P2P
PURCHASING PROCEDURE
April 2012
Prepared by N Addison, Approved by R Dale, April 2012
ESS revApril12
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Contents
Page
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Introduction
Purchasing Requirements
Number of Quotes or Tenders Required
3.1
Use of Contract Suppliers – Goods and Services
3.2
Use of Contract Suppliers – Works
3.3
Use of Non-contract Suppliers – Goods and Services
3.4
Use of Non-contract Suppliers – Works
3.5
Single Quotes or Tender
Purchasing Process Chart – Goods and Services
Purchasing Process Chart – Works
Quotations
4.1
Quotation Procedure
4.2
Specifications
4.3
Quote Information Requirement
4.4
Value for Money and the Assessment Quotations
Tenders
5.1
Tender Procedure
5.2
Specifications
5.3
Terms and Conditions
5.4
Programmes
5.5
Taking Over
5.6
Pre-Qualification of Suppliers
5.7
Health and Safety
5.8
Insurance
5.9
Tender Costs
5.10 Liquidated Damages
5.11 Bonds and Guarantees
5.12 Contract Price Adjustment
5.13 Retentions
5.14 Amendment to Tender Documents
5.15 Tender Opening
5.16 Value for Money and the Assessment of the Tenders
Separation of Duties
Order Placement
Authorisations
Order Amendments
Confirmations (Goods Receipts)
Purchase Invoices
Goods Returns
Settlement Disputes
Document Retention and Audit Records
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Prepared by N Addison, Approved by R Dale, April 2012
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NEWCASTLE UNIVERSITY
PURCHASING PROCEDURE
1. Introduction
This Procedure sets out the mandatory process to be followed when purchasing all Works,
Goods and Services however funded.
The aim of this Procedure is to ensure that the University purchases works, goods and
services in a manner that is compliant with Financial Regulations; provides value for
money for the University as required in the University’s Value for Money Policy; and meets
all of the legal and funding requirements placed on the University.
Quotations for Purchase Orders with an estimated value below £50,000 should be
obtained in accordance with the Quotation Procedure described in Section 4. Tenders for
Purchase Orders in excess of £50,000 should be obtained following the Formal Tender
Procedure described in Section 5.
Failure to comply with this Procedure may result in disciplinary action being taken against
the person concerned.
ESS Policies and Procedures
Note 1
ESS Procurement Procedures have been incorporated into this document. Any
variances from this document will be highlighted in the ESS Policies and Procedures
box at the end of each section.
2. Purchasing Requirements
Limits of Devolved Authority
i.
Tenders for Goods and Services likely to be in excess of £50,000 (exc. VAT), and
Works in excess of £250,000 (which may be conducted by authorised ESS staff),
must be conducted with the involvement of Procurement Services staff.
ESS Policies and Procedures
Note 2
The ESS Project Manager will decide on the appropriate procurement route and if the
Due North e-tendering system is to be used.
ii.
Where the contract value is in excess of the EU purchasing thresholds of
£173,934 (ex VAT) for Goods and Services and £4,348,350 (ex VAT) for Works a
formal EU tender should be conducted with the involvement of Procurement
Services staff.
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It is the responsibility of Procurement Services to place an advert in the Official
Journal of the European Union (OJEU). Contract notices should be sent to the
OJEU using Achilles Themis system. A copy of the Notice should be kept on file
by the Procurement Services Office.
ESS Policies and Procedures
Note 3
The thresholds are recalculated in accordance with the EU Directives on
Public Procurement and are adjusted every two years. The latest thresholds
can be viewed at www.ojec.com/Threshholds.aspx Any projects with an
estimated value of 90% of the thresholds will need to follow the OJEU route.
iii.
All purchase orders with a value in excess of £1million (ex VAT) must be
authorised by the Executive Director of Finance before they can be placed.
ESS Policies and Procedures
Note 4
ESS Purchase orders authorisation levels;
>£1m – Executive Director of Finance
£250k to £1m – PVC or Registrar
£50k to £250k – Director of Service
£5k to £50k – Direct Report to Director of Service
£500 - £5k – Service Nominee
<£500 on catalogue – No approval required
Additional Procedures to be followed
iv.
Tenders or Quotes involving the provision of on-campus Services such as
maintenance or installation of equipment should be carried out in accordance with
the ‘Guidelines for Engaging Contractors to Work in Academic Departments’.
(See www.safety.ncl.ac.uk/uploads/GUIDE.DOC).
ESS Policies and Procedures
Note 5
For all ESS projects refer to the ESS Management of Contractors and
other documents. http://www.ncl.ac.uk/estates/healthsafety/Policy.htm
For specific information or advice please contact please contact the
ESS Health and Safety Officer Ext: 6847
v.
Purchases made with a University Purchasing Card should follow the Purchasing
Card Procedure.
vi.
University approved contracts set up through the Procurement Services Office
and detailed on the P2P-Marketplace or the Procurement Services website MUST
be used.
(See www.ncl.ac.uk/internal/purchasing- services/agreements/index1.php)
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University contracts include those let by the NEUPC, National Working Parties,
NEPO, and the GPS.
Use of a non contracted supplier must be avoided as the purchase order could be
in breach of the EU directives on aggregation of demand, non compliance within
the scope of the EU directives (Supplies 93/36/EEC, Services 92/50/EEC and
Works 93/37/EEC) or breach of an existing contractual term.
