POLICY AND PROCEDURE FOR THE PROCUREMENT OF EQUIPMENT
AND SERVICES
February 2014
Author:
Lead Director:
Version No:
Implementation Date:
Date of Next Review:
Vanessa Jinks
Martin Sykes
2.0
February 2014
February 2017
Policy and Procedure for the Procurement of Equipment and Services
INDEX
(Click on the subject to be taken to the relevant part of the document)
1. Introduction
2. Scope
3. Policy Objectives
4. Procedure for the Procurement of Goods and Services less than £5k or covered by existing contract
5. Procedure for the Procurement of Goods or Services in excess of £5k (whole life time costs) not
covered by existing contract
6. Advertising within the European Union
7. Contracts
8. Waivers
9. Emergency Orders
10. Ethics and Fraud
11. Equality Impact Assessment
12. Master Indemnity Agreements
13. Frequently Asked Questions
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Policy and Procedure for the Procurement of Equipment and Services
1. Introduction and Purpose
1.1
This policy is applicable to all FPH staff who are involved in the process of selecting and requisitioning
equipment and services
1.2
This policy defines the process involved in the ordering of equipment and services where the funding for
the equipment has already been agreed either within a budget, via specific capital funds, charitable funds
or as part of a project. The policy is to be followed in conjunction with:



Trust Standing Financial Instructions
Public Procurement Law
European Union Legislation
1.3
In all cases it should be ensured that the Trust achieves best Value For Money (VFM) and that there exists
a standardisation of the processes involved in requisition, order and receipt.
1.4
It is important to ensure that the Procurement Department are notified of any purchasing need at the
earliest opportunity even if funding has not been assured. Their function is to advise, co-ordinate and
process all purchasing activity. Early warning of need allows the buying team time to achieve best VFM.
1.5
Throughout this policy, flowcharts will be used to summarise the chain of activity. The action boxes are
colour coded as follows:
Indicates Requisitioner activity
Indicates Procurement Department activity
Indicates Finance Department activity
2. Scope
2.1
This policy will apply to all equipment, goods and services purchased by the Trust from any of the
following sources of funds:
 Revenue budgets
 Capital budgets
 Charitable Funds
2.2
Excluded from this policy are the following items ordered direct by purchasers within Estates, Catering,
Pharmacy and the Appliance office:
 Estates day to day hardware and items relevant to the running of the site.
 Fresh and frozen food.
 Pharmaceutical Drugs.
 Patient Appliances.
3. Policy Objectives
3.1
The procurement procedure will ensure that:
 Value for money is achieved and can be demonstrated, whilst maintaining appropriate quality,
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Policy and Procedure for the Procurement of Equipment and Services






Page 4 of 17
All procurement complies with Trust Standing Financial Instructions and European Union
Procurement Legislation,
All purchases are in line with the Trust’s strategic and business plans,
Goods are obtained with the minimum of delay subject to adherence to Trust SFIs,
Medical equipment is purchased in line with the Medical Devices Policy and NHS Pre-Purchase
Questionnaire recommended standards,
The Procurement Department are involved at the earliest opportunity in the procurement of
goods and services.
Purchases are made in line with Equality and Diversity Legislation
Policy and Procedure for the Procurement of Equipment and Services
4. Procedure for the Procurement of Goods or Services less than £5k or covered by existing contract.
4.1
The requisitioning department must identify exactly what is required. If the goods or services are less
than £5k or a current contract for the items exists then it is sufficient to raise a requisition (either on EROS
or on the Trust approved non-stock requisition form).
4.2
Appropriate authorisation must be obtained from either the budget holder or their nominated deputy.
Note that an authoriser or buyer may not be involved in the receipt of goods.
4.3
Goods or services less than £5k not under contract require two quotations where possible – these may be
verbal or written. These quotations will be obtained by the Procurement department and will be
informally evaluated by the requisitioning department and Procurement. The cheapest quote should be
accepted unless there is a compelling reason not to do so.
4.4
The Procurement department will then raise and despatch the purchase order.
4.5
Summary:
Need identified as being below £5k
in value or covered by existing
contract
Requisition input onto EROS (or
complete non-stock requisition)
Requisition electronically
authorised (paper requisition
passed to Procurement Dept. if
applicable)
Are goods under existing contract?
