Procurement Rules
(Approved and last updated to include revised UK Procurement Thresholds as from 1 January 2024, the revised UK Procurement Thresholds are now inclusive of VAT Owner – Head of Service Procurement)
- Interpretation
- Scope and Status of Procurement Rules
- Required approvals
- Principles of procurement
- Contract value, lotting, aggregation and supplier selection
- Framework Agreements
- Grants
- Use of Selection Questionnaires (SQs)
- Contract Procurement Activity Requirements for Services and Supplies by Value
- Contract Procurement Activity Requirements for Execution of Works by Value
- Contract Procurement Activity Requirements for (a) Service Contracts for Schedule 3 Services (Only applicable to Schedule 3 Services), and for (b) Contracts where the Provider Selection Regime Regulations apply
- General Contract Requirements.
- Contract Modification and Short Term Contract Extensions
- Waiving Procurement Rules
- Appendices A and B
1. Interpretation
1.1
In the Procurement Rules, the following terms shall have the following meanings:
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Central Purchasing Body (CPB) |
A Central Purchasing Body (CPB) means a Contracting Authority that acquires supplies or services intended for one or more Contracting Authorities; or awards public Contracts for works, supplies or services intended for one or more Contracting Authorities; or concludes framework agreements for works, supplies or services intended for one or more Contracting Authorities. |
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Contract |
Means any contract, whether in writing or not, including but not limited to the provision of services, goods or supplies, any execution of works, the appointment of consultants, hire and leasing arrangements. |
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Contracting Authority |
Shall have the meaning ascribed under the Regulations. |
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Council |
Means Lancashire County Council. |
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Financial Rules |
Means Lancashire County Council's Financial Rules published in accordance with section 151 of the Local Government Act 1972. |
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Framework Agreement |
Has the meaning ascribed in the Regulations, as set out at paragraph 6.1 of these Procurement Rules, in respect of Framework Agreements let pursuant to the Regulations. In respect of framework agreements for Health Care Services which fall under the Provider Selection Regime, "Framework Agreement" shall have the meaning ascribed in the Provider Selection Regime Regulations. |
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Health Care Service |
Has the meaning ascribed in the Common Procurement Vocabulary (CPV) codes set out at Schedule 1 to the Provider Selection Regime Regulations. |
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Procurement Documents |
Has the meaning ascribed in the Regulations. |
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Provider Selection Regime |
Means the procurement regime for Health Care Services which removed the procurement of contracts for Health Care Services from the scope of the Regulations. |
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Provider Selection Regime Regulations |
Means the Health Care Services (Provider Selection Regime) Regulations 2023 which came into force on 1 January 2024. |
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Regulations |
Means the Public Contracts Regulations 2015 (as amended). |
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Relevant Authority |
Has the meaning ascribed in the National Health Service Act 2006. |
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Schedule 3 Services |
Refers to social and other services listed in Schedule 3 to the Regulations included at Appendix A for ease of reference. |
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Scheme of Delegation |
Means the Council's Scheme of Delegation to Officers. |
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SME |
Means small and medium enterprises. |
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Tender Process |
Refers to any process to appoint a contractor. |
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Third Sector |
Means non-government and non-profit making organisations or associations, including charities, voluntary and community groups. |
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UK Procurement Threshold |
Means the thresholds above which the provisions of the Regulations are held to apply. |
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Works, Supplies and Services |
As defined in the Regulations. |
1.2
Where the term "contractor" is used, this should be taken to include any provider or supplier of Works, Supplies and Services or economic operator as defined within the Regulations at Regulation 112.
2. Scope and Status of Procurement Rules
2.1
The Council is required as a matter of law (S135 Local Government Act 1972) to make standing orders in connection with its contracting requirements for goods and supplies, services and works. These Procurement Rules form part of the Council's constitution and compliance with them by all staff is mandatory.