Whenever a purchase order is to be placed outside of an approved University
contract permission to place the order must be obtained from the Procurement
Services Office.
ESS Policies and Procedures
Note 6
ESS Contracted Suppliers are suppliers that have tendered their particular
service for a specified cost and a specified time period. Please see current list
of ESS contracted suppliers
Purchase Orders Requiring Additional Approval
vii.
Tenders for Consultancy Services MUST follow the Engagement of Consultants Regulations and Procedures. (See http://www.ncl.ac.uk/internal/purchasingservices/regulations/index.php)
ESS Policies and Procedures
Note 7
This process is not necessary when consultants are appointed from a
framework panel. ESS has consultants frameworks for the following
disciplines:








Architects
Cost Consultants
Structural Engineers
Project Managers
Mechanical & Electrical Engineers
Building Surveyors
Landscape Architects
CDMC
Consultants are to be selected using a mini-competition as detailed on
capital procedures.
viii.
The provenance of the goods being purchased should be known. Web sites such
as ebay or any type of auction website shall not be used without the approval of
the Procurement Manager.
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ix.
All purchases of telecommunication services and equipment (e.g. telephone and
data lines, mobile phones, telephone handsets) must be procured through ISS.
x.
All purchases of computers should be approved by the faculty, school or services
Computing Officer before any orders are placed.
xi.
All purchases of photocopiers should be approved by Procurement Services
before any order is placed.
xii.
All requirements for on-campus hospitality and catering provisions should be
made to the University’s delivered hospitality service ‘Food Chain’.
In the event that Food Chain are unable to supply the requirement suppliers on
the approved external catering contractors list as detailed on the Procurement
Services website may be used. (See http://www.ncl.ac.uk/internal/purchasingservices/agreements/RegisteredFoodCateringContractors.php)
xiii.
All purchases of Vehicles should be approved by the Procurement Manager
before any order is placed.
xiv.
All purchases of radioactive materials and x-ray generating equipment must be
approved by the Radiation Protection Adviser. All purchases of Unsealed (Open)
sources of radioactivity must be routed via the Radiation Protection Office using
the approved forms. (http://www.safety.ncl.ac.uk/opensourceuse.aspx).
Standards for Purchasing
xv.
Suppliers requested to provide quotations should be known to be capable of
providing the works, goods or services required, they should be competitive and
commercially sound.
xvi.
Any contract with the University should not exceed 25% of the Supplier’s annual
turnover unless approved by Procurement Services.
xvii.
A member of Council or a member of staff having a personal, financial or any
other beneficial interest in any transaction between a third party and the University
must disclose this interest to the Procurement Manager prior to commencing any
tender process.
xviii.
No person may communicate, or allow to be communicated to a tenderer any
information that may give the Supplier a commercial advantage (all tenderers
must be aware of all of the same information and be able to bid in full knowledge
of all of the facts).
xix.
The University is entering into a legally binding contract which is enforceable by a
Court of Law. All correspondence (verbal or written) and actions can be included
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in any case against the University should it reach such a stage, therefore
members of staff must always ensure they conduct themselves with this in mind.
xx.
3.
No person shall seek or accept any gift or hospitality that could be construed to be
an inducement to award an order or contract.
Number of Quotes or Tenders Required
Purchase Orders less than £25,000 raised using the Parabilis Market Place
catalogues or Punch Out do not require a quotation where the lowest priced item or
shopping basket has been selected (the basket comparison facility should be used
to determine this). It is the responsibility of the Procurement Services Office to
ensure that only goods and services from contracted suppliers are included on the
Market Place.
For all other purchases where the Parabilis Market Place is not used competitive
quotes should always be obtained where possible by following the Quotation or
Tender Procedure. The number of quotes or tenders required is detailed below. All
Values are exclusive of VAT.
ESS Policies and Procedures
Note 8
Please note the special arrangements for the Measured Term Contract
(MTC) and the Consultants Framework.
NB. Any savings from mini-competitions provide an opportunity to
demonstrate value for money savings and should be recorded.
Use of Contract Suppliers – Goods and Services
3.1
i.
A tender exercise must always be carried out in accordance with EU Procurement
Directives and involving Procurement Services where the purchase order is above
£173,934 (ex VAT). Procurement Services will ensure that the contract complies
with EU procurement Directives.
ii. For all other purchase orders placed through an approved University contract set up
through the Procurement Services Office and detailed on their website
(see www.ncl.ac.uk/internal/purchasing-services/agreements/index1.php), the
requirements are:
Value of purchase
order (ex VAT)
< £25,000
£25,000 to £49,999
£50,000 to £173,934
Quotes required
A single quote is required
Quotes from all appropriate suppliers should be
obtained
A tender exercise involving Procurement Services
should be used
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3.2
Use of Contract Suppliers – Works
A tender exercise must always be carried out in accordance with EU Procurement
Directives and involving Procurement Services where the purchase order is above
£4,348,350 (ex VAT). Procurement Services will ensure that the contract complies
with the EU Procurement Directives.
For all other purchase orders placed through an approved University contract set up
through the Procurement Services Office and detailed on their website (see
www.ncl.ac.uk/internal/purchasing-services/agreements/index1.php), the
requirements are:
Value of purchase
order (ex VAT)
< £25,000
£25,000 to £249,999
£250,000 to £4,348,350
Quotes required
A single quote is required as a minimum
Quotes from all appropriate suppliers should be
obtained
A tender exercise involving Procurement Services
should be used
Quotes and tenders for Works contracts may only be obtained by authorised ESS
staff.