No
Yes
Procurement Dept
obtain informal
quotes.
Requisitioner
evaluates quotes and
confirms supplier.
Procurement Dept place order
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Policy and Procedure for the Procurement of Equipment and Services
5. Procedure for the Procurement of Goods or Services in excess of £5k (whole life time costs) not
covered by existing contract.
The following procedure details in full the steps required to purchase goods and services in excess of £5k. Note
for goods charged to capital codes this level is increased to £10k.
5.1 Identify Requirement
5.2 Quotes or Tenders Received
5.3 Evaluation and Trial of Equipment if appropriate
5.4 Evaluation of Quotes and Tenders
5.5 E101 Raised
5.6 Purchase Order Raised
5.1
Identify Requirement
The requisitioning department should contact the Procurement department detailing the specification of
the goods or services required. In many cases the supply of equipment and consumables has been
standardised. Department should therefore check with the Procurement department if they are unsure.
Account must be taken of whole lifetime costs and this could include:






Cost of actual goods.
Accessories associated with the product.
Any maintenance or service contract costs.
Training Costs
Delivery and miscellaneous charges.
Cost of disposal of items within Environmental procedures.
If there is no standardisation in the Trust, then the user is required to produce a specification. The
specification should be generic and not show bias to a particular manufacturer.
If the user is unsure whether a contract currently exists, they should contact the Procurement
department for advice. Where a contract exists all departments are obliged to use it unless they can give
valid reasons why it may not be appropriate.
5.2
Quotes or Tenders Received
In accordance with Trust SFI’s the Procurement department will obtain quotes as follows (Values exclude
VAT):

Between £5,000 (£10,000 in the case of Capital purchases) and £50,000 – Three written quotations
required. Requests to waiver the requirement for three quotes must be made on the E101 stating a valid
reason. The E101 is then approved by the Head of Procurement, the appropriate Management
Accountant and finally by the Director of Finance.

Between £50,000 and £111,676 – Formal competitive tender required. Requests to waiver the
requirement for a tender process must be made on the E101 stating a valid reason. The E101 is then
approved by the Head of Procurement, the appropriate Management Accountant and finally by the
Director of Finance.
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Policy and Procedure for the Procurement of Equipment and Services

Over £111,676 (current OJEU level as at 1/1/2014) there is a legal requirement to follow the EU
procurement rules. Local waivers are NOT allowed (by EU law) by Trust staff. - OJEU Notice followed by
full Tender Process.
5.3
Evaluation and Trial of Equipment if appropriate
If the requirement is for medical equipment then this must be trialled and evaluated in accordance with
the Medical Devices Policy. A Pre-purchase questionnaire (PPQ) for the Equipment must be obtained by
Procurement and passed to the EME Department / HSDU / Infection Control for approval as appropriate.
5.4
Evaluation of Quotes and Tenders
Quotes and Tenders are evaluated in accordance with the following system outlined in Trust SFI’s:

Between £5000 (£10,000 in the case of Capital purchases) and £50,000 – The Procurement department
and the end user will evaluate the quotes and should accept the cheapest unless there is a compelling
reason not to do so. This reason must be documented on the E101 to the satisfaction of the Procurement
Manager and the Director of Finance.

Between £50,000 and £100,000 – The tenders will be received and evaluated by the requisitioning and
Procurement departments and the outcome of evaluation will be documented with the E101 to the
satisfaction of the Director of Finance. Any proposal to waive this would need the approval of the Director
of Finance.

Over £100,000 - A sub-committee of the Board, which should be formed, comprising, as a minimum, two
Executive Directors, will receive the tenders. The Procurement department and the end user will
evaluate the tenders and the outcome of evaluation will be reported to the sub-committee of the Board
for ratification. The recommendations of the Sub-committee will be submitted by a Director to the CDIC
for consideration if the value is over £500,000. The lowest tender must be accepted and any proposal to
waive this would need the approval of the Chief Executive for values in excess of £100,000 and the
approval of the Trust Board / CDIC for values in excess of £500,000.
