Procurement manual: guide to procurement within BERR. Section B: accountability & ethical practice
URN No: 08/1509/A2
Department for Business, Enterprise and Regulatory Reform procurement manual section B: accountability & ethical practice
B. Accountability & Ethical Practice
B.1 Accountability & Standards of Conduct
B.2 Financial Procedures
B.3 Record Keeping and Documentation
B.4 Audit
B.5 Ethics & Good Customer Practice
B.6 Freedom of Information
B.1 Accountability & Standards of Conduct
B.1.1 Contents
General Principals of Accountability & Conduct
Use of Delegated Power
Separation of Duties
Functions Should Not Be Combined
Sources of Additional Information
B.1.2 General Principals of Accountability & Conduct
Public sector purchasers, as stewards of public resources, are expected to observe the highest standards of honesty and fairness and conduct their business in a way that ensures full accountability. This Section of the Procurement Manual covers the rules and conventions that govern the activities of those involved in public procurement, including financial procedures and government accounting rules, ethics, open government, the role of audit and record keeping.
B.1.3 Use of Delegated Power
Heads of Management Units and Agency Chief Executives (ACEs) are responsible for appointing capable and appropriately trained staff to carry out procurement. In making appointments in respect of IT procurement they should consider their delegations from Procurement Policy Services within IWS Commercial Office. In the case of ACEs the appointments should be interpreted in light of the delegated responsibilities set out in their Framework Documents.
Only individuals with the appropriate delegated levels of authority should carry out procurement functions. Staff without the delegated authority to carry out procurement should not enter into discussions with suppliers or make commitments on behalf of the Department or its Executive Agencies.
B.1.4 Separation of Duties
To protect public funds, payment systems guard against fraud and robust systems also protect staff against any suspicion of financial impropriety. Wherever possible the four key procurement duties, listed below, should be carried out by different people:
• approval to incur or commit expenditure;
• ordering goods or services;
• certifying the satisfactory receipt of goods or completion of the services; and,
• authorising payment.
It is essential to keep the various financial and contractor functions separate. If functions are combined, charges of collusion with a supplier or misappropriation of funds may be difficult to refute.
B.1.5 Functions Should Not Be Combined
If splitting all four functions (Section B.1.4 - Separation of Duties) is not possible, at a minimum, do not combine the following:
1. Approval/Commitment of Expenditure and Authorisation of Payment: keep these functions separate in all but exceptional circumstances;
2. Financial Approval and Ordering: the officer who decides that money is to be spent, should not, in isolation, select the supplier. (this does not apply where the purchasing decision is part of a central Framework Arrangement);
3. Ordering and Certification: could present an opportunity to place a fraudulent order with a colluding supplier and certify the resulting invoice; and
4. Certification and Authorization: should not normally be carried out by the same person because authorisation of payment is a check on certification of goods or services and a claim for payment.
In addition, officers certifying and authorising expenditure should ideally be organisationally separate from one another (e.g. an authorising officer should not be a certifying officer's immediate line manager) although it is recognised that this can be difficult in a small Directorate.
When setting up delegations, managers must use common sense. If rules cannot be followed exactly possible risks need to be weighed, and duties possibly re-organised, or additional checks introduced by senior officers, to avoid or minimise those risks.
B.1.6 Sources of Additional Information
Definitive guidance on separation of duties is to be found in Government Accounting as supplemented by BERR’S’s Finance Handbook. If in doubt about any issues relating to separation of functions seek advice from Internal Audit.
B.2 Financial Procedures
B.2.1 Contents
General Compliance Requirement
Prompt Payment Policy
Sources of Additional Information
B.2.2 General Compliance Requirement
Procurement systems, arrangements and practices must comply at all times with the provisions of Government Accounting.
Managers must:
1. use fully compliant local systems,
2. ensure local systems are reviewed in light of new experiences, and
3. monitor compliance by procurement staff.
Procurement staff must consistently comply with all local arrangements.