3.3
Use of Non-contract Suppliers – Goods and Services
Where the value of the purchase order is above £173,934 (ex VAT) a tender
exercise shall be carried out by Procurement Services in compliance with EU
Procurement Directives. Procurement Services will ensure that the contract
complies with the EU Procurement Directives.
For all other goods, services or works obtained outside of an approved University
contract set up through the Procurement Services Office and detailed on their
website (see www.ncl.ac.uk/internal/purchasing- services/agreements/index1.php)
or a contract approved by Procurement Services, the number of quotes or tenders
required is as follows:
Value of purchase
order (ex VAT)
< £100
£100 to £1,000
£1,000 to £9,999
£10,000 to £49,999
£50,000 to £173,934
Quotes required
Quotes not required
A single quote is required as a minimum
Two quotes should be obtained as a minimum.
Three quotes should be obtained as a minimum.
A tender exercise involving Procurement Services
should be used
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3.4
Use of Non-contract Suppliers – Works
Where the value of the Works is above £4,348,350 (ex VAT) a tender exercise shall
be carried out by Procurement Services in compliance with EU Procurement
Directives. Procurement Services will ensure that the contract complies with the
EU Procurement Directives.
For all other Works being obtained outside of an approved University contract set
up through the Procurement Services Office the number of quotes or tenders
required is as follows:
Value of purchase
order (ex VAT)
< £1,000
£1,000 to £9,999
£10,000 to £249,999
£250,000 to £4,348,350
Quotes required
A single quote is required as a minimum
Two quotes should be obtained as a minimum.
Three quotes should be obtained as a minimum.
A tender exercise involving Procurement Services
should be used
Quotes and tenders for Works contracts may only be obtained by authorised ESS
staff.
3.5
Single Quotes or Tenders
Single quotes or tender should only be obtained in the following circumstances:
i.
Where the purchase is made from the P2P marketplace and the total value is
less than £25,000.
ii.
Where the value of the Works, Goods or Services is below £1,000 (ex VAT)
when purchased from a non University contract.
iii.
Where the value of the Works, Goods or Services is below £25,000 (ex VAT)
and where the purchase is made from a University contract set up through
the Procurement Services Office and detailed on the P2P Marketplace or the
Procurement Services Website. (See www.ncl.ac.uk/internal/purchasingservices/agreements/index1.php).
iv.
Where there is a clear absence of alternative sources of supply and
approved by Procurement Services.
v.
Where it is necessary to extend, repair or refurbish proprietary or specialist
equipment or where a particular expertise is required and approved by
Procurement Services.
vi.
Where it is necessary to continue the use of specialist professional skills and
approved by Procurement Services.
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vii.
In an emergency situation where there is a risk to health and safety or the
continuing operations of the University.
viii.
Where it is in the interest of the University and approved by the Director of
Finance.
A record of the reason for single tender should be retained for audit
purposes.
ESS Policies and Procedures
Note 9
Approval required in writing from Procurement and this
approval should be retained for audit purposes. Also this
document should be provided as background documentation
with any requests for signature from the Director of ESS.
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Purchasing Process Goods and Services Not Ordered Through Parabilis
Market Place or Catalogue
NEWCASTLE UNIVERSITY PURCHASING PROCESS GOODS AND SERVICES
Aggregate Value <£25k
Aggregate Value <£50k
Are Goods Or
Services
Available From
A Contracted
Supplier?
1 Quote
Yes
Aggregate Value £25k - £50k
Aggregate Value <£100
Purchase
Aggregate Value £100 - £1k
1 Quote
Aggregate Value £1k - £10k
2 Quotes
Aggregate Value £10k - £50k
3 Quotes
Quote From All
Contracted Suppliers
No
Aggregate Value >£50k
Purchase / Tender Conducted
With The Involvement Of
Procurement Services
Aggregate Value £50k £173,934
Aggregate Value >£173,934
Purchased / Tendered In Compliance
With University / Funding Body
Regulations
Purchased / Tendered In Compliance
With EU Regulations
Aggregate value is the expected value of orders for the same or similar nature goods / services, over the intended contract period, excluding VAT
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Newcastle University
NEWCASTLE UNIVERSITY PURCHASING Purchasing
PROCESS FOR
Process
WORKS
Aggregate Value
<£250,000
Are Works
Available From
A Contracted
Supplier?
No
Aggregate Value >£250k
Purchase / Tender Conducted
With The Involvement Of
Procurement Services
Aggregate Value <£25k
1 Quote
Aggregate Value £25k - £250k
Quote From All
Contracted Suppliers
Aggregate Value <£1k
1 Quote
Aggregate Value £1k - £10k
2 Quotes
Aggregate Value £10k - £250k
3 Quotes
Yes
Aggregate Value >£250k £4,348,350
Aggregate Value >£4,348,350
Purchased / Tendered In Compliance
With University / Funding Body
Regulations
Purchased / Tendered In Compliance
With EU Regulations
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4.
Quotations
Purchase Orders raised using the Parabilis Market Place catalogues or
Punch Out do not require a quotation where the lowest price item or
shopping basket has been selected. (The basket comparison facility
should be used to determine this.)
It is the responsibility of the Procurement Services office to ensure that
only goods and services from contracted suppliers are included on the
Market Place.
