Procurement Objectives, Regulations & Procedures

Regulations, Guidelines and Procedures for the Procurement of Goods and Services

Updated January 2017

In addition to the regulations, guidelines and procedures detailed below, there are specific regulations governing the use of the University's purchasing card programme . There are also regulations governing the procurement of specific services, for example, consultancy, travel and advertising. Such regulations should therefore be viewed in conjunction with those below.

For the purposes of these guidelines, the word 'unit' refers to Schools, Directorates, Institutes, Service Units, etc.

IN THIS SECTION

 

 

General

Anyone committing University funds for the supply of goods and services must adhere to the University’s procurement regulations. These regulations apply to all purchases, regardless of the source of the funds (e.g. general, research and other external grants, commercial/trading areas etc.) - in other words, any transaction which is processed via the University's financial system.

With regard to transactions for or by joint appointees or jointly funded units, if funding is channelled through the University's system, then, regardless of the source, the purchase must comply with the regulations.

The direct contact between the University and outside agencies selling goods or services, is an area which is particularly vulnerable to fraud, hence, it is critical that the University and all members of staff are protected by the use of strict and formal procedures for obtaining quotations, authorising expenditure, recording the receipt and acceptance of goods and services and clearing invoices for payment.

 

The University as a Contracting Authority

The University is a body governed by public law which means that it is bound by EU procurement rules - i.e. the Public Contracts Regulations and associated case law. 

Further, all its procurement activities must follow the rules and principles of the EC Treaty which require that all suppliers must be treated with the same degree of non-discrimination, equal treatment, transparency, proportionality and mutual recognition.

This means that the University must ensure that adequate control arrangements are in place in respect of all of its procurement practices and that such practices comply, at all times, with the procurement regulations outlined below. 

It should be borne in mind that non-compliance with procurement regulations can lead to:-

  • public accountability issues - due to a perceived mis-use of 'taxpayers' money'
  • possible legal challenges from suppliers
  • reputational and financial risk to the University

 

Check List for Buying Goods and Services

This checklist for purchasers provides 'at-a-glance' guidance on what should be  considered when purchasing goods or services on behalf of the University.

 

Financial Thresholds

The University has a number of prescribed financial levels above which different procedures apply. These are summarised below and will be reviewed periodically and revised as appropriate.

 

Please note the change to the requirement for competitive quotations, effective from 1 November 2012.

Threshold / Band (excluding VAT)

Requirement

A.

£2,500

Orders with values below this threshold may be approved by a Nominated Buyer.

B.

£2,500 to £30,000

All purchases of goods and services require at least three written competitive quotations.

C.

> £30,000

All purchases of goods and services are subject to a competitive tendering exercise which must be handled by the Procurement Office. (The Procurement Office should be contacted as soon as possible, once a requirement has been identified.)

D.

OJEU/EU Threshold*

All purchases of goods and services are subject to tender under European procurement regulations.  All such tenders must be handled by the Procurement Office. (The Procurement Office should be contacted as soon as possible, once a requirement has been identified.)

E.

OJEU/EU Threshold*

Major works contracts exceeding this value must be tendered by the Procurement Office under European procurement regulations.

*These thresholds are subject to change – please contact the Procurement Office for the up to date thresholds.

(General guidelines on the issue and receipt of quotations can be found at 'Guide to Seeking Competitive Quotations'. See also guidelines on Equipment Purchasing.)

 

Calculating Cost Thresholds

In order to determine which of the above thresholds apply to a purchase, the aggregated total of the goods or services required over a specific period should be taken into account. For example, if a consultant is required to provide a service to the University for two days per month over a two-year period, then the cost of the service should be estimated as no. of days per year (24 in this case) x estimated daily rate (eg £500) x 2 years. The estimated total cost of the engagement would therefore be £24,000 which requires four competitive quotations.

 

Purchasing Secondhand, Reconditioned, Ex-Demonstration or Refurbished Equipment

Occasionally, items of used equipment will become available at a price which is a fraction of the cost of purchasing the equipment new. Purchasing secondhand, reconditioned, ex-demonstration or refurbished equipment is permitted as long as value for money is being obtained and it can be determined that the equipment will remain fully operational for the period of its use.

To this end, when deciding whether to purchase used equipment, the usage history must be taken into consideration in line with the purchase price and the age. The seller should be able to provide a history of the equipment to inform the decision whether to proceed with the purchase. Common sense should prevail in that if the equipment has been used in an environment and for a purpose which means that heavy wear and tear is likely, then it should not be purchased. The buyer should also be satisfied that the saving being made on the used equipment, compared to buying new, is significant, taking into consideration the various factors detailed above.

