Guidance Notes for Gateway 1 Procurement Strategy

Approval Non Cabinet

This guidance note has been produced to assist officers in drafting gateway 1 reports
that are going to be submitted to chief officers and individual decision makers. If your
report is going to the cabinet then please refer to Guidance Notes for Gateway 1
Procurement Strategy Approval Cabinet.

Before completing your gateway 1 report you should familiarise yourself with the
guidance on undertaking procurements set out in the Procurement Guidelines.

Overview of procurement approval reporting process

There are three reporting stages for procurements:

Gateway 1 report to obtain approval of the procurement strategy

Gateway 2 report to obtain approval to award contract
Gateway 3 report to obtain approval to vary a contract during its term, e.g.
in terms of length, cost or scope where this has been allowed for in the terms
and conditions of the contract

When should the Gateway 1 report template be used?

The gateway 1 report seeks approval for the method of procurement intended to be
used for any goods, works and services. It must be used for all procurements that
have an estimated contract value of over 75,000 and where appropriate for other
approvals required under Contract Standing Orders.

The gateway 1 report template is also required to be used in the following

circumstances:-

when not gathering 3 quotes/5 tenders

when not using the approved list of contractors in the case of works contracts.
where approval is sought to bring a service back in-house
where officers believe that goods and services provided through a corporate
contract do not meet their requirements then approval should be sought
regardless of the value of the purchase
to use a third partys framework contract
if officers wish to use framework contract or similar such as a schedule of
rates contract for supplies and services and officers wish to place orders
which exceed the EU threshold unless alternative ordering procedures were
approved at the original award of the framework.

As best practice, officers are encouraged to use the report template for contracts
awards below 75,000 so as to ensure an audit trail of decisions made and reasons
for them, although officers can edit the template to include only headings applicable
at these levels of expenditure.

For contracts above EU thresholds

For contracts that are above current EU thresholds which are valid until December
2015 (i.e. for supplies and services above 172,514 and for works above
4,332,012) the following applies:

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 all headings contained in the report template must be completed. If not
relevant the statement There are no specific implications is to be inserted
with a brief explanation as to why this is the case

supplementary advice from the contracts, finance and the corporate

procurement teams must be provided and when otherwise required by CSOs
for example when not using the approved list of contractors

formal concurrents will usually be supplied post departmental contracts

review board (DCRB)/corporate contracts review board (CCRB).

It is important to allow at least five working days for this advice and to plan for
further time to deal with any issues that may be raised and that will need to be
addressed before the report is finalised and the concurrent is given.

For contracts below EU thresholds

There are some sections that are mandatory and must be filled in regardless of the
size/type of contract. There are other sections that are optional and the need to
include them will depend on the type, value and nature of the contract. You should
aim to include these headings.

The table below shows a key for the two types of section headings. In this document
beside each section heading appears a symbol, which indicates when the heading is
to be included.

Type of heading Symbol When to be included

Mandatory (M) Must be used at all times

Optional (S) Should be used as necessary

(May or may not apply)

Additional factors to remember when completing a gateway report include:

refer to the councils style guide

always use Font Arial Size 11pt
be concise, use plain English
avoid unnecessary duplication
avoid jargon
when using abbreviations, always put in full when first used and
ensure each paragraph is numbered, do not number headings.

Header Box

Item No. Classification: Date: Meeting Name:

Open/Closed * Date/Month/Year> e.g. Name of Decision
5 July 2010 Maker

Report title: Gateway 1 Procurement Strategy Approval

Insert title of contract.

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 Ward(s) or groups affected: Electoral ward(s); key groups affected

From: Title of Chief Officer / Responsible Officer

Report Classification

There are 2 report classifications Open and Closed delete as applicable

Definition of open/closed reports

The constitution sets out the definitions of exempt or closed information (see
clause 10.4 of the Access to Information Procedure Rules of the Southwark
Constitution).

The following advice applies to all Gateway reports.

The classification of a report may depend on who is taking the decision, i.e. the
decision maker, and the audience for the report. Decisions taken by the full cabinet
and individual cabinet members will have a higher level of public interest.

Report authors

Where a report is to the individual decision maker/ strategic director of finance and
corporate services, the report author will normally be the relevant strategic director.
For reports to strategic directors the report author will normally be a business
manager as set out in the departments scheme of management. Please note that
only the officers post title is required not the report authors name.

Report Type Definition

Open An open report is one which is available to all councillors and the
public. Therefore officers must ensure they include information
which is either in the public domain or can be put into the public
domain. Information that is deemed commercially sensitive is not
included in open reports.

Closed The closed report contains information that is deemed

commercially sensitive and should not be released into the public
arena. It should be noted that it is unusual for a closed version of a
gateway 1 report to be needed. The report will contain the name of
the recommended contractor and contract terms. A closed report is
available to the decision maker and to other members on a need to
know basis.

Which reports do you need to produce?

