Changes to MPS procurement processes in support of the new MPA standing orders

Report: 14
Date: 19 March 2009
By: Director of Resources for the Commissioner

Summary

At the July 2008 Full Authority meeting the MPA approved revised levels of authority for Single Tender Actions (STAs). This approval was provided on the basis that the Service could demonstrate appropriate levels of control and record the justification for granting STAs. The Authority also asked that Procurement Services played a significant role in the new approval process.

This report briefs Members on the proposed changes to internal MPS processes to meet these requirements, together with the required changes to the DP1049 form (the initial step that is required within the MPS to commence Procurement activity or tendering for goods or services) to capture the appropriate information and approval authority.

A. Recommendations

That

1. members note the changes to MPS procurement processes and associated form (DP1049); and
2. approve the increased delegated level granted to the MPS for exemptions to Contract Regulations (use of a Single Tender Action) to £100,000 with effect from 1 March 2009.

B. Supporting information

1. At the July 2008 Full Authority meeting the MPA approved a number of proposed amendments to the existing Standing Orders based on recommendations from a joint MPA/MPS working group including members of Finance, DoI, Property and Procurement Services. These amendments:

• Provided greater flexibility and increased authority levels;
• Increased delegation levels to business units before consultation with Procurement is required (now £50,000) subject to appropriate competition;
• Increased approval level granted to MPS for exemptions to Contract Regulations (use of a Single Tender Action) subject to approval by Procurement Services;
• Increased the financial value of contracts above which the MPA are required to sign and seal contracts i.e. they now fall in line with MPS approval levels;
• Supported the current MPS sponsored work on improving controls and governance.

Single tenders

2. The only change that was not effective immediately was the increased approval level granted to the MPS for exemptions to Contract Regulations. This relates to the award of contracts to suppliers without a competitive tender (what is known as Single Tender Action [STA] within the MPS). Before the increased authority was approved the MPA wanted the MPS to put additional controls in place and asked that Procurement Services played a greater role in the approval of exemptions below £100k.

Previous regulations

3. Previously the Regulations stated that exemptions to a Tender or Quotation process were only permitted where certain conditions apply. These legal exemptions are:

1. There was no acceptable alternative: there was only one source of supply.
2. Advertising would not be in the best interest of the Authority.
3. The prices or rates were fixed pursuant to national legislation, trade organisation, government department or by regulatory body.
4. A genuine unforeseeable operational need arose and competition was impracticable where the urgency of need is such that it did not permit the full procurement process to be carried out.

4. Where the subsequent contract was likely to exceed £40,000 and the need for an exemption was identified, approval had to be sought from the MPA Chief Executive in writing immediately and prior to any decision being made.

5. All exemptions under £40,000 could be approved by an appropriate budget holder and retrospectively reported to the MPA Chief Executive.

Revised regulations

6. The new threshold in the new Contract Regulations, for requiring prior approval of the MPA Chief Executive for an STA has increased from £40,000 to £100,000, subject to the Service being able to demonstrate an increased level of control and providing Procurement Services plays a greater role in the approval of exemptions below £100k. The de minimis level, where one written quotation (Single Tender) is acceptable, remains unchanged at £5,000.

7. To comply with the Authority’s request, the MPS is proposing to change the process on exemptions as follows:

• All STAs with a total value between £5,001 - £100,000 must be forwarded to Procurement Services for prior approval in accordance with their Scheme of Delegation (SoD), providing there is justification for the exemption in EU legislation.
• STAs over £100,000 must be forwarded to Procurement Services, who in line with current practice, will review the justification for the exemption request and if deemed valid will seek prior approval of the MPA Chief Executive.

It should be stressed that Procurement Services do not have to be involved in activity below £50,000 if appropriate competition has been undertaken.

8. As required by the Authority, Procurement Services will provide a quarterly report to the Resources Sub-Committee, detailing the number of single tender actions and the legal exemption (as set out in B3) under which they have been approved. It is implicit in this reporting process that Procurement Services will have to highlight exemptions required to fulfil an operational need resulting from poor planning or failure to take appropriate actions necessitating the need to utilise a non-competitive approach.

DP1049 form

9. It is current MPS procedure for the budget holder to complete a DP1049 form to commence either a tendering or single tender activity above £40,000. The DP1049 records the basic details of the procurement, provides financial sign off that the money is available within the budget for the goods / service being procured and details any conflict of interest.

10. In order to collect and record the information required to support the additional controls required by the Authority a number of alterations to the MPS internal DP1049 form are required. The opportunity has also been taken to simplify the existing form in several areas and request additional information in, for example, the areas of Health and Safety to ensure we comply with additional legislative elements that are currently not recorded (e.g. Control of Substances Hazardous to Health). A copy of the new DP1049 has been deposited in the Members’ Library for information.

11. Procurement Services has liaised with Finance, MPA Internal Audit, DoI, Property Services, BRG and MPS Forms Unit re the make-up of this revised form and has incorporated, as far as practically possible, all comments received.

12. It is the intention to launch this new form and process in the week commencing the 2 March 2009. Following approval by Members, a full communication exercise will be undertaken including intranet notices, the publication of ‘how to’ manuals and a letter to all relevant FRMs.

14. Once approved, officers and staff who fail to comply with this new process will be subject to appropriate management action in line with existing Police Misconduct or Staff discipline procedures.

C. Race and equality impact

There are no specific race and equality impacts associated with this initiative.

D. Financial implications

There will be some increased work for business groups and Procurement Services in dealing with STAs under £40k. This is not expected to be significant.

E. Background papers

None

F. Contact details

Report author(s): Anthony Doyle, Director of Procurement Services, MPS

For more information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

Send an e-mail linking to this page

Feedback