2.2
The Council is a Contracting Authority for the purposes of the Regulations and is therefore legally bound to comply with certain practices and procedures in the award of Contracts to which the Regulations apply. The Council is a Relevant Authority for the purposes of the Provider Selection Regime Regulations and is legally bound to comply with certain practices and procedures in the award of Health Care Services contracts to which the Provider Selection Regime Regulations apply.
2.3
These Procurement Rules are designed to assist the Council in complying with relevant legislation and to ensure that the public purse is managed in a proper and responsible fashion and in a way which will promote value for money and act as a safeguard for the Council and its staff against any allegations of dishonesty and corruption.
2.4
Consequently, save for the exceptions listed at 2.8, every Contract made by or on behalf of the Council shall comply with the provisions and principles of the Regulations and all other applicable principles and provisions of EU and domestic legal requirements, these Procurement Rules and Financial Rules. In the event of any inconsistency between the provisions of the Procurement Rules and any legal requirement then the legal requirement shall prevail.
2.5
These Procurement Rules are supplemented by the Council's Procurement Strategy and Social Value Policy; and regard must be had to them in relation to any procurement activity.
2.6
When conducting procurement activities all staff must comply with the County Council Code of Conduct for Employees.
2.7
Where any employee either of the Council or of a contractor may be affected by any change in supplier/contractor, it is essential that the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) are considered prior to commencing any Tender Process.
2.8
The provisions of these Procurement Rules shall not apply to Contracts for the provision of legal services or land transactions to the extent that these are exempted from the application of the Regulations. In cases such as these, further advice should be sought from Legal and Democratic Services.
2.9
With effect from 1 January 2024, the procurement of contracts for Health Care Services was removed from the scope of the Regulations and placed under the remit of the Provider Selection Regime. In procuring contracts for Health Care Services, the Council must act in accordance with the procurement principles set out in Regulation 4 of the Provider Selection Regime Regulations and make decisions as to the appropriate contract award process in accordance with the decision-making processes set out in Regulation 6 of the Provider Selection Regime Regulations and the Provider Selection Regime statutory guidance. Where a competitive procurement process is required by the Provider Selection Regime Regulations or is otherwise chosen by the Council as its preferred contract award process, the Council must comply with the steps and transparency requirements set out in the Provider Selection Regime Regulations.
2.10
Given the specialist nature of the roles and the market, these Procurement Rules provide an exemption, in relation to the appointment of Independent Investment Advisers and Shareholder Advisers to the Pension Fund (where the contract value is below the UK Procurement Threshold) from the requirement set out at paragraph 9 to approach the market via Oracle Sourcing Portal and to advertise the contract via Contracts Finder.
3. Required approvals
3.1
Where contractual spend concerns a Key Decision (Advice in relation to what constitutes a Key Decision should be sought from Democratic Services) then appropriate approval to undertake a Tender Process should be sought from the Cabinet. Where a decision to undertake a Tender Process cannot await the next Cabinet meeting, the decision shall be taken by the Cabinet Member with responsibility for Procurement. This approval will provide authority to the relevant Director to proceed to award a Contract on the completion of the Tender Process, in which case no further Cabinet approval will be required and the provisions of paragraph 3.3 will apply.
3.2
Where contractual spend would not involve a Key Decision the relevant Director must approve the commencement of a Tender Process and record the decision on the central decision recording system.
3.3
The Director must approve the award of a Contract on the satisfactory completion of the Tender Process prior to entering into a Contract or notifying any person or organisation of the Council's intention to award a contract. The same Director shall ensure the relevant Cabinet Member is informed and the decision is recorded using the central decision recording system.
3.4
All ICT procurements must be taken with the involvement of Digital Services.
4. Principles of procurement
4.1
Any Tender Process conducted by the Council shall comply with the following principles:
4.1.1
All contractors involved in any Tender Process shall be treated equally and without discrimination.
4.1.2
All Tender Processes should be conducted in a transparent and proportionate manner.
4.1.3
The design of any Tender Process shall not be made with the intention of excluding it from the scope of the Regulations.
