Minutes:
Sarah Janusz, Head of Strategic Procurement and Project Planning attended the meeting to inform the Committee on the way that the Council procures its goods and services.
The presentation set out the Procurement Framework; systems used for sourcing, ordering and making payments; Governance; Risk Management - the procurement cycle; and monitoring.
It was explained that the Procurement Framework started with legislation then the Councils Vision, Values and Outcomes, the Procurement Strategy - Buying into Bury and the Contract Procedure Rules.
The Council used an electronic business portal called 'The Chest' to source its goods and services. The Chest is a regional collaboration which has access to a business database and e-tendering functionality which allows the Council to get the best prices and high quality tendering which is open and transparent.
The system allows providers to tender for business on the one site. The advantages were that the system was secure, there was a complete audit trail, the system allowed verification by legal services and reduced the administration costs. It also allows users to see the opportunities available and to ask and share information relating to them in an open arena.
The Council uses P2P (Procure to Pay) within the Agresso System to order most of its goods. The one system is used from requisition of goods to invoice and there is also a punch out facility with on-line catalogues available for ease of use.
The advantages of the system were explained and included the up-front authorisation of expenditure, reduction to the risk of fraud, administration costs reduced and a reduction in the payment period.
It was also explained that the Council had issued payment cards to staff that required them for face to face payment and other internet purchases. The scheme was run through the Royal Bank of Scotland and was shared with Manchester City Council which offered further benefits.
There were specific rules about how and when the cards should be used and these were explained to the card holder in detail. There was a clear audit trail on purchases which reduced the risk of fraud.
The procurement cycle was set out in a diagram and it was explained that there were a number of gateways within the cycle where specific questions were asked before proceeding to the next stage.
The Procurement Team were also responsible for managing contracts to ensure best Value for Money and continued competitiveness. All contracts were reviewed at an appropriate time and if changes were required then these could be negotiated.
All purchasing was monitored regularly and the Council was required to identify all spending over £500 and publish this information regularly.
Sarah explained that there were Key Performance Indicators that were being worked towards and these were monitored monthly and annually.
Members were given the opportunity to ask questions and the following points were raised:-
· Councillor Whitby asked whether the procurement team would ensure that service level agreements were being met when a service had been procured at department level.
Sarah explained that support was given to all departments going through a procurement exercise and all specifications would be reviewed to ensure that they were appropriate.
Audit Committee, 15 December 2014
· Councillor Walker referred to the added value requirement that was incorporated into some contracts and asked whether the contractors were aware that this had to be provided when they tendered for the job.
Sarah explained that they would be aware of the requirement to add value as this would be set out within the legal pack and information relating to the contract.
· Councillor Parnell asked whether the Council were using local providers more.
Sarah explained that the ‘Buying into Bury’ strategy ensured that local providers and suppliers were given the opportunity to quote. The strategy ensures that the Council work closely with the Bury Chamber of Commerce and have access to a database of local suppliers.
· Councillor Mallon referred to the use of payment cards and asked who would be responsible if something was bought in error and had already been paid for.
Sarah explained that the item would still be able to be returned for a refund as would happen anywhere.
· Councillor Walker asked what the threshold was for European tenders.
Sarah reported that the threshold for goods and services was £172,514 and for construction £4.322,012.
· Councillor Walker asked how much information members were given in relation to contracts and tenders now that they were applied for on line.
Councillor Parnell stated that the cabinet had received regular information on contracts and tenders when he was a member.
Councillor FitzGerald stated that the Audit Committee would be receiving updates on some of the Key Performance Indicators relating to contracts and tendering.
· Councillor Walker referred to the Council using local contractors and suppliers and stated that this would not be good if all Council’s were to do the same.
Sarah explained that local suppliers would be considered and this would be across Greater Manchester as well as across Bury. If a non local supplier offered a better service and value for money then local suppliers could be overlooked.
It was agreed:
That Sarah be thanked for her presentation.