Copies of all quotations obtained should be uploaded to SRM with the
Purchase Order.
4.1
Quotations Procedure
Written quotes should be obtained for Purchase Orders with an
estimated value of less than £50,000 (ex VAT) from suppliers. This can
be in the form of an official quotation, letter, fax, email, or pricing
information from the suppliers’ web site.
The P2P Market Place, Due North e-tender system or a university
Enquiry Form (see www.ncl.ac.uk/internal/purchasingservices/regulations/documents/ENQUIRYForm.doc) may also be
used.
4.2
Specifications
A specification should be provided for the supplier to quote against.
This should be sufficiently detailed to allow the supplier to quote an
offer which fully meets the University’s requirements. The specification
should be in the following form:
i.
ii.
iii.
4.3
a description of the goods or services required
a description of the output of the goods or services required
a manufacturer’s part number or equivalent reference number.
Quote Information Requirement
The quote should include the following as a minimum:
i.
ii.
A university Reference Number
Name, address, contact details of the supplier issuing the
quotation
iii.
A description of the Goods or Services to be provided
iv.
The quantity of the Goods or Services to be provided
v.
The price and details of all other costs associated with the offer
vi.
The delivery point for the Goods or the place of performance for
Services
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vii.
4.4
The delivery date or time for completion of the services.
Value for Money and the Assessment Quotations
i.
All quotes should be assessed to determine the most suitable
offer to the University. This should be the offer that provides the
University with the best Value for Money and in accordance with
the University’s Value for Money Policy. This will normally be
determined by the Price to be paid, the Quality of the goods or
services offered, suitability of the Specification of the offer to the
needs of the University, and the delivery timescales. The
suitability of the specification should take into account of
environmental and sustainability factors which should be
weighted highly in the assessment criteria.
ii.
Where items and equipment are assessed to be equal in the
assessment the item which scores highest for environmental
and sustainable factors should always be purchased.
A record of the assessment should be retained for audit purposes.
ESS Policies and Procedures
Note 10
Tender assessment reports are to be provided by the Project Manager. The
assessment should include scoring against each award criteria.
5.
Tenders
5.1
Tender Procedure
Tenders for Goods and Services with an estimated value in excess of
£50,000 (ex VAT) and works with an estimated value in excess of
£250,000 (ex VAT) should be carried out with the involvement of
Procurement Services.
Where the estimated tender value for Goods and Services is over
£173,934 (ex VAT) and Works over £4,348,350 (ex VAT) a formal EU
Tender process should be followed by Procurement Services.
Tenders should normally be obtained following a formal tender
procedure. Tenders should be requested from Suppliers using any of
the following methods; the SAP Request for Quotation functionality,
Due North etender system, A University approved emarket place, or a
formal Invitation to Tender document.
The SAP Request for Quotation or a hard copy of the Invitation To
Tender should be sent to the Supplier by Post, fax, or email, or etendering system.
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The tender should contain all of the information necessary for the
Supplier to provide a quotation in the appropriate fields. Where
possible, this should include the following as a minimum:
i.
ii.
iii.
iv.
v.
vi.
vii.
The tender Reference Number
Name, address, contact details of the person issuing the
tender
Address of the Supplier
The quantity of the Works, Goods or Services required
A description of the Works, Goods or Services required
The delivery point for the Works, Goods or the place of
performance for Services
The tender return date and time
When a tender is issued it may only be amended with the approval of
the Procurement Manager or authorised ESS staff.
If a tender is amended all Suppliers must be informed in writing of the
amendment at the same time and they should be given sufficient time
reflect the amendment in their offer to the University.
ESS Policies and Procedures
Note11
Approval is not required for ESS projects; however any amendments
must be recorded and circulated to all tenderers.
5.2
Specifications
The specification should cover:
1.
Technical Requirements
This should state or ask the Supplier to provide some or
all of the following:
i.
Functional, performance and reliability requirement.
ii.
Any Licensing or safety requirements.
iii.
Any Environmental or Hazard considerations.
iv.
Any Design Standards or Codes of Practice to be
adhered to.
v.
Any Operational or Maintenance requirements.
vi.
Any specific tests or inspections to be completed
before Taking Over.
vii.
Any installation requirements.
viii.
Quality assurance requirements.
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2.
Quality Plans and Approvals
Any Quality Plans or Approvals required of the Supplier
should be detailed including details of the format to be
submitted and the persons authorised to make such
approvals.
3.
Health and Safety
Suppliers should asked to provide a Health and Safety
document as part of their tender detailing all the health
and safety hazards associated with the use of the
equipment and any recommended safety measures to be
adopted by the user to ensure safe operation of the
equipment.
4.
Drawings and Documents
Any drawings and documents including Operate and
Maintain manuals to be provided by the Supplier including
the quantity and format to be provided in should be
stated.
5.
Maintenance
Details of any maintenance contracts including service
levels required, the location that the maintenance is to be
carried out and the duration of the maintenance
agreement should be detailed or requested.
ESS Policies and Procedures
Note 12
Item 5.2 Specifications; ESS projects standard documents and
specifications may be substituted for or added to items 5.2 1 to 5 inclusive.
The above list can be used as an optional check list.
