Agenda item

The Committee received a presentation from the Assistant Director of Procurement and Governance, outlining Stockton-on-Tees Borough Council’s procurement arrangements. The presentation included:

• The Council used a Hybrid Model covering Construction and ICT procurement systems and responsibilities, and General goods and services.  Service departments identified requirements, while Procurement Service managed compliance, tendering processes and monitoring of social value.
• Procurement processes were defined based on level of expenditure, reflected the legal requirements within the Procurement Act, and were set out in the contract procedure rules within the Constitution:
  • Contracts under £15,000 required demonstration of value for money, goods and services between £15,001 and £179,087 required quotations from four suppliers, one of which had to be a local supplier, and goods and services above £179,087 required a formal tender process, with contracts advertised on the governments Central Digital Platform. Alternatively, contracts could be called off under framework agreements.
  • Construction contracts had significantly higher thresholds, with quotations permitted up to £1million before a full tender process was required. Alternatively, contracts could be called off under framework agreements.
• Framework agreements were in place to pre-select one or more suppliers. For each framework a procurement process had taken place and terms set during this period, which included pricing and/or call off terms. Framework agreements could operate with single supplier or multiple suppliers that were ranked or where further competitions took place.
• Exceptions to following Contract Procedure Rules were recorded.
• Officers could approve contracts up to £500,000 under delegated powers, with contracts over £500,000 requiring Cabinet approval. This was for the total contract figure, e.g. if the contract was for a set amount each year over several years. Procurement decisions were made generally by directors and had to be recorded through Delegated Decision Records and were subject to consultation with Finance and Procurement Services.
• A public contract register was maintained and available online. The Council managed 551 live contracts at the time of the meeting and contract management was based on risk and value, with varying levels of oversight.

It was noted that the procurement of non-social care services was part of a transformation review to assess how money could be saved in the process, and the findings from this would be brought to the Committee.

The Committee questioned the quotation threshold for construction contracts. It was explained that construction projects were generally of a higher value, often of £100,000 or above, and competition was still achieved through quotations and framework agreements. However, the £1million threshold was locally determined and could be reviewed.

The level of officer delegated decision was also questioned, and it was noted that this had been determined by Full Council previously and included in the Constitution. Procurement controls, finance consultation, and delegated decision recording still applied below the threshold.

Contracts for health and social care long-term placements were discussed. It was noted that decisions for these placements were considered by officer panels, chaired by senior managers, recorded formally and regularly reviewed. These arrangements were often rolling placements rather than traditional fixed-term contracts and notice could be given at any point.

Members also raised examples of low value works and projects where quality concerns had arisen.

The following further information was requested:

• Detail and value of contracts awarded via exceptions to contract procedure rules.
• Detail regarding the construction quotations sought for £15,001 - £1million threshold, including frequency and supplier participation.
• Detail of officer delegated decisions over the previous two years below the £500,000 threshold, including number of contracts approved, total value, and background information on how the limit was established.
• Findings from the transformation review of procurement processes.

AGREED the information provided be noted and information requested be sought.