The rules on when you can use procurement are simple. Essentially, you need to:
- Be outsourcing a function of the public body. For example, if it is a function of your public body to maintain certain pathways, you may outsource that to a contractor, and you may use procurement to select and appoint the contractor;
- Have the money in a suitable block (often called a programme budget) relative to the good or service you intend to buy. For example, if you intend to buy a computing service to support the operation of your organisation, the money will need to be in a block called ‘running costs’ or ‘administration’ or something similar. If you intend to procure the path maintenance service (discussed above), the money will need to be in a block called ‘current’ or ‘programme’ or something similar. You can consult your finance manager on this.
Practical example: Preconditions of procurement
Your organisation is responsible for a set of museums. Their heating bills are high and their boilers old and due for renewal. This is an opportunity to look again at the whole heating set-up.
Your board asks you to look into an eco-friendly option for replacing the boilers and associated changes such as better insulation. It quickly becomes clear that there is no real expertise on this in your organisation. You decide you wish to procure two contractors to support the museum in this:
- a green energy advisory company to help you scope and specify the works and to help you choose a second contractor (below);
- a green energy provider, which will supply and maintain the new equipment including solar panels and insulation.
You have a meeting with your finance manager before you proceed with the procurement process. In terms of the preconditions, you establish that:
- heating the museums is one of the functions of your organisation. You may outsource it;
- the money for the proposed two new contractors will come from the same budget block – known as ‘running costs’ in the organisation’s financial system – as the money for the current, old boilers does.
Although these rules are simpler than those on when you can use grant, the rules and regulations to be followed during procurement are many and more complex.