5.3
Terms and Conditions
i. It is the responsibility of the Procurement Officer or ESS
Project Manager to ensure that the Terms and Conditions
are appropriate for the requirements of the contract.
ii. The choice of which Terms and Conditions to use includes:
The Newcastle University Conditions of Purchase, The
Research Equipment Affinity Group Terms and Conditions of
Purchase, Newcastle University Conditions of Contract for
the Provision of Services, CIPS Conditions of Contract.
iii. The choice of other Terms and Conditions of Contract as
issued by Professional Bodies should be considered as
appropriate by the Procurement Officer or ESS Project
Manager.
iv. The Invitation To Tender Document should always state the
Terms and Conditions applicable to the contract.
v. Where the Terms and Conditions require the completion of
an Appendix it is the responsibility of the Procurement Officer
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or ESS Project Manager to ensure that this is completed and
communicated to the Supplier in the Invitation To Tender
Document.
ESS Policies and Procedures
Note 13
Item 5.3 Terms and Conditions; for ESS projects standard contract documents
will be used and the standard terms and conditions will apply.
5.4
Programmes
i.
The production of a contract programme should be made by the
Procurement Officer or ESS Project Manager in consultation
with the School, Faculty, Institute, or Service.
ii.
Where the University has determined a Programme this should
be detailed in the Invitation To Tender Document and the
Supplier advised of the requirement to meet the Programme.
iii.
Where a Programme is requested from the Supplier, the
Procurement Officer or ESS Project Manager should request
sufficient details to allow a realistic assessment of the proposed
Programme. This may be split into sections covering areas such
as: Order, Supply, Manufacture, Test, Delivery, Installation, and
Training, as deemed appropriate by the Procurement Officer or
ESS Project Manager.
iv.
The Procurement Officer or ESS Project Manager and the
School, Faculty, Institute, or Service should assess any
proposed Programme to ensure that it is reasonable and
achievable by both the University and the Supplier. The
Procurement Officer or ESS Project Manager should take into
account in the assessment that delays caused by the University
which result in the Programme being extended could result in
claims against the University by the Supplier.
ESS Policies and Procedures
Note 14
Item 5.4 Programmes; for ESS projects the programme will be developed by
the Project Manager in collaboration with the design team and the client.
5.5
Taking Over
Where the contract requires the Supplier to install the equipment and
demonstrate that it is operating as per the contract the Invitation To
Tender Document should state the mechanism, which will be adopted
for the University to Take Over the equipment. This will normally
involve the University issuing a Certificate stating it has taken over the
equipment.
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The Certificate may be in the form of a letter from the University to the
Supplier. The issue of a Taking Over certificate will allow the Supplier
to invoice for the agreed contract amount.
ESS Policies and Procedures
Note 15
Item 5.5 Taking Over; for ESS projects the industry standard certificates will
be used all as specified in the standard tender documents.
5.6
Pre-Qualification of Suppliers
In certain circumstances it may be desirable to use a two stage tender
process, with the use of a Pre-Qualification document to request
management information and documents such as references,
accounts, health and safety policy, COSHH data etc.
The information may also be obtained from a technical appraisal of the
Supplier. Technical Appraisals should be used to determine that the
Supplier:
i.
has satisfactory previous experience of supplying similar
goods or services
ii.
has previous acceptable higher education performance
iii.
has the appropriate quality systems or accreditation
where necessary
iv.
has capacity to perform the contract
A formal scoring system with weightings shall be used to evaluate the
returns and appraisals and to ensure that an audit record exists for the
selection of the final Tenderers. The following information should be
recorded as a minimum:
i.
Companies initially considered for short-listing for tenders
ii.
Criteria used in determining the short-list for tenders
iii.
Reasons for selection of short-listed companies for tender
iv.
The scores given to each Supplier.
ESS Policies and Procedures
Note 16
Item 5.6 Pre-Qualification; the assessment criteria will vary from project to
project, typically the following criteria will be assessed;







Relevant Experience
Quality assurance
Resources
Record of legal proceedings
Environmental
Financial
Health and Safety
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The Due North e-tendering system has an excellent PQQ template together
with a catalogue of stock criteria; this system provides a fully auditable
process and storage facility. All PM should consider using the system.
5.7
Health and Safety
5.7.1 Where the contract requires the Supplier to install the equipment
as part of the contract the installation requirement should be
stated including the following information:
i.
Details of the University’s working hours
ii.
Details of access to the University
iii.
Whether the Supplier will have sole possession to the
area
iv.
Any permission from the University the Supplier may
have to obtain
v.
Details of any services the University will provide
5.7.2 Where the contract is for the Supplier to install the equipment
the following should be requested:
i.
A copy of the Suppliers Health and Safety Policy together
with the appropriate codes of practice.
ii.
A copy of the Suppliers policy for reporting and
investigating accidents and dangerous occurrences.
Prior to commencing any installation of the equipment the
Supplier should be informed of the following
requirements:
iii.
a. The requirement to agree with the University a Method
Statement detailing how the installation and the
associated Health and Safety risks will be managed.
b. They should ensure that they conform with the
requirements of the University’s ‘CODE OF SAFETY
PRACTICE FOR CONTRACTORS WORKING FOR
ACADEMIC DEPARTMENTS’. The Code should be
included in the Invitation To Tender Document as an
appendix. (See
http://www.safety.ncl.ac.uk/uploads/CODE.DOC).
c. They inform the School Safety Officer in writing the
name of the person responsible for Health and
Safety.
d. They present a Health and Safety Plan including a
method statement for approval by the School safety
Officer. The clause should say that ‘such approval
does not relieve the Seller of their responsibilities
under this contract’.
