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Above a certain financial threshold, there must, except in certain specified circumstances, be a competition between potential providers [Footnote 2]. Indeed, even for contracts below the threshold values set by public procurement regulations, some form of advertising or open competition is often regarded as best practice [Footnote 3]. This helps achieve value for money. Further rules govern theextent of the competition. Procurement should involve no preferential treatment for TSOs (or other organisations or types of organisation). You should consult both your organisation’s guide to procurement, which will reflect government rules and legal requirements, and Office of Government Commerce guidance. Local government staff should consult 4Ps (The Public Private Partnerships Programme) which acts as the procurement adviser to local government [Footnote 4].
However, in designing a particular procurement exercise, you can take certain action to ensure that TSOs are not disadvantaged:
- Make sure that all potential providers are aware of the procurement opportunity and the rules governing the procurement process.
- Help the relevant TSOs to develop the capacityto compete effectively in the procurement exercise against other types of potential providers. This must be done outside that particular procurement exercise. It could be achieved through, for example, a separate programme of development funding to relevant organisations or of strategic funding to the relevant umbrella body.
- Ensure that the focus of the procurement process is the desired outcomes.
- Ensure you build any requirement for any relevant social or environmental benefits in from the start of the process [Footnote 5].
- If a pre-existing or standard contract is used, review the standard terms and conditions to ensure that they do not discriminate against TSOs.
- Ensure the procurement process is proportionate to the scale of the programme.
- Make sure that all involved in the procurement understand that value for money is not the same as the lowest initial price: it is the optimum combination of whole-life costs andquality to meet the user’s requirement.
- Ensure, within procurement rules, that any minor terms and conditions in the proposed contract between the government body and the provider that might disadvantage TSOs can be agreed in post-tender discussion. All potential bidders must be told in the invitation to tender that this is part of the procurement process. Note that post-tender discussion only permits minor clarifications; negotiations on price or on any substantial aspect of the contract are not permitted.
Under grant or grant-in-aid
If the grant or grant-in-aid channels are used, the funder has more discretion about the degree of competition. However, you must still act fairly. For example, if there is no competition between potential providers, there must be a good reason for this.
Where there is a competition, this must be organised so that all potential providers have fair access.
- For further information, see your organisation’s guide to procurement. This will be based on the Office of Government Commerce’s advice on public procurement (http://www.ogc.gov.uk/). The values of the financial thresholds above which there must be a competitive process are given at http://www.ogc.gov.uk/index.asp?docid=397. The highest-level guidance on procurement is contained in HM Treasury, Government Accounting, HM Treasury, April 2005.
- Even for contracts below the threshold value/s set by public procurement regulation, some form of advertising or open competition is often regarded as best practice. Specialist procurement staff can provide advice.
- In such cases, the extent of competition should be proportionate to the value of the contract. Specialist procurement staff can provide advice.
- The 4Ps website is at http://www.4ps.gov.uk.
- Office of Government Commerce, Joint note on social issues in procurement (pdf – 25KB). Office of Government Commerce and Department for Environment, Food and Rural Affairs, Joint note on environmental issues in purchasing, October 2003.