Rules of procurement

In its capacity as local authority for the 'Square Mile', there are regulations at a European, national and local level which the City of London has to follow when procuring goods, services and works and when establishing approved tender lists.

European procurement legislation / UK legislation / Local rules

European procurement legislation

All public sector contracts no matter what their value within the European Union are covered by a treaty which incorporates the free movement of goods and services and which prevents discrimination against firms on the grounds of nationality. The principles of the treaty are backed up by a series of EC Procurement Directives.

The City of London, in its role as local authority is subject to EU Directives governing Tender procedures. Under the EU regulations there are three types of tender procedure available to buyers

• The open procedure: This is available in all circumstances and involves a single stage approach where all candidates may respond to the Official Journal of the European Union (OJEU) advertisement and all offers received must be considered.
• The restricted procedure: This is available in all circumstances and involves a two stage approach where candidates who respond to the OJEU advertisement will be considered to have expressed an interest and, from these, the buyer will then shortlist a number of candidates to submit offers.
• The negotiated procedure: This is only available in a very limited number of circumstances and is subject to strict conditions.

Due to the wide and costly process involved in the open procedure and the limitations that surround the negotiated procedure, the most common procedure used is the restricted.

Where the restricted procedure is used, the buyer must allow a minimum of 37 days from the date the OJEU notice was despatched to the closing date for receipt of expressions of interest. Once short listing has taken place, a minimum of 40 days must be allowed for offers to be returned (although this may be shortened to 26 days if a Prior Information Notice [PIN] has been published to the correct requirements).

If procurement activity has been derived from unforeseeable and urgent circumstances then the timescale above may be classified as an accelerated restricted procedure.

Further information about the EC Procurement Directives can be viewed at the SIMAP website. 

UK legislation

Whilst there is no prescription on local authorities to tender out specific services, the City of London has a duty under Best Value legislation (introduced in April 2000) as laid down by Part 1 of the Local Government Act 1999 to fundamentally review its services and make arrangements to ensure continuous improvement having regard to economy, efficiency and effectiveness. Performance indicators and targets for improvement are set and published in an annual Best Value Performance Plan. The City of London recognises that effective procurement is at the heart of Best Value and that the Best Value review process will help deliver it’s commitment to provide the best possible services for the people of the 'Square Mile'.

Further information about Best Value is available on the Department of Communities and Local Government website. The City of London must also have regard to Part ll of the Local Government Act 1988 which prohibits “non commercial considerations” being taken into account when awarding contracts.

Local rules

Procurement activities must also comply with the City of London’s Standing Orders and financial regulations. These are the City of London’s own internal rules that govern its operations. An extract from standing orders detailing the procurement procedures to be followed for sub-EU tenders is provided below:

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