5.5
E101 Raised
For goods and services over £5,000 (£10,000 in the case of Capital purchases) an E101 must be raised
prior to the order being placed. The E101 is completed by the requisitioner and signed by the budget
holder. The E101 details the suppliers from whom quotes have been obtained and is then passed to the
Procurement Manager for approval. Any request to waive the requirement for three quotes is detailed
on the E101 by the requisitioning department. Following Procurement approval, the E101 is passed to
Finance to indicate available funding and to obtain final approval from the Director of Finance.
5.6
Purchase Order Raised
Following notification of E101 approval the requisitioning department will raise a requisition for the
goods either on the Trust official non-stock requisition or on EROS. The Procurement department will
then raise the official order and any other appropriate paperwork such as contract schedules etc.
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Policy and Procedure for the Procurement of Equipment and Services
5.7
Summary
Need identified as being in excess of £5k and
not under existing contract
Procurement Dept contacted with the
specification of the goods / services required.
Procurement Dept. obtain quotes and tenders
in accordance with SFIs / EU law
Is the requirement for medical equipment?
Yes
No
Evaluation and Trial of
Equipment in accordance with
the Medical Devices Policy.
Evaluation of Tenders and
Quotes
Evaluation of Tenders and
Quotes
PPQ to EME for Approval
E101 and requisition raised indicating source of
funding (charitable funds, capital or revenue)
E101 approved in accordance with SFIs
Procurement Dept raise Purchase Order
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Policy and Procedure for the Procurement of Equipment and Services
6. Advertising within the European Union
6.1
For procurements with a whole life time cost in excess of £111,676 (current level as at 1/1/2014), the
Trust is required by European law to carry out a full tender within the regulations laid down in the Public
Contracts Regulations SI 2006 No 5.
6.2
The basic process followed for a Restricted procedure using the Trust’s e-tendering portal is detailed
below. The mandatory time periods are noted in red:
Advert and pre-qualification
Questionnaire (PQQ) placed
within the Official Journal of
the European Union (OJEU)
Advert must remain open
for 30 days
Expressions of Interest
Received
Shortlisting of suppliers
based on PQQs
Invitation to Tender
documents issued to
shortlisted suppliers
Tenderers must be given a
minimum of 35 days to
return their bid.
Tenders returned
Trust evaluates the
equipment / services offered
and the tender documents
Suppliers notified of Award
Contract Concluded
A typical timeline is attached at Appendix A
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A 10-day standstill period
applies before the Contract
can be concluded.
Policy and Procedure for the Procurement of Equipment and Services
7. Contracts
7.1
The Procurement Department will be responsible for drawing up the Contract or Memorandum of
Agreement and Schedules with the successful supplier(s).
7.2
The Contract will be drawn up in accordance with UK, European legal requirements and Trust Policies and
in accordance with best practice not limited to the legal guidelines and advice found in the following:
7.2.1
7.3
Public Contracts Regulations SI 2006 No 5.
http://www.opsi.gov.uk/si/si2006/uksi_20060005_en.pdf
Roles and Responsibilities
Roles and Responsibilities for managing of contracts will be established during the contract award period
and the following table acts as a guideline to these positions:
Action
Drawing up of contractual documents and
advice concerning legal matters during the
term of the contract
Monitoring and Review of Services provided
during the contract (eg SLAs, maintenance)
Responsibility
Procurement Department
Nominated Project lead (usually a senior enduser)
Payment Authorisation
Budget Holder
Payments
Finance – Accounts Payable
7.4
7.4.1
Contract Review
For contracts that have an ongoing input from the contracted supplier(s) either in the form of a service
provided or for requirements such as maintenance then a Contract Review and Monitoring process will
be put in place at the time of contract award.
7.4.2
The Review and Monitoring process periods will be determined at the time of contract award but
should ideally be:
7.5
7.4.2.1
Quarterly for services that are deemed critical to the Trust and whose reduction or
absence will seriously affect all areas (or the area to which the service is being
provided).
7.4.2.2
Bi-annually for services that are of lesser importance to the Trust but whose
reduction or absence will cause delays or minor interruptions to the running of that
area.
7.4.2.3
Annually for services that are of low importance to the Trust whose reduction or
absence will cause inconvenience to the running of that area.