The table below provides a guide to which reports you will need to produce for those
different types of decisions being submitted to chief officers and individual cabinet
members.

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Decision maker Classification of Publication
report(s) required
chief officer non key Closed Internal only
decision
chief officer key decision Open and Closed Open report available to
public on request.

Both open and closed

reports circulated to:
decision maker
overview and scrutiny
committee members

Individual cabinet member Open and Closed Open report published on

key decision agenda and website, as
required

Both open and closed

reports circulated to:
decision maker
overview and scrutiny
committee members

IDM Non Key Decision Open and Closed Open report available to
public on request.

Access to reports

It should be remembered that Freedom of Information Act requests can be made for
closed reports and other documents associated with the process. These will need to
be dealt with in the normal way; a public authority cannot contract out of its
responsibilities under the Act and unless information is covered by an exemption it
must be released if requested. Section 40 (personal information) may apply to details
of a companys personnel provided in support of a tender. Section 44 (statutory
prohibition), will apply to information provided by contractors in some circumstances,
particularly where covered by the Public Contracts Regulations 2006. The two most
relevant exemptions are likely to be section 41 (information which has been provided
in confidence) and section 43 where the release of information is likely to prejudice
someones commercial interests. If you want any further information please contact
Janet McDonald, corporate freedom of Information manager on extension 57511.

Remember that there is a right to view background papers mentioned in open

reports. If your background papers are commercially sensitive they should only be
referred to in the closed version.

What to include in open / closed reports?

When writing reports officers should bear in mind that there is always a presumption
in favour of openness. Reports should place as much information as possible in the
public domain, unless it falls within one of the exempt categories of exempt
information e.g. commercially sensitive. Open link to Southwarks Constitution
See Part 4, Para 10.4, Page 85 Meaning of exempt information.

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Report authors should ask themselves: Does all information in the closed report
need to be confidential or can any part of the information be included in the open
report?

The open information does not need to be repeated in the closed report.

The following table is a summary of the requirements for open and closed reports.

Open Closed
Recommendation Yes excluding closed Yes - in full
information such as
commercially sensitive
contract terms

Note: For the following sections officers do not need to repeat the open information in
the closed report. This duplication is unnecessary. The closed report should include
the recommendation in full, a brief introduction in background information and any
other commercially sensitive information.
Background Information Yes all relevant public Any closed information
information and a brief summary of
open information
Key Issues for Yes all relevant public Any closed information
Consideration information such as contract
evaluation and scoring etc
and a brief summary of
open information
Supplemental Advice All comments that can be Commercially sensitive
from other Officers placed in public domain advice
Background Information, Yes You will need to list Only closed background
Appendices, Audit Trail open background information
documents here

A closed report must contain the following statement inserted in bold type below the
report heading table on page one.

Not for publication by virtue of category <insert number>of paragraph 10.4 of

the Access to information Procedure Rules of the Southwark Constitution.

What to do when preparing reports

At the initial stages of report drafting it is easier to include all information both open
and closed in a single report. This is the version that will be circulated to all contract
review boards as necessary.

When your report has been reviewed by the relevant contract board(s) you will then
need to take out the commercially sensitive parts and any other exempt parts. These
will need to be incorporated into a new closed version with a brief summary of open
information. All remaining non closed elements of the report will then form the open
version.

For final clearance you will need to provide both open and closed versions for
clearance. Reports must be cleared through the relevant departmental clearance
processes and will also be subject to the cabinet agenda clearance process. Further

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information is available from the constitutional team. Cleared reports should be
provided to the constitutional team by the deadlines set for publication of agenda or
notice of forthcoming decision.

For more advice

For further advice on this please contact Ian Millichap, constitutional manager, in the
chief executives department on extension 57225.

RECOMMENDATION(S) (M)

The recommendation(s) should provide a clear and concise summary of all approvals
being sought in the report.

1. That <insert decision maker> approve the procurement strategy outlined in

this report for the <insert name of contract >contract at an estimated value of
<insert amount> for a period of <insert years/months>; or

1. That <insert decision maker> approve the procurement strategy outlined in

this report for the <insert name of contract >contract at an estimated annual cost of
<insert amount> for a period of <insert years/months> making a total contract value
of <insert amount>.

Insert details of other recommendations sought. Examples of other recommendations

could include:-

that <insert decision maker > seek exemption from Contract Standing Orders
as provided in CSO xx <insert requirement of Contract Standing Orders>

that <insert decision maker > approve the request to join a consortium
contract as provided in CSO xx

You may also wish to add here important information that the decision maker is
asked to note rather than approve.

For a non cabinet report there should be no recommendations regarding delegation

in respect of a gateway 2 decision as this will be dealt with through a separate
approval process.

BACKGROUND INFORMATION (M)

Give brief description of what the current contract provides, if one exists, or the
events etc that have led to the need for a new contract.

