Part E - Contract Standing Order | Argyll and Bute Council

Definitions

“Authorised Signatory” means an authorised signatory of the Council in terms of the Contract Standing Orders as more particularly described in the Authorised Signatories for Contracts List;
“Category Manager” means the manager of a particular category of contract for the categories Corporate & Education; Construction & Environment and Care & Housing;
“Contract Owner” means an officer from the Relevant Service who is responsible for the management of the Contract
"Call-Off Contract’ means the terms and conditions under which specific purchases can be made under a Framework Agreement and/or a DPS and/or an arrangement established in terms of the light touch regime;
‘DPS’ means a dynamic purchasing system as defined in the European Procurement Regulations;
‘Framework Agreement’ means an agreement which sets out terms and conditions under which specific purchases (Call-Off Contracts) can be made throughout the term of the agreement;
‘Portal” means the national portal established and maintained by Scottish Procurement for the purpose of publicising: (i) the seeking of offers, and (ii) the award of contracts, which may be found at Public Contracts Scotland;
“Procurement Manual” means the Council’s procurement manual which sets out the procurement processes, templates and guidance which the Council requires to utilise when carrying out a public procurement;
‘Procurement Process’ means a procurement process approved by the Council’s Procurement Board and/or set out in the Procurement Manual in relation to the conduct of a procurement exercise;
‘Procurement Regulations’ means the Public Contracts (Scotland) Regulations 2015, the Procurement (Scotland) Regulations 2016, the Procurement Reform (Scotland) Act 2014 or such other Regulations as may be in force from time to time;
'Regulated Procurement’ has the meaning defined in the Reform Act and mmeans contracts of or over £50k in value excluding VAT for goods and services and £ 2m for works ( excluding VAT let by public sector;
‘Reform Act’ means the Procurement Reform (Scotland) Act 2014 and any new legislation amending, substituting or replacing that Act;
"Relevant Service" means the service department of the Council with the particular operational requirement in any individual case for supplies, services or works on behalf of the Council (or for the disposal of surplus materials);
“SGN” means Supplementary Guidance Note forming part of the Procurement Manual;
“SPPNs” means Scottish Public Policy Notes issued by the Scottish Government.

1. Preliminary

General

Argyll and Bute Council makes these Standing Orders in terms of section 81 of the Local Government (Scotland) Act 1973 and they apply to the arrangements made by or on behalf of the Council in relation to the supply of goods, provision of services and carrying out of works.

Compliance with General Principles

These Standing Orders must be interpreted in accordance with the key principles of transparency, openness, fairness and non-discrimination.

Scots Law

Except where otherwise agreed between the Executive Director of the Relevant Service and the Director of Legal and Regulatory Support, every contract entered into by the Council shall be in writing and shall be subject to Scots Law and the exclusive jurisdiction of the Scottish Courts.. They are also subject to Scottish Government guidance on public procurement that may be issued from time to time.

Extent

Subject to Clause 1.5 and 1.6 below, these Standing Orders apply to all Council contracts (as appropriate) including but not limited to the award of contracts, the establishment of Framework Agreements, a DPS or an arrangement established in terms of the light touch regime and the award of Call off Contracts.
These Standing Orders shall not apply to any contracts made on behalf of the Council by any central purchasing body with whom the Council has made arrangements for the award of works, supplies or services contracts on its behalf.
These Standing Orders do not apply to any of the following:
1. contracts of employment;
2. contracts relating to the disposal of heritable property; and
3. contracts for the execution of works, the supply of goods and materials, or the provision of services which are, in the reasonable opinion of the Executive Director whose service are arranging the contract (hereinafter referred to throughout as “the relevant Executive Director) urgently required for the immediate prevention of risk to life or damage to property.
4. such other contracts that the relevant Executive Director and the Executive Director with responsibility for Legal and Regulatory Support Services shall agree may legitimately be excluded from all or part of the provisions of the Standing Orders, by reason of the circumstances relating to the requirement for such contracts.

Procurement Manual

These Standing Orders must be read in conjunction with the Council’s Procurement Manual (including relevant SGNs). Where there is any discrepancy between the Standing Orders and the Procurement Manual, consultation will be undertaken with the Head of Legal and Regulatory Support Services and the Manager of the Procurement, Commercial and Contract Management Team to agree precedence. All Council employees must comply with these Standing Orders and the Council’s Procurement Manual (including any procedure, supplementary guidance note (SGN), or manual or template made under or in conjunction with the Procurement Manual) and failure to comply may result in disciplinary proceedings. The Council’s Procurement Manual is an Operational document and will be updated from time to time to reflect relevant thresholds, legislative documents and guidance.

