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Agenda item

Procurement Update

Invitees

 

Andrew Jolley – Corporate Director Operational and Partnership Services

Cllr Hywel Williams – Deputy Leader

Cllr Dhanisha Patel – Cabinet Member for Wellbeing and Future Generations

Minutes:

The Scrutiny Officer presented a report which gave an update on the progression of the various work streams on the Corporate Procurement Review and which also highlighted how compliance with legislation is achieved via the procurement process.

 

The Committee questioned who would be consulted as part of the review of the Procurement Strategy.  The Corporate Procurement Manager stated that consultation would take place with the Corporate Management Board which would then filter through the Council. 

 

The Committee questioned the lack of a deadline for eTendering.  The Corporate Procurement Manager informed the Committee that eTendering had been rolled out in accordance with the Public Contract Regulations and the authority will be fully compliant by October 2018.  The Corporate Director Operational and Partnership Services confirmed that a number of large scale projects had been procured through eTendering, including the procurement of school transport contracts. 

 

The Committee questioned what due diligence measures are applied when the authority procures contracts to ensure the financial probity of companies and that companies which tender for the Council’s services behave in an ethical manner and in line with the Council’s own values.  The Corporate Director Operational and Partnership Services informed the Committee that an appraisal into the financial probity of companies is undertaken each time by the Finance Department to ensure they are financially secure.  He stated that due diligence of potential contractors is undertaken before companies are allowed on to the Framework Agreements in use by the authority.  The Committee questioned who is responsible for reviewing that process before the authority enters into a contractual arrangement with a company.  The Corporate Director Operational and Partnership Services clarified that the appropriate Corporate Director along with the Category Specialist would have that responsibility to ensure scoring of a tender was done correctly.  The Committee questioned what steps were taken to ensure the ethical probity of companies the authority was to enter into contract arrangements.  The Corporate Director Operational and Partnership Services stated that the authority used a standard set of questions which potential contractors were required to answer in assessing whether they were ethical and also used standard contracts.              

 

The Committee also questioned why the authority had not committed to the ethical code of practice by paying its staff the living wage which goes to the heart of fairness and whether the authority required companies it contracted with to do the same.  The Corporate Director Operational and Partnership Services commented that paying the living wage is a political decision for the authority to make.  He stated that paying the living wage would impinge on every Directorate and on national pay scales which was to be the subject of review.  Paying the national living wage would require a great deal of work and funding.  He also stated that the authority would not require its contractors to do what the authority would not do itself.  The Cabinet Member Wellbeing and Future Generations informed the Committee that the authority adheres to the national minimum wage but confirmed the authority did not pay the living wage.  The authority would need to cut costs in order to pay the living wage and that it would be difficult for the authority to ask suppliers to sign up to something the authority did not itself do.  The Deputy Leader informed the Committee that the authority meets all its statutory obligations and that it comes down to the authority checking that its suppliers has the same values as the authority and he was content the authority is an ethical employer.  He stated that paying the living wage would be a budgetary pressure and that the paying the living wage would be looked at in the context of the budget process.  The Chairperson stated that paying the living wage would be a huge brief for the authority.

 

The Committee expressed concern at the potential for suppliers to be used by the authority who do not allow their employees to be members of trade unions and that the authority should only engage with suppliers who encourage their employees to be members of recognised trade unions.  Concern was also expressed that suppliers who do not allow employees to be members of trade unions may undercut competitors to win contracts.  The Corporate Director Operational and Partnership Services informed the Committee that the authority encourages ethical responsibility by its suppliers; however there was a need to ensure that smaller companies are not precluded from tendering for services where the employees of those companies were not members of trade unions.  He stated that the wording of procurement documentation would be strengthened encouraging suppliers to recognise trade unions as part of the authority’s ethical standards. 

 

The Committee also questioned whether there was gender disparity in relation to pay and career opportunities.  The Corporate Director Operational and Partnership Services informed the Committee that the authority requires its contractors to comply with equalities legislation.  He stated that the authority has standard pay scales and employs more females than males.  He informed the Committee that the authority recruits and promotes on merit and ensures there is no gender disparity.  He stated that the authority can require companies to comply with legislation. 