4.1.4
Achieve value for money for public money spent.
4.1.5
Be consistent with the highest standards of integrity.
4.1.6
Comply with all legal requirements.
4.2
For the avoidance of doubt, the provisions of paragraph 4.1 shall apply equally to tenders or procurement activities below the UK Procurement Threshold as above the UK Procurement Threshold.
5. Contract value, lotting, aggregation and supplier selection
5.1
It is important to properly estimate the total value of a Contract on the basis that different rules apply depending the nature and value of a Contract (please refer to paragraphs 9, 10 and 11). Please note that paragraph 11 only applies to Schedule 3 Services (as set out in Appendix A) and not to services Contracts generally.
5.2
The estimated total value of a Contract shall be the total value of the Contract net of VAT. This is the total consideration estimated to be payable over the full term of the Contract by the Council to the contractor, including any extensions.
5.3
Where the Contract is one where the benefit to the contractor is made up entirely or in part from benefits other than simple monetary payment (Such other benefits may include but are not limited to concessions, options, licences or more generally exposure to other opportunities or funding streams) from the Council, a best estimate of the total financial value should nonetheless be ascertained and this should be treated at the relevant Contract value for the purposes of the application of the remainder of this paragraph 5.
5.4
Where, in relation to Contracts for Services, the Contract period or total value of the Contract is indefinite or uncertain, the estimated value shall be calculated on the basis that the Contract will be of four years' duration.
5.5
Where the Contract has an option to extend, then the proposed extension period must be included in determining the Contract value.
5.6
The estimated value of a Framework Agreement is the total value of all the Contracts which could be entered into by the Council (and other Contracting Authorities if appropriate) over the duration of the Framework Agreement.
5.7
In the case of supply/goods Contracts which are regular in nature (i.e. a series of similar individual purchases throughout the year), there is a requirement to aggregate these and assess their value on the basis of spend over the preceding 12 months or, where such data is unavailable, the estimated value over the 12 months following the first delivery under the contract to be procured; and this calculation is to be used as the relevant Contract value for the purposes of the application of these Procurement Rules.
5.8
Purchases of the same or similar nature must be aggregated wherever practicable; and it is unlawful to deliberately disaggregate purchases so as to avoid the application of the Regulations.
5.9
For Contracts above UK Procurement Threshold under the Regulations purchase requirements should be lotted where appropriate so as to attract the interest of SME and VCFS organisations. Where this is not practicable the justification for the decision must be recorded on any associated report and/or Procurement Initiative Plan.
5.10
Where purchase requirements are lotted, the estimated value of Contracts should be the estimated value of all lots envisaged for the total term.
5.11
Whatever method is used for the calculation of the estimated Contract value, you must not choose a manner of estimated Contract values with the deliberate intention of excluding that Contract from the scope of the application of the Regulations.
5.12
For the avoidance of doubt, Contracts relating to the leasing, hire, rental or hire purchase and Contracts for concessions are subject to the provisions of these Procurement Rules.
6. Framework Agreements
6.1
The Regulations define a Framework Agreement as:
“an agreement between one or more contracting authorities and one or more economic operators, the purpose of which is to establish the terms governing contracts to be awarded during a given period, in particular with regard to price and, where appropriate, the quantity envisaged”.
6.2
In other words, a Framework Agreement is a general term for agreements with providers that set out terms and conditions under which specific purchases ("call-offs") can be made throughout the term of the Framework Agreement. It may be the case that a Framework Agreement itself is not a Contract, but the procurement to establish a Framework Agreement will still be subject to the Regulations where the estimated value exceeds the relevant UK Procurement threshold, save where the subject matter of the framework is exempt from their application. All Framework Agreements established by the Council are required to be in writing.