It is also advisable to seek as a minimum a 12-month warranty with any used equipment rather than the 3 or 6 months' cover which is usually offered.

With regard to competitive quotations, if other sellers are offering similar used equipment, then these may be used for comparison purposes. In most cases, however, such equipment becomes available as a 'one-off' and hence, when satisfied that a purchase of used equipment should proceed, the official order should be accompanied by a quotation for the used equipment together with a quotation for the item if it were to be purchased new. If possible, the 'new' quotation should be from an alternative source but if not, a quotation from the same supplier will suffice.

Purchasing Secondhand Vehicles

Any unit considering purchasing a secondhand vehicle should contact the Transport Manager for advice.

Purchasing Items from Auction

Occasionally, an opportunity arises whereby an item may be available to purchase at auction.  As different auction houses manage purchases in different ways, any unit wishing to discuss the purchase of an item in this manner should contact procurement@qub.ac.uk for advice.

 

Direct Award Declaration

Where a procurement can only legitimately be facilitated via a sole supplier, the Direct Award Declaration must be completed and uploaded on the requisition on P2P.

The Procurement Office will use a method of random sampling to determine that validations provided in such cases are legitimate.

Regarding sole or limited supply sources where the value exceeds Threshold D, the Procurement Office will advise on the most appropriate means of competition.

 

Tendering for Goods and Services

Users must contact the Procurement Office as early as possible in a procurement exercise where the estimated expenditure is likely to exceed Threshold D. This early contact is most important as it can save many hours of wasted or duplicated work if competition procedures are required and have not been followed.

A detailed specification of the requirements must be provided as the basis for the tender documentation.  When specifying a requirement for goods or services - particularly in relation to equipment - it should be borne in mind that the specification should be unambiguous whilst, at the same time, ensuring that competition is not restricted by making the specification so explicit that it 'locks out' certain suppliers from tendering, which could result in a legal challenge against the University.

For equipment tenders, the lead user will be required to complete a Statement of Need as well as providing a technical specification for the item(s) and determining the standards and performance criteria on which the item(s) will be scored. 

The Procurement Office uses a Tender Assessment Model for all tender evaluations.

 

Importing Goods

For notes on importing goods, the associated costs and Incoterms, click here

Nominated Buyers

The University has a network of Nominated Buyers who are members of staff nominated by their Head or Director. A Nominated Buyer has delegated authority by the Head of Procurement to approve requisitions with values up to threshold A.

Nominated Buyers act as an extension of the central procurement team and approve requisitions, having ensured that procedures have been followed, central contracts used where appropriate and value for money obtained.

 

Guide to Seeking Competitive Quotations

The procedure to be followed when seeking competitive quotations for goods or services can be found here.

 

Guide to Ethics in Procurement

Guidance on the ethical standards which apply to all University procurement can be found here.


Pre-payment of Procurement Orders

On some occasions, it may be necessary to pay for goods or services prior to receiving them. It should be noted that wherever possible, pre-payment should be avoided as it places University funds at risk and it may be very difficult to obtain a refund if the supplier does not honour the procurement order. This is of particular importance where large sums of money are involved.

Particularly in the case of large items of scientific equipment which are being purchased as the result of a tender, a supplier may seek payment in a number of stages. Members of staff must not become involved in negotiating payment terms. It is University policy that stage payments will only be permitted where there is clear evidence that work of that value has been completed and/or the supplier provides a banker's guarantee that all monies paid will be refunded in full, should the supplier fail to fulfil the contract. In cases such as this, advice should be sought from the Procurement Office.

Given this policy, when ordering large items of equipment, consideration should also be given to any building work and/or services which may be required prior to installing the new equipment. Inability by the University to take delivery of such equipment can result in storage payments being requested by the supplier or, at worst, an action in breach of contract by the University.

Where pre-payment is approved, then a pro-forma invoice should be sought from the supplier. The supplier should be advised that the invoice header should be clearly marked 'pro-forma'.

The official order must have the required approval after which the pro-forma invoice should be processed on P2P in the same way as a regular invoice.  It is acceptable to proceed with sending the order to the supplier with a note that payment of their pro-forma invoice will follow.