5.7.3 Where the contract is for Works the ESS Project Manager is
responsible for ensuring the appropriate Health and Safety
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assessment of the contractor and the Works is completed before
the Works commence.
ESS Policies and Procedures
Note 17
Item 5.7 Health and Safety; all ESS projects must comply with the CDM
Regulations 2007 and all other safety regulations. Projects will have
appropriate risk assessments and method statements.
5.8
Insurance
i. It is the responsibility of the Procurement Officer or ESS
Project Manager to ensure that the Suppliers used by the
University are adequately insured for the contract. The
University generally requires Suppliers to be covered by
Contractors All Risks Insurance, Public Liability Insurance
and Employers Liability Insurance.
ii. Contractors All Risks Insurance covers the property the
Supplier is working on or building and the University would
typically require cover of up to £5million as a minimum.
iii. Public Liability Insurance insures the Supplier for damage,
loss or injury for which the Supplier is liable. The University
would typically require cover of £1million as a minimum.
iv. Employers Liability Insurance provides cover for the
employees of the Supplier and the University would normally
require cover of £1million as a minimum.
v. Depending on the requirements of the contract the University
may require the Supplier to provide Professional Indemnity
Insurance. This may be required where the Supplier is
carrying out a design. The cover required would be
dependent on the Design but in most cases should not be
less than £1million as a minimum.
ESS Policies and Procedures
Note 18
Item 5.8 Insurance; see standard forms xxx Hyperlink to shared drive. Also
need to rearrange process for assessing and recording contractor’s insurance
details – DS to resolve NB. Copy of document to be forwarded to Angela
Collins who will monitor the insurance period and inform PM’s when the
insurance certificate is about to expire.
5.9
Tender Costs
The Invitation To Tender Document should clearly state the University
shall not be responsible for the payment of any costs or expenses
incurred by Supplier in the preparation and submission of tender offers
or for costs or expenses incurred in submitting or delivering any
presentations or demonstrations to the University.
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5.10
Liquidated Damages
i.
ii.
iii.
It is the responsibility of the Procurement Officer or ESS
Project Manager in consultation with the School, Faculty,
Institute, or Service to determine if Liquidated Damages are
to be applied to a contract.
All Liquidated Damages are to be a genuine pre-estimate of
the loss suffered by the University if the Suppliers breach the
contract.
Liquidated Damages are usually calculated as a percentage
of the contract Price with a maximum percentage payable by
the Supplier stated.
ESS Policies and Procedures
Note 19
Item 5.10 Liquidated Damages; for ESS projects the Project Manager in
collaboration with the design team will determine the rates for Liquidated
Damages.
5.11
Bonds and Guarantees
i.
ii.
It is the responsibility of Procurement Services or ESS
Project Manager to obtain a Parent Company Guarantee or
Performance Bond where required.
Parent Company Guarantees and / or a Performance Bond
should be obtained where Procurement Services or the ESS
project manager has assessed a material risk to the
University resulting from the contract.
ESS Policies and Procedures
Note 20
Item 5.11 Bonds and Guarantees;
5.12
Contract Price Adjustment
Where the contract is to supply over a long period Procurement
Services should determine if a Contract Price Adjustment clause is
appropriate. If the Procurement Officer or ESS Project Manager
decides that a Contract Price Adjustment clause is appropriate this
should be clearly defined including the mechanisms to adjust the price.
Mechanisms may include as examples: Rate of inflation, Currency
fluctuations, BEAMA Indices.
5.13
i.
Retentions
It is the responsibility of Procurement Services or ESS Project Manager
to determine if a Retention is required as part of the contract. Retention
should be requested where the University requires surety that Supplier
has fully met the requirement of the contract.
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ii.
The amount of the Retention and the period it is to be held should be
determined by the Procurement Officer in consultation with the School,
Faculty Institute, or Service.
iii.
The Invitation To Tender Document should clearly state that the
University will be withholding a Retention. This should either be as a
clause within the Commercial Specification or it may be explicitly stated
in the Terms and Conditions of contract.
iv.
The Invitation To Tender Document should clearly state the form the
Retention will take, such as an amount or percentage of each payment
due or an amount or percentage of the contract Price, the duration of
the retention, and the manner the Supplier should invoice for the
release of the Retention.
ESS Policies and Procedures
Note 21
Item 5.13 Retentions; for ESS projects the Retention policy will be as
specified in the appropriate standard building contract.
5.14
Amendment to Tender Documents
When a tender is issued it may only be amended with the approval of
the Procurement Manager or ESS Project Manager. If a tender is
amended all Suppliers must be informed in writing of the amendment at
the same time and they should be given sufficient time reflect the
amendment in their offer to the University.
ESS Policies and Procedures
Note 22
Item 5.14 Amendment to Tender Documents; Project Manager is responsible
for approving any amendments. Any amendments must be recorded and
circulated to all tenderers.
5.15
Tender Opening
i.
Tenders received through the Due North e-tender system
should be accepted using Due North functionality by a
person not involved with the tender exercise. These tenders
are automatically time stamped by the system.
ii.
Tenders not received through the Due North e-tender system
should be opened at the same appointed time after the
tender return date and time indicated in the tender document
and should be date stamped, and endorsed with the name of
the person opening the tender and the time it was opened
and recorded on a Tender Opening Sheet. Tenders should
be opened and witnessed by 2 people not involved with the
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tender exercise. The names and signatures of the person
opening and witnessing the opening of the tender should be
written on the tender opening form.
iii.