6.3
The Council may set up its own Framework Agreements or may use Framework Agreements set up by other CPBs. Without prejudice to the remainder of this paragraph 6.3 and the requirements set out in paragraph 3 of these Procurement Rules, all purchases made via a CPB are deemed to comply with these Procurement Rules and no waiver will be required. In any eventuality, use of Framework Agreements must be exercised only through the Council's Procurement Services to ensure that such action reflects compliance with these Procurement Rules and the Regulations and any other appropriate legislation.
6.4
For the purposes of determining whether the value of a proposed Framework Agreement is such as to attract the application of the Regulations, please refer to paragraph 5.6 above.
6.5
For the avoidance of doubt, the use of select lists, preferred providers or approved providers shall, for the purposes of these Procurement Rules, be treated as a Framework Agreement and shall therefore require compliance with this paragraph 6 and these Procurement Rules generally.
6.6
A Framework Agreement shall not exceed 4 years' duration without prior approval of the Monitoring Officer, which will only be given in exceptional circumstances where justified by the subject matter of the Framework Agreement. A call-off Contract may be let for a period of longer than 4 years, but not in a manner that distorts or restricts competition. Call- off Contracts should not in any event exceed more than 7 years' duration.
7. Grants
7.1
The award of grants of public money may invoke the provisions of the Subsidy Control Act 2022 and/or the Regulations. In either case advice should be sought from Legal and Democratic Services Commercial and Procurement Team unless you have had confirmation from Government or a quasi-government body that the Subsidy Control Act 2022 and/or the Regulations do not apply OR you carry out appropriate procurement activity in compliance with these Procurement Rules and, where appropriate, the Regulations.
8. Use of Selection Questionnaires (SQs)
8.1
The use of SQs for any Tender Process is governed by the Regulations (irrespective of value) and does not apply to the procurement of contracts for Health Care Services under the Provider Selection Regime.
8.2
In order to determine whether you are permitted to use a SQ and if you are, any requirement to use a national standard form SQ is set out in Appendix B to these Procurement Rules.
8.3
In the event that you are required to use a standard form SQ or alternatively you are not permitted to use a SQ at all then this requirement cannot be deviated from or waived. The Procurement Service can provide further assistance and advice in connection with these requirements.
Paragraphs 9, 10 and 11 identify specific requirements for Service and Supply Contracts, Contracts concerning the execution of Works and Contracts for Schedule 3 Services.
The requirements set out below reflect the nature of the Services, Supplies and Works purchased by the Council and are designed to provide the most efficient and effective route to market, whilst maintaining compliance with the Regulations and appropriate governance.
9. Contract Procurement Activity Requirements for Services and Supplies by Value
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Aggregate value |
Quotes or Tender Process? |
How should you approach the market? |
Who undertakes the Procurement? |
Must the Contract be formally advertised? |
What is the minimum quote/tender period? |
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Email/Call Supplier for quote, raise |
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£0 to £9,999 |
Minimum of one quote |
requisition for LPS Purchasing Team. Use a Lancashire supplier if they offer best value. |
Service Area |
No |
N/A |
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£10,000 to £74,999 |
Minimum of three quotes* |
Raise a requisition for Procurement Service Purchasing Team, develop request for quotation documentation, quote process conducted through |
Procurement Service Purchasing Team or Service Area where agreed. |
No |
10 days |
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£75,000 to £214,904 |
Via Tender Process |
Oracle Sourcing Portal Oracle Sourcing Portal** |
Procurement Service Category Management or Service Area where agreed. |
Yes, via the LCC website and Contracts Finder |
10 days |
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£214,904 and above |
Via Tender Process |
Oracle Sourcing Portal** |
Procurement Service Category Management or Service Area where agreed. |
Yes, via the Find a Tender Service, the LCC website and Contracts Finder |
30 days (open procedure) |
*If this is not reasonably practicable in the circumstances, the reasons for not doing so must be formally recorded by the relevant Director.
**Whilst the Council's default option will be to tender electronically, there will be processes and procedures put in place to accept hard copies in appropriate circumstances by arrangement with the Procurement Service.