B.2.3 Prompt Payment Policy
All Government Departments have signed up to the CBI prompt payers code, undertaking to pay invoices promptly.
BERR has adopted British Standard BS 7890 “Method for achieving good payment performance in commercial transactions”, to enable better relationships between suppliers and customers and to improve payment practices.
BERR’s Standard Terms and Conditions of Contract for Supplies and for Services stipulate that BERR should normally pay invoices within 30 days of receipt of a correct invoice and acceptance of the goods or performance of the services. However, BERR has in addition set itself a target of paying all invoices not in dispute within 30 days.
B.2.4 Sources of Additional Information
Wherever possible, links to financial procedures are identified throughout this Manual, with appropriate cross-references.
More generally, definitive guidance on financial and accounting matters is to be found in:
• Government Accounting
• Finance Guidance on BERR Intranet
• Accounting Memoranda held by all GFCs
B.3 Record Keeping & Documentation
B.3.1 Contents
Requirements
Documentation & Record Management
Numbering
Retention of Documents
Sources of Additional Information
B.3.2. Requirements
It is important that, for every contract entered into, the Department maintain a uniquely identifiable and complete record. Without such records the Department may not be able to:
• meet its obligations of accountability to Ministers and to Parliament;
• refute accusations of wrong-doing in procurement activities; or
• meet its obligations to disclose information under Open Government.
Therefore, all contractual documents must be uniquely identifiable. This avoids misunderstandings and the potential waste of resources on disputes while enabling management and audit authorities. Similarly, records must be kept of all discussions, meetings, minutes and particularly the decisions, with the decision logic, taken at any stage in the procurement process.
Contractual documents must be kept on registered files and it is good practice to keep contractual documents separate from other material. It can be helpful to have separate files (appropriately cross-referenced) for each key stage of a contract. At a minimum keep pre-award and post-award documentation separate.
B.3.3 Documentation and Record Management
Under the existing BERR Records Management system, contract documents must be kept on registered files. It is good practice to keep contract documents separate from other material and it can be helpful to have separate files (appropriately cross-referenced) for each key stage of a contract. At the very least, keep pre-award and post-award documentation separate.
Under MATRIX - see the Matrix website for further Matrix information - any document verified by a signature(s) is in hardcopy (paper format) as the original cannot be held electronically on file. The original must be registered as a paper document within the MATRIX folder and held in the hardcopy file although a scanned version may be kept online. Each document is given a unique identifier by MATRIX when entered into the system, which may be copied for use as the hardcopy unique identifier. There is no limit to the number of folders/files relating to a particular topic so segregating documents is not a problem. Further there is a facility to relate documents or files to other records.
B.3.4 Numbering
Every contract or order is assigned a unique reference number to be used in all correspondences. Formal amendments to a contract or order should also be given unique numbers showing the order in which the amendments were made.
Under the MATRIX system all softcopy documents are stored electronically and it is necessary to ensure that the descriptor of the folder containing any contract variation documentation has a clear relationship to the folder containing the original contract. The formal variation to contract document is in hardcopy, as it contains signatures by the Contractor and BERR Client, and must be registered as a paper document within the MATRIX folder and held in the hardcopy file.
B.3.5 Retention of Documents
Documentation retention periods are dictated by the Statute of Limitations and (where applicable) EU requirements. Retention of documents for 6 years is typical.
Headquarters staff can avoid the risk of premature destruction on any of the items listed in Table B.3-1 by storing them in accordance with Departmental rules prohibiting the addition of any new papers to registered files that are more than 5 years old.
Procurement Bulletins do not need to be placed on registered files and may be destroyed locally at the appropriate time.
Government Offices and Executive Agencies responsible for the disposal of local files must ensure their arrangements include provisions so that the requirements of these Retention Schedules are met in every case.
