http://www.novapro-m.

com

Public Procurement Processes

-
Adapted for NHS Organisations

© NovaPro M Ltd 2010

 http://www.novapro-m.com

Course Tutor: Dr Fatai Badmus

Public Procurement Consultant

BSc. (Hons); MB ChB;

PRINCE2 (Project Management) Practitioner;
MSP (Managing Successful Programmes) Practitioner;
MBCS (Full Member of the BCS the Chartered Institute of IT);
CITP (Chartered IT Professional).

Contact options:
•Complete form at http://novapro-m.com/about
•Tel: +44 84 4884 2652 or +44 84 4884 2652
•Fax: +44 84 4774 2924
•eMail: admin@novapro-m.com
Health & Safety, etc http://www.novapro-m.com

o Fire exit locations:

o Toilet locations:
o Hydration fluids (sadly non-alcoholic!) freely
available throughout the day
o Two 15-minute tea/coffee breaks and a 1-hour
lunch break, to ensure energy levels are kept up.
 Course Programme
• Start time: 09:00 Hrs
• Preamble: GTKY, etc –
09:00 – 09:15
• Session 1: Introduction to
procurement, then Q&A -
09:15 – 10:15
• Coffee Break: 10:15 – 10:30
• Session 2: Procurement for
“Game-Keepers” (aka
Commissioners), then Q&A -
10:30 – 12:00
• Lunch Break: 12:00 – 13:00
http://www.novapro-m.com
• Session 3: Procurement for
“Poachers” (aka Providers), then
Q&A - 13:00 – 14:00
• Session 4: Procurement How-
To, then Q&A - 14:00 – 15:00
• Coffee Break: 15:00 – 15:15
• Session 5: Group Scenario
Exercises, then Q&A - 15:15 –
16:15
• Closing Session, including
recaps and Q&A - 16:15 – 16:30
Finish time: 16:30 Hrs
Introductions http://www.novapro-m.com
 http://www.novapro-m.com

Session 1

Introduction to Procurement
 What is Procurement? http://www.novapro-m.com

One of the most functional definitions is:

“Public procurement is the process of the

acquisition, usually by means of a contractual
arrangement after public competition, of
goods, services, works and other supplies by the
public service, from third parties”.
Principles of Public Procurement http://www.novapro-m.com

1. Accountability

2. Competitive Supply

3. Consistency

4. Effectiveness

5. Efficiency

6. Fair-dealing
Principles of Public Procurement - 2 http://www.novapro-m.com

7. Integration

8. Integrity

9. Informed decision-making

10. Legality

11. Responsiveness

12. Transparency
 More definitions http://www.novapro-m.com

HM Treasury Purchasing guidelines:

The concept of “best value for
money” can be defined as “the
optimum combination of whole
life cost (not just initial or short
term costs), quality (or fitness for
purpose) and delivery factors
against price, to meet the
customer’s requirements”.
 More definitions - 2 http://www.novapro-m.com

“Whole life cost” includes both quantifiable

and non-quantifiable (or intangible) costs and
benefits.

The obligation devolves upon public purchasers

to compile a procurement specification which
includes social, economic and environmental
policy objectives within the procurement
process.
 More definitions - 3 http://www.novapro-m.com

A VFM Improvement or a Procurement Saving can

be described as:

“A benefit generated by the purchaser’s initiative

and achieved by an action beyond that of, or
arising from, routine order-placing”.
More definitions - 4 http://www.novapro-m.com

Establishing best VFM is directly linked

to attaining the "Seven Rights" of
purchasing which are:

The right commodity (or service).

In the right quantity.

Of the right quality.
At the right price.

At

To the right location.

At the right time.