I.T. Contracts
The process for drawing up contractual documents for large (over £50k) IT Contracts will follow the
procedure set out by the Informatics Operational Group.
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Policy and Procedure for the Procurement of Equipment and Services
8. Waivers
8.1
Waivers apply where there are genuine reasons why it would not be appropriate or advantageous to seek
competitive tenders.
8.2
Orders under £50,000 may be waived under the following circumstances (Reference: SFI, December
2011, Appendix 1 section 3.2):
8.3
8.2.1
Where the supply of goods (or related goods) is of a special character and does not
exceed £5,000.
8.2.2
Where there is only one supplier and no reasonably satisfactory alternative product or service.
8.2.3
Competition would be impractical, impossible or not beneficial.
8.2.4
The requirement is to be ordered under existing contracts.
8.2.5
The work for practical reasons must be of the same manufacture, for instance repairs / spare
parts for existing equipment.
8.2.6
Where it is known that a marked financial advantage will accrue to the Trust from making a spot
purchase of products subject to quickly changing market conditions.
Orders between £50,000 and £100,000 may be waived under the following circumstances (Reference
SFI Appendix 1, section 2.1):
8.3.1
Where the requirements are ordered under existing contracts and where in the opinion of the
relevant Director:
8.3.2
There is only one supplier and no reasonably satisfactory alternative product / service
8.3.3
Competition would be impractical, impossible or not beneficial;
8.3.4
The work for practical reasons must be of the same manufacture, for instance repairs / spare
parts for existing equipment
8.2.7
Where it is known that a marked financial advantage will accrue to the Trust from making a spot
purchase of products subject to quickly changing market conditions.
These circumstances and opinion must be documented and the E101 authorisation countersigned by the
Procurement Manager in confirmation of such circumstances.
8.4
Orders greater than £111,676 may not be waived under any circumstances and are subject to European
law.
8.4.1 Waivers should not be used to avoid the tendering process even where there is no apparent
competition. Suppliers have the right to challenge Trusts where they believe Public Procurement Rules
are not being adhered too and feel that the Trust is not seeking fair and open competition. In any case
waivers do not exclude the Trust from following EU Procurement rules.
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Policy and Procedure for the Procurement of Equipment and Services
9. Emergency Orders
9.1
Emergency orders are those orders, which, due to a pressing operational need, must be placed with the
supplier with the utmost speed. There are two types of emergency order:


9.2
Orders needing to be raised out of normal office hours (ie when there is no representative from the
Procurement Department on site).
Orders urgently required during office hours
Emergency Orders for goods or services required out of normal office hours.
If goods or services, of an operational nature, are required which cannot be ‘borrowed’ from another area
of the hospital then an emergency order may be raised by the requisitioning department. The following
process must be used:
9.2.1
Identification of need
9.2.2
Efforts made to source the item or service from existing resources within the Trust. If unsuccessful
proceed to:
9.2.3
Authority for procurement of the goods must be given by an authorised signatory for the requisitioning
budget whose name appears on the Master List of Authorised Signatories. If no-one is present with this
authority, then approval must be obtained by one of the following:
For goods or services less than £5k
 A budget holder
 Site Manager
For goods or services in excess of £5k but less than £50k
 On-call Manager (reached through Switchboard)
 Procurement Manager (reached through Switchboard)
 On-call Director
The authority must be given in writing on a green non-stock requisition. Where this is not possible an
emailed confirmation is acceptable. The email must state the items and the value being authorised. The
non-stock requisition must then be completed retrospectively.
Under no circumstances may an order in excess of £50k be placed without the approval of a Director of
the Trust.
9.2.4
Place the order with the supplier quoting the order number “EPO[today’s date dd/mm]” Eg an order
placed on the 27 April would have order number EPO2704. Supplier’s phone numbers can be found on
EROS using the Search function or by the usual means (Yellow pages, internet, directory enquiries)
9.2.5
For goods: when placing the order ensure that the supplier is aware that goods are to be delivered
directly to the Department since the hospital loading bay is locked out of hours.
9.2.6
On the next working day ensure that the Procurement Department have a copy of the approved
requisition and any delivery notes. Procurement staff will then input the requisition onto EROS using the
order number as the requisition number. Retrospective E101s will be raised as required.