Under the MATRIX system the Retention Schedules on files are determined in consultation with Information Policy Standards and Compliance Monitoring Unit (IPSCM/IWS) and the local Information Manager (IM) for the management unit. Once agreed the Retention Schedule can be placed on the file as part of the meta data (meta data is the information input to the system which describes the file or record being stored). Generally, the standard retention period is about 8 years from closure till the first review. IMs should take into account the periods set out in Tables B.3-1 when considering any amendments to the standard retention period of 8 years.
Under MATRIX there is no limit to how long files can be open. However, best practice is that a folder/file should be closed annually (or at least within 3 years) depending on the amount of information stored within it. This facilitates locating documents at a later date. This again should be discussed with the relevant local IM.
B.3.6 Sources of Additional Information
The retention schedules for MATRIX are currently being defined. There are no definitive rules about size of file or how long it should be kept open. The local IM should be consulted and if necessary IPSCM in IWS consulted directly. Everything will depend on the growth of the file (i.e., how many documents it contains) and the file contents. Local knowledge should be used in judging when the file is to be closed. In MATRIX an older file can be closed and new file opened as normal. However, when the older part of the file is closed documents can only be viewed i.e., looked at but not altered or changed. This may cause problems for documents still under development. A new version of a document will have to be carried forward or a structure devised for the file system by which the topic separates the development work from the actual completed documents.
Further information can be found on the BERR intranet Records Management web site.
B.4 Audit
B.4.1 Contents
The Role of Internal Audit (IA) in Relation to Procurement
General Criteria for Auditing Procurement Activities
Internal Audit Reviews
National Audit Office (NAO)
Sources of Additional Information
B.4.2 The Role of Internal Audit (IA) in Relation to Procurement
Internal Audit (IA) has an important regulatory and reporting role in procurement. This role covers the ability of managers to adhere to agreed procedures, achieve pre-determined objectives and generally obtain value for money in all purchase and contract transactions. IA also scrutinise and report on matters of impropriety and where the risk of fraud, theft or corruption may be unnecessarily high.
IA have a right of access to all parts of the department and to all records that are necessary for their duties. IA equally have a right of direct access to the Department's Accounting Officer.
IA provide advice on the controls to be built into new or re-designed systems. Managers should, therefore, feel free to consult IA at any time, independently of an actual audit, about such issues including remedial action to be taken should weaknesses be found in local procedures. Consult the Procurement Policies & Services (PPS) Branch in IWS Commercial Office if the procurement guidelines appear unclear or need interpretation.
B.4.3 General Criteria for Auditing Procurement Activities
Because of its nature, procurement activity is likely to be subject to frequent rigorous scrutiny by IA. They expect to find the procedures and practices advocated in this Manual in operation when an audit is carried out and they will seek to ensure that:
1. Activities are controlled and accord with good practice;
2. Working procedures comply with external requirements (e.g. legislation) and internal policy and requirements (e.g. guidelines in this manual); and,
3. Functions are carried out economically, efficiently and effectively.
B.4.4 Internal Audit Reviews
IA carry out full systems audits of the procurement function within or across particular Management Units. Purchasing may be included as one topic within a wider resource management audit centred on the Group Financial Controller (GFC) function.
An annual plan of audits is agreed between IA and each Head of Management Unit (HMU) at the commencement of the financial year. If a purchasing or resource management audit is included in one of these plans, management at the appropriate level is notified in advance and consulted about the audit objectives and precise timing of fieldwork.
During audit fieldwork, IA interview key purchasing staff, review files and other documentation, and selectively test individual transactions. Management are kept informed of progress during the audit, and told of findings and recommendations at an End of Audit meeting. Management are invited to comment on a draft report, and complete an Action Document that sets out the implementation date and officer responsible for each recommendation. IA then issue a final report, which is copied, to senior management and the National Audit Office (NAO).
Internal auditors are employed by BERR to give assurance and advice on systems. An audit assignment should therefore be viewed positively as an opportunity to obtain expert advice on the controls that are necessary to minimise risk. Recommendations to strengthen systems should not be viewed as a criticism of management or staff.