Provide an overview of the requirement, whether there are going to be any new
requirements, what service is going to be provided, works or goods are being sought,
being replaced, reason for letting the contract, previous contracts, current contractor.

Explain why this contract is being let and the options that have been considered. For
example this could be non-provision, extending the current contract, joint
procurement with other councils or the service is being brought back in-house.

Information given here should also relate to the proposed new contract.

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 insert a brief description of what the proposed new contract will provide and of
what consideration has been given as to how it may improve the economic,
social and environmental well being of our area in a way which is
proportionate and relevant to the service provide. This requirement is as a
result of the Public Services (Social Value) Act 2013 which came into effect on
the 31 January 2013. Further reading/information can be found here.

insert estimated annual cost of contract

insert length of contract (delete weeks/months/years as appropriate)

insert details of all possible allowed for contract extension provisions

insert total estimated contract value

a) The calculation of the estimated contract value should be based on the

maximum you would expect to pay if the contract is concluded, net of VAT but
including the exercise of any options i.e. the longest possible length of the contract
for example 3 + 1 years extension

b) For demand led contracts where it is likely the contract is going to be

renewed the estimated contract value could be calculated based on previous spend
(if available). State whether these figures have been obtained from SAP, and/or from
supplier(s)

c) For demand led contracts (say, for advisory services) where the contract is
unlikely to be renewed and is only for a fixed period the estimated contract value is
calculated by making a best guess of the value of the contract.

d) If it is a works contract it is the total value of all that is necessary to complete

the project

e) For hire/lease or hire purchase agreements without a fixed term of indefinite

duration the estimated contract value is calculated by taking the monthly value x 48
months

f) For service contracts where there is no fixed price, without a fixed term or of
indefinite duration the estimated contract value is also calculated by taking the
monthly value x 48 months.

Summary of the business case/justification for the procurement (S)

If required, the full business case/service review may be provided as an appendix or

be listed in the background papers table for members and public who require more
information. You should also provide details of any service reviews that have been
completed within the last three years setting out a summary of the findings. If no
service review has been undertaken please describe the following:

how does the procurement fit with the councils objectives and current
priorities and how it is consistent with the councils duty to consider social
value
what range of options have been explored and considered with other LBS
departments or in conjunction and collaboration with other local authorities or
agencies

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 will the outcome of the procurement will achieve the desire outcomes for the
council
how will customer and stakeholder views will be incorporated into the
procurement and
how continuous improvement will be achieved.

Where possible you should also include a cost benefit analysis indicating whether the
contract is likely to achieve savings or provide a better service and giving details of
these.

Market considerations (M)

Include any relevant market information such as information about the main providers
and a commentary on how developed the market and whether the market is
considered to be either a niche market or has national or global coverage.

Refer to market research if relevant but set out a summary of the main factors of this
research. This may inform, for example, whether the contract is sourced internally or
outsourced. State any conclusions made from market research. Any source
documents should be listed under background papers.

Set out here the market response to this.

KEY ISSUES FOR CONSIDERATION

Options for procurement including procurement approach (M)

Set out what other procurement options you have considered are available to ensure
that any market challenge and competition can be demonstrated and the reasons for
not embarking upon them.

Describe here the approach you are going to undertake for example, to consider and
develop any collaborative or partnership working either internally (departmental) or
externally (with other local authorities or public sector organisations).

Your approach should also outline what considerations you have made to take into
account the requirements of the Public Services (Social Value) Act 2012.

If you are considering setting up a shared service you must register your proposal
with the director of corporate strategy, Graeme Gordon, who can be contacted on
extension 57384.

Proposed procurement route (M)

Describe here the procurement route you intend to use in this procurement

i) Competitive tendering seeking 5 or more tenders via approved list or public

advertisement
ii) EU Restricted Procedure
iii) EU Open Procedure
iv) Competitive Dialogue
v) Negotiated Procedure
vi) Single Supplier Negotiation
vii) Framework Agreement including Consortium

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To ensure you identify the appropriate route also refer to Contract Standing Orders
and the Procurement Guidelines.

Identified risks for the procurement (M)

Describe the risks that have been identified, their assessment (likelihood and
impact), actions to manage them in respect of:-

a) the procurement process

b) the service delivery

You may prefer to append a risk log or risk management table, if so, refer to it here.

The key risks identified should not be limited only to those financial risks, but also
non-financial risks such as reputational, operational, legal and regulatory, staffing and
culture, and economic.

As part of your risk assessment you will need to establish whether a Performance
Bond or Parent Company Guarantee is required. This should be considered on
a contract by contract basis.

Please indicate which is appropriate to the proposed contract

i) A performance bond is required for this scheme

ii) A performance bond is not required for this scheme. In which case provide a
brief assessment of the risk that informed this decision
iii) A parent company guarantee is being required because..

Key /Non key decisions (S)

The report template includes standard wording for this section.

