What is meant by Procurement & Purchasing?

The Official definition of “Procurement” is:

“Procurement is the process of acquiring goods, works and services from third parties and from in-house providers. It spans the whole cycle from identification of needs through to the end of a services contract or the end of the useful life of an asset. It involves options appraisal and the critical ‘make or buy’ decision, which may result in the provision of services in-house in appropriate circumstances.”

Professional Procurement is the term used for obtaining or providing goods and services through the establishment of well-managed contracts that deliver value for money, and that are the best the marketplace can offer. All procurement should be managed in the context of the Council’s Corporate Procurement Strategy, which has been developed in line with the Office of the Deputy Prime Minister (ODPM) & Local Government Association (LGA) National Procurement Strategy for Local Government.

Purchasing at its simplest is an activity encountered every day in our private lives, but the procurement of goods and services on behalf of organisations is a professional activity, a strategic function of the organisation and needs to be treated as such. Where purchasing involves the actual spending of public money through buying, this is particularly important.

All procurement is a result of a contract between buyer and seller, but the procurement process should start well before the source is decided on and will continue after the contract is formed.

In the context of a procurement process, obtaining "best value for money" means choosing the bid that offers "the optimum combination of whole life costs and benefits to meet the customers requirement". This is not the lowest initial price option and requires assessment of the ongoing revenue/resource costs as well as initial capital investment.

Expenditure on goods and services has inevitable social, economic and environmental impacts and the Council endeavour to ensure that sustainability is considered throughout the procurement cycle. The Council’s requirement includes social, environmental and other strategic objectives and is defined at the earliest stages of the procurement cycle. The criteria of best value for money and most economically advantageous tender (MEAT) are used at award stage to select the bid that best meets the requirement of the contract. Procurement is therefore about making sustainable choices, in line with the Councils Strategic aims to 'promote a strong and diverse local economy' and 'protecting and enhancing our heritage and environment'.

The Council’s Strategy sets out how it can improve the delivery and cost effectiveness of high quality services through more effective, prudent and innovative procurement practices. The Strategy illustrates the scope for potential cost savings through more efficient procurement practices and partnership working, to release resources to the frontline

By the implementation of good practice in procurement we reduce the likelihood of time and cost overruns, poor quality and contract failures. It also helps remove unnecessary 'red tape' to reduce time and costs for councils and suppliers alike.

National Procurement Concordat for Small & Medium-sized Enterprises

Worthing Borough Council as part of it's continuing procurement strategy is committed to supporting local businesses and during 2006/2007 spent £5.6 million with West Sussex suppliers some 39% of the councils total spend of this figure £2 million was spent with Worthing based suppliers.

Also to show further committment to local businesses Worthing Borough Council signed up to the National Procurement Concordat for Small & Medium-sized Enterprises (see PDF file below) This is a national agreement to support and encourage small and medium sized businesses to tender for local government contracts.

EC Public Procurement Directives

In addition to the UK local government legislation mentioned above, there are legal requirements that govern procurement by public authorities, including councils, right across the European Union. In the UK these are set out in public procurement regulations that implement EC directives on supplies, services, works and procurement by utilities. The regulations provide remedies for aggrieved suppliers if the rules are flouted, including the ability to seek redress in the UK courts. By complying with the procurement regulations (EC rules) we reduce the likelihood of legal challenge

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