B.4.5 National Audit Office (NAO)
BERR must satisfy itself and the Treasury and Parliament that operations are sound and subject to adequate and reliable systems of control. The NAO has a statutory duty to certify BERR accounts and report to Parliament on BERR’s economy, efficiency and effectiveness.
The NAO relies on the work carried out by IA but also carries out its own audit of financial systems and procurement procedures.
NAO normally arrange their BERR audits through IWS Commercial Office. Any request for information received directly from the NAO must be referred to IWS Commercial Office before a response is made.
B.4.6 Sources of Addition Information
Advice on any audit matter should be sought from the Internal Audit section responsible for your Directorate.
B.5 Ethics & Good Customer Practice
B.5.1 Contents
Introduction
Ethics
Guiding Principles
Legislation Governing Conduct
Gifts & Hospitality
Entertainment & Social Events
Conflicts of Interest
Fraud
Confidential Matters
Data Protection Act
Soliciting Contributions
Personal Discounts, Samples & Purchases
Contests, Lotteries or Draws
Good Client / Contractor Relationships
Sources of Additional Information
B.5.2 Introduction
It is Government policy that when dealing with suppliers and potential suppliers, Departments must preserve the highest standards of integrity, objectivity, fairness, efficiency, courtesy and professionalism. Contractors acting as agents on behalf of Departments must also adhere to these public sector standards.
Procurement staff should:
1. familiarise themselves thoroughly with the very high standards expected of public servants;
2. make contractors acting for the Department aware that they are also expected to meet these standards; and,
3. ensure suppliers are aware that they are expected to respect those standards.
The general principles regulating the conduct of civil servants are laid down in “The Guide” that is the BERR Staff Handbook.
B.5.3 Ethics
Ethics in procurement require standards of conduct that ensure individuals and organisations are trusted and respected by those with whom they deal. They are about the probity of officials and the propriety of their actions.
Officials such as purchasing staff who work closely with the private sector are in a particularly sensitive position. The use of procurement procedures that guard against fraud and corruption, particularly the separation of duties (Section B.1.4 - Separation of Duties) are of the highest importance.
B.5.4 Guiding Principles
A professional approach must be exercised in all dealings with suppliers and it is important that the following Guiding Principles are met:
1. officials' conduct must not foster the suspicion of any conflict between official duties and private interests;
2. officials must not give the impression of being influenced by gifts or considered to show favour or disfavour to any person or organisation;
3. dealings with suppliers must be honest, fair and even-handed at all times;
4. ethical behaviour must be promoted and supported by appropriate systems and procedures; and,
5. all BERR contracts should be based on BERR Standard Terms and Conditions that contain appropriate clauses regarding specific provisions relating to gifts.
B.5.5 Legislation Governing Conduct
Under the Prevention of Corruption Acts 1889 to 1916 suppliers are forbidden from making an offer or inducement of corrupt gifts or payment of commissions and staff are forbidden from soliciting similar consideration.
Under the Prevention of Corruption Act 1906 public servants are forbidden from corruptly accepting any gift or consideration as an inducement or reward for the following:
1. doing or refraining from doing anything in an official capacity; and,
2. showing favour or disfavour to any person in an official capacity.
The Prevention of Corruption Act 1916 goes further in that any gift or consideration received by an official from an organisation holding or seeking to obtain a government contract will be deemed to have been received corruptly unless proved to the contrary.
B.5.6 Gifts & Hospitality
Staff must refuse any offer that might be against the law as set out in the Prevention of Corruption Acts 1889 to 1916 and, in their own interest, report any irregularities immediately to line management.
Offers of gifts with a value of £10 or more or any material hospitality of more than an incidental nature, such as tea or coffee, must be recorded in the Directorate’s register of gifts and hospitality, regardless of whether or not it is accepted. Failure to do so constitutes a disciplinary offence.
