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Not every deal a council or a hospital
signs has to go through a massive tendering
process. Most of them don’t now – tendering
is a time-consuming and expensive process so
it really only tends to be used on really
large contracts.
What this means is that the way the public
sector acquires products and services splits
down into two distinct types of method –
‘buying’ and ‘purchasing’. Although to
everyone else they mean the same thing, in
the public sector the difference is massive
and very important. |
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Buying decisions
can be carried out by almost
anyone in a council, NHS trust,
government department, etc. This
is especially true for products
and services which are not
purchased as part of an annual
contract.
Think about this scenario – in a
council, a junior officer may
see an advert which peaks their
interest and they want to be
able to have this product or
service. They suggest to their
team leader that the product is
worth looking at.
If it’s of sufficient interest,
the team leader can put in a
"requisition" to his manager. If
the manager agrees, an order is
"raised". Once raised, it goes
to the departmental or central
purchasing people who will then
raise a purchase order to you.
The fact that a supplier is not
on an approved list does not
stop you from being able to sell
to a public sector body. Your
products are cheaper or
different from the products on
the approved list, there may be
an over-riding reason for a
purchase to be made.
‘Buying’ is particularly
relevant for one-off, function
specific or specialist purchases
and more often than not tend to
be £20,000 in value or less.
Examples of products and
services that public sector
bodies tend to buy are if...
• You trade in lower value
products (particularly costing
£20,000 or less)
• You offer
time-/compliance-sensitive
services
• You offer something truly
unique which is unlikely,
because of scarcity, rarity or
the fact it is new to the
•
market, to appear in a tender
document any time soon
• You run events and are looking
for exhibitors or visitors
• You sell publications relevant
to the public sector
• You run training courses |
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Purchasing is
more the way of getting goods
and services into a public
sector body that you might
expect. But it’ll surprise you
just how many misconceptions
there are about that too.
Purchasing is, by its nature,
formal and bureaucratic. It
involves a process and in this
process there are rules and
procedures. The rules and
procedures are laid down by the
body that’s getting the goods or
services in.
These rules are called “Standing
Orders”. Standing Orders
stipulate requirements for
companies to be on an approved
list of suppliers before orders
can be placed with them. In
addition to that, they define
the processes and approvals need
to allow purchase orders to be
made.
Standing Orders also work within
the bodies themselves – they lay
down the role of central
purchasing in the authority and
where central purchasing is not
required for certain things, the
autonomy they give to individual
departments to make purchases
and the people who work within
them. |
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Central Purchasing departments maintain the
list of approved suppliers. They also
undertake purchasing on behalf of individual
departments.
When approaching a local authority for
example, please check out the purchasing
procedure each one uses – you’ll find lots
of things in common but quite a few subtle
differences too. It may be necessary to get
on an approved list before approaching
potential buyers.
Not all authorities have central purchasing
departments. Departmental Purchasing
processes may be integrated with central
purchasing - in which case departmental
officers undertake the first steps in the
purchasing process before handing over to
the central purchasing department.
Alternatively, departments may have their
own purchasing sections working
independently of central purchasing; for
example, highways departments may purchase
their own road maintenance materials,
perhaps on an annual basis.
The purchasing of Computing and IT supplies
may be controlled centrally, by the central
IT department operating their own list of
approved suppliers and software, which other
departments have to abide by. Standard
off-the-shelf items (e.g. personal
computers) may be purchased on annual
contracts.
Annual Contracts are usually administered by
the central purchasing departments. They
involve the purchase of standard goods and
services, which are required throughout the
year; examples include fuel, paper, building
materials and office supplies. |
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