Policy implications (S)

Insert details of the policies that are driving this procurement; the impact on the
procurement; whether the council has adopted at the highest level the use of
procurement to benefit the economy and businesses , the impact caused by policy,
legislation, organisational change. Include here anything that may affect the letting of
this contract. Examples of such include Every Child Matters, Southwarks Older
People Strategy, Southwark Cleaner Greener Safer, Sustainable Community
Strategy and the Council Plan.

Procurement project plan (M)

For larger contracts a full project plan should be provided as an appendix. Here
provide a summary of the planned dates for key steps in the process. (Please refer to
the procurement guidelines for tender management protocol steps to follow)

Include in your procurement plan (if appropriate) activities such as submission to

relevant decision maker, the Alcatel Standstill period, and the issue of the Contract
Award Notice.

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Where you are reliant on other parties e.g. Pre Qualification Questionnaire (PQQ)
evaluations ensure you have consulted with them with reference to the timelines on
the proposed project plan. You should also cross reference with your project plan that
you have the documents completed to meet the proposed timelines.

Before completing this part of your report you should familiarise yourself with the
activity definitions associated with the project plan. These can be found on Gateway
Report Activity Definitions.

TUPE implications (M)

The Transfer of Undertakings (Protection of Employment) Regulations 2006 protects

employees rights in the event the works or services they provide are transferred to
another provider. This may occur where:

1. Services provided by the council are transferred to an external provider (out-

sourced first generation ("primary") TUPE transfer);

2. Those services are subsequently transferred to another external provider (second

generation ("secondary") TUPE transfer); or

3. Those services are brought back in house by the council (in-sourced /reverse
TUPE transfer);

4. Where external services (i.e. services not previously delivered by council

employees) are transferred from one provider to another (external TUPE transfer);
and

5. Where the council undertakes contracts for other public service authorities.

Whilst TUPE is likely to apply in each of these situations the implications of its
application will differ depending on the situation.

If council officers are considering any of the following in their business or service then
they must consider TUPE:

externalising or outsourcing
partnerships with the public, private or voluntary sector
letting out contracts for services and
joint commissioning or delivery.

This applies even where the employees involved in providing the service belong to
another part of the council e.g. support services, or an external employer.

Therefore in this section you should indicate whether TUPE is applicable to the
contract i.e. it is a transfer of an existing service (rather than something new) and
then make a comment as to whether there are implications- - where you think there
will be individuals who are affected by the new contract proposals.

If you think there will be TUPE implications then you should include how this will be
addressed during the tendering process.

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You should also report that confirmation has been received in writing from the current
supplier(s) on whether they believe TUPE does or does not apply.
You will need to allow 12 weeks before the new contract starts if TUPE applies for the
necessary consultation to take place. This should be built into your procurement
project plan.

You should seek advice and guidance from HR, Pensions, and for contracts over
75,000 you should seek advice and guidance from Niall Kilfoil senior lawyer - in
the corporate services team within legal services on extension 57509.

Pensions

If employees transfer under TUPE then pension provisions MUST also be considered
and detailed in the gateway 1 report.

The council is under a statutory duty to ensure the pension rights for their transferring
staff on primary TUPE transfers are the same as, broadly comparable to, or better
than, those rights received as an employee of the authority. This protection also
applies on secondary TUPE transfers i.e. .to former employees of the council, who
were transferred under TUPE to a contractor, in respect of any re-tendering of a
contract for the provision of those services.

You must therefore include:-

what the current pension arrangements are

confirmation of liaison with the pensions team on who will instruct the actuary
if applicable
confirmation that tender documents will ask the tenderers to detail their
intentions on how pensions will be dealt with and include a draft admission
agreement if applicable and
confirmation that pension costs will be factored into the tender return and
form part of the financial evaluation.

If pensions are applicable to your procurement you must consult with the legal
contracts team and be aware of the advice on The Source, under Workforce Issues.

Development of the tender documentation (M)

Provide details of how you will develop the specification, evaluation criteria, pricing
documents, Instructions to Tender (ITT) and the conditions of contract, identifying
who will complete the tasks and the timescales for development. Detail any changes
to the current terms and conditions; if no current detail include any innovative
changes to standard terms e.g. legislative changes, changes through consultation,
value for money improvements, whether suitable for a framework contract, etc.

You should also cross reference the production of your tender documentation with
your project plan to ensure that you have the documents ready to meet any
publication dates especially those set out in the Official Journal of the European
Union (OJEU) notice.

You can find examples of tender documentation and get advice on developing your
tender documentation from either viewing the procurement pages on The Source or
by contacting the corporate procurement team.

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If your strategy is to bring a service back in-house you should refer here to the
process for defining and establishing the organisational structure together with the
production of job descriptions, possible recruitment processes etc.

Contract(s) Packaging

Describe here whether it is your intention to bundle several requirements together

into a single contract or whether to join with other public sector organisations to
procure goods and services or not.