10. Contract Procurement Activity Requirements for Execution of Works by Value
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Aggregate value |
Quotes or Tender Process? |
How should you approach the market? |
Who undertakes the Procurement? |
Must the Contract be formally advertised? |
What is the Minimum quote/tender period? |
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£0 to £24,999 |
Minimum of one quote |
Email/call Supplier for quote, raise requisition for LPS Purchasing Team. Use a Lancashire supplier if they offer best value. |
Service Area Procurement Service |
No |
n/a |
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£25,000 to £99,999 |
Minimum of three quotes* |
Oracle Sourcing Portal** |
Purchasing Team or Service Area where agreed. Procurement Service |
No |
10 days |
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£100,000 to £5,372,609 (incl VAT) |
Via Tender Process |
Oracle Sourcing Portal** |
Category Management or Service Area where agreed. Procurement Service |
Yes, via the LCC website and Contracts Finder |
10 days |
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£5,372,609*** (incl VAT) and above |
Via Tender Process |
Oracle Sourcing Portal** |
Category Management or Service Area where agreed. |
Yes, via the Find a Tender Service, the LCC website and Contracts Finder |
30 days (open procedure) |
*If this is not reasonably practicable in the circumstances, the reasons for not doing so must be formally recorded by the relevant Director.
**Whilst the Council's default option will be to tender electronically, there will be processes and procedures put in place to accept hard copies in appropriate circumstances by arrangement with the Procurement Service.
11. Contract Procurement Activity Requirements for (a) Service Contracts for Schedule 3 Services (Only applicable to Schedule 3 Services), and for (b) Contracts where the Provider Selection Regime Regulations apply
(a) Contract Procurement Activity Requirements for Service Contracts for Schedule 3 Services (Only applicable to Schedule 3 Services)
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Aggregate value |
Quotes or Tender Process? |
How should you approach the market? |
Who undertakes the Procurement? |
Must the Contract be formally advertised? |
What is the minimum quote/tender period? |
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£0 to £663,540 (incl VAT) |
To be determined as appropriate by Procurement and Legal Services* Process followed to be communicated in notice. |
Oracle Sourcing Portal** |
Procurement Service Category Management or Service Area where agreed. |
No |
n/a |
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Yes, via the Find a Tender Service, the LCC website and Contracts Finder |
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£663,540 (incl VAT) and above |
(b) Contract Procurement Activity Requirements for Contracts where the Provider Selection Regime Regulations apply
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Aggregate value |
Quotes or Tender Process? |
How should you approach the market? |
Who undertakes the Procurement? |
Must the Contract be formally advertised? |
What is the minimum quote/tender period? |
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Any (no financial thresholds apply under the Provider Selection Regime) |
To be determined as appropriate by Procurement and Legal Services under the Provider Selection Regime
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Oracle Sourcing Portal** for a Competitive Process |
Procurement Service Category Management or Service Area where agreed. |
To be determined as appropriate by Procurement and Legal Services under the Provider Selection Regime |
n/a |
*The Regulations still provide obligations of transparency and equal treatment on a Contracting Authority awarding a contract which is of cross-border interest, in which case some form of advertising of the opportunity and process is likely to be required.
**Whilst the Council's default option will be to tender electronically, there will be processes and procedures put in place to accept hard copies in appropriate circumstances by arrangement with the Procurement Service.
12. General Contract Requirements.
12.1
The optimum use of the Council’s purchasing power must be made by aggregating purchases and through the use of Framework Agreements and Contracts. Where there is an approved Contract or Framework Agreement in place then this should be used in the first instance for purchasing Supplies, Services or Works.
12.2
All Contracts awarded by competitive tender must be in writing. Save where the Council's standard terms and conditions are used advice is to be sought from Legal and Democratic Services as to the suitability and adequacy of any proposed written conditions of contract.
12.3
In the event that a low value Contract carries a disproportionate risk by means of concerning high risk services or service users, or carrying significant reputational, operational or financial risk, advice should be sought from Legal and Democratic Services Commercial and the Procurement Service prior to any Contract award.