Compliance with Procurement Strategy

The appropriate Executive Director shall carry out all Regulated Procurements in accordance with the Procurement Strategy applicable to the financial year during which the procurement exercise commenced.

Sustainable Procurement Duty

In carrying out any Regulated Procurements (other than Call Offs and contracts for Social Care Services which may be awarded without advertising) the appropriate Executive Director will comply with the Sustainable Procurement Duty.
1. In complying with the Sustainable Procurement Duty the appropriate Executive Director must comply with the Reform Act, any guidance issued by the Scottish Government under the Reform Act, any guidance and requirements as the Head of Legal Services and/or Head of Finance considers appropriate and any relevant procurement process.
2. In complying with the Sustainable Procurement Duty the appropriate Executive Director will so far as possible within the law and where relevant and proportionate to do so encourage fair work first practices including payment of the real living wage and the discouragement of use of inappropriate use of ‘zero hours’ contracts.

Internal Arrangements

Any action taken on the Council’s behalf under these standing orders must also be in terms of the Council’s Scheme of Delegation, Financial Regulations and the Standing Orders on Procedures

2. Contract Register

The relevant Executive Director will maintain and publish a register of all Contracts awarded. The Contract Register is maintained and published by the PCCMT and all awards, modifications and terminations should be included in the said Contract Register and sent to PCCMT inbox (procurement@argyll-bute.gov.uk )

3. Thresholds

Regulatory Thresholds

Where a relevant Service is preparing to enter a contract under these Standing orders, regard shall be had to the regulatory thresholds set out section 1 of the Procurement Manual (or as directed by the Scottish Government from time to time). Where a contract is subject to the regulatory thresholds the relevant regulations and guidance must be followed.

Local Thresholds

Where a relevant Service is preparing to enter a contract under these Standing orders, regard shall be had to the regulatory thresholds set out section 1 of the Procurement Manual. Where a contract is subject to the Local Thresholds the relevant procurement routes as set out in 1.8 of the Procurement Manual must be followed.

Public Contracts

All public works contracts are to be tendered and awarded in accordance with the Public Contracts (Scotland) Regulations 2015 or the Procurement (Scotland) Regulations 2016 by the Council having an estimated contract value exceeding of £2 million or such figure as may be advised by the Scottish Government from time to time, whichever is lower, and all contracts for the supply of goods and services having an estimated contract value exceeding £50,000 will be advertised on the Portal, and, unless the circumstances of the particular contract require otherwise, it shall be a requirement that all tenders and other responses are submitted electronically through the Portal, where there is the technical capability to do so. The relevant Executive Director shall ensure that once awarded the required contract details are entered upon the Portal.
When the Council proposes to award a public works contract which has an estimated value which is below the threshold in paragraph 3.1 but exceeds £50,000, or where a proposed public works contract is otherwise exempt from the requirement for prior publication of a contract notice, the relevant Executive Director will ensure a degree of advertising which is sufficient to enable open competition and meet the requirements of the principles of equal treatment, non-discrimination and transparency and complies with the thresholds set out in the Council’s Procurement Manual.

Procedure for Award

The procedure for the award of any contract depends upon the estimated value of that contract and any related contracts over their intended duration. Detailed provisions in relation to the tendering award of contracts and contract management activity are contained in the Procurement Manual and all Council employees should refer to the Procurement Manual for guidance.

Where a contract is tendered and awarded, the guidance, templates and standardised processes set out in (or supplementary to) the Procurement Manual must be used. If there is any doubt as to the relevant guidance, templates and standardised process this should be clarified in consultation with the Manager of the Procurement, Commercial and Contract Management Team

Community Benefit

In carrying out any Regulated Procurement (including any Call Off Contract and excluding any contracts for Social Care Services which are awarded without advertising) where the estimated value of the contract is equal to or exceeds £100,000 for Supplies and Services or £2,000,000 for Works (or other amount set out in Supplementary Guidance Note 3 from time to time) the appropriate Executive Director will comply with the Community Benefit Requirement. In complying with the Community Benefit Requirement the appropriate Executive Director must comply with the Reform Act, any guidance issued by the Scottish Government under the Reform Act, any guidance and requirements as the Head of Legal and Regulatory Services and/or Head of Finance considers appropriate

4. Contract Management

4.0 The Role and Responsibilities of Executive Directors

Each Executive Director has responsibility for all contracts tendered and let by their Directorate and is accountable to the Council for their performance of their duties in relation to contract letting and management, as follows:

to ensure compliance with these Standing Orders, the Procurement Manual and SGN 17 Contract and Supplier Management Policy;
to put in place arrangements for the efficient contract and Supplier management including the identification of a Contract Manager/Owner and management of benefits and performance, for the entire duration of the contract or Framework/DPS.

