D2 Contracts for Services Under EU Threshold

Background

All contracts for services expected to cost more than £113,057 (EU Threshold) must be issued by Procurement Group (PrG), using contract processes set out in Her Majesty's Government's (HMG) public procurement regulations (derived from the European Union (EU) Procurement Directives. The purpose of the Directives is to open public procurement markets to international competition thereby increasing opportunities for all suppliers and service providers. This reinforces HMG policy on value for money through fair, open and transparent competition.

All Consultancy (Administration spend only) above £20,000 must be approved by the SoS.

The regulations cover:

• Contracts for services, supplies & works
• Those services, which must be purchased through procedures, set by the Directives (Part A services), and those, which may be excluded (Part B Services)
• Financial thresholds (adjusted every two years) above which competition is required: Current Thresholds: Services and Supplies - £113,057  Works - £4,348,350
• Certain Research & Development and Telecommunications Services have a financial threshold of £173,934 - please seek further guidance from PrG
• Four contracting Procedures - open, restricted, (the norm for DFID contracts), competitive dialogue and negotiated.

• All Consultancy (Administration spend only) above £20,000 must be approved by the SoS or a designated departmental minister. Submissions to SoS must be in the prescribed format detailed in the Resourcing Policy and Procedures guidance.
  Task assigned to: All Staff, Local Contract Officer
• Contracts must only be issued by appropriately trained staff - up to £25k or £113,057 (EU Threshold) with limits subject to approved level of training and accreditation.
  Task assigned to: Local Contract Officer, Project Staff
• Delegated contracts must be signed by appropriately trained and authorised staff and appropriate records maintained to support the procurement process decision.
• Task assigned to: Local Contract Officer, Project Staff
• DFID departments and overseas offices issuing contracts between £25k and £113,057 must apoint a Local Contracts Officer (LCO). PrG maintain a register of all Local Contract Officers (LCOs). Only LCOs may issue contracts in the range £25k - £113,057 .
  Task assigned to: Head of Department, Local Contract Officer, Project Staff
• A requisition must be raised on ARIES for all procurement of services. 
  Where a competition is required, details of Quest document numbers for the Terms of Reference (TORs) and all other relevant documents must be completed in the workflow comments field.
  The TORs must be completed in accordance with Procurement Guidance Note 05
  The ARIES requisition and the completed TORs, together form an authorisation for PrG, or a Local Contract Officer (LCO), to proceed with the procurement of services.
  Task assigned to: Local Contract Officer, Project Staff
• Duty of care to suppliers must be considered and addressed at the beginning of the procurement process.  An initial risk assessment must be competed to determine if the intervention is Low/Medium/High risk. Those identified as Medium/High risk require SCS level approval before proceeding with a procurement and the procurement process must include an assessment of supplier capability to take on their Duty of Care responsibilities.  The country risk register must be updated and monitored regularly. Suppliers should be updated as necessary as part of on-going contract management.
  Task assigned to: Project Staff
A detailed record of the competitive process must be maintained in order to provide a clear and secure audit trail at every stage, including the evaluation and scoring of proposals.
Task assigned to: Local Contract Officer, Project Staff
• Spending Departments seeking to waive competition for contracts in the region of £25k - £113,057 must obtain approval from their Head of Department/Overseas Office before proceeding.
  Task assigned to: Head of Department, Local Contract Officer, Project Staff
• PrG must be consulted about any proposed contract amendments likely to carry the aggregate value of the contracts beyond the competition threshold of £113,057 or above the LCOs level of delegated authority.
  Task assigned to: Local Contract Officer, Project Staff
• Government policy requires that value for money, transparency and probity be achieved in the expenditure of public funds.  Managing Public Money rules requires a separation of the roles of all staff involved in the procurement process, to reduce opportunity for collusion.  As a minimum requirement the following responsibilities must be separated:
  • Specifying the need
  • Placing the order/signing the contract
  • Receipt of services
    d. Payment
  • Task assigned to: Local Contract Officer, Project Staff
• A minimum of two staff should be involved in the process.  Where the separation of duties cannot be achieved due to staffing constraints the Head of Department/Overseas Office must be alerted and the matter referred to PrG to advise on possible compensatory controls.
  Task assigned to: Local Contract Officer, Project Staff