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Commercial policy

This policy provides the rules and processes for all procurement activity within our organisation.

Commercial activity policy

Last updated: October 2021


Why do we need this policy?

We are an arm’s length body (Non-Departmental Public Body) of the Department for Education (“DfE”), funded initially by an allocation of budget from the department. Our procurement activity must comply with UK legal and regulatory requirements that implement EU procurement directives.

This policy exists for a number of discrete but often interconnected purposes. These objectives are expanded below and reflected in the detailed procedures and guidance.

The policy commits us as an organisation, and every individual involved in purchasing and supply management processes within our organisation, to use their best endeavours to ensure that our purchasing and contracting activities are:

  • compliant with UK legal and regulatory requirements
  • transparent, accountable and auditable
  • ethically, environmentally and socially responsible
  • compliant with good commercial practice
  • contributing to the efficient and effective performance of Social Work England
  • providing value for money
  • capable of identifying, minimising and managing risks that may threaten the supply chain of Social Work England
  • aligned with current cabinet office guidance and other government plans where appropriate
  • open to continuous improvement and development.

In addition, it is our objective that, as far as is within our power, we will only contract with suppliers, providers and associates who subscribe to and operate on similar principles.


Who needs to follow this policy and why?

The policy applies to all our employees and associates in any situation where they are involved in a procurement process, whether as requisitions or specifiers, purchasers or negotiators, or those who award contracts, manage contracts, validate or authorise payment.

‘Procurement’ includes all procurement related activities including leasing and hiring and may, where appropriate, include other activities accompanying the life cycle of goods or service contracts and the end-of-life disposal of goods which have been procured (whether or not they remain in our ownership).

This policy also covers memorandum of understanding (MOU) and grant activity.


What’s our policy and how will we implement it?

This policy sets out the aims of Social Work England’s procurement and contract activities and how they will be delivered. It combines principles relating to policy, techniques, process and people.

This policy is a public document - it may be quoted in annual reports, operating and financial reviews, stakeholder information, and is freely available to potential suppliers. It confirms to our employees, to existing and potential suppliers, to customers, to government and other regulators and to stakeholders in the wider community, the principles on which we procure and contract.

The policy is supported by procedures and guidance which are published on the Social Work England internal portal. All procurement activity should be carried out using defined procurement processes which cover the whole ‘purchase to pay’ cycle and ensure value for money.

The most efficient, appropriate approach for the procurement should be used to reduce costs. Procurement activity should be underpinned by an understanding of the costs, benefits and risks of proceeding through a procurement process. A procurement strategy is usually the means of demonstrating this.

All contracts entered into by us (Social Work England) must be approved by the commercial team and will be based on our standard terms and conditions unless it is necessary to agree otherwise. The commercial team must authorise any departure from our standard terms and conditions before the departure is made.

Where a potential bidder or supplier does not wish to accept our terms and conditions, the commercial team will manage this process. We will ensure there is a business case justification for all expenditure. The business case will set out the strategic, economic, financial, commercial and management case to ensure:

  • justification for expenditure in terms of budget and value for money
  • compliance in terms of procurement route
  • clear audit trail for authorisation

Rules apply to ‘aggregated expenditure’ i.e. the total expenditure over the life of the contract aggregated with any similar expenditure elsewhere in our organisation that has not been advertised via an Official Journal of the EU (OJEU) advert or through a compliant framework. There must be no artificial sub-division of ‘aggregated expenditure’ to avoid EU regulations.

Where similar goods or services are repeatedly required, framework agreements and pre-arranged contracts must be used where these are in place. The commercial team will assess Social Work England’s demand, and identify suitable government frameworks or possibly look to establish new frameworks to improve efficiency.

We will make maximum use of pre-negotiated contracts and framework agreements. The benefits of framework agreements are that they:

  • leverage Social Work England total spend
  • optimise Value for Money (VfM)
  • help ensure quality of materials and reliability of supply
  • reduce the associated transaction costs
  • enable faster award of a contract.