Describe also:-

i) How many contractors/suppliers you are thinking of appointing

ii) Whether the award is going to be on a geographical /rotational basis
iii) What the plans are (if any) for back up arrangements
iv) Whether you are seeking to achieve volume discounts in this procurement
v) Whether there is going to be a limit on the number of lots that are going to be
tendered and awarded to any one supplier
vi) Whether you are going to cap the level of orders to be placed
vii) Whether there is an opportunity to include community benefits within the
terms and conditions

Advertising the contract (M)

Include here details of where this contract is to be advertised e.g. OJEU, trade
journals, local press and how you will advertise in a range of publications and other
means in order to encourage greater diversity and competition and reach small
businesses, ethnic minority businesses and social enterprises based in Southwark.

You must however ensure that your OJEU notice is published before any UK
advertisement.

For those tenders valued under 75,000 you should ensure that local suppliers are
aware of the contract opportunity.

For contracts valued over 75,000 and under the EU threshold (non construction
related) you should advertise the contract opportunity in local press outlets or on the
councils web site.

In both cases you should also access the register of interest on The Source to
find firms who may be interested in submitting a tender

For construction contracts under the EU threshold the tender list should be derived
from the approved list of contractors (CSO 5.3). For further advice please contact
John Darby in the corporate procurement team.

Where the approved list is not being used for works related contracts to draw up a
tender list, contractors will need to have been pre vetted to the same standard as
those already on the approved list of contractors and consultants. Contact John
Darby in the corporate procurement team for advice or see the procurement
guidelines.

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Evaluation (M)

List the evaluation criteria that will be used

to short list organisations (pre qualification questionnaire) and

to award the contract.

These must be two separate lists and must not contain duplicate information.

For the avoidance of doubt a 70:30 price/ quality weighted model should be used to
evaluate tenders or an alternative model that supports cost reductions. If any
evaluation is weighted other than in favour of price this should be highlighted
and will require particular justification. Where you propose to use an alternative
method of evaluation other than a weighted model this will also require
justification.

If you are creating sub weightings as part of your evaluation criteria these have to be
communicated to potential tenderers at invitation to tender stage.

Describe the mix of the tender evaluation panel e.g. whether it will include a
combination of both officers and external stakeholders i.e. resident representatives
and whether you intend to carry out interviews or receive presentations as part of the
evaluation process.

Community impact statement (M)

This is a corporate requirement and must address all six strands of the councils
equality agenda: age, disability, faith/religion, gender, race and ethnicity and sexual
orientation. Not all reports will relate to all six strands on all occasions however, it is
important that all strands are considered equally.

The following should be addressed:

what the impact will be on local people

who the people are that will be affected by the contract
whether particular communities/groups are likely to be affected differently by
the contract
how the requirement to create new opportunities is going to be delivered
utilising local supply chains and local labour markets
if there are likely to be adverse or less favourable implications for any
particular communities/groups, what possible actions could be taken to
improve these and whether there are any resource implications
where it is possible that the contract will have a disproportionate effect on a
particular community or group explain the positive/negative effects
what the opportunities will be for local business, employment and training.

If the contract will genuinely have no impact on local people or communities the
following statement should be included: This decision has been judged to have no
or a very small impact on local people and communities

The corporate strategy team within the chief executives department will provide
advice to the report author and other senior officers where there are particular

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queries about a community impact statement. Whilst the unit will aim to assist as far
as possible, they are not responsible for either drafting or commenting on every
individual statement.
Sustainability considerations (M)

The report template contains standard wording for this section.

There are three general headings that should be reported on and they are:-

economic considerations
social considerations and
environmental considerations.

By including comprehensive information under these three headings you will ensure
that any matters arising from our obligations under the Public Services (Social Value)
Act 2012 will be covered.

Public Services (Social Value) Act 2012

This act only applies to services contracts, services framework agreements and
mixed goods/services and works/services contracts to which the Public Contracts
Regulations 2006 apply (i.e. with an estimated total value in excess of 172,514).
However, the council requires social value to be considered for ALL contracts which
require a gateway one procurement strategy report (i.e. all contracts valued over
75,000).

What obligations does this Act impose?

From 31 January 2013, you must consider:

How what is proposed to be procured may improve the economic, social and
environmental well-being of our area
How the council may act with a view to securing that improvement in
conducting the process of procurement and
Whether to undertake any community consultation on these matters.

The Council is therefore committed to looking at the role procurement has to play in
delivering the councils objectives and its contribution to the Community Strategy,
workforce issues, diversity and equality and sustainability as set out in the Southwark
Procurement Strategy. Sustainability should be considered in its widest sense
including the potential for meeting the Sustainable Community Strategys objective
for residents to achieve economic well-being and to support a vibrant economy.

You should then detail under the headings below those issues that have been
considered in specifying the works, goods, or services and in the delivery of the
proposed contract and explain how you are going to build these into your
procurement. The Council has adopted a clear framework for achieving best value
and has extensive powers and obligations to improve social, economic and
environmental conditions within the borough.

