the project code of Visa payments usually

contains Z03 - enter your 'bucket' code

Tab to current amount - input negative amount eg. If total on the statement is 100

(inc. VAT), type in -100

The figure will appear in red

Next

The text - it is very important that this filled in include your department, for example CPO or

Languages. Also include 'Visa Statement m/e _ _ / _ _ / _ _ _ _ Type in PCP (for Purchasing

Card Process) and the name of the company the goods were bought from.


49/77

Tab through to the bottom of the table and the information appears at the bottom of the screen

Second Stage

Tab through to the start, (account code) follow the procedure as before only changing the

account code and the project code with the relevant codes to be charged

The tax code is left at zero (even if there is VAT on the goods)

The amount should be a positive black figure now, including VAT

The text, again this field must be filled in. Please input the details of the supplier,

PCP, invoice number, invoice date and the goods purchased. There is space for 50

characters so put in as much information as possible.

Tab down to the bottom, and the table total changes to zero.

When the lines are balanced to zero the transaction can be saved

Press the save button and note the transaction number on the log sheet

Agresso will not allow you to save the transaction if the last line does not balance

Chapter 6 - Procedure for the Introduction of Suppliers to the Purchasing CardSystem

6.1 First Contact

Card users should first check that their primary suppliers are VISA capable.

6.2 Register of VISA capable suppliers

Purchasing Services intends to keep an up-to-date register of all regularly used, VISA

capable, University suppliers who will be placed on the University web pages. Card users are

advised to check this list prior to contact with a supplier.

19: NEGOTIATION BRIEFING NOTES


50/77

Why negotiate

As we are spending taxpayers money, we are publicly accountable and must ensure

that value for money is obtained. Negotiation is one method of achieving this. Also

savings made enable budget holders to gain more from typically decreasing budgets.

When conducted with integrity and professionalism negotiation is a perfectly logicalstep in the procurement process. It must be carefully planned and managed so that

confidence and trust in the purchaser (which in the longer term translates into better

value for money) are always retained. Suppliers who realise that their customer always

wishes to negotiate will invariably add a little on to their price to compensate.

Conducting a basic negotiation

A negotiation strategy should be developed prior to the negotiations taking place.

Analysing information, identifying objectives, formulating a strategy and ensuring that

you are authorised to conduct the proposed negotiations will help you to negotiate

from a position of strength and achieve an effective result. Ensure you differentiate

from facts and assumptions.

1. Pre-Meeting Strategy Development

When creating your strategy consider all potential items for negotiation and ways in

which the Universitys needs may be met. Consider also the current market trends

and the suppliers current and future business situation e.g. seasonal variations,

current financial standing and market strategies. Analyse the faults of suppliers

products, even if they are unimportant to the purchaser, getting the supplier to

identify / confirm weaknesses can put the balance of power on your side.

Considering many options will allow you to change tack during negotiations if

necessary.

1a. What to negotiate

Price (except in EU contracts)

supply and cost of spare parts

earlier delivery/completion dates

warranties/guarantees/maintenance/repair/after sales service

compensation for failure to meet specified requirements.

quantity/educational discounts. This list is not exhaustive, it is a concept of

purchasing that everything is negotiable.

2. Meeting - Introduction

Home turf is always useful, familiarity with environment and information to hand

offers a position of strength from which to conduct proceedings. The meeting

should commence with an introduction, giving background information and gently

leading up to points to discuss. Allow suppliers time to talk, you can pick up useful

information prior to negotiating.

3. Meeting - Discussion


51/77

Commencing the process of discussion, start with items you will find easy to agree

on to build a relationship. Suggest a break if things become difficult or deadlocked.

4. Tactics

Ask suppliers what you could do to improve your dealings with them, there may besomething important to them which involves little effort on your part. Such

concessions can dramatically improve a suppliers impression of the University as a

customer.

Salespeople are highly trained and motivated to fend off their competitors and win

your custom so be on your guard.

Avoid situations where a supplier knows they will get an order. This can occur

when they have the best product to meet our needs, deadline date or because an end

user has advised them!

When undertaking team negotiations ensure that all members are aware of their rolein the negotiations and the tactics to be deployed.

Ask for cost breakdowns to include the profit margin, labour and various product

components. This enables comparison between suppliers, which you can then use

to query any anomalies.

Recognise suppliers strengths and weaknesses in relation to your requirements.

Ensure that your weaknesses are played down, put in a positive light, or not

disclosed at all. Make more of the suppliers weaknesses and less of their strengths.

Make more of your strengths. Think not of how little your concessions mean to you

but of how much they may mean to the supplier.

Reserve your position until you see the full scope of the proposed deal. Never agree

point by point. Using conditional language e.g. if... then perhaps ... can assist you in

this. Try not to concede without gaining a concession from the supplier, always

SOMETHING FOR SOMETHING! Observe how the supplier negotiates and

adjust your tactics accordingly, or choose to take the lead.

5. Meeting - Close

Once agreement has been made summarise the points and method ofimplementation. Make an effort to leave the supplier with some satisfaction at the

completion of a negotiation. Such satisfaction may be nothing more than

understanding why it has been necessary for him to make concessions. Aim for a

win win situation.


52/77

6. Ethics

Contracts for the supply of goods and services do not have to be in writing to be

legally enforceable and so great care must be taken during any negotiations to avoidentering contracts orally.

Negotiation sh

policy and procedures april2011

Documents