From the right source.
 The Procurement Cycle http://www.novapro-m.com

Basic procurement processes can be

summarised as follows (relevant formal stage descriptions
are in bold blue):

1.Determine the requirement – Business Case

2.Produce a specification to define the need;
3.Find and select potential sources – Advert / Contract
Notice / Deciding on the Procurement Route / EU Considerations / Gateway
Considerations / Framework Procurement

4.Make an enquiry to the potential suppliers

against the specification – Expressions of Interest / Pre-
Qualification Questionnaire / Invitation to Tender

5.Evaluate the responses to the enquiry –

Obtaining Quotes or Tenders / Tender Evaluation

6.Negotiate the terms of the contract - Post Tender

Negotiations

7.Prepare a purchase order and send to the

selected supplier – Contract Award
 The Procurement Cycle – 2 http://www.novapro-m.com

8. Manage the progress of the order - Contract

Award

9. Obtain acknowledgement of order - Contract

Award (including the Alcatel procedure of 10 days to receive any appeal)

10. Progress chase – Service Delivery

11. Monitor incoming goods and services,
accept if satisfactory, reject if inadequate –
Service Delivery

12. Deal with discrepancies - Contract Management

13. Make payment for satisfactory goods or
services – Payment on Delivery of Value
14. Ensure that proper stock management
controls are in place if the goods are to be
held in stores. Dispose of surplus assets.
 Prime considerations http://www.novapro-m.com

• Need to ensure that all procurement is carried

out in an expedient and efficient manner.
• Need to ensure that all procurement is fully
compliant with “The Public Contracts
Regulations 2006”.
• Need to ensure that there is an appropriate
level of competition to promote the submission
of the most economically advantageous
solutions.
• In procuring goods, services or works, every
purchaser is personally responsible and
accountable for achieving value for money
(VfM).
 Why do formal procurement? http://www.novapro-m.com

• It is a legal requirement (to help with achieving WCC

competency # 9 – “Secure procurement skills”)

• Enables you to be fair, open and transparent (to help with

achieving WCC competency # 8 – “Promote improvement
and innovation”)

• You encourage competition across a range of providers (to

help with achieving WCC competency # 7 – “Stimulate the
market”)

• You are able to ascertain market deliverability (to help with

achieving WCC competency # 11 – “Make sound financial
investments”)

• You can evaluate the source(s) of supply (to help with

achieving WCC competency # 10 – “Manage the local health
system”)
 But, why bother? http://www.novapro-m.com

• Well, the Cooperation and Competition Panel is taking a

keen interest!

• According the DH, “The panel will advise the Strategic Health
Authorities and the Department of Health, and (for compliance issues)
Monitor, on resolving disputes relating to competition for NHS-funded
services. It will have the specific responsibility for considering complaints
about issues associated with the procurement of clinical services,
advertising and promotion, and the merger or acquisition of healthcare
providers where an NHS body is involved. It will only consider disputes
where these have not been able to be resolved locally.

• The Cooperation and Competition Panel will ensure that providers operate
on a level playing field, safeguarding the interests of patients and
taxpayers.”

• And all that is in addition to the “eagle eyes” of the SHA in

their normal statutory oversight role!

The next slide puts this relationship into some context.

But, why bother? - 2 http://www.novapro-m.com
 EU procurement regime http://www.novapro-m.com

• The EU Treaty principles of non-discrimination on

ground of nationality; equal treatment;
transparency; proportionality and free movement of
goods and services apply to all public sector
contracts.
• The regulations have 2 levels – a full regime for
priority services (Part A) and a lighter regime for
other services (Part B).
• Health and social care services are Part B services.
• The regulations only apply if the contract is over a
threshold amount (updated every 2 years). Current
thresholds are (briefly):
• £101,323 for Part A services & supplies
• £156,442 for Part B (residual) services
• £3,927,260 for Public Works
 EU procurement regime - 2 http://www.novapro-m.com

The main requirements of the regulations are:

• Non discriminatory specifications (Parts A & B).
• Competition through a tender advertised in the
Official Journal of the EU (Part A).
• Compliance with minimum timescales for providers
to respond to adverts, pre-qualification checks and
tenders (Part A).
• Prescribed criteria for the selection of tenderers and
contract award (Part A).
• Provision of feedback to unsuccessful suppliers and
issue of contract award notice within 30 days of
award (Parts A & B).
 http://www.novapro-m.com

Session 2

Procurement for Commissioners