Contract managers are responsible for ensuring that the rules on gifts and hospitality are strictly adhered to before and after contracts award.
a. Gifts
If staff are offered gifts, they must exercise discretion in dealing with suppliers or prospective suppliers. Officials or their family members must not accept gifts or gratuities other than diaries, calendars or similar promotional items, and certainly nothing with a value greater than £10. Gifts with a retail value of £25 or more should be surrendered to the HR Directorate. Senior management must be consulted if non-acceptance may cause misunderstanding or offence to the donor.
In all cases the decision to refuse or accept, and the reasons for this action, must be recorded in writing.
b. Hospitality
Hospitality from suppliers may often not be acceptable in the public sector, although it may be justifiable on general marketing grounds in the private sector.
However, occasional material offered during the course of official duties may be accepted provided that all the following considerations are fulfilled:
• the aims of BERR are furthered;
• the level of hospitality is reasonable in the circumstances;
• it has been openly offered; and
• it could not be construed as any form of inducement and is unlikely to put officials under any obligation to those offering it.
B.5.7 Entertainment & Social Events
Lavish or expensive entertainment of any form should be refused and reported to line management, as should regular, frequent, annual or seasonal offers of hospitality from any one individual or organisation.
Offers to participate in social events, such as sports events or theatre visits, organised either jointly or separately by suppliers should be refused and reported.
Occasionally, it may be considered appropriate and acceptable to organise team-building events between groups of officials involved in contract monitoring and staff from the service suppliers they monitor. However, participation in fringe social activities is acceptable only if non-attendance would impair good working relationships and on the condition that officials meet all their own expenses.
Offers made by suppliers or potential suppliers to pay travel, hotel or other expenses may only be accepted with the authority of a senior manager.
B.5.8 Conflicts of Interest
Officials should ensure personal interests do not conflict, or appear to conflict with the best interests of BERR. Those having business relationships with outside organisations should carefully consider the position in which they place themselves and BERR. To avoid conflict, they should not invest in or have any business interest in such organisations. Particular care should be taken in not using business information that becomes available to them in the course of their work for personal gain, or that of relatives or friends. If in doubt, staff should inform their line management in writing.
B.5.9 Fraud
No precise legal definition of fraud exists, but for practical purposes it may be defined as the use of deception with intention of obtaining an advantage, avoiding an obligation or causing loss to another party. The issue of fraud is dealt with more fully in the principal Financial Guidance Documents.
Managers are responsible for identifying any risks and developing and maintaining effective controls to prevent and detect fraud, ensuring that controls are being complied with. Separation of duties (Section B.1.4 - Separation of Duties) is one vital control.
Staff are responsible for acting with propriety in the handling of official resources and public funds and for reporting any suspected fraud or suspicious acts to their line management.
B.5.10 Confidential Matters
Public sector procurement staff have access to sensitive information on government contract prices, product comparisons, product quality and supplier performance. This sensitive information must not be disclosed without good reason. Suppliers should feel assured that the same care is taken with their information as with the Department’s own. Care should also be taken that information and ideas from one supplier is not passed on to another.
In dealing with enquiries from outside the Department for commercially sensitive information, staff should be guided by the Code of Practice on Access to Government Information. While the presumption of this Code is in favour of disclosure of information, it has exemptions that allow information to be withheld, among other reasons, due to commercial confidentiality.
Enquiries from outside the Department for price checking information should be referred to senior management. However, if the Department is to benefit from price checks it needs to reciprocate.
B.5.11 Data Protection Act
The1984 Data Protection Act applies to computerised details of suppliers' staff and individual consultants employed by the Department. Any enquiries from individuals about personal system data should be referred in the first instance to a Directorate’s Data Protection Liaison Officer or, alternatively to the Departmental unit responsible for Data Protection Act compliance.
B.5.12 Soliciting Contributions
Staff who in their official capacity are considered to be in a position of influence over purchasing decisions should not in any private capacity, including community or charity work, directly solicit contributions from suppliers.
B.5.13 Personal Discounts, Samples & Purchases
Personal discounts for goods or services from a supplier or potential supplier should not be accepted if the offer is made because of a business relationship and is not generally open to all staff or the public. Samples should be returned to the supplier wherever possible.
