Procurement is defined in the National Procurement Strategy as:

"The process of acquiring goods, works and services, covering both acquisition from third parties and from in-house providers. The process spans the whole cycle from identification of need, through to the end of a service contract or the end of the useful life cycle of an asset. It involves options appraisal and the critical 'make or buy' decision which may result in the provision of services in house in appropriate circumstances"

Although the definition is primarily about procurement, it also about the need to secure sustainable services, products and outcomes which meet the needs of the community we serve.  Strategic procurement also encompasses collaboration, including the need to develop partnerships, consider delivery options and ensure value for money for every pound spent.

Our complete rules for buying goods, services and works are contained in our Contract Standing Orders:

Contract Standing Orders (Part 4G of Merton's Constitution)

Tender procedures

There are a number of different tender procedures and the timeframes for each will depend on how complex the procurement is.

Quick Quote

For Contracts under £5,000. No requirement to advertise the Contract opportunity publically unless a Responsible Officer decides that advertising would provide better Value for Money. Three written quotations via the Council's e-Tendering Portal are required, unless the responsible officer is satisfied that a single quotation can be justified. 

Request for Quote (RFQ)

Three written quotations via the Council's e-Tendering Portal must be sought, unless the requirement is urgent or it can be demonstrated there is only one supplier capable of meeting the requirement.

Details of awarded contracts over £5,000 must be published on the Council's Contract Register.

Awarded contracts over £25,000 must be published on Contracts Finder.

Open tender

Where all suppliers who request tender documentation in response to advertisements will be invited to submit a tender. There is no selection questionnaire or short-listing stage prior to invitation to tender, although the Council may lay down minimum standards of suitability, it must send out the contract documents to anyone who asks for them. This information is requested as part of the tender itself. The open tender procedure is normally only used where the known market place is limited, and the Council needs to seek out extra interest, or where the timetable does not allow the two stage restricted tender procedure to be followed.

Restricted tender

Where suppliers respond to advertisements expressing an interest in tendering and are required to complete a selection questionnaire to show that they have sufficient experience and resources to meet the needs of the procurement opportunity. Only suppliers who are subsequently short-listed can be invited to submit a tender. Care must be taken to ensure that the number invited is adequate to provide competition.

Negotiated tender

The negotiated procedure with a call for competition is an exceptional procedure, justifiable in specified circumstances, under which the contracting authority selects at least 3 participants on similar lines to a restricted procedure, and negotiates the terms of the contract with them

The negotiated procedure without a call for competition is an even more exceptional procedure, for use in narrowly defined circumstances, for example when a supplier is the sole source of the goods or service required, in cases of extreme urgency, or when the precise specification can only be determined by negotiation and under which the contracting authority may negotiate the terms of the contract with one or more economic operators of its choice.

A competitive dialogue procedure may be used for "particularly complex contracts" where an open or restricted tender procedure will not allow the award of a procurement contract.

Suppliers will respond to advertisements by submitting an expression of interest in the tender and complete a selection questionnaire. Suppliers who are short-listed will be invited to participate in a competitive dialogue with the Council. The dialogue is flexible and may include written or verbal submissions and interviews.

The dialogue may take place in successive stages to reduce the number of potential suppliers, and at the conclusion of the dialogue the Council will ask potential suppliers to submit their final tender.

Tender assessment

Tender evaluation criteria are agreed by the relevant authorised officers and published with the tender documentation. Possible criteria are price, service, quality of goods, running costs, technical merit, previous experience, delivery date, cost effectiveness, quality of service, relevant environmental considerations, aesthetic and functional characteristics, safety, after-sales services, technical assistance and any other relevant matters.

Quotations and tendering

The method of procurement we use depends on the estimated or actual value of the contract:

  • Up to £25,000 + VAT: we must get at least one quotation but advise to seek three
  • £25,001 to £99,999 + VAT: we must seek at least three written quotations
  • £100,000 or more + VAT: a competitive tendering exercise must be conducted

All Bids must be submitted in writing via the Council’s e-Tendering portal

EU regulations

The European Union public procurement regulations may apply to some contracts that we award. It depends on what the contract is for and its estimated value. If the regulations do apply we must advertise the contract in the Official Journal of the European Union and following set time limits for the different stages of the procurement process.

EU Thresholds

Goods and Services - £181,302

Light Touch Regime, Social and Other Specific Services - £615,278

Works and Concessions - £4,551,413

Thresholds are generally updated every 2 years and were last updated 1 January 2018

IR35

With effect from 6 April 2017 tax changes (known as IR35 - off-payroll working in the public sector) will mean that an individual contracting through their own company (known as an intermediary company) and working for the Council will have to pay Income Tax and National Insurance at source.

From 6 April 2017 onwards, the PAYE deductions will be made from the money paid to the intermediary company. Where the correct amount of tax and NI is already being paid, individuals should see little or no overall difference to their net earnings.

If, but for presence of the agency or the intermediary company, an individual would be a Council worker, s/he will be caught by the new rules. Under the new rules, the Council will have a duty to assist the agency in identifying who is caught by the test.

The new rules do not apply to the very few individuals who are genuinely self-employed or to companies who are not operating as intermediaries as defined by tax legislation.

Agency workers

Almost all of those affected will be agency workers. The agency will have to make the PAYE deductions from the fees its pays to the individual's company.

Normally there will be no doubt that the new rules apply. The Council will need to tell the agency that the rules apply with respect to the particular individual and say why it arrived at that view. The reasons why will be because the individual:-

  • does the work for the Council;
  • does the work personally or is obliged to do it personally; and
  • would be a Council worker if engaged directly to do the work

Agencies will continue to make PAYE deductions as usual for those workers who do not contract through their own intermediary company, for example those already paid by the agency via PAYE. Therefore, managers should not see any difference in authorising time sheets or in their dealings with agencies.

Agency workers raising queries should be directed to their agency.

Useful links

Contact us

Commercial Services

Email: commercial.services@merton.gov.uk