Contents

  1. Current contracts, e-tendering and procurement
  2. Community Right to Challenge
  3. Procurement strategy
  4. How we buy goods and services

Public procurement law is changing. For guidance see The Procurement Act 2023: A short guide for suppliers as well as the Useful Links section below. If you are a supplier to us please email us with any questions commercial.services@merton.gov.uk

The Provider Selection Regime (PSR) came into force on 1 January 2024. We will now have to apply the PSR when procuring health care service contracts. For guidance, see PSR Statutory guidance.

Procurement Rules

We are bound by public procurement laws that regulate how public sector procurement should be carried out. Currently these are governed by The Public Contracts Regulations 2015 as amended by the Public Procurement (Amendment etc.) (EU Exit) Regulations 2020 as well as the WTO Agreement on Government Procurement.

These are then supplemented by our own standing orders which are procedural rules required by law for entering into contracts.

Our complete rules for buying goods, services and works are contained in our Contract Standing Orders.

Tender Procedures

There are a number of different tender procedures and the timeframes for each will depend on how complex the procurement is.

Quick Quote

For Contracts under £5,000 (excl VAT). There is no requirement to advertise the Contract opportunity publicly unless a Responsible Officer decides that advertising would provide better Value for Money. Three written quotations via our e-Tendering Portal are required, unless the Responsible Officer is satisfied that a single quotation can be justified.

Request for Quote (RFQ)

Three written quotations via our e-Tendering Portal must be sought, unless the requirement is urgent, or it can be demonstrated there is only one supplier capable of meeting the requirement. Details of awarded contracts over £5,000 (incl. VAT) must be published on the Contract Register. Awarded contracts over £30,000 (incl. VAT) must be published on Contracts Finder.

Open Tender

An advert will be published on the London Tenders Portal which may appear on Contracts Finder and Find a Tender Service. Suppliers who request tender documentation in response to advertisements will be invited to submit a tender. There is no selection questionnaire or short-listing stage prior to invitation to tender (ITT), although the Council may lay down minimum standards of suitability, it must send out the contract documents to anyone who asks for them. This information is requested as part of the tender itself. The open tender procedure is normally only used where the known market place is limited, and the Council needs to seek out extra interest, or where the timetable does not allow the two stage restricted tender procedure to be followed.

Restricted Tender

Where suppliers respond to advertisements expressing an interest in tendering and are required to complete a selection questionnaire (SQ) to show that they have sufficient experience and resources to meet the needs of the procurement opportunity. Only suppliers who are subsequently short-listed can be invited to submit a tender. Care must be taken to ensure that the number invited is adequate to provide competition.

Negotiated Tender

The competitive negotiated procedure (CPN) is an exceptional procedure, justifiable in specified circumstances, under which a contracting authority selects at least 3 participants on similar lines to a restricted procedure, and negotiates the terms of the contract with them. The negotiated procedure without competition is an even more exceptional procedure, for use in narrowly defined circumstances, for example when a supplier is the sole source of the goods or service required, in cases of extreme urgency, or when the precise specification can only be determined by negotiation and under which the contracting authority may negotiate the terms of the contract with one or more economic operators of its choice. A competitive dialogue (CD) procedure may be used for "particularly complex contracts" where an open or restricted tender procedure will not allow the award of a procurement contract. Suppliers will respond to advertisements by submitting an expression of interest in the tender and complete a selection questionnaire. Suppliers who are short-listed will be invited to participate in a competitive dialogue with us. The dialogue is flexible and may include written or verbal submissions and interviews. The dialogue may take place in successive stages to reduce the number of potential suppliers, and at the conclusion of the dialogue we will invite potential suppliers to submit their final tender.

Tender Assessment

Tender evaluation criteria are agreed by the relevant authorised officers and published with the tender documentation. Possible criteria may include price, quality of goods or services, social value, running costs, technical merit, previous experience, delivery date, cost effectiveness, relevant environmental considerations, aesthetic and functional characteristics, safety, warranties, technical assistance and any other relevant matters.

Quotations and tendering

The method of procurement we use depends on the estimated or actual value of the contract. Currently Merton's thresholds are set to:

  • Up to £25,000: we must get at least one quotation but advise to seek three
  • £25,001 to £99,999 + VAT: we must seek at least three written quotations
  • £100,000 or more + VAT: a competitive tendering exercise must be conducted

All Bids must be submitted in writing via our e-Tendering portal.

Public Procurement Thresholds

Where contracts are equal to or above the public procurement thresholds, the procedures set down in legislation and revised by Government through Procurement Policy Notes must be used, all values must be inclusive of the relevant VAT % that applies to the goods or services being procured:

  • Goods and Services - £213,477
  • Light Touch Regime, Social and Other Specific Services - £663,540
  • Works and Concessions - £5,336,937

Thresholds are generally updated every 2 years and were last updated 1 January 2024

IR35

With effect from 6 April 2017 tax changes (known as IR35 - off-payroll working in the public sector) will mean that an individual contracting through their own company (known as an intermediary company) and working for us will have to pay Income Tax and National Insurance at source.

From 6 April 2017 onwards, the PAYE deductions will be made from the money paid to the intermediary company. Where the correct amount of tax and NI is already being paid, individuals should see little or no overall difference to their net earnings.

If, but for presence of the agency or the intermediary company, an individual would be a Council worker, they will be caught by the new rules. Under the new rules, we will have a duty to assist the agency in identifying who is caught by the test.

The new rules do not apply to the very few individuals who are genuinely self-employed or to companies who are not operating as intermediaries as defined by tax legislation.

Agency Workers

Almost all of those affected will be agency workers. The agency will have to make the PAYE deductions from the fees its pays to the individual's company. Normally there will be no doubt that the new rules apply. The Council will need to tell the agency that the rules apply with respect to the particular individual and say why it arrived at that view. The reasons why will be because the individual:-

  • does the work for the Council;
  • does the work personally or is obliged to do it personally; and
  • would be a Council worker if engaged directly to do the work

Agencies will continue to make PAYE deductions as usual for those workers who do not contract through their own intermediary company, for example those already paid by the agency via PAYE. Therefore, managers should not see any difference in authorising time sheets or in their dealings with agencies. Agency workers raising queries should be directed to their agency.

Terms and Conditions

The terms and conditions for each contract opportunity will be uploaded to the London Tenders portal together with the Quick Quote, Request for Quotes, or Invitation to Tender. For simple, low value procurements the council's standard purchase order terms and conditions will be used. Purchase order terms and conditions

Useful links

Contact us

Commercial Services

Email: commercial.services@merton.gov.uk