In its capacity as local authority for the 'Square Mile', there
are regulations at a European, national and local level which the
City of London has to follow when procuring goods, services and
works and when establishing approved tender lists.
European procurement legislation /
UK legislation / Local
rules
European procurement
legislation
All public sector contracts no matter what their value within
the European Union are covered by a treaty which incorporates the
free movement of goods and services and which prevents
discrimination against firms on the grounds of nationality. The
principles of the treaty are backed up by a series of EC
Procurement Directives.
The City of London, in its role as local authority is subject to
EU Directives governing Tender procedures. Under the EU regulations
there are three types of tender procedure available to buyers
- The open procedure: This is available in all circumstances and
involves a single stage approach where all candidates may respond
to the Official Journal of the European Union (OJEU) advertisement
and all offers received must be considered.
- The restricted procedure: This is available in all
circumstances and involves a two stage approach where candidates
who respond to the OJEU advertisement will be considered to have
expressed an interest and, from these, the buyer will then
shortlist a number of candidates to submit offers.
- The negotiated procedure: This is only available in a very
limited number of circumstances and is subject to strict
conditions.
Due to the wide and costly process involved in the open
procedure and the limitations that surround the negotiated
procedure, the most common procedure used is the restricted.
Where the restricted procedure is used, the buyer must allow a
minimum of 37 days from the date the OJEU notice was despatched to
the closing date for receipt of expressions of interest. Once short
listing has taken place, a minimum of 40 days must be allowed for
offers to be returned (although this may be shortened to 26 days if
a Prior Information Notice [PIN] has been published to the correct
requirements).
If procurement activity has been derived from unforeseeable and
urgent circumstances then the timescale above may be classified as
an accelerated restricted procedure.
Further information about the EC Procurement Directives can be
viewed at the SIMAP website.
UK legislation
Whilst there is no prescription on local authorities to tender
out specific services, the City of London has a duty under Best
Value legislation (introduced in April 2000) as laid down by Part 1
of the Local Government Act 1999 to fundamentally review its
services and make arrangements to ensure continuous improvement
having regard to economy, efficiency and effectiveness. Performance
indicators and targets for improvement are set and published in an
annual Best Value Performance Plan. The City of London recognises
that effective procurement is at the heart of Best Value and that
the Best Value review process will help deliver it’s commitment to
provide the best possible services for the people of the 'Square
Mile'.
Further information about Best Value is available on the
Department
of Communities and Local Government website. The City of London
must also have regard to Part ll of the Local Government Act 1988
which prohibits “non commercial considerations” being taken into
account when awarding contracts.
Local rules
Procurement activities must also comply with the City of
London’s Standing Orders and financial regulations. These are the
City of London’s own internal rules that govern its operations. An
extract from standing orders detailing the procurement procedures
to be followed for sub-EU tenders is provided below:
Supplies and services (excluding professional consultancy)
| Title |
Threshold |
Basis and Guidance |
| Best Value |
£0 – £500 |
Low value tenders can be undertaken at officers’ discretion,
providing Best Value Principles are observed |
| Minor Procurement |
£501 – £20,000 |
A minimum of two firms will be invited to quote. |
| RFQ |
£20,001 – £50,000 |
Request for Quote (RFQ) – a minimum of three firms to be
invited to submit written quotations |
| Advertise |
£50,001 – EU threshold |
Written RFQ or Tender – a minimum of three firms to be invited
to submit written quotations or tenders, which will be advertised
via the London Tenders Portal
(www.londontenders.org) |
| OJEU |
Above EU threshold |
Tenders for Part A services must be advertised in the Official
Journal of the European Union (see http://ted.europa.eu) via The London Tenders
Portal (www.londontenders.org). Part B services will
also be advertised on the London Tenders Portal and tendered
accordingly. |
Professional consultancy
| Title |
Threshold |
Basis and Guidance |
| Consultancy |
£0 – £50,000 |
Officers’ discretion, providing Best Value principles are
observed |
| Advertise |
£50,001 – EU threshold |
A minimum of three consultants to be invited to submit
written quotations or tenders, which must be advertised on the
London Tenders Portal (www.londontenders.org) |
| OJEU |
Above EU threshold |
Tenders will be advertised in the Official Journal of the
European Union (see http://ted.europa.eu) through the London
Tenders Portal (www.londontenders.org/) |
Works
| Title |
Threshold |
Basis and Guidance |
| Best Value |
£0 – £500 |
Low value tenders will be undertaken at officers’ discretion,
providing Best Value Principles are observed |
| Minor Procurement |
£501 – £20,000 |
Procurements can be undertaken at officers’ discretion,
providing Best Value principles are observed. |
| Works RFQ or ITT |
£20,001 – £400,000 |
A minimum of three firms will be invited to submit written
quotations or formal tenders. The London Tenders Portal
(www.londontenders.org) may be
used. |
| Works Advertise |
£401,000 – EU threshold |
A minimum of three firms will be Invited to Tender, and the
opportunity will be advertised through the London Tenders Portal
(www.londontenders.org) |
| Works OJEU |
above EU threshold £3,927,260 |
Tenders will be advertised in the Official Journal of the
European Union (see http://ted.europa.eu) through the London
Tenders Portal (www.londontenders.org). |