To consider the report from the Director of Resources, which provides information on procurement processes; the terms and conditions upon which contracts are entered into; and the Council’s approach to contract management and performance monitoring.
The Board received a report from the Director of Resources, which provided information on procurement processes, the terms and conditions upon which contracts are entered into and the Council’s approach to contract management and performance management.
In attendance for this discussion:
Kieron Dennett – Head of Procurement and Commercial Services
Attention was drawn to the information in the report, which sets out the procurement processes that must be followed depending on the value and complexity of contracts. Members were asked to note legal requirements in relation to Contract Procedure Rules, which require the use of the Council’s standard terms and conditions. The circumstances where non-Council terms and conditions might be used were also outlined.
It was confirmed that Chief officers are responsible for contract management. The benefits of good contract management were noted, including encouraging innovation, avoiding unnecessary costs and helping to identify savings.
The Board was advised that the Constitution is to be updated to reflect responsibility for setting policy in respect of contract management as a function of the Director of Resources.
Contract management was highlighted as a key area of concern for the Board. In response, Kieron Dennett advised the Board that a new Contract Management module will shortly be made available on YORTender3. It will be compulsory to complete this for all new contracts over £10,000 and existing contracts will be transitioned according to priority. This will act as a contract management plan and allow access to information that will be useful for contract management reporting.
Members were further advised that best practice in contact management is being reviewed in the Council, and elsewhere, to assess how this can be replicated across all contracts.
The Board sought clarification as to how the procurement system can help support local SMEs in being able to bid for contracts, in the context of Council ambitions to deliver inclusive growth.
The Board was advised that Executive Board would be considering proposals to establish a social value fund, which aims to use the procurement system as a lever to support community initiatives and projects with social value. The contribution sought would vary according to the size, nature of the organisation and locality – the greatest contribution would be paid by large suppliers based outside Leeds.
Members questioned how officers will review the ‘asks’ in procured contracts and how the Council will be able to ensure that contract management is taking place once the new module comes into effect. Officers responded by advising members that one of the fields on the module includes requiring internal annual reviews of the contracts, including the Council’s requirements.
The Board was assured that any contract over £10,000 will go onto the new system and it will be possible to see whether the e-module has been completed. In the initial stages of roll out it is intended that regular reports will be provided to directorates to provide an overview of the modules completed for new contracts.
PACS will also support services to review existing contracts. This process will start with the top 20 contracts for a service in terms of value, to ensure appropriate contract management is in place and at least an annual review of the contract is taking place.
Responding to a query regarding ‘due diligence’ at the start of any procurement process, Kieron updated Board members on the outcome of the LGA Peer Review into procurement. He noted the positive feedback about the early stages of the procurement processes and the recommendation that improvement activity focuses on contract management in the medium term.
It was agreed that a report for Corporate Governance and Audit Committee on the progress in delivering actions identified following the LGA peer review will also be shared with the Strategy & Resources Scrutiny Board.
Contract flexibility was discussed with members, who queried the scope to adapt existing contracts when faced with changing local demands. Board was assured that some degree of flexibility should be available to vary all contracts, though subject to the value/scope of the requested change and the practicalities (e.g. could the supplier actually deliver the extra supplies requested).
- That the contents of the report, and the further advice provided, is noted.
- That a report being prepared by the Head of Procurement and Commercial Services for the Corporate Governance and Audit Committee, on the outcomes of the LGA peer review, is also shared with the Strategy & Resources Scrutiny Board.