Reference
Appendix A
FINANCIAL LIMITS
Authorisation to proceed with either a requisition or tendering exercise is dependent
upon:
*
In the case of revenue expenditure: Ensuring that both the source and
availability of funds has been established. Thus the manager should have
a budget approved by the Board or Joint Board of Directors against which
to incur the proposed expenditure. This principle applies to; the
employment of staff, requisitions for stock and non-stock items,
acceptance of tenders and all other expenditure. In addition no
expenditure of a recurring nature may be expended against non-recurring
resources without the approval of the Trust Board, Joint Board of
Directors, or Chief Executive.
*
In the case of capital expenditure:
Buildings
When applying for funds all schemes must include a best estimate of the
total cost of the scheme. The estimate will be provided by an in-house
member of staff from the relevant department e.g. Estates Technical
Services, Estates Department. Once funding has been approved for total
life costs, full tendering can commence.
Goods and Services
When applying for funds quotes should include costs relating to
maintenance and consumables. Once funding has been approved for total
life costs, full tendering can commence.
Approval to proceed to tender is dependent upon the approval of either
the Trust Board, Joint Board of Directors, or Capital Control Group.
1.
QUOTATIONS
CONTRACTS
1.1
AND
TENDERS;
BUILDING
AND
ENGINEERING
Number of Firms Invited to Quote or Tender
Where quotes or tenders are invited from firms on the approved list or from firms not on
the approved list in respect of specialist work, the number of firms to be invited to quote
or tender are as follows (all figures are inclusive of VAT):
a) contract value less than £5,000 – formal tendering procedures do not apply
b) contract value £5,000 or more, but less than £10,000 – not less than two firms
or more than three firms to be invited to quote
c) contract value £10,000 or more, but less than £50,000 - not less than three
firms or more than four to be invited to tender
d) contract value £50,000 or more, but less than £200,000 – not less than four
firms or more than five to be invited to tender
e) contract value more than £200,000 – normally six but not less than five firms to
be invited to tender. For Design and Build contracts use two-stage tendering with
no more than three firms invited for the 2nd and final stage. The Trust Board will be
required to approve all contracts in excess of £300,000.
1.2
Return of Quotes or Tenders for Building and Engineering Schemes
a) Estimated value of work less than £10,000
Quotations may be obtained, returned to and opened by the General Manager, Estates
Technical Services in accordance with standing orders
b) £10,000 and over but less than £50,000
Tenders to be returned to Chief Executive and opened by an Executive Director and
another member of staff in accordance with standing orders
c) £50,000 and over but less than £200,000
Tenders to be returned to Chief Executive and opened by two Directors in accordance
with standing orders
d) Over £200,000
Tenders to be returned to Chief Executive and opened by an Executive Director and a
Non Executive Director in accordance with standing orders
1.3
Signing of orders for Building and Engineering Schemes
a) Under £50,000: Offer and acceptance to be confirmed by an official order to be
signed by the General Manager, Estates Technical Services or another member of
the Capital Control Group.
b) £50,000 to £200,000: The contract is to be in an Approved Standard Form of
Building or Engineering Contract or Sub Contract as listed in CONCODE together
with an official order signed by two members of the Capital Control Group.
c) £200,000 and over: The contract is to be in an Approved Standard Form of
Building or Engineering Contract or Sub Contract as recommended by CONCODE
together with an official order signed by the Chief Executive or an Executive
Director deputising for him.
d) Single tender action: Where single tender action is necessary in accordance with
Paragraph 28.7, either the Chief Executive or the Director of Finance may
individually approve and sign an official order for sums up to £250,000 together
with a form detailing the reason for single tender action. Such sums in excess of
£100,000 must be reported to the Trust Board. The Board must approve sums in
excess of £250,000 unless urgent action is required, in which case the terms of
Paragraph 44 shall apply. Sums in excess of £10,000 should be reported to the
Joint Board of Directors.
e) In each case ‘a) – c)’ above the supporting documents and plans may be signed by
the General Manager, Estates Technical Services
2. QUOTATIONS AND TENDERS; SUPPLY OF GOODS AND SERVICES
2.1
There are three main methods for acquiring goods and services (see a – c
below). Ordering procedures for these three methods can be found at section 2.3
below. Other methods for obtaining goods and services are also possible but the type
of transactions these apply to is limited (see d – f below).
a. Goods and Services on the Electronic Catalogue
The primary means of ordering goods or services will be through the Trust’s Electronic
Catalogue (section 2.3)
Section
2.3
b. For repeat purchases which should be added to the electronic ordering
system’s catalogue
A new item request form will require completion for onward transmission to the
Procurement Department (section 2.3).
Section
2.3
c. For the purchase of a ‘one-off’ goods or services
An electronic ‘free format’ requisition must be produced on the system by the
requisitioner and, subject to authorisation and approval of IT or MDMC as appropriate,
be forwarded within the electronic system to the Procurement Department.
d. Cheque Application Forms
Orders under £500 for non-recurring items can be placed and paid for using a Cheque
Application Form without the involvement of the Procurement Department or the need
to obtain competitive quotations subject to the approval of the Director of Finance.