BERR’s name or purchasing facilities must not be used for any buying intended for personal use.
B.5.14 Contests, Lotteries or Draws
Procurement staff should not participate in contests, lotteries or draws if participation appears to depend on their job responsibility. For example a golf tournament run by suppliers often has prizes allocated for the winner with the entrance to the tournament probably based on your customer status. The prizewinners may also receive publicity in the supplier's house journal and possibly the trade journals.
B.5.15 Good Client / Contractor Relationships
Best practice procurement has evolved in recent years away from traditional adversarial relationships towards partnership working. The objective is to secure best value for the purchaser through the pursuit of the mutual self-interests of both purchaser and supplier. Purchasing staff should ensure that close partnering relationships do not impede objectivity in contractual dealings.
The Department should have a 'good customer' reputation; one with which suppliers and potential suppliers are content to deal.
The services offered by supplier representatives can be of considerable value to the procurement process as they provide a source of intelligent information on the supply market. Staff dealing with suppliers should interview these representatives promptly and courteously.
Casual enquiries for bids from potential suppliers should be avoided and all requests should be based on a serious intention to buy something. The cost to a supplier of putting a bid package together can be extremely high.
Officials should do their best in dealings with suppliers and potential suppliers to:
1. preserve the highest standards of honesty, integrity and impartiality;
2. be fair, efficient, firm and courteous;
3. achieve the highest professional standards in contract award, usually by means of competition, to maximise value for money while conforming to international obligations;
4. provide clear specifications of requirements that encourage innovation and refer to relevant technical and other standards;
5. make available as much information as suppliers need to respond to the bidding process, and to define and publicise purchasing contact points in the Management Unit, where appropriate;
6. manage the bidding process to minimise the burdens on suppliers, while preserving genuine competition and avoiding discrimination;
7. make available the broad criteria for bid evaluation, evaluate bids objectively, and notify the outcome promptly;
8. debrief on request (within the bounds of commercial confidentiality) winners and losers on the outcome of the bidding process and reasons for non-selection, to facilitate better performance on future occasions;
9. achieve the highest professional standards in the management of contracts;
10. pay promptly for work done in accordance with contracts; and,
11. respond promptly, courteously and efficiently to suggestions, enquiries and complaints.
Suppliers should, in return, observe similar standards of integrity, professionalism, cooperation, courtesy, competency and efficiency.
B.5.16 Sources of Additional Information
Procurement staff in any doubt about matters relating to standards of conduct in the procurement process should consult their line managers. Further advice can be obtained from the Procurement Policies & Services (PPS) Branch in IWS Commercial Office or from the HR Directorate.
B.6 Open Government
B.6.1 Contents
The Freedom of Information Act
Guidance
Information That Should Be Disclosed
Disclosure of Contractor's Identity, Number of Tenders & Criteria for Award of Contract
Disclosure of Nature of the Job, Service or Goods Supplied
Performance Standards
Performance Against Simple Quality, Time & Price Targets
Performance in Relation to Detailed Quality Type Targets
Price Disclosure
Disclosure of Contract Terms & Conditions or Sections of Service Level Agreements
Requests for References
Preparation of Consultancy Reports & Studies
Sources of Additional Information
B.6.2 The Freedom of Information Act
Under the Code of Practice on Access to Government Information there is a requirement to release information (subject to exemptions) in response to specific requests. The requirement applies to information about contracts and other wider information. Failure to comply with the Code leaves BERR open to criticism by the Parliamentary Ombudsman. In January 2005, the right of access to information was provided by the Freedom of Information Act.
B.6.3 Guidance
Guidance contained in the following paragraphs of this Manual is intended to supplement that provided in the Guidance on Interpretation of the Code of Conduct (the Guidance), which can be accessed on the BERR intranet.