Framework agreements should be for a fixed period of no more than 4 years. The duration will be dependent upon factors such as development costs, the stability of the market, and the pace of technology change.

Framework agreements should be used in accordance with the specified call off procedures. Commercial can provide further information and advice on how these should be used. We will require different levels of competition based on the value of the contract being placed, and on the type of goods and services to be supplied.

When requirements are being defined, consideration must be given to potential ongoing goods and services that may be required beyond the immediate requirement. This will ensure that the procurement process is effective in delivering a contract that meets the whole-life contract spend.

If the value, duration or scope of a contract appears likely to increase, commercial must be consulted before any commitment is made to the contractor, and Commercial will provide appropriate advice. It is essential to consider the contract exit strategy, as early as possible to ensure continuity of service and plan for contract expiry.

Contingency planning to manage impact of supplier failure should be considered and commercial may be able to provide management information on the risk status of suppliers. Please contact commercial if you have a query.

There are a range of government initiatives that are piloted or promoted through public procurement. We take account of these wherever possible together with the relevant legal requirements, our business needs and VfM. Further guidance is available through the commercial team.

We respect the confidentiality of technical and commercial information provided by bidders. All information provided to and used by us is subject to appropriate data legislation and regulations including:

  • i) the Freedom of Information Act 2000 (FOIA)
  • ii) the General Data Protection Regulations(GDPR)
  • iii) the Data Protection Act (DPA) 2018.

All suppliers and potential suppliers are expected to reciprocate in respect of commercially sensitive information given to them. To protect against disclosure and unauthorised use of confidential information suppliers may be asked to sign our non-disclosure agreement, where appropriate. Please refer to the data handling guidance available for procurement and contract management activity.

Teams are ultimately accountable for the actions in respect of contracts for which they have responsibility, and contract managers must:

  • i) identify existing contracts which involve processing of Personal Data and
  • ii) undertake actions set out in the guidance.

The method of supplier selection must be fully documented to allow full and open review of the decision-making process at any time. This will include the selection and award criteria (e.g. financial status, price, expertise, uniqueness, etc) weighted according to our procurement needs. This record will be logged and kept on file and be made available to both internal auditors and Commercial upon request.

Under the Freedom of Information Act 2000 (FOIA) we are required to maintain sufficiently robust and effective information handling procedures. In practice, this means that all our employees have a responsibility to maintain accurately named and numbered files, using up-to-date, clear and systematic cross-referencing.

All requests relating to disclosure of information under the FOIA must be managed in accordance with the relevant handling procedures. It should be noted that to comply with legal requirements, contracts, purchase orders and all associated documents will be retained in accordance with our document retention policy.

In addition, we are required to comply with the government’s transparency agency. It is the responsibility of all employees to ensure that they adhere to this policy. Managers are accountable for applying this policy within their areas of responsibility.

Managers must be able to demonstrate compliance for all procurement activity they have delegated to their teams and for any procurement activity their suppliers are contracted for on their behalf. Procurements must be delivered in line with the departmental spending controls process.

If the value, duration or scope of a contract appears likely to increase, commercial must be consulted before any commitment is made to the contractor, and Commercial will provide appropriate advice. An extension to contract must be agreed and signed off to ensure there is no risk of non-compliance.

Only in very exceptional circumstances should a significant requirement be sourced without competition. It is the responsibility of all staff to remove the need for any single tendering through effective planning and decision making that improves the competitiveness of our markets.

For all single tenders, a business case must be completed and fully approved. No commitment can be made to suppliers before such approval is granted and no follow-on single tender should be made at the end of the contract period. Any extension to a single tender contract is effectively a new single tender and should be accompanied by a new business case.

Effective commercial decision making is essential for Social Work England to demonstrate legal and regulatory compliance and best practice. The market circumstances, the degree of risk, technical complexity and the value associated with a procurement will determine the extent and timing of any commercial involvement.

