Agenda item

(a)       That the Audit Committee confirms to Council that the proposed CPRs will give satisfactory assurance and controls in the provision of awarding contracts only;

(b)       That the Committee recommends Council adopts the proposed new rules;

(c)       That the Audit Committee receives an early report on the successful transition to the new Contract Procedure Rules and receives reports on the performance of contracts against the rules in practice; and

(d)       That the implementation date will remain as 1 November 2016 to enable a period of implementation prior to January at which an update report will be received.

The Chief Officer (Governance) presented the draft revised Contract Procedure Rules (CPRs) which had been updated to reflect various legislative changes and the move to an electronic procurement system.  The current CPRs had been adopted in 2013 following delays in the agreement of a national model and the proposed new set was consistent with those used at Denbighshire County Council with whom Flintshire shared the procurement service.  A number of improvements had been made to the revised CPRs including the introduction of a commissioning form and changes to authorisation thresholds which allowed an increased level of oversight for Members.  A programme of sessions for Members and officers was planned to raise awareness of the new rules, including more targeted user training.

The Committee was introduced to Mr. Tom Booty, the Programme Manager for Facilities, Assets & Housing at Denbighshire County Council.  He explained that the development of the revised CPRs had been informed by assessing procedures and issues raised by Internal Audit.  Feedback from Denbighshire, where the CPRs had been in use for several months, showed that the training programme and increased focus on procurement planning had been well received.

Councillor Ian Roberts asked whether any weight was given to the previous performance/conduct of contractors within the new rules.  Mr. Booty explained that the electronic system incorporated a performance review element for completion at the end of each contract which would help to inform future tendering exercises.  Councillor Roberts went on to question the current process in Flintshire and stressed the importance of safeguards to ensure that contractors with a poor record of service delivery were not given an opportunity to tender for further work.

The Chief Officer said that whilst contract award criteria was 60/40 for quality and cost, consideration should also be given to previous under-performance which had not been rectified.  The Chief Executive said that officers were expected to apply rigour and judgement when awarding contracts under the rule prevailing at that time.

Councillor Glyn Banks commented on the Council’s select list of contractors and was advised that this was no longer required under the new CPRs as contracts were awarded on an individual basis.

Councillor Roberts raised concerns about the continuing performance levels of a particular contractor and stressed the importance of safeguards within the CPRs to flag up this issue.  Councillor Alison Halford felt that the report gave no assurance about the issue raised by Councillor Roberts.  The Chief Officer referred to his earlier response and that given by Mr. Booty on collating performance data, asking that any concerns about specific contractors be raised with him outside the meeting.

In response to concerns raised by Councillor Arnold Woolley, Mr. Booty explained that the regulations did not permit a contractor to be excluded from tendering solely on the basis that they already undertook a significant proportion of work for the Council.  Where this had occurred in Denbighshire, the practice was for the Economic Development team to discuss diversification options with the supplier.  The Chief Officer added that a section on risk planning had been included in the CPRs which helped to give assurance on safeguards in respect of engaging start-up businesses.  He went on to clarify that the CPRs did not apply to agency contracts as a robust recruitment process was already in place.

Mr. Paul Williams felt that the CPRs were too complex and difficult to follow, suggesting that the inclusion of a flowchart would help to clarify the process.  He sought assurance on safeguards to ensure workforce compliance with the rules, as this had been a previous issue, and asked whether aggregate authorisation limits had been set for service managers.  In response to further points raised, it was reported that audits on the new CPRs were scheduled in both Denbighshire and Flintshire and that Internal Audit officers from both councils had been involved in the reviewing process of developing the CPRs.  Mr. Williams felt unable to support the recommendations at this stage and suggested that implementation be delayed until the audit findings were known to give assurance on the safeguards.

The Chief Executive reiterated the need to refresh and modernise the current CPRs which were already in use, and that appropriate training and support would be provided.  He said that a report on training and operations could be provided to the Committee to give assurance about how the new rules were working in practice following the transition.

The Chief Officer spoke about the role of the Procurement Team in having an oversight of the process and reporting directly to him.  Discussions on the timing of the training programme had resulted in agreement on 1 November 2016 as the current rules were outdated.  Explanation was also given on plans to adopt a category management approach similar to Denbighshire.

Mr. Booty said that guidance used in Denbighshire for both suppliers and officers could be shared with the Committee.  Feedback had shown the document was easier to read and highlighted the benefits of moving to electronic procurement.  Flowcharts used in Denbighshire could also be shared whilst noting that there were complexities in the process.

Councillor Halford welcomed the learning from Denbighshire’s experience and understood the need to refresh the rules, but felt that not enough consideration was being given to the quality of contractors’ work.  Councillor Roberts agreed and said that the issue extended beyond one contractor, for example on a number of contracts for the Flint redevelopment.  He raised concerns about reputational risk to the Council and felt that the quality of workmanship should be strongly represented in the CPRs to reinforce the message to contractors.

Councillor Woolley agreed that the rules should reflect the responsibilities of contractors to rectify any faults identified.  Mr. Booty said that the CPRs set out clear accountability on the management of contractors’ performance and the expectation for contract managers to address any issues of underperformance.

The Chief Executive pointed out that the new CPRs would not in themselves remove the concerns raised.  He proposed a report on the transition to the new rules and the success of training and supervision of those making procurement decisions.  He said that the new rules should be implemented as they raised expectations on managing contracts and achieving community benefits.

The Chief Officer drew attention to the section on contract performance within the CPRs which gave clear guidance on managing contracts and said that specific focus could be given to this during the training.

On contractor performance, Councillor Halford asked about opportunities for resident feedback, adding that some may not feel comfortable reporting issues.  The Chief Executive referred to the robust system for housing tenants where both positive and less positive feedback was received, which helped to identify trends.

Councillor Halford referred to section 1.1.9 of the CPRs on the role of Council Members on accountability for the Council’s actions and said that a better system was needed with provision to feedback satisfaction levels to contractors.  Councillor Roberts felt that individual officer capacity was an issue.

Councillor Woolley suggested an additional resolution that the Committee confirms to Council that the proposed CPRs would give satisfactory assurance and controls in the provision of awarding contracts only.  The Chief Executive again made his suggestion for a report on the transition to the new rules and performance of contracts against the rules in practice.  The Committee agreed that the implementation date should remain as 1 November 2016 to enable a report to be submitted in January detailing progress on implementation and training.  On being put to the vote, this was carried.

As suggested by Councillor Halford, an update on CPRs would be scheduled twice yearly on the Committee’s Forward Work Programme.

RESOLVED:

(a)       That the Audit Committee confirms to Council that the proposed CPRs will give satisfactory assurance and controls in the provision of awarding contracts only;

(b)       That the Committee recommends Council adopts the proposed new rules;

(c)       That the Audit Committee receives an early report on the successful transition to the new Contract Procedure Rules and receives reports on the performance of contracts against the rules in practice; and

(d)       That the implementation date will remain as 1 November 2016 to enable a period of implementation prior to January at which an update report will be received.