SECTION 2: BUYING GOODS AND SERVICES 1

Areas to cover Procurement Services Process cycle Thresholds Purchase Orders Tendering Areas of focus Questions 2

Procurement Services 3

Process cycle 4

Thresholds ThresholdRequirement Up to £5,000Purchase Order £5,000 to £25,000Quotation, then Contract and Purchase Order £25,000 to £113,057*Tender, then Contract and Purchase Order £113,057* to £500,000 OJEU Tender, then Contract and Purchase Order £500,000 to £1,000,000 OJEU Tender, then Contract and Purchase Order Retrospective Approval needed from the Health Minister Over £1,000,000Advanced Approval from Health Minister, OJEU Tender, then Contract and Purchase Order 5 * OJEU threshold is £4,348,350 for estates works

Purchase Orders Raise Requisition on Oracle Approve Requisition on Oracle PO created by NWSSP PO sent to supplier by NWSSP Goods delivered Goods booked in on Oracle Invoice to NWSSP Invoice, PO and booking in matched and paid by NWSSP 6

Purchase Orders Health Board requires for all expenditure No Purchase Order in advance of incurring cost = breach of Health Board policy (SFIs) Breaches will be reported to the Audit Committee Simple: Requisition > Approve > Supply Convenient: Orders can be placed 24/7 Quicker: Reduced supplier lead time Cheaper: Reduced cost of processing 7

Receipting All goods or services must be ‘receipted’ within Oracle. Confirms that the goods or services have been delivered. Impact of not receipting can be difficult. It’s a simple process! 8

Invoices Invoices live on system within 2 days of receipt. Any without a Purchase Order returned to supplier. Manager responsible has breached HB policies. If invoices are not paid promptly: –supplier may stop supplying, –they could fine us for lost interest, –Lost credibility. 9

Payment 10 Purchase Order Receipted goods / services Valid invoice Payment Triangle Must pay valid invoices within 30 days of receipt (PSPP)

Preparing to tender Early procurement involvement What is the value of the contract (lifetime) How will it be funded? How will it change the service? How do you ensure transparency (scoring, evaluation, dealing with challenges)? Have you consulted with colleagues? Is it being done across Wales? 11

Tender procedures ProcedureWhat does it mean? OpenAdvert and Invitation to Tender RestrictedAdvert, Pre Qualification Questionnaire and Invitation to Tender NegotiatedExceptional circumstances Competitive dialogueExceptional circumstances, and cannot decide on specification 12 PQQ Selection and shortlisting of supplier Assessing supplying organisation (H&S, References, Personnel) ITT Contract award and evaluation Assessing the offer to supply goods or services

Specification 13 Output (Performance) Input (Functional) Focus on outputs Don’t discriminate (national, brands, personnel) Reference known standards Legal Must not directly or indirectly advantage one supplier over another

Getting it wrong Remedies Directive 2009 Encourages litigation! Damages if process not covered correctly: –Failure to advertise in OJEU –Lack of tender debriefs –No standstill period Involve procurement early! 14

Buy2Wales/Sell2Wales and e-Tender Wales Open and transparent system Standard for all Welsh Public Sector Adverts for OJEU and Non-OJEU Ensures compliance Encourages supplier participation E-Tender allows contract management 15

Waivers Used sparingly! Must have valid reasons Cannot exceed OJEU threshold Detailed outline of reasons Must be signed by Head of Department, Procurement, Director of Finance (or nominated deputy) Will be reported to the Audit Committee Involve procurement early! 16

Areas of focus Savings Audit and assurance Contract alignment Standardisation Automation Process improvement 17

Questions? 18