For Frameworks/DPS call off or contracts used by more than one Directorate the arrangements for contract and supplier management shall be made by the Executive Director for the Directorate with the largest spend or anticipated spend in respect of the same.

Form of Contract

Every contract will be in writing and will specify:
1. the work, materials, matters or things to be provided, had or done, (including any appropriate technical specifications(s));
2. the price to be paid with a statement of discounts or other deductions, together with the arrangements for payment,
3. the time or times within which the contract is to be performed, including the financial consequences of non-compliance;
4. any other relevant matter relating to the due performance of the contract.

Signing

All contracts entered into in terms of and in accordance with these Standing Orders shall be signed by the relevant Authorised Signatory in line with the Scheme of Authorised Signatories and Pecos Users on the Hub as also set out at section 2.4 of SGN 15. If there is doubt about the Authorised Signatory for a contract consultation should be undertaken with the PCCMT or Head of Legal and Regulatory Services.

Contract Modification

A contract, Framework Agreement, DPS, arrangement established in terms of the light touch regime or Call Off Contract may be modified during its term without a new procurement exercise being carried out provided the requirements the Procurement Regulations are met (this means that there should be no material changes during the lifetime of a contract. If in doubt seek advice from PCCMT legal). This Standing Order will apply to all contracts, Framework Agreements, DPS, arrangement established in terms of the light touch regime or Call Off Contracts where the estimated value exceeds £50,000
The decision to modify in accordance with this Standing Order shall be authorised by the appropriate Authorised Signatory as set out at 8.4 of SGN 17. If there is doubt about the Authorised Signatory for a contract consultation should be undertaken with the Manager of the PCCMT.
Prior to concluding any such extension or modification, Relevant Service (in consultation with the PCCMT) shall prepare-
1. A written Contract Modification using the agreed modification approval templates referred in SGN 17 demonstrating the legal basis for the extension or modification. The report shall be maintained on file by the Executive Director of the Relevant Service to provide an audit trail in each case. The Signatory for the Council approval should be in line with the signatories for Contract Award Recommendation Reports set out at the Scheme of Authorised Signatories List on the Hub and at 8.8 of SGN 17. If there is doubt about the Authorised Signatory for a contract seek advice from PCCMT.

Termination of Contract

The decision to terminate any contract, Call Off Contract or a contractor’s appointment to a Framework Agreement, DPS or arrangement established in terms of the light touch regime shall be authorised by the appropriate Executive Director in consultation with the Head of Legal and Regulatory Support.
Prior to terminating a contract the Relevant Service (in consultation with PCCMT ) shall prepare a written Contract Termination Report in the form set out at para 8.7 which sets out the legal basis for termination the Signatory for the Council approval should be in line with the signatories for Contract Award Recommendation Reports set out the Scheme of Authorised Signatories at 8.8 of SGN 17, If there is doubt about the Authorised Signatory for a contract termination seek advice from PCCMT.

Best Value

All contracts must secure Best Value and maintain an appropriate balance among:
1. the quality of the performance of the Council’s functions
2. the cost to the Council of that performance
3. the cost to persons of any Council service provided for them on a wholly or partly rechargeable basis having regard to
  1. efficiency
  2. effectiveness
  3. economy
  4. the need to meet equal opportunity requirements
  5. the need to ensure sustainable development

Guidance Notes (SGNs) and SPPNs

When entering into a contract, due regard must be given to any guidance issued by the Scottish Ministers in terms of the Local Government in Scotland Act 2003 and the Procurement Reform Act.
Guidance Notes (SGNs) and SPPNs on tendering procedures for any contract or type of contract entered into by or on behalf of the Council may be issued by the Manager of PCCMT with the approval of the Head of Legal Services and Regulatory Support. Any Practice or Guidance Notes or SPPNs issued under this Standing Order shall form part of these Standing Orders.