Tenders estimated to be over £50,000 (ex VAT) should be
opened in the presence of a Procurement Officer or member
of the ESS Management Accounts team.
iv.
The University does not undertake to accept late tenders.
Late tenders should only be opened or accepted on Due
North with the approval of Procurement Services. A record
detailing why a late tender was opened should be made and
kept on file for audit purposes.
ESS Policies and Procedures
Note 23
Item 5.15 Tender Opening; ESS tenders will be opened by the ESS Management
Accountant (ESS MA). All PM’s should inform the ESS MA of the tender return
dates, tender list and pre-tender estimates. Once opened the ESS MA will
summarise the tenders and provide reports to the Director of Estates and the
PM.
When PM’s are using the Due North e-tendering system the following people
need to be added as verifiers to allow them to open tenders; Keith Patrick, Vicky
Craney and Angela Wylie. Once opened the ESS MA will summarise and report
as above.
5.16
Value for Money and the Assessment of the Tenders
i.
All Tenders should be assessed to determine the most suitable offer to
the University. This should be the offer that provides the University with
the best Value for Money and in accordance with the University’s Value
for Money Policy.
ii.
This will normally be determined by the Price to be paid, the Quality of
the goods or services offered, suitability of the Specification of the offer
to the needs of the University, and the delivery timescales.
iii.
The suitability of the specification should take into account of
environmental and sustainability factors which should be weighted
highly in the assessment criteria.
iv.
Where items and equipment are assessed to be equal in the
assessment the item which scores highest for environmental and
sustainable factors should always be purchased.
v.
A record of the assessment should be retained for audit purposes.
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6.
Separation of Duties
i.
All Heads of Schools, Institutes and Central Services must
ensure that there is a segregation of duties in making financial
commitments in accordance with the delegations of financial
authority as approved by Council and also the SAP SRM
Authorisations structure. TP2P roles assigned may be as
follows:
ii.
Staff with access to the P2P system can create a Shopping Cart
for approval, and process the confirmation (goods receipt) as the
invoices are routed to a third party for scanning/data extract and
then processed via the Accounts Payable Workbench. It is good
practice to ensure that more than one person is involved in the
purchasing and receipt of goods / services.
iii.
Staff with access to the P2P system should not complete the
web requisition to the Expert Buyer.
Unit Nominee, Unit Manager, and Heads of Unit must not
approve carts that have been created on their behalf by an
Expert Buyer.
iv.
7.
Order Placement
i.
Purchase Orders must be placed for all works, goods and
services required by a School, Faculty, Institute, or Service with
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the exception of utilities, telephone charges and vehicle taxes.
These will be paid centrally by ESS or ISS as appropriate and
the charge distributed to the School, Faculty, Institute, or
Service.
ii.
All Purchase Orders should be placed through SAP SRM. Staff
create a Shopping Cart that is then authorised and converted to
a Purchase Order. A separation of duties should be maintained
for staff processing and authorising Purchase Orders as per
Section 6.
iii.
SAP SRM offers a variety of possible solutions to create a
Shopping Cart. The recommended order to consider the
solutions is:
a) By selecting items from the P2P-Marketplace
b) Limit Order
Not to be used for items available from the P2P-Marketplace.
For regular repeat orders with variable invoice values, but which
can be budgeted for a time period. e.g. photocopier charges,
gas rentals, taxis, glaziers, locksmiths.
For individual orders where the final cost is unknown. e.g.
equipment maintenance/repairs with unknown final labour/parts
cost.
c) Free Text / With Free Description
For individual requirements where the final cost is known and
fixed in advance of creating the order. Needs to be supported by
the appropriate number of quotes as per Section 3.
Free text Shopping Carts should include or contain references to
the following information where appropriate:

Details of the works, goods or services ordered.

The contract price

The contract period

The delivery requirements and date

The payment terms

The maintenance terms

The Warranty period

The quotation reference number should be entered
in the SAP SRM Purchase Order Header text or
Supplier text in the shopping cart.
Where a Shopping Cart is not raised through the P2P-Marketplace
copies of supporting quotes and a record of the assessment of the
suppliers offer stating why the supplier was selected should be
attached or detailed in the Shopping Cart on SRM.
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iv.
Staff can request new vendors to be added to SAP using the
online form to request a new vendor account can be found on the
following link:
http://www.ncl.ac.uk/internal/purchasing-services/sap/
The Procurement Manager may reject the request where the vendor
already exist on SAP or there is an existing university contract or
approved framework agreement in place or the Procurement Manager
deems the vendor to be unsuitable to the University.
8.
Authorisations
i.
All purchase orders shall be approved in accordance with the
University’s Delegations of Authority prior to be sent to the
supplier.
Cost of purchase
Authorisation by
Up to £5,000
£5,001 to £25,000
£25,001 to £50,000
£50,001 to £250,000
£250,001 to
£1,000,000
£1,000,001 to
£2,000,000
Over £2,000,000
Unit Nominee
Unit Manager
Unit Manager
Head of Unit
Faculty PVC/Registrar
Vice-Chancellor
Concurrence
required from
Not required
Not required
Procurement Services
Procurement Services
Procurement Services
plus FMBSG if >£500k
Executive Director of
Finance plus FMBSG
Council
Purchase orders with a value under £500 where all the items are from
the P2P-Marketplace are auto approved.
ii.
