Procurement: standards and best practice
agendaNi summarises the Northern Ireland Public Procurement Policy and the best practice principles for how government should interact with suppliers.
The Northern Ireland Public Procurement Policy was first published by the Department of Finance and Personnel in 2002 after a policy review and is now in its ninth version; it was last updated in February 2014.
Public procurement is defined as “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”. This process spans a whole life-cycle “from initial conception and definition of the needs of the public service through to the end of the useful life of an asset or the end of a contract.”
Best value for money is viewed as “the most advantageous combination of cost, quality and sustainability to meet customer requirements.”
Those three concepts are defined as follows:
• cost: consideration of the whole life cost;
• quality: meeting a specification which is fit for purpose and sufficient to meet the customer’s requirements; and
• sustainability: economic, social and environmental benefits, considered in the business case, in support of the Programme for Government.
The award of grants is not included within the activity of public procurement as this area is subject to different legal requirements under EU law. Twelve principles underpin procurement policy in Northern Ireland (see box).
Practically, the Executive wants to see a closer alignment between procurement policy and its wider strategies and initiatives, “appropriate consultation” with members of the public who will be directly affected by the procurement. Greater emphasis should be placed on integrating the North/South, UK and EU-wide procurement markets, and collaboration between public bodies.
Public bodies, as purchasers, should also “as a matter of enlightened self-interest” use their commercial influence to “help improve the competitiveness of their suppliers” and ensure that appropriate procurement policies and principles “cascade down the supply chain.”
Professional development for procurement officials should be complemented by the implementation of best practice across all public bodies, which includes following the Managing Public Money NI guidance.
The Procurement Board is responsible for the “development, dissemination and co-ordination” of public procurement policy and practice for the public sector. Chaired by Finance Minister Simon Hamilton, it comprises the 12 permanent secretaries, the Treasury Officer of Accounts (Fiona Hamill), two external experts (Stuart Cairns and Tony Doran) and the Director of the Central Procurement Directorate (Des Armstrong). Strategic Investment Board Ltd is represented by an observer.
The board oversees the work of the Department of Finance and Personnel’s Central Procurement Directorate (CPD) and the centres of procurement expertise in the following public bodies: the Roads Service; Northern Ireland Water; Translink; the Health Estates Agency; the Business Services Organisation’s Procurement and Logistics Service (for health and social care); the education and library boards and the Housing Executive.
The cross-cutting Procurement Practitioners Group is a forum where representatives from the CPD and the centres inform, test and develop policy and look at “operational issues” in the process. The group now two sub-groups: supplies and services; and construction works and services.
Administrative action is preferred over legislation. The CPD produces procurement guidance notes which are then discussed at the Procurement Board and, if endorsed, issued to all public bodies in central government. The policy also applies to the Public Prosecution Service, which is a non-ministerial department. However, district councils cannot be obliged to follow the policy as they are independent of the Executive.
Principles
1. Accountability: effective mechanisms to enable accounting officers to discharge their responsibility
2. Competitive supply: carry out procurement by competition unless there are convincing reasons to the contrary
3. Consistency: suppliers should be able to expect the same general procurement policy across the public sector
4. Effectiveness: public bodies should meet the commercial, regulatory and socio-economic goals of government in a balanced manner
5. Efficiency: procurement processes should be carried out as cost-effectively as possible
6. Fair dealing: suppliers should be treated fairly and public bodies should not impose unnecessary burdens or constraints
7. Integration: procurement policy should pay “due regard” to the Executive’s other economic, social and environmental policies rather than cut across them
8. Integrity: no corruption or collusion with suppliers or others
9. Informed decision-making: public bodies need to base decisions on accurate information and monitor requirements to ensure that they are being met
10. Legality: public bodies must conform to EU and other legal requirements
11. Responsiveness: public bodies should endeavour to meet the “aspirations, expectations and needs” of the community served by the procurement
12. Transparency: public bodies should ensure openness and clarity in procurement policy and its delivery
Equality law delayed
Back in 2001, the procurement review found that it was unclear whether procurement was covered by some aspects of discrimination law. The Executive (at the time) accepted this opinion and agreed to bring forward legislation with three aims:
• clarify that current anti-discrimination law applies to procurement;
• ensure that the Disability Discrimination Act 1995 covers procurement; and
• stop firms which breach anti-discrimination legislation from receiving contracts.
The legislation was to be contained in a Single Equality Bill, which has not yet been published. At the time of the Bill’s consultation in 2004, the DUP was ambivalent, accepting that there was a case for consolidating legislation but also warning of the financial implications of legislating for rights. There is no commitment in the Programme for Government to bring the Bill forward (and none is planned) but the department believes that it meets current EU law in this area.
