Procurement
Compliance and
Governance - What you
need to know to protect
you and your school
Speakers: Sarah Thompson and Samantha Pritchard
June 26th 2014
Introduction
• Sarah Thompson - Associate, Education and Procurement
• Samantha Pritchard - Associate, Charities
Agenda
• Procurement and Governance the basics
• Case studies
• Questions
Procurement – the basics
• Public procurement itself can be described as the process
whereby public sector organisations acquire goods, services
and works from third parties.
• School’s procurement requirements:
- School’s financial regulations;
- Academies Financial Handbook;
- DfE’s Buying Goods and Services – Schools;
- TFEU principles; and
- EU Procurement Rules/Public Contracts Regulations
2006
Procurement – the basics
• Getting it right is important
• Best value for school
• Value for money statement
• Audit perspective
• Consequences of getting it wrong
Governance – the basics
• Nolan 7 standards of public life
• Selflessness
• Integrity
• Objectivity
• Accountability
• Openness
• Honesty
• Leadership
• Trustee duties and responsibilities
Case Study 1 - Financial policy and EU
procurement
• School’s financial policy – General principles
- expenditure should reflect best value principles
- fair competition through quotations and tenders
- ensure contracts are procured in the most economic,
efficient and effective way
- School’s financial policy – Typical values
- Less than £10k
- £10k - £40k 3 written quotations
- £40k+ (but below EU thresholds) 3 competitive tenders
Case Study 1 - Financial policy and EU
procurement
• ICT contract value £80,000
• Write a specification to include as part of tender
• Clearly state what you want quantity/quality/other
requirements
• Does the supplier have to meet any legal criteria? (h&s)
• Outline standards of performance expected
• Advertise
• Local/national newspapers/trade journals
• School’s/Council’s website
Case Study 1 - Financial policy and EU
procurement
• ICT Contract annual value £40,000 – total value?
• (£40k x 4) + (£40k x 1) = £200,000
• EU procurement financial thresholds for schools
• Services and Supplies
• £172,514 (excl VAT)
• Works
• £4,322,012 (excl VAT)
• Above threshold purchases must be undertaken in
accordance Public Contracts Regulations 2006
• Prescribe detailed rules (supplemented with case law) on
how the competition must be undertaken
Case Study 1 - Financial policy and EU
procurement
• Can you extend the existing contract?
• What do the terms of the contract state?
• Is there a clear/unequivocal variation clause permitting an
extension?
• Yes
• No
• Careful not to exceed the EU procurement thresholds
• Can you award a new contract to supplier recommended to
you?
• Comply with school’s financial policy
• Avoid direct award as difficult to demonstrate best value
Case Study 1 - Financial policy and EU
procurement
• Other procurement options
• Framework Agreements
• LA
• PSBO – Crown Commercial Services, Crescent
Purchasing Consortium
• Collaboration with other schools
Case Study 2 – Maximising income
• Trading limit
• All sources
• Look at other sources of income
• Maximising use of facilities – not trading if just ‘hand over the
keys’
• Further charitable purposes
Case Study 3 – Ratifying an appointment
• Check the relevant procedure
• Notify the Board immediately
• Consider whether the appointment can be deferred to the
next Board meeting
• Board ratify the appointment
Case Study 4 – Procurement challenge
• What to do when faced with a potential challenge
• If it’s a below threshold procurement and followed school’s
policy – tell them
• If it is above threshold and should have been advertised in
the OJEU seek legal assistance
• Most complaints are settled out of court –a formal
challenge is very costly and can damage a supplier’s
reputation
Case Study 4 – Conflict of interest
• Academies
• “Connected Person”
• Duty to declare interest in a transaction
• Abstain from voting, not count towards the quorum, leave
the room
• Is there a Trustee benefit - are extra steps necessary?
• Adequate training? Declarations of Interests?
• Ask about conflicts in quote/tender documents
Questions?
Contact:
Sarah Thompson
Associate
Projects & Procurement Team
Tel: 0191 279 9636
Email: sarah.thompson@bonddickinson.com
Samantha Pritchard
Associate
Charities Team
Tel: 0191 279 8391
Email: samantha.pritchard@bonddickinson.com