Procurement staff need to be aware of the following parts of the Guidance that cover:
1. Functions Delivered by Contractors;
2. Third Party's Commercial Confidences;
3. Effective Management and Operations of the Public Service for contracts which deliver services to the public; and,
4. issues relating to the results of consultancy contracts, pay particular attention to sections on Interpretation on Disclosure of the Facts and the exceptions relating to:
- Expert Advice
- Publication and Prematurity in relation to Publication
- Research, Statistics and Analysis.
Two key general points are:
1. When a request for information is received, it is preferable that the Department release the information rather than have the contractor respond directly; and,
2. in the interest of good client-contractor relationships always consult the contractor before releasing information in case there are specific problems, particularly for contracts, which pre-date the introduction of the obligation to cooperate.
B.6.4 Information That Should Be Disclosed
For each contract the following information at a minimum must be released on request:
• the name of the successful tenderer;
• the nature of the job, service or goods supplied;
• the performance standards set (which should be output based);
• the criteria for award of contract; and,
• the winning tender price, or range of prices (minimum/maximum) paid.
Where requests for further information are received it will often be reasonable to disclose the following after consideration has been given to the request:
• the circumstances surrounding the contract;
• the nature of the procurement;
• the general contract terms and conditions, or sections of service level agreements;
• the number of tenders received; and,
• the range of tender bids, where three or more were received.
However, care must be taken to ensure that additional information cannot be deduced from what is disclosed. Also, whilst commercial best practice welcomes openness, it also demands confidentiality to preserve the business interests of competing companies and protect the position of the Department in current or future tendering activities.
Because of the large number of contracts let by the Department (well in excess of a thousand each year), irrespective of considerations over confidentiality, it would be highly impracticable and costly to automatically publish the information in every case. Information should therefore be released only on request or when:
• there is a statutory requirement to publish (applicable to procurement under EU Directives);
• there is a public interest factor (for example services to the public); or,
• Ministers or officials feel that publicity is desirable.
All cases are, of course, subject to considerations of confidentiality.
B.6.5 Disclosure of Contractor's Identity, Number of Tenders & Criteria for Award of Contract
The disclosure of the identity of the successful tenderer and how many tenders were received is straightforward. The response in respect of the basis on which the successful tender was chosen should be as follows:
“The contract was awarded on the basis of the lowest price”, or,
“The contract was awarded on the basis of the most economically advantageous tender” .
Where a notice containing the above has been published in the OJEU this should be used as the official response.
B.6.6 Disclosure of Nature of the Job, Service or Goods Supplied
The nature of the job, service or goods supplied is usually set out in the specification or terms of reference included in the invitation to tender. It may be convenient to release this information in full or abridged form. Where a contract has been advertised in the OJEU it may be sufficient to provide a copy of the notice.
Unpublished information should be disclosed only after the contract has been awarded. Subsequent variations to the initial specification that have been negotiated and incorporated in the contract should not be automatically revealed. Give careful consideration to the future negotiating position of the Department and the competitive position of the contractor and ensure that substantial changes are not made to a specification that has been let under EU Procurement Directives.
B.6.7 Performance Standards
The main obligation is to disclose the performance standards set. For services to the public there is a requirement to be open about achieved performance.
There appear to be two types of contract to consider when listing and reporting on performance:
• those concerned with the delivery of a product against simple quality, time and price targets, and
• the more service orientated contracts, which usually have a variety of detailed quality type targets.
Consultancy studies are usually of the former type, but there are no hard and fast rules. In both cases, where a contract has been tendered, performance targets will be part of the specification or terms of reference and embodied in the main text or a separate document. It should be a relatively straightforward matter to extract the details. Again, information should not be released before a contract has been let and care needs to be taken over targets that have been produced through negotiation.
B.6.8 Performance Against Simple Quality, Time & Price Targets
Contracts for supplies and consultancy usually fall into this category.
The quality of supplies is usually either clearly acceptable or unacceptable. The quality of a consultancy report is more subjective. If the Department does not reject a report outright and has the contractor resubmit it and the report is eventually accepted as the best the contractor can produce, the Department may still declare the report either satisfactory or unsatisfactory. To say more could create problems where there are no specific targets since a detailed explanation would be required. It is expected that few reports would be classed as unsatisfactory. However, payment in full for the goods or service provided indicates satisfaction.