Cheque Application Forms can only be used for those services listed on the form i.e.
Publications, Subscriptions, Hire Charges, Course Fees, Course Trainer Fees, Repairs
and Servicing.
e. Purchasing Cards
Orders under £100 for non-recurring items can be placed and paid for using a
Purchasing Card without the involvement of the Procurement Department or the need
to obtain competitive quotations subject to the approval of the Director of Finance. The
Financial Controller controls the issue of cards on behalf of the Director of Finance.
f. Internet Purchasing
No purchasing is permitted through the internet without the express approval of the
Director of Finance.
2.2
Authorisation Levels For Electronic Requisitioning System
All staff authorised to approve the purchase of goods or services will be allocated to
one of the following six authorisation levels:
Level 1 - Up to £500 per total requisition (e.g. nurses, ward assistants, staff with
requisitioning responsibility in smaller departments)
Level 2 - £501 - £5,000 per total requisition. The actual level of authority will depend
on the work area and the following are examples:
⋜ £1,000: requisitioning staff in larger departments
⋜ £2,000: ward sisters
⋜ £3,000: supervisory levels in departments, requisitioners in theatres, staff
club manager
⋜ £5,000: catering manager, med physics manager, deputy heads genetics
Level 3 - £5001 - £15,000 per total requisition
⋜ £10,000: DSNs, DMs, heads of larger departments
⋜ £15,000: Director of Facilities
Level 4 - Up to £20,000 per total requisition: Finance Manager, Financial Controller
Level 5 - Up to £100,000 per total requisition: Director of Operations, Director of HR,
Nurse Director, Medical Director
Level 6 - Over £100,000 per total requisition (but subject to limits approved by the
Section
2.3
Trust
Policies
on e-mail
Financial
Controller
Trust Board): Chief Executive, Director of Finance
2.3
Each directorate is responsible for compiling their own authorised signatories
list, including determining which staff should be given authorisation levels 1 or 2.
Amendments to the above levels of authorisation may be approved in specific cases
but will need to be approved by the Director of Finance.
2.4
The Finance Department will maintain a database of staff on each
authorisation level per Directorate. Directorates will be responsible for notifying the
Finance Department of any additions, deletions or other changes to their authorised
signatories lists. The Finance Department will ensure the database is amended to
reflect the changes and ensure the computer security is amended accordingly.
2.5
Ordering Procedures
2.5.1 Orders for items on the Trust’s electronic catalogue
Orders for items on the Trust’s catalogue will be processed within the Procurement
Department where individual staff will have specific levels of authorisation. The
electronic requisition will have already been authorised at the appropriate level within
the organisation. The Head of Procurement will have authority to process orders up to
Level 4 (Para 2.2) - £100,000. Any orders beyond this amount will need to be
authorised by the Chief Executive or Director of Finance.
2.5.2
Orders for ‘one-off’ goods and services not on the catalogue
Where an electronic requisition is placed for an item not on the Trust’s catalogue this
will need to be done using the ‘free format’ part of the system and will involve
authorisation in the same way as for catalogue items. Processing the order will take
place as in Para 2.3.1 subject to appropriate tendering procedures having been
undertaken in accordance with Standing Orders.
2.5.3
Manual System – Charitable purchases and purchases for other
organisations
Requisitions relating to charitably funded items will still need to be forwarded on paper
to the Procurement Department using non-stock requisition forms. Requisitions should
include an estimate of the price and be signed by the manager responsible for the
funds or budget. Orders will comply with normal tendering requirements and be
authorised within the Procurement Department as for Para 2.3.1 Where a single tender
action is proposed a completed and certified paper copy of the form must be attached.
2.5.4 Repeat purchases which should be added to the Trust’s electronic
catalogue
Items the Trust is likely to purchase on a recurring basis not on the catalogue will need
to be added to the catalogue. The standard request form will require completion and
approval by an authorised signatory with a level of authorisation of £5,000 or more
under Para 2.2. Requests should indicate the likely annual volume and may be subject
to formal tendering by the Procurement Department before adding to the catalogue.
2.5.5 Tendering for goods and services
In order to ensure best value for money it is essential that competitive quotations or
tenders are obtained. This is the case whether an item is to go onto the Trust'’
catalogue or not. In determining the number of quotes or tenders to obtain
consideration should be given to the likely volume of the goods or services to be
required in the year ahead and subsequent years. The following are the quotation and
tender requirements based on total life time costs (ie goods + x years maintenance) or
total value over contract period:
Goods/services ⋜ £500 - one quotation required
Goods/services from £501 to £3,000 - not less than three quotations
Goods/services from £3,001 to £20,000 - not less than three written quotations
against a formal specification using the Trust Quotation Form
Goods/services from £20,001 to £50,000 - not less than four formal tenders
against a formal specification
Goods/services > £50,000 - not less than six tenders against a formal
specification and where appropriate EU tendering requirements apply
VAT should be included when comparing quotes and tenders to all the above limits.