 

Non-Purchase Order Invoice Approval

Non-purchase order invoice approval is defined when an invoice has been received from a supplier when a purchase order has not been raised on P2P. This means that the budget holder has not authorised expenditure of the funds paying for the goods/services and that the commitment has not been recorded. It also means that the Procurement Office (or the unit’s Nominated Buyer) has not approved the order ensuring that procurement regulations have been followed and contracts used where appropriate. This places the University at considerable risk in terms of the unapproved commitment of funds and it is therefore imperative that this practice be avoided where possible.

The Procurement Office has produced guidelines which outline the most common justifications given for the use of confirmation orders and also identify proposed solutions in each instance so as to prevent further use.

 

Standing/Blanket Orders or Use of Purchasing Card

Within many units, there will be categories of low value, high volume requirements with a small number of suppliers, for example, weekly dry cleaning of laboratory coats. The use of a standing or blanket order can reduce the administrative work created by the need to write numerous individual orders, each of a low monetary value.

Standing Orders

A standing order is one which is placed for a quantity of a product, eg bottled water for a water cooler which is to be delivered at staged intervals, say, weekly over a pre-determined period. As each delivery is received and paid for, the outstanding balance is reduced until it is complete. It should be noted that care must be taken to ensure that the appropriate procurement procedures are adhered to, based upon the total value of the order or consecutive orders for the same product. The Procurement Office should be approached to seek guidance on the introduction and use of standing orders.

Standing orders should not be carried over from one financial year to the next.  The order should therefore be terminated via P2P Support at the end of a financial year, once all related invoices have been cleared, and a replacement order raised for the new financial year, if the requirement for the goods/services still exists.

Blanket Orders

A blanket order is one which may be appropriate where the goods required from the supplier are of an ad hoc nature, either due to irregular demand patterns or varying types of goods. A blanket order should quote either a maximum monetary value (estimated to cover, for example, six months of deliveries) or a fixed time period. In both cases, the blanket order should not, if at all possible, cross from one financial year into another (this will ease accounting processes). As goods are received from the supplier, their receipt must be recorded.

It should be noted that the estimated value of a blanket order should not exceed the monetary threshold above which the University’s competitive quotation/tendering procedures apply, unless the items are being purchased from a central contract.

Blanket orders should not be carried over from one financial year to the next.  The order should therefore be terminated via P2P Support at the end of a financial year, once all related invoices have been cleared, and a replacement order raised for the new financial year, if the requirement for the goods/services still exists.

Use of Purchasing Card

As an alternative to the use of standing/blanket orders, units with nominated cardholders may use a purchasing card for the purchase of low value goods/services. For further information and guidance on the use of purchasing cards, see below.

 

Purchasing Cards

Purchasing Cards make the purchase of low value goods and services fast, cheap and simple as the administrative costs normally associated with purchasing such items are disproportionate to the cost of the goods or services themselves. Each card is assigned to a named Cardholder, with the approval of his/her Line Manager, and it is the named individual who has sole responsibility for the proper and appropriate use of the Card. This individual is normally a unit's Nominated Buyer, ie, the person who has most experience of his/her unit's requirements for goods and services.

The strict security and control features applied to the Card are sufficiently robust to give a high degree of confidence that any fraudulent use or abuse will be exposed at a very early stage. In addition to these features - which include transactional and monthly expenditure limits set against each card - there are stringent guidelines and procedures for the use of the Card. These are detailed in the Cardholder Manual .

 

Goods and Services for Personal Use

Official procurement orders, University notepaper or any other form purporting to come from the University shall not be used to obtain goods or services for an individual's personal use, nor will University funds be made available to any individual for goods or services for personal use.

Some of the University's contracted suppliers will operate private procurement arrangements for staff and students whereby they may take advantage of the University's contract prices. In such cases, details of these arrangements will be contained in the webpage for the relevant goods/services under the ' Contracts and Buying ' section of this website.

 

Paying Personally for Goods or Services

Unless in exceptional circumstances (for example, to meet an urgent requirement when travelling abroad), staff and students are not permitted to pay personally for goods or services with a view to being reimbursed by the University for their expenditure. All goods and services must be purchased using either an official order or a purchasing card. 