All that is required in these cases is a simple response in the form of:
"Delivery [was/was not] on time.
The cost was [less than/equal to/more than] the bid price.
Quality was [unsatisfactory/satisfactory]".
Potential contractors who object to disclosure of this basic information should not be awarded contracts.
B.6.9 Performance in Relation to Detailed Quality Type Targets
Where there are additional performance targets to those mentioned above they will invariably relate to quality and open up a contractor's performance to even closer scrutiny.
The Department is expected to release full information on the performance of in-house service providers, particularly those that deliver services to the public, so comparable standards should be applied to a contractor providing similar services. Commercial confidentiality will in most cases be an unsatisfactory excuse.
When reporting the performance against an agreed target, do so in a factual manner without subjective interpretation. For example:
“Target - to respond to 95% of requests for literature within 48 hours
Performance achieved - 85%”
Nevertheless exercise care when measuring performance to avoid distortions. Avoid using the results of a single monitoring exercise and make sure the sample is representative. Regular monitoring avoids such problems.
B.6.10 Price Disclosure
Wherever possible release details about the contract price or, failing that, at least the price range when there are more than three bids. Commercial confidentiality is an acceptable argument in respect of price if a contractor refuses disclosure. It should also be noted that the EU accepts commercial confidentiality as a reason for non-disclosure.
The argument that disclosure may prejudice future competition is relatively weak. For goods of readily defined quality the winning price sets a benchmark that other contractors can beat in subsequent tenders. However, it can also readily expose a contractor's profit margin in some cases and the contractor should always be consulted.
For consultancy or services judged on value for money a price is meaningless out of context as it is only one of several factors used to evaluate proposals. Whether to disclose or not is a more difficult decision. However, where a contractor is content for the price to be disclosed there must be good reasons why the information should be withheld. In all cases try to reach agreement with the contractor prior to disclosing information.
B.6.11 Disclosure of Contract Terms & Conditions or Sections of Service Level Agreements
Most Departmental contracts are based on BERR Form PF31 (Standard Terms and Conditions of Contract for Services) or Form PF32 (Standard Terms and Conditions of Contract for Supplies). In other cases, particularly services that have been market tested under the EU Directive, a special contract for the work is included in the invitation to tender and, as with specifications, it is acceptable to release information about the contract terms and conditions provided to candidates at the tendering stage that form the basis of the eventual contract or service level agreement.
However, do not disclose the actual contract since it will almost certainly include commercially confidential material such as a contractor's day rates, expenses and other information that could harm the competitive position of the contractor. It might also include material that could prejudice the Department's future negotiation position.
B.6.12 Requests for References
You may be approached by Government Departments or outsiders to provide performance references on previously used contractors. This is of particular relevance in the case of consultancy contracts and major contracts where the Department will also seek performance references, from within this, other Departments and the industry, prior to contractor appointment. For such supplier checks to work there is an obligation to reciprocate.
Respond positively providing only factual information. The "reference" should follow the suggested formats for disclosure of performance referred to above (See Section B.6.8 - Performance Against Simple Quality, Time & Price Targets).
B.6.13 Preparation of Consultancy Reports & Studies
Certain consultancy reports and studies are likely to attract interest under Open Government. Plan ahead in such cases. To alleviate the burden, consultants can be asked to edit reports and studies for exemptions at the outset. In some cases it will be possible to justify placing any advice or recommendations in a separate report (marked for internal use only), see the Guidance Part IV. The document, which only contains the facts, and the analysis of the facts (including conclusions), must state which exemption was used. For example:
“Under the Code of Practice on Access to Government Information, Part II, Exemption 2, the recommendations in this report have not been disclosed because they are concerned with `internal opinion, advice, recommendation, consultation and deliberation'.”
B.6.14 Sources of Additional Information
If you require further advice consult the Information Rights Unit in IWS