All orders exceeding £25,000 (exc. VAT) – or equivalent
currency – will be routed to the Procurement Manager (or their
authorised deputy) to review the tender / quotation documents
and to ensure the Purchasing Procedure has been followed and
the order represents value for money, any reasons for not
accepting the most economically advantageous bid is
satisfactory and sufficient evidence is available to satisfy Audit
requirements.
iii.
The Procurement Manager has delegated authority to stop a
Shopping cart raised on SAP SRM if it can be shown that an
identical product or service can be obtained from an alternative
source of supply at a lower cost, given the same or better
guarantees of delivery, price stability, training, customer support,
etc., and subject to any pre-existing contractual liability.
The Procurement Manager must inform the School, Faculty,
Institute or Service if a Shopping Cart has been stopped. In the
event of disagreement between the Procurement Manager and
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the School, Faculty, Institute, or Service about a proposed order,
the Director of Finance must be consulted.
iv.
9.
All Shopping Carts with a value in excess of £1million (ex VAT)
must be authorised by the Director of Finance before they can
be placed.
Order Amendments
i.
Once a Purchase Order is placed, the quantities and values as
stated on the Purchase Order should not be increased,
extended or otherwise amended:
For goods a new Shopping Cart should be raised and authorised
as per the SAP SRM Authorisation Structure for any additional
items or quantities required.
For services the invoice will be sent to the Shopping Cart creator
for review and acceptance and authorisation as per the SAP
SRM Authorisation Structure. If the invoice needs to be reviewed
and accepted by a member of staff other then the Shopping Cart
creator this should be conducted by email and details should be
added to the notes section of the WIA communication before
approving.
ii.
10.
Where an increase to the quantities or values would take the
total value of the orders above one of the purchasing thresholds
as detailed in Section 3, additional quotes may need to be
obtained before the additional cart is created, or the additional
invoice is approved.
Confirmations (Goods Receipts)
i.
Goods Receipts Notes should be obtained for the receipts of
goods. Whenever possible the Goods or Services must be
inspected before signing the goods receipt note as accepted. If
this is not possible then the signature must include the wording
“received unchecked".
ii.
In the event of Goods being delivered with a shortage (e.g. 9
delivered but 10 on delivery note) then the Supplier must be
notified via either the delivery note being manually altered or the
correct quantity being signed for, or in writing within three
working days.
iii.
Only the quantity delivered must be entered onto the
Management Information System.
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11.
Purchase Invoices
i.
The invoice details (quantity, price, discount, etc.) must be in
accordance with the originating order.
ii.
Any invoice not correct must be notified to the supplier within
three days of receipt, and held until such time as a corrected
invoice, or part credit note is received.
iii.
The invoice should contain the following information as required
by HM Revenue and Customs:







an invoice number
the seller's name or trading name, and address
the seller's VAT registration number
the invoice date
the tax point if this is different from the invoice date
the University’s name or trading name, and address
a description sufficient to identify the goods or services
For each different type of item listed the invoice must show the:






unit price or rate, excluding VAT
quantity of goods or the extent of the services
rate of VAT that applies to what's being sold
total amount payable, excluding VAT
rate of any cash discount
total amount of VAT charged
If the VAT invoice includes zero-rated or exempt goods or
services, it must:


iv.
show clearly that there is no VAT payable on those goods
or services
show the total of those values separately
Any expenditure in excess of the order amount for goods a new
Shopping Cart should be raised and authorised as per the SAP
SRM Authorisation Structure for any additional items or
quantities required.
Any expenditure in excess of the order amount for services the
invoice will be sent to the Shopping Cart creator for review and
acceptance and authorisation as per the SAP SRM
Authorisation Structure.
12.
Goods Returns
i.
Any goods received that require return to the supplier/sender
must be recorded on the original delivery note.
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ii.
Contact the supplier and ask for clarification of their returns
procedures.
If goods are to be sent to an overseas address for inspection, or
repair etc and then returned – ask the supplier which courier
they will use to ship back, book return with same courier and
ensure they complete or advise necessary customs paperwork
to ensure VAT and Duty isn’t charged on re-import.
The goods should be returned, wherever possible, in the original
packaging, including a copy of the original delivery note, with an
accompanying letter explaining the reason for return (a copy
should be retained with the original paperwork).
If a delivery has been entered onto SAP SRM then the return
must be processed as a ‘Return Delivery’
iii.
iv.
v.
13.
Settlement of Disputes
The School, Faculty, Institute, or Service should take these up with the
supplier in the first instance. Where the dispute can not be resolved by
the School, Faculty, Institute, or Service then the dispute should be
referred to the Procurement Services Office.
ESS Policies and Procedures
Note 24
Item 12. Settlement of Disputes. For ESS projects the settlement of disputes will
be as specified in the standard contract documents.
14.
Document Retention and Audit Records
All tenders and quotations received should be retained for inspection
by Audit. A record saying why the successful Supplier was selected
should be made and kept on file. Records should be kept in
accordance with the University’s ‘Document Retention Policy’.
The following are examples of documents in relation to the purchase
which should be retained:
1.
2.
3.
4.
5.
6.
7.
8.
Quotes
Tender assessments
Goods receipt notes
Invoices
Credit notes
Returns authorisations
Tender opening forms
Any other documentation relevant to the tender and order
placement process
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