2.5.6
Where quotations are obtained for an item or group of items costing up to
£3,000 the requisitioner or relevant budget manager must include the details and
relative prices on the ‘free format’ electronic requisition. The Procurement Department
will consider the quotation information provided prior to releasing the order.
2.5.7 Where quotations are obtained for an item or group of items costing more than
£3,000 but less than £10,001, the requisitioner or relevant budget manager must attach
these to the ‘free format’ electronic requisition providing they are in electronic form. If
they are paper based they should be sent by internal post to the Procurement
Department and a note to this effect included on the electronic requisition. The placing
of an order will then be held by the Procurement Department until supporting
documentation has been received.
2.5.8
The Procurement Department must sanction the process to be used for
tendering for goods and services across the Trust. Is particularly important where a
department is to lead on the process due to the technical nature of the purchase. The
Procurement Department will advise on European Directives to ensure compliance.
2.5.9
Single tender actions
In Accordance with Standing Order Para 28.9 it is possible in exceptional
circumstances that a requisitioner may request a particular supplier. Alternatively may
not be enough suitable companies to obtain the number of tenders or quotations laid
down in Para 2.5.5. In both these cases a single tender action form should be
completed in electronic form and attached to the electronic requisition. This should be
forwarded through the normal authorisation route but to include a Level 3 authoriser in
accordance with Para 2.2. On receipt in the Procurement Department financial
authorisation will be sought from the Director of Finance or his authorised
representative.
2.5.10
For purchases in excess of £200,000 the Trust Board will be required to
approve tenders where the number of firms invited to tender falls below the required
level unless urgent action is required, in which case the terms of paragraph 44 of the
Standing Orders shall apply.
2.5.11
Any failure to comply with the systems identified will result in requisitions
being returned to their originator with a note as to the reason why.
2.6
Return of Tenders
a) Contract estimated value less than £20,000: tenders to be returned to the
Director or Head of Service for opening by two people within their department.
b)
Contract estimated value £20,000 or more but less than £50,000: tenders to
See Para
44
be returned to the Chief Executive for opening by an Executive Director together with
another member of staff in accordance with Standing Orders.
c) Contract estimated value £50,000 or more but less than £200,000: tenders to
be returned to the Chief Executive for opening by two Directors in accordance with
Standing Orders.
d) Contract estimated value in excess of £200,000: tenders to be returned to the
Chief Executive for opening by an Executive and Non-Executive Director in accordance
with Standing Orders.
Appendix A (contd.)
3.
EUROPEAN COMMUNITY LIMITS
The European Union thresholds apply for a two-year period. From the 1 January 2004
the EU thresholds, excluding VAT are as follows:
Supplies Contracts
£99,695
154,014 Euro
Service Contracts
£99,695
154,014 Euro
£3,834,411
5,923,624 Euro
Works Contracts
These figures will apply until 31 December 2005.
EXTRACT FROM THE ETHICAL CODE OF
THE CHARTERED INSTITUTE OF PURCHASING AND SUPPLY
Precepts
1. Staff shall never use their authority or office for personal gain and shall seek to uphold and enhance
the standing of the Purchasing and Supply profession and the Institute by:
a. Maintaining an unimpeachable standard of integrity in all their business relationships both
inside and outside the organisations in which they are employed.
b. Fostering the highest possible standards of professional competence amongst those for
whom they are responsible;
c. Optimising the use of resources for which they are responsible to provide the maximum
benefit to their employing organisation;
d. Complying with the letter and spirit of:
i)
the law of the country in which they practise;
ii)
such guidance on professional practice as may be issued by the Institute from time to
time;
iii)
contractual obligations;
e. rejecting and business practice which might reasonably be deemed improper.
Guidance
2. In applying these precepts, members should follow the guidance set out below:
a. Declaration of interest - .Any personal interest which may impinge or might reasonably be
deemed by others to impinge on a member’s impartiality in any matter relevant to his or her
duties should be declared;
b. Confidentiality and accuracy of information – The confidentiality of information received in the
course of duty should be respected and should never be used for personal gain; information
given in the course of duty should be true and fair and never designed to mislead;
c. Competition – While bearing in mind the advantages to the member of staff’s employing
orgainsation of maintaining a continuing relationship with a supplier , any arrangement which
might, in the long term, prevent the effective operation of fair competition, should be avoided;
d. Business gifts – Business gifts, other than items of very small intrinsic value such as business
diaries or calendars should not be accepted;
e. Hospitality - Modest hospitality is an accepted courtesy of a business relationship. However,
the recipient should not allow him or herself to reach a position whereby he or she might be,
or might be deemed by others to have been , influenced in making business decisions as a
consequence of accepting such hospitality; the frequency and scale of hospitality accepted
should not be significantly greater than the recipient’s employer would be likely to provide in
return;
f. When it is not easy to decide between what is and is not acceptable in terms of gifts or
hospitality, the offer should be declined or advice sought from the member’s superior.
3. Advice on any aspect of the precepts and guidance set out above may be obtained on written request
to the Institute.