Economic considerations (M)

This consideration is a requirement of the Public Services (Social Value) Act 2012.

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You will need to indicate the likely full cost to the council over the full period for which
the requirement exists for the service. This would take into account running costs
such as energy usage, maintenance requirements, disposal costs such as recycling
as well as the initial estimated contract sum. The life span of the product /service will
also need to be considered and explained.
Local economic benefits can be built into procurement in a variety of ways including -

advertising opportunities in local press, and a range of publications to reach

small businesses, ethnic minority owned business and social enterprises

asking contractors/suppliers to engage with borough-wide employment

programmes such as Southwark Works and Building London Creating
Futures to support unemployed residents access to training, skills and
sustainable employment

asking contractors/suppliers to engage with apprenticeship schemes

requiring contractors/suppliers to use local companies in their sub-contracting

and supply chain arrangements

include local economic benefits as part of the evaluation criteria where

appropriate

For further information refer to the procurement guidance on economic benefits and
sustainability on the intranet.
`
Social considerations (M)

This consideration is a requirement of the Public Services (Social Value) Act 2012.

Describe here how you intend to ensure that the procurement process is accessible
to a variety of suppliers including SMEs, BMEs, women and disabled owned
businesses and the voluntary and community sector.

London Living Wage (LLW)

Council Assembly on the 29 February 2012 approved the introduction of clear plans
over the next three years to March 2015 to ensure that LLW benefits not only council
directly employees but also those who work for the council through contractors..

The presumption being that LLW will apply on each new contract where
services/works are to be provided on council premises or in the greater London area,
and where best value can be demonstrated on a case by case basis.

This commitment is subject to a rigorous procurement process being carried out and
linked to quality improvement in the service being delivered.

You must then set out all the relevant factors why you are proposing to include LLW
in your contract including how this is going to be dealt with when evaluating tenders,
within contract documents and how you intend to monitor the introduction and
continuing application of LLW during the lifetime of the contract.

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If you are not proposing to include LLW in your contract you must set out detailed
reasons why it is not appropriate in this contract.

More information, guidance and application of the London Living Wage in Contracts
can be found by clicking on the link.
Environmental considerations (M)

This consideration is a requirement of the Public Services (Social Value) Act 2012.

This should be considered on a contract by contract basis.

The council has adopted targets to reduce energy and water consumption, waste and
paper usage in its operations on its estate and to encourage more sustainable
methods of operational transport (fleet, business travel and commuting). In addition,
the council has committed to acting to reduce borough CO2 by 22.4% by 2020.

Detail here any environmental impacts that will result from the works, goods, or
services in the delivery of the proposed contract. You should consider the following:-
energy use (and associated CO2 emissions)
water use
use of natural resources (e.g. timber, aggregates)
transport related impacts (CO2 emissions and impact on local air-quality)
waste ( specifying recycled content materials , end of life disposal impacts)
biodiversity (impact on local ecology.

In general, contracts should seek to ensure an improvement in the carbon, resource

efficiency or biodiversity compared with the 'business as usual' context. Define how
this procurement will minimise resources to be consumed or user demand once it
has been obtained. Where possible please quantify the likely reduction that will
result.

For example, when specifying measures for buildings, a reduction in energy or water
consumption would normally be expected. This is in light of both the environmental
targets highlighted above and the avoided cost to the council that will result from
specifying more efficient goods and services, even where these have a higher initial
cost.

For guidance on whole life costings, please contact the councils sustainability team.

For some categories of goods and services, existing eco-label criteria or standards
can be built into the specifications to aid this process (for example, EU Energy Label
for white goods, EU Energy star for office equipment, and EU Eco-label for a range of
products and FSC or equivalent for timber). Care should likewise be taken when
considering ongoing orders of routine disposable items. Where possible these should
be avoided since they will both impact upon the waste targets and incur ongoing
disposal costs for the council.

The council has a legal duty to report operational CO2 emissions each year. This
data is published in a national league table along with data on CO2 emissions per
borough. From 2012, the council has been required to pay a charge for each tonne of
CO2 emitted per year from council offices, depots and school buildings. In 2011, this
totalled 35 thousand tonnes of CO2. The council additionally monitors waste,
recycling and water consumption in key buildings and publishes performance data on

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a quarterly intranet league table. For major contracts with a high impact, the following
annual data will be required:-

(i) the amount of energy (e.g. gas, electricity, oil) used by any stationary sources (i.e.
premises) in connection with the performance by the contractor of its obligations
under the contract

(ii) either the total distance travelled by each type of vehicle and its fuel type, or the
total quantity of each fuel type, used in connection with the performance by the
contractor of its obligations under the contract

The successful contractor will need to have in place targets to minimise consumption
of energy and emissions of pollutants and be able to demonstrate the effectiveness
of these procedures. If this is likely to apply, please contact the councils
sustainability team who can supply the relevant forms.