 

Guidelines on the use of E-Bay

Purchases via e-Bay are permissible only in exceptional circumstances where no other purchase option exists. In the event that such a transaction is necessary, then it must be strictly controlled and must remain within the current restrictions for purchase card use. Purchase card transactions via e-Bay will be monitored on a monthly basis by Procurement staff and cardholders may, at any time, be requested to provide full details of the transaction and their justification for using e-Bay. The following should be noted:-

  • There are significant potential risks associated with bidding on an electronic auction website, such as e-Bay, as opposed to placing an order based on the University’s conditions of contract. These risks are the unit's responsibility.
  • The unit should make all reasonable efforts to ensure that it is satisfied with the information concerning the supplier’s identity, the specification and condition of the goods concerned, delivery arrangements, payment, technical support, software upgrades etc.
  • Any associated costs, eg VAT if applicable and import duty, are also the unit's responsibility. It is also the budget holder's responsibility to ensure that sufficient funds are available to meet the total cost of procurement.
  • The University is not normally able to obtain supplier accounts and appraise them for financial stability prior to an e-Bay bid. As such, as payment would be made in advance of receipt of goods, which is contrary to normal procedures, the School would bear the risk if the goods are not as advertised, or not delivered for any reason, following payment.
  • Transactions via e-Bay should not be paid for personally as this is in direct contravention of the University’s Procurement Regulations. Purchasing cards must be used at all times.
  • Any queries in respect of purchasing via e-Bay should be referred to the Procurement Office in the first instance.

 

Guidelines on the use of a third party marketplace (not University endorsed i.e. Amazon, Dabs, Ebuyer etc.)

Purchases via a third party marketplace are permissible only in exceptional circumstances where no other purchase option exists. In the event that such a transaction is necessary, then it must be strictly controlled and must remain within the current restrictions for Purchase Card use. Purchase Card transactions via a third party marketplace will be monitored on a monthly basis by Procurement staff and cardholders may, at any time, be requested to provide full details of the transaction and their justification for using a third party marketplace. The following should be noted:-

  • There are significant potential risks associated with purchasing from a third party marketplace, as opposed to placing an order based on the University’s conditions of contract. These risks are the unit's responsibility.
  • The unit should make all reasonable efforts to ensure that it is satisfied with the information concerning the supplier’s identity, the specification and condition of the goods concerned, delivery arrangements, payment, technical support, software upgrades etc.
  • Any associated costs, eg VAT if applicable and import duty, are also the unit's responsibility. It is also the budget holder's responsibility to ensure that sufficient funds are available to meet the total cost of procurement.
  • The University is not normally able to obtain supplier accounts and appraise them for financial stability prior to purchase from a third party marketplace. As such, as payment would be made in advance of receipt of goods, which is contrary to normal procedures, the School would bear the risk if the goods are not as advertised, or not delivered for any reason, following payment.
  • Transactions via a third party marketplace should not be paid for personally, as this is in direct contravention of the University’s Procurement Regulations. Purchasing Cards must be used at all times.
  • Any queries in respect of purchasing via a third party marketplace should be referred to the Procurement Office in the first instance.

 

Delivery of Goods and Services

When the goods detailed on the purchase order have been received, their correctness should be checked and the quantities received should agree with the delivery note which accompanies them. Goods should not be signed for until they have been checked. If insufficient time is available to do this, the delivery note should be clearly marked "goods received but not inspected by ....".

It should be noted that goods retained for what the law terms "a reasonable time" will be deemed to have been accepted. It is therefore essential that all goods are checked as soon as possible and any deficiencies, faults etc notified to the supplier as soon as possible, and confirmed in writing.

The delivery note is a key component of the contract documentation. Hence, the delivery note should be uploaded onto P2P and the items good receipted.

 

Centrally Managed Procurement Arrangements

The Procurement Office manages a number of arrangements on behalf of the University. These are summarised below.

Type of Arrangement

Description

Contract

Contracts are arrangements which have been established following a competition.  Contracts are binding on the University.  They can be for specific 'one-off' purchases or for goods or services, required on a 'call-off' basis by a particular School or Directorate or, in most cases, by all Schools and Directorates across the institution.

Framework Agreement

A framework agreement is an arrangement where 3 suppliers or more are appointed to a 'panel' to supply goods or services to the University.  Under a framework agreement, the University gives a commitment to those suppliers that all business falling within the scope of the arrangement will be placed with them.  However, no guarantee is given as to the volume or value of business that will be placed with any individual firm.

Under a framework agreement, each order placed with a supplier constitutes an individual contract.

When a framework is established, the Procurement Office will indicate the way in which business should be placed.  For example, firms may be ranked in order of use, or business will be placed with the firm which performed best, during the tender evaluation, in respect of the criterion which is most important to a user in placing the order (ie awarding the contract), eg price.  Alternatively, each time goods or services are required, a mini competition may be held amongst the suppliers appointed to the framework.