12.4
All Contracts, whether in writing or otherwise, shall require the Council to make payment within 30 days of receipt of an undisputed invoice and Contracts shall require a similar payment term to be reflected down any relevant supply chain.
12.5
In the case of any Contract in writing, reference should be had to the Scheme of Delegation as to who is authorised to attest the Council's seal or sign a particular Contract. If in doubt contact Democratic Services.
12.6
Notwithstanding the provisions of paragraph 12.5, any Contract that meets any of the following criteria MUST be made under seal:
12.6.1
Any Contract that is required by law to be executed as a Deed (which includes but is not limited to appointment of trustees, transfers of land, powers of attorney, some formal scheme amendments – please seek further guidance from Legal and Democratic Services).
12.6.2
Any agreement that is otherwise executed as a deed (for example, agreements for no consideration or where it is uncertain as to whether any valuable consideration exists (i.e. there is no price or no obvious benefit to a party), where an extended limitation period is required (standard Contracts have a 6 years limitation period whereas deeds have a 12 year limitation period).
12.6.3
Any agreement with a value in excess of the Key Decision threshold unless the requirement is waived (as agreed by Legal Services and recorded in the Scheme of Delegation database).
12.7
In entering into any Contract you should have regard to and ensure compliance with any relevant provisions of the Scheme of Delegation to Officers.
13. Contract Modification and Short Term Contract Extensions
13.1
Contracts may only be modified, changed or amended in very limited circumstances and regard should be had to:
13.1.1
Regulation 72 of the Regulations in respect of contracts to which the Regulations apply;
13.1.2
Regulation 13 of the Provider Selection Regime Regulations in respect of contracts for Health Care Services. For the avoidance of doubt, Regulation 13 of the Provider Selection Regime Regulations applies to contracts for Health Care Services which were originally let pursuant to the Regulations.
Such modifications, changes or amendments that are not compliant with the Regulations or the Provider Selection Regime Regulations (as appropriate) may result in a legal challenge, including termination of the Contract. Prior to modifying any Contract, whether in terms of value, duration, scope or otherwise, advice must first be sought from the Procurement Service.
14. Waiving Procurement Rules
14.1.
Any decision to be taken contrary to these Procurement Rules where the financial implications do not exceed £75,000 for Services and Supply contracts or £100,000 for works contracts AND the total contract value (Contract value shall be determined in accordance with paragraph 5 of these Procurement Rules) (including the value of any proposed or actual extensions) does not exceed the applicable EU Threshold must be formally recorded by the relevant Director on the central decision recording system. All supporting documentation should be retained and made available to the Procurement Service.
14.2.
Save as is provided for in paragraph 14.1, decisions taken contrary to these Procurement Rules must be taken by the Cabinet. Where a decision cannot await the next Cabinet meeting, the decision shall be taken by the Cabinet Member with responsibility for Procurement.
14.3.
For avoidance of doubt, the definition of a waiver to these Procurement Rules incorporates decisions concerning the direct award of Contracts, including extensions to existing Contracts where the period and/or value of extension was not provided for in the original Tender process.
14.4.
For the sake of completeness, it should be noted that it is not possible to seek a waiver of the requirements of the Regulations or the Provider Selection Regime Regulations in relation to the procurement activity, but such conduct must be referred to the Head of Procurement and notified to the Cabinet Member responsible as portfolio holder for Procurement.
14.5.
Save as is provided for in paragraph 14.1, decisions taken contrary to these Procurement Rules shall be reported to Cabinet on a monthly basis.
Appendices A and B
Appendix A: Schedule 3: Social and Other Specific Services
View Appendix A: Schedule 3: Social and Other Specific Services of the Procurement Rules.
Appendix B - Requirements Relating to the Use of SQS
View Appendix B - Requirements Relating to the Use of SQS of the Procurement Rules.