For further information please contact the councils sustainability team.

Plans for the monitoring and management of the contract (M)

Describe the arrangements and systems to be put in place especially where a new
service is to be provided or there has been a significant change in the provision of an
existing service in respect of managing and monitoring the contract in respect of:-

compliance with the specification and contract

the performance of the contractor/supplier
cost
user satisfaction
risk management and
key performance indicators.

Please state whether the monitoring of the contract will have an impact on any staff
resources and how this will be addressed.

Outline the payment mechanisms you intend to introduce for the contract and
whether these payments are linked to outputs. Describe how contract payments are
going to be made.

Staffing/procurement implications (M)

For all strategic procurement projects provide a project structure and resource plan
that will describe how the procurement processes will be delivered.

Please state whether the letting of the contract will impact on any staff resources and
how this will be addressed.

Financial implications

The financial implications/information that should be shown here or summarised from

elsewhere in the report should include

current prices (if known)

current volumes (if known)

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 current budget
future volumes and any expected changes
total estimated contract value including any extensions
revenue implications of any capital expenditure including confirmation of the
budget to meet additional revenue costs and the treatment of any revenue
savings
how contract will be resourced, potential implications for budget setting,
including impact on separate funds that are to be recharged, e.g. HRA,
Schools Budget
departmental finance managers (DFM) agreement to these figures and
resource availability and
confirmation that all costs to be incurred as a result of this procurement (for
example professional fees associated with a construction project) are
budgeted for

The report author must liaise with the departmental finance representative at the
earliest opportunity to allow sufficient time for the financial implications to be
considered. This is because it is the responsibility of the DFM/Senior Finance
Manager to ensure that the financial implications section has been completed and is
robust.

If the strategic director of finance and corporate services is to provide supplementary

advice the report template contains a requirement for a finance concurrent reference
number to be inserted. This reference number will be supplied with the financial
concurrent.

Investment implications (S)

This is for housing and community services department contracts only.

A statement is required that expenditure will be met from the relevant allocation e.g.
warm, dry, safe or strategic safety works

An estimated spend profile is required to be produced and included in this section of

the report.

The investment strategy team within the chief executives department must complete
this section.

Price Indexation

Price Indexation is a mathematical formula in the payment mechanism by which

prices could be automatically inflated, usually each year either from the start of the
financial year or anniversary of the contract, by linking them to an agreed index set
out in the contract terms and conditions.

The standard position for all new contracts is that no contractual indexation provision
must be included, but this must be considered on a case by case basis. If you
consider indexation is appropriate to your contract, the Consumer Prices Index (CPI)
will be used as the new standard indexation rate.

If you consider there is a more specific index or specific elements of the CPI which
should be used instead of the standard all items CPI rate this must be stated here.

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You should state when these indices will apply from - for example at the anniversary
of the contract, financial year end and how this will be calculated if a term contract
over a number of years i.e. increase/decrease based on tendered price or
cumulative. This should be set out in the contract terms and conditions

Legal implications (S)

Where the contract has an estimated value below the EU threshold you should set
out any relevant legal implications.

Where a concurrent is to be provided by the director of legal services the report

template contains standard wording for this section.

Consultation (S)

As part of the requirements of the Public Services (Social Value) Act 2012 you will
need to consider whether a period for community consultation needs to be included
within your procurement plan. You should therefore set out here how you intend to
consult with stakeholders and/or the market place to ensure that economic, social
and environmental considerations are considered before the procurement
commences. If you do not consider that consultation is necessary, please set out the
reasons behind this decision.

Insert here any details of consultation with the public on specification or design, or
tenants panels to assist with evaluation, trade unions or with other council
departments.

Other implications or issues (S)

In the event there are other implications or issues not covered elsewhere these
should be detailed here.

SUPPLEMENTARY ADVICE FROM OTHER OFFICERS (S)

Head of Procurement
Director of Legal Services
Strategic Director of Finance and Corporate Services -The report template
contains a requirement for a finance concurrent reference number to be
inserted
Head of Specialist Housing Services (if Housing Contract)

Supplementary advice must be sought from the head of procurement, director of

legal services and the strategic director of finance and corporate services in the case
of all contracts:

1) Above the relevant EU threshold; or

2) Below EU threshold where there are significant risks.

Supplementary advice must also be sought as follows:

a) From the head of procurement, where the report is seeking not to use the
approved list of contractors and consultants
b) From the strategic director of finance and corporate services where the report
involves capital expenditure

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c) From the head of specialist housing services, where the report relates to the
housing department

Please allow adequate time for gathering comments from each section. A minimum of
five working days is recommended as good practice.

FOR DELEGATED APPROVAL (S)

This section is only required when officers are using delegated powers to make
decisions. In such reports, insert the following:

FOR DELEGATED APPROVAL

Under the powers delegated to me in accordance with the Councils Contract

Standing Orders, I authorise action in accordance with the recommendation(s)
contained in the above report.