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Policy and Procedure for the Procurement of Equipment and Services
9.3
Orders urgently required during office hours.
These orders are placed in the same way as non-urgent orders.
9.3.1
Contact any member of the buying team within the Procurement department stating that you have an
urgent requirement.
9.3.2
The requisition must be input on EROS or a non-stock requisition and authorised in the usual way.
9.3.3
Orders over £5k must still have an E101 raised though this may be signed retrospectively. However,
verbal or email approval from either the Director of Finance, the Head of Finance or one of the Directors
of the Trust must first be obtained.
10. Ethics and Fraud
All Trust staff should be aware of the following sections of the Trust’s Standing Financial Instructions
December 2011 in as far as they apply to Procurement.
10.1
Acceptance Of Gifts And Hospitality
10.1.1 The acceptance of gifts, hospitality or consideration of any kind from contractors and other suppliers of
goods or services as an inducement or reward is not permitted under the Corruption Acts 1906 and 1916.
Staff must comply with national guidance ‘Standards of Business Conduct for NHS Staff’ and any guidance
and directions issued by the Independent Regulator.
10.1.2 Where offers of goods and services do not involve inducement or reward Officers should not accept gifts
from commercial sources other than inexpensive articles such as calendars or diaries. If such gifts arrive
unsolicited, the advice of the Director of Finance should be sought.
10.2
Declaration Of Interest
10.2.1 In accordance with Standing Orders, the trust Secretary shall be advised of declared pecuniary interests of
members of the Board (Standing Order 7) or Officers (Standing Order 8) for recording in registers he will
maintain for that purpose.
10.3
Trust’s Code of Business Conduct
10.3.1 In all cases staff and suppliers must comply with the Trust’s Standards of Business Conduct
Standards of
Business Conduct.doc
11. Equality Impact Assessment
11.1
The users of this policy will take into account their statutory duty to promote equality and human rights
and act lawfully within current equality legislation and guidance.
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Policy and Procedure for the Procurement of Equipment and Services
11.2
This policy has been equality impact assessed and has been shown to have no adverse impact on any
equality group.
11.3
The Trust will continue to monitor its effect and will assess again if negative impact is identified or at the
review date.
12. Master Indemnity Agreements
12.1
If a requisitioning department wishes to use a piece of equipment that is either on loan to the Trust or has
been gifted (in other words any equipment in use that has not received consideration or payment) then
the appropriate Indemnity approvals must be sought.
12.2
The list of Master Indemnity Agreements is held and updated by the Department of Health and the full
register of companies can be found at the following link:
http://www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/DH_117
175
12.3
On each occasion of equipment use the requisitioning department must complete an NHS Delivery Note
and return the form to the Procurement department.
FPH NHS Delivery
Note
12.4
If the company does not appear on the Department of Health registry then one of the following forms
must be completed along with the NHS Delivery Note. Forms should be forwarded to the Procurement
Department along with a copy of the Suppliers Indemnity certificate. The Procurement department will
assist with completion of these forms if required.
Items on loan:
FPH Indemnity Form
A
Items gifted:
FPH Indemnity Form
B
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Policy and Procedure for the Procurement of Equipment and Services
13. Frequently Asked Questions
13.1
How do I get Quotations/Tenders?
Procurement will manage the Quotation/Tender process. Your contribution will be the specification or
details of the requirement together with assistance from the EME in the case of medical equipment. If
there is significant competition for the equipment then Procurement may be required to produce a PreQualification Questionnaire, which is used to shortlist suppliers.
Procurement will co-ordinate all communications with the suppliers during the Quotation/Tender
process, this is to ensure that all potential suppliers are treated equally and that the competition is open
and fair. All unsuccessful suppliers are entitled to a full de-brief with reasons why they were not selected.
Procurement will undertake this on request.
13.2
Can I evaluate and trial equipment before purchase?
Equipment trials may be required. A Trial Co-Ordinator should be nominated from the Ward/Dept. They
will need to ensure that Trial forms are completed and are returned in time to form part of the tender
evaluation process. The EME department should be contacted before electro-medical equipment brought
in on trial is put into service. EME will ensure that the equipment is electrically safe and that the Supplier
has indemnified the Trust in case of incidents.