5. Contract Terms

Assignation and Sub-Contracting

In every contract for the execution of works or supply of goods material or services, a clause shall be inserted which shall have the effect of preventing a Contractor or supplier from transferring or assigning directly or indirectly, or sub-contracting to any person or persons whatever, any portion of the contract without the written permission of the relevant Executive Director, or an officer authorised by that Executive Director.

Supplementary Guidance Note SGN 17 sets out how PCCMT can support the implementation of a consistent contract management process across the Council and achieve objectives:
1. To build good working relationships between parties;
2. Proactively anticipating future risks and appropriate dealing with them;
3. Aiming for continuous improvement in performance over the life of the contract;
4. Identifying and driving best value over the life of the contract;
5. Delivering community benefits for our local community.

Following agreed processes and using the related templates where appropriate and working with the PCCMT will enhance officers’ ability to manage Suppliers and deliver contract objectives on time and within budget.

Liquidated Damages

A contract which is for the execution of works or the supply of goods or materials by a particular date or series of dates may provide for liquidated damages
Where completion of a contract is delayed beyond the contract period, it will be the duty of the relevant Executive Director to take appropriate action in respect of a claim for damages due under the terms of the contract.

Indemnities and Contract Security

All specifications issued by or contracts entered into with the Council in connection with the carrying out of works or the provisions of services or supplies will specify that the contractor will be required to indemnify the Council and shall be insured with an insurance company approved by the Council or shall demonstrate to the satisfaction of the relevant Executive Director against -
1. liability at common law and/or under legislation including but not restricted to liability under Employers Liability Insurance;
2. any claim for injury or damage to the persons or property of third parties;
3. any claim which the Council may have or receive arising from the professional negligence of the contractor and the contractor will, when required by the relevant Executive Director produce satisfactory evidence that there is Employers Liability. Public Liability and Professional Indemnity insurance against any such claims.
4. any other matters relevant to the contract being entered into to such levels specified in the Procurement Manual or as may be specified from time to time by the relevant Executive Director or by law.
5. The Council may ask for security on any contract for the carrying out of works, supply of goods or the provision of services (including any Call Off Contract) where it is in the opinion of the appropriate Executive Director and/or the Head of Financial Services in consultation with Head of Legal and Regulatory Services considered to be appropriate. Such security could include, but not be limited to, a parent company guarantee, performance bond (if the estimated value of the single contract or Call Off Contract is more than (£1 million) or where circumstances dictate it is prudent to do so. The terms of any security will be in a form approved by the Head of Legal and Regulatory Services.

Specification and Standards

All tenders for the execution of works or the supply of goods, materials or services will be based on a defined specification appropriate to the requirements of the proposed contract.
All contracts issued by a UK Conformity Assessed (UKCA) approved Body or other Notified or Approved Body as may exist from time to time.
All contracts will contain provision for the compliance with all current Health and Safety legislation and the relevant Executive Director will satisfy himself as to the arrangements in place in this respect.

Prevention of Fraud

In every contract a clause will be inserted to secure that the Council will be entitled to cancel the contract and to recover from the contractor the amount of any loss resulting from such cancellation if:

the contractor has offered or given or agreed to give to any person any gift or consideration of any kind as an inducement or reward for doing or for not doing or having done or not having done any action in relation to obtaining, or the execution of, the contract or any other contract with the Council, or for showing favour or disfavour to any person in relation to the contract or any other contract with the Council.

or if the like acts have been done by any person employed by the contractor or acting on the contractors behalf (whether with or without the knowledge of the contractor).

or if in relation to any contract with the Council, the contractor or any person employed by, or acting on the contractor’s behalf, (whether with or without the knowledge of the contractor) will have committed any offences under the Bribery Act 2010, or will have given any fee or reward the receipt of which is an offence under Section 68 of the Local Government (Scotland) Act 1973.