 

The Committee commented that is more likely that females would be engaged on zero hour contracts and that the authority should limit the use of companies who employ staff on such contracts and only use in exceptional circumstances.  The Corporate Director Operational and Partnership Services informed the Committee that the Registrar’s service engages staff on zero hour contracts who conduct weddings at weekends.  He stated that those staff would not wish to be engaged otherwise than on zero hour contracts as most are retired and prefer to have flexibility on the hours they work.  He informed the Committee that the authority does not promote the use of zero hour contracts.  The Committee considered that procurement documentation should state that zero hour contracts should only be used in exceptional circumstances. 

 

The Committee questioned whether the review would look at individual contracts.  The Corporate Director Operational and Partnership Services informed the Committee that the review would look at Contract Procedure Rules; the starting point would be to look at legislation and to ensure the authority receives best value.  He stated that the authority now has a contracts register and has re-structured the Corporate Procurement Team where Category Specialists concentrate on where spend is made by Directorates and who also have corporate oversight. 

 

The Committee questioned whether all staff have received training on modern slavery and ethical practices and in domestic violence.  The Corporate Procurement Manager stated that all staff involved in procurement receives training in modern slavery and ethical practices.  The Corporate Director Operational and Partnership Services informed the Committee that there is a requirement that all staff receive domestic violence training as part of the corporate training programme. 

 

The Committee questioned the meaning of the term SQuID.  The Corporate Director Operational and Partnership Services informed the Committee that the term SQuID (Supplier Qualification Information Database is a common set of questions used to assess and evaluate suppliers and makes the contracting process simpler for the supplier and buyers. 

 

The Committee asked whether the authority has the ability to terminate contracts.  The Corporate Director Operational and Partnership Services stated that the authority would need to have evidence that a breach of contract had occurred and if so, the authority would have the ability to terminate.    

 

The Committee questioned whether the authority has a commitment to procuring services from local companies and within Wales.  The Corporate Director Operational and Partnership Services stated that the authority supports local businesses by procuring locally and has included in contract documentation the need for suppliers to recruit locally and to provide apprenticeship opportunities.  The Deputy Leader stated that the new school under construction in Ynysawdre required the contractor to offer 3 apprenticeship opportunities on site. 

 

The Committee considered that officers should consider best practice amongst local authorities in England where the Due North procurement portal is used to procure contracts particularly amongst small and medium enterprises as the Sell2Wales favours procurement of services from larger companies.            

 

The Chairperson thanked the invitees for their contribution.

 

Conclusions

The Committee made the following conclusions:

 

  1.  Members were concerned that the Authority were not signed up to the Code of Practice - Ethical Employment in Supply Chains and recommended officers undertake a review of the full implications of the Authority signing up to the code, including the cost to the Authority for paying the Real Living Wage and report the cost implications back to Members
  2. Members recommended that when undertaking the Procurement Business Review that the Authority state in the procurement specifications that they support ethical employment, and did not support the following:

 

  • Suppliers who do not allow their employees to join a trade union.  
  • Zero hour contracts except in exceptional cases.
  • Gender disparity in relation to pay and career opportunities.

3. The Committee recommend that Officers look to pursue best practice with other Local Authorities in relation to procurement software packages that identify due diligence and signpost Officers to Due North. Members recommended that as part of the corporate review process that a mechanism be put in place to support the local economy when procuring contracts and ensure that the contract is efficient, fit for purpose and the Authority do not just sign a contract with those suppliers offering the cheapest price.  

 

The Committee requested the following further information from Officers:

  • What percentage of contracts awarded are offered to local businesses and welsh based businesses?
  • How many Local Authorities in Wales have signed up to the Code of Practice – Ethical Employment in supply Chains, and of those signed up how many pay the voluntary Real Living Wage as set by the Living Wage Foundation which is calculated on actual living costs.

What Strategic Overview is undertaken for large scale contract awarding to ensure due diligence such as reputational issues of suppliers, past performance and engagement and consultation with other Local Authorities? 

Supporting documents:

 

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