13.3
How do I evaluate Quotations/Tenders? (User Evaluation)
Depending on the complexity of the quotation/tender summary, a panel may be required to make the
final decision. If the decision is with the User then they need to ensure that the tenders meet the
specification. Tender responses should be judged against the previously agreed evaluation criteria. At this
stage user evaluations should be carried out separately from and without knowledge of the financial
evaluation. A record must be kept of all decisions made.
13.4
Who else is involved in the evaluation process? (Financial Evaluation)
The appropriate Management Accountant or the Procurement Department will assist with the production
of a financial summary of the tenders. The financial summary will be based on the “whole life costs” of
the equipment. “Whole-life costing” includes not just the cost of the equipment but the maintenance,
consumables and training over the total life of the equipment.
The Procurement Department will provide an overview of the tenders and company information where
appropriate. Purchasing will also organise presentations from Suppliers and ‘Open Days’ or site visits to
view the equipment.
Any decision made has to be supported by the evaluation criteria used. Un-successful suppliers have a
right to a de-briefing, by the Procurement Department, outlining why they were not successful. It is
therefore necessary to have clear reasons to justify the final decision.
13.5
How do I know the equipment meets relevant safety standards and can be decontaminated?
Procurement will contact the Supplier to obtain a “Pre-Purchase Questionnaire” (PPQ) either separately
or as part of the quotation/tendering process. The PPQ confirms that the equipment meets the relevant
standards for electro-medical equipment and gives details of maintenance support. The PPQ is passed to
the EME department for approval. Procurement will request additional information related to cleaning
and decontamination and pass this to HSDU for approval. Any issues over decontamination will be passed
to the Trust’s Decontamination Officer.
An order cannot be placed until EME staff has given PPQ approval and that HSDU are satisfied with the
cleaning/decontamination instructions.
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Policy and Procedure for the Procurement of Equipment and Services
13.6
How do I order the equipment?
It is the Project/Budget Manager’s responsibility to raise the requisition and to ensure that the
requirement is correct. They should also ensure that it is properly authorised (either by electronically
authorising the requisition or signing off a paper non-stock requisition) before it is passed to the
Procurement Department. You need to ensure you keep a record of the requisition number.
13.7
Who places the order?
Procurement are responsible for placing the order and ensuring that the details are correct, as per the
quotation/tender and requisition.
13.8
How do I keep track of the order?
If the Ward/Dept. needs to track the order, they should contact Procurement with either the requisition
or order number. Alternatively you can check the progress of your order by utilising the Order Enquiry
field on EROS. Where Procurement are involved with a Capital Equipping Project then they will ensure
delivery dates are met.
13.9
What do I do once the order is received?
Once the order is received, Receipt and Distribution will notify EME (if applicable), who will check the
equipment. The equipment will then be sent to the Ward/Dept for use
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Appendix A – Sample Procurement Timeline – OJEU route
The table below illustrates a typical OJEU procurement timeline. It assumes that a business case for the procurement has been approved and the necessary market
intelligence including verification of the route to market has been undertaken.
Project Team to establish project plan and agree
timetable.
Prepare and Post Advert and PQQ on OJEU (open for
30 days)
Pull together tender document, spec and draft
contract inc means of evaluation
Expressions of Interest / PQQ stage closes
PQQ Evaluation and Shortlisting
Issue Invitation to Tender and Draft Contract Docs
(out for minimum 35 days)
Tenders received online via e-tendering portal
Clarification of tenders if required
Evaluation Activity (may include site visits, supplier
presentations)
Final shortlisting
Paper to Sub-committee of the board for approval or
CDIC as determined by SFIs
Paper to Board of Directors for Approval as
determined by SFIs
Issue intent to award (10 day standstill period
applies)
Completion of award including posting of award into
OJEU
Implementation / Installation / Delivery begins
Week 20
Week 19
Week 18
Week 17
Week 16
Week 15
Week 14
Week 13
Week 12
Week 11
Week 10
Week 9
Week 8
Week 7
Week 6
Week 5
Week 4
Week 3
Week 2
OJEU Route
Timeline
Week 1
Action