Signature Date..

Designation

BACKGROUND DOCUMENTS /APPENDICES /AUDIT TRAIL (M)

These sections must be completed in the case of reports where the decision is to be
taken by a chief officer or an individual cabinet member.

You should also complete the background document attached to the gateway 1
report template giving details of the contract to be entered onto the contract register
and passed to the member of staff in your department responsible for keeping your
contracts register up to date.

To assist you with the with the completion of information for the contract register
please see below a list of definitions which should be used as appropriate and at the
different stages of the gateway approval processes.

Contract Name Please specify the name of the contract

Contract Description Please enter a short description of the contract
Contract Type Please enter whether the contract is for a
service, works or goods
Lead Contract Officer Name The name of the person responsible for the
contract
Telephone Number The telephone number of the lead officer 020
7525 xxxx
Department This is the department within the council where
the contract originated
Division This is the division within the council
department where the contract originated
Procurement Route This is 5 tenders, EU Open Tender, EU
Restricted Tender, Single Supplier, Negotiated,

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 Competitive Dialogue, and Framework
Agreements
EU CPV Code This is the code number as appears on your
OJEU notice (if appropriate)
Departmental/Corporate This is the impact of the contract. Is it limited to
your department or does it have a council wide
impact. Departmental the use of the contract
is limited to your department. Corporate the
contract is available for all council departments
to use?
Fixed Price/Call Off Fixed Price - This is a contract where the price
has been fixed at a date and only revised
subject to an agreed arrangement usually set
out in the contract terms and conditions
Call Off This is a contract that where there are
one or more contractors, suppliers or service
providers providing for a defined range of
services, goods or works as and delivered as
and when required
Contract Award Date This is the actual date of contract award
Supplier(s) Name Please specify the name of the supplier (s)
Contract Total Value This is the total value of the contract and not the
annual value.
Contract Annual Value This is the annual value of the contract not the
whole contract value.
Contract Start Date This is the date the contract takes effect. In
cases the award date and start date are
different please use the start date, not the
contract award date. .
Initial Contract End Date The contract end date as stated when contract
was initially let
No of remaining contract
extensions This is the number of possible extensions
available under the contract and shown in your
Gateway 2 report.
Revised End Date The new end date if contract was extended
Contract Review Date This is the date when the service review
commences to inform the strategy on what we
want to be delivered and how. It is estimated
this should be undertaken at least 18 months
before the start of any new contract.
Comments Please feel free to use this space for any
additional information you may want to
communicate about the contract.

If your report is to be submitted to the constitutional team this form should be moved
before submission.

You are also required to liaise with your procurement departmental representative
prior to report being submitted to DCRB/CCRB to ensure no procurement issues are
outstanding that could delay the approval process and for further advice on
constitutional issues please contact Ian Millichap, constitutional manager in the chief
executives department on extension 57225.

Special reporting circumstances

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Reporting requirement for combined gateway 1 and 2 decisions

These may be permissible when gateway 1 and gateway 2 decisions are to be taken
simultaneously.

These reports should be used only in exceptional circumstances. For example:-

when undertaking market analysis in order to develop your procurement

strategy it becomes clear there is only one provider
an existing contract did not allow for a variation/extension and there is a
continuing need for the works or services to only be delivered by the existing
provider and
where there are timing and funding conditions that have to be met and a full
procurement process would place the funding or the project at risk.

If you are presenting a combined gateway 1 and gateway 2 report you will need to
consider whether the gateway 1 element is retrospective.

Where the gateway 1 decision is to be taken at the same time as the gateway 2
decision relating to that procurement, but the gateway 2 decision is not retrospective,
the decision maker may agree that this combined decision is not in fact retrospective
and does not need to be reported to the departmental contract review board or to the
audit and governance committee.

This will only be the case where the decision maker is aware of and has agreed to
the need to combine the procurement strategy with the contract award before taking
the decisions formally.

Reporting requirements for retrospective approvals

Please note that if approval for a procurement strategy is being sought

retrospectively, this needs to be made clear in the recommendation(s). Contract
Standing Order 4.7 requires that a report should be submitted to the relevant
departmental contract review board for information and if the decision is valued at
100,000 or more also to the audit and governance committee. The report should set
out the circumstances and manner in which the decision was taken, for the purpose
of obtaining guidance and to inform future decision making. Once the decision has
been taken, you will need to contact the head of financial governance who will work
with you on taking a report to the audit and governance committee.

Where both the gateway 1 and gateway 2 approvals relating to a procurement are
being sought retrospectively but have different decision makers, they may both be
taken by the higher decision maker (see the hierarchy set out in section 2 of the
Contract Standing Orders), after consulting with the other decision maker. In such
cases, they may be combined into one report. The reporting requirements to the
departmental contract review board and to the audit and governance committee as
described above will apply.

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