Contract Payment and Other Provisions

The Council’s agreed credit period is thirty (30) days. Payment of valid undisputed invoices will be made by the Council within thirty (30) days of the date of the invoice issued on or after delivery of the Goods or performance of the Service. The Contractors shall ensure a similar clause is included in any sub contract or any sub-sub contract.
Where contracts provide for payment to be made by instalments, arrangements will be made by the relevant Executive Director, for keeping a contract register to show the state of account on each contract between the Council and the contractor together with any other payments and related professional fees.
Payments to contractors by instalment will be made only on an authorisation issued by the relevant Executive Director (or other authorised officer) or by a consultant engaged by the Council for the purpose of supervising the contract.
Subject to the provisions of the contract, in each case, every extra provision or variation will be authorised in writing by the relevant Executive Director (or other authorised officer) or by a consultant engaged by the Council for the purpose of supervising the contract.
All such extra provisions or variations will, in respect of contracts where the contract value exceeds £50,000 for supplies and services and £2 million for works be reported to the Council as soon as practicable if the cumulative effect of these is to increase the value of the contract by the greater of 10% or £50,000, or where the effect is a material variation to the contract, regardless of the contract value.
Claims from contractors in respect of matters not clearly within the terms of any contract will be referred to the Executive Director with responsibility for Legal and Regulatory Support Services for consideration of the Council’s liability and, where necessary, to the Head of Financial Services in respect of any significant financial consideration before a settlement is reached.

Freedom of Information (Scotland) Act 2002

The Freedom of Information (Scotland) Act 2002 and Environmental Information (Scotland) Regulations 2004 give a statutory right of access to all information held by Scottish public authorities, except where an exemption can be applied. All invitations to tender, invitations to negotiate and pre-qualification questionnaires should, accordingly, give notice of this.
On occasions, parties with whom the Council contracts will seek to incorporate stipulations that all or some information is provided in confidence. No such provision should be accepted without the prior approval of the Executive Director with responsibility for Legal and Regulatory Support Services.
In all cases other than those specifically approved by the Executive Director with responsibility for Legal and Regulatory Support Services, all contract conditions should include the following provision:

“No terms of this Contract, whether express or implied, shall preclude the Council from making public, if required under the Freedom of Information (Scotland) Act 2002 (referred to in this Condition as the “2002 Act”) or the Environmental Information (Scotland) Regulations 2004 (referred to in this Condition as “the EIRS”) or both any information held relating to the Contract. In exercising its obligations under the 2002 Act and the EIRS, the Council shall have due regard to the commercial interests of the Contractor but without the prejudice to its duty to discharge its obligations under the 2002 Act or the EIRS. The interpretation of the Act by the Council and any exemptions therein, will be final and conclusive subject only to any decision or binding ruling on the matter made by the courts or the Office of the Scottish Information Commissioner. The Contractor will facilitate compliance by the Council with its obligations under the 2002 Act and the EIRS and comply with any requests from the Council for that purpose”.
The Public Records (Scotland) Act 2011 places an obligation on public authorities to ensure that all public records are managed in accordance with a Records Management Plan, as approved by the Keeper of Records of Scotland. Section 3(1) (b) of the Act defines public records as “records created by or on behalf of a contractor in carrying out the authority’s functions”. In the case of any function of the authority being delegated to a contractor, the contractor will comply with the Public Records (Scotland) Act 2011, and indemnify the Council in respect of any claims arising due to the contractor’s breach of that Act.

Equal Opportunity in Employment - Equalities

Before entering into a contract, the Council shall obtain from the contractor an assurance in writing that, to the best of their knowledge and belief, they have complied with all statutory requirements in respect of the Equality Act 2010.
Contracts awarded by the Council will contain a condition obliging the Contractor to comply with all duties arising from the Equality Act 2010.

6. Engagement of Consultants

It will be a condition of the engagement of the services consultant who is to be responsible to the Council for, or to be involved in, the process of obtaining or assessing tenders, or for the supervision of a contract on the Council’s behalf, that in relation to that contract they will –
1. (a) comply with the Contract Standing Orders.
2. (b) to ensure any necessary checks such as IR35 or Disclosure Scotland checks are carried out and any appropriate contract security documents are signed before the contract commences.
The Service engaging the consultant will ensure that effective contract management arrangements are established to ensure the delivery of cost-effective consultancy services which meet the contract i.e. the work required is completed on time, within budget and to specification.

7. Breach

Any employee discovering a possible breach of these Standing Orders or the Council’s Procurement Manual must report the matter immediately to the Executive Director with responsibility for Legal and Regulatory Support Services and to his or her own Executive Director. Failure by any employee to comply with the orders, or in the case of staff with appropriate supervisory responsibilities, failure to ensure the compliance with others, can be a serious matter, which may give rise to disciplinary consequences.

Argyll and Bute Council Constitution - Part E - Contract Standing Order