Preferred Supplier

A preferred supplier is where preferential terms have been negotiated with a supplier, where the nature of the requirement is such that a competition is either unnecessary or inappropriate (for example, in a sole source situation).  Terms are often in the form of a percentage discount off the supplier's trade catalogue or pricelist.  The value of orders to preferred suppliers should not normally exceed threshold.

The above arrangements should be used where possible.  For further information, please refer to the Contracts & Buying section of this site.

Consultancy Services

The provision of all consultancy services must be in accordance with the University's Policy for the Engagement of Consultants as outlined in its Regulations and Procedures for the Engagement of Consultants.

 

Ethical Standards

Misuse or misappropriation of the assets and funds of the University is a serious disciplinary matter which could ultimately lead to criminal proceedings.

The University is committed to observing the highest standards of probity, integrity and accountability in its conduct and to compliance with all applicable laws and regulations. It therefore seeks to conduct its affairs in a responsible manner, having regard to the seven principles established by the Nolan Committee which members of staff at all levels are expected to observe. These principles are as outlined below:

 

selflessness

Holders of public office should take decisions solely in terms of the public interest. They should not do so in order to gain financial or other material benefits for themselves, their families or their friends.

integrity

Holders of public office should not place themselves under any financial or other obligation to outside individuals or organisations that may influence them in the performance of their official duties.

objectivity

In carrying out public business, including making public appointments, awarding contracts, or recommending individuals for rewards and benefits, holders of public office should make their choices on merit.

accountability

Holders of public office are accountable for their decisions and actions to the public and must submit themselves to whatever scrutiny is appropriate of their office.

openness

Holders of public office should be as open as possible about all their decisions and the actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands.

honesty

Holders of public office have a duty to declare any private interests relating to their public duties and to take steps to resolve any conflicts in a way that protects the public interest.

leadership

Holders of public office should promote and support these principles by leadership and example.

 

Disclosure of Interest

Members of staff who are involved in the commitment and payment of funds used to procure goods and services on behalf of the University therefore have a responsibility to ensure that their actions are conducted with integrity and that they are fully accountable for those actions. Where a member of staff has a related interest, or a potential related interest, in a planned purchase, then he/she must declare the related interest which they may have in any proposed transaction.

For example, where a member of staff, involved in the purchase of goods/services, finds him/herself in a conflicting situation where, say, a preferred supplier for the required goods or service is a relation, friend or colleague, then this fact should be made known to both the member of staff's line manager and reference should be made, by both the individual and his/her line manager, to the University's Register of Interests Policy.

For further details of the roles and responsibilities of staff procuring goods and services on behalf of the University, see Guide to Ethics in Procurement.

 

Bribery Act 2010

The Bribery Act 2010 was introduced into UK law on 1 July 2011.  There are four offences under the Act, all of which impose the risk of imprisonment of senior officers and employees of an organisation and unlimited fines for any organisation found to be involved in bribery or corruption.  The first three offences are applicable to educational institutions of all types and their employees.  These are:-

  • the offering, promising or giving of a bribe
  • requesting, agreeing to receive, or acceptance of a bribe
  • the discrete offence of the bribing of a foreign public official

The fourth offence is much wider in remit than the others:-

  • failure, by a 'commercial organisation' to prevent a bribe being made, on its behalf, by an 'associated person'.

An 'associated person' is defined in the Act as one who performs services on behalf of a commercial organisation.  The Act gives examples of employees, agents and subsidiaries.  From the University's perspective, this would include the University's related companies, joint ventures, partners, agents working abroad and University staff.

With regard to a 'commercial organisation', the guidance on the Act states that ' so long as the organisation in question is incorporated (by whatever means), it does not matter whether it pursues primarily charitable or educational aims or purely public functions'.  An organisation will therefore fall under the Act if it engages in commercial activities - irrespective of the purpose for which the profits were made.

A Bribery Act Working Group has been established to ensure that appropriate risk assessments are undertaken and that policies and procedures are adequate in order to address the risks identified.  This site will therefore be updated in due course.

 

Equipment Register Requirements

The University’s Equipment Register records all equipment owned by, or located within, the University. There are detailed guidelines for dealing with the input of information to the Register and the subsequent maintenance of equipment records. Further information on input, maintenance and control can be found under Equipment Register.

Disposal of Obsolete or Redundant Equipment

The Policy/Guidelines on the Disposal of Obsolete/Surplus Equipment provide information on the disposal of equipment which is no longer required.

There are legal requirements for the disposal of specific items such as waste electrical equipment, fridges and freezers. For further information on the disposal of all waste items, contact the Environmental Services section of the Estates Department.