The Commercial team resource will support a nominated Social Work England lead to successfully conclude a procurement. It is particularly important that Social Work England maximises the benefits of effective procurement in the awarding and subsequent managing of contracts. It is necessary to promptly seek any input from commercial:

  • in annual planning and budgeting
  • in the event of any potential and actual disputes with suppliers (pre or post contract)
  • in considering the legal environment and agreeing the nature of the competition
  • when developing a business case, specification or statement of requirements
  • from the start of any project.

Early engagement with commercial will ensure timely commercial support can be provided to deliver a successful procurement. If this policy isn’t followed, the most appropriate course of action will be agreed between the policy owner and the HR manager, dependent on the circumstances.


Roles and responsibilities

4.1 Commercial team

The commercial team provide a specialist service. They are responsible for setting the procurement rules for expenditure, the development of our organisation’s procurement policy and strategy, providing advice and guidance on the procurement of all goods and services.

The commercial team work closely with the finance team to ensure commercial risks are managed, the role of the accounting officer is assured, and probity is in place for all commercial transactions. Commercial team fulfil the following functions:

  • publish guidance and templates that will enable Social Work England to meet the objectives of the policy
  • agree a framework of cabinet office delegated limits
  • ensure business case sign off within expenditure limits
  • lead all procurement activity on behalf of Social Work England
  • manage commercial intelligence, including information on supplier spend, contract performance and related management information
  • support teams in pro-active engagement with new and evolving supply markets, and exploration of market-making opportunities
  • ensure active supplier management to manage suppliers in a way which is appropriate to their strategic importance and value to Social Work England
  • provide commercial support and guidance to legal, strategy, policy and engagement, registration and quality assurance, fitness to practise and corporate services teams.

On end to end commercial activity:

  • provide a centre of excellence and source of information about procurement and commercial issues
  • manage purchase order activity to ensure compliance
  • hold and plan a pipeline of activity for all goods and services expenditure and, hold a copy of business cases, authorisations, and contracts for audit purposes.


Related policies, procedures and information sources

Anti-fraud policy

Business case checklist

Business case guidance

Evaluation code of conduct

Process for becoming a supplier

Specification guidance

Business case template


Data protection, equality and diversity

A data protection impact assessment (DPIA) and equality impact assessment (EIA) have been completed for this policy.


Queries?

If you have a query about this policy, please contact Leanne Clarke, head of finance.


Definitions

8.1 Aggregate

Where there is a requirement for goods or services of the same type which have similar characteristics, the value of those contracts should be added together to determine whether the EU thresholds have been reached.

8.2 Commercial

Part of the People and Business Support Directorate. Provides instruction and support to Social Work England for pre procurement, procurement, post procurement, contract management, and contract exit activity.

8.3 Government procurement agreement (GPA)

A treaty administered by a committee on Government procurement, which includes World Trade Organisation members party to the GPA. Its purpose is to open up as much of Government business as possible to international competition. It is designed to make laws, regulations, procedures and practices regarding Government procurement more transparent and to ensure they do not protect domestic products or suppliers or discriminate against foreign products or suppliers.

8.4 Public Contracts Regulation 2015

Public Contracts Regulation 2015, the standards and rules that apply to all expenditure for Government and Arm’s Length Bodies.

8.5 Sustainability

Ensuring a purchase maximises environmental, social and economic benefits and minimises waste to secure value for money delivery over time.

8.6 Value for Money (VfM)

The process under which Social Work England’s procurement, projects and processes are evaluated and assessed to provide confidence about suitability, effectiveness, quality, value and avoidance of error and other waste, judged for the public sector as a whole.

8.7 Whole life costing

An evaluation of all costs associated with a purchase, which includes initial purchase price (such as legal and procurement costs, purchase of licenses), running costs (such as salaries, accommodation, cleaning, quality assurance), maintenance, disposal, life-span of goods, reusability, recyclability and other sustainable considerations.


Version

Last reviewed: September 2020

Policy owner: Richard Simpson, Head of Finance and Commercial

Policy reference: POL_COM_001

Version: 1.2

If you require a PDF version of this policy, please contact us.

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