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Adopted VersionCBC: Working with Partners This paper
was originally adopted by the Management Committee of
the Central Buying Consortium at its meeting of 3rd
July 2001.It was subsequently amended on 23rd January
2002 (sections 4 and 6).This version seeks to provide
some guidance on the issue of “Detriment”.1.
Summary
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This document outlines the process whereby the
Central Buying Consortium (CBC) may consider allowing
access to the CBC by a potential partner organisation
which is not/will no longer be in the public sector.
It also covers the management of the relationship
with that partner, including the termination of
such access.
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A potential partner will need to satisfy CBC that
it can abide by agreed protocols which will have
addressed potentially contentious issues such as
trading conflicts and the application of CBC contracts
by the partner. Mutual trust is therefore vital.
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A Partner Panel is proposed to make recommendations
to the CBC Management Committee on each application
to allow access to CBC by a potential partner. The
Panel will also keep such arrangements under review
and will be able to recommend sanctions including
termination of the arrangement.
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Access can only be granted by unanimous agreement
of the Management Committee; sanctions need also
to be agreed by the Management Committee.
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Mediation in the event of a dispute is proposed.
2. Introduction
This document was prepared in May 2001 and is presented
for discussion in response to the trend in local government
towards working with private sector partners in order
to carry out functions hitherto undertaken by the local
authority. This often leads to the partner organisation
undertaking a procurement function on behalf of the
local authority. If the collaboration agreed between
the private sector partner and the local authority is
to extend also to CBC, there are issues for CBC to address
in order to establish a sound and effective working
relationship.
The CBC Constitution states, “Other local authorities
or outside bodies may be permitted, by the decision
of the Management Committee, to join the Consortium
as Full Members upon such other terms as the Management
Committee may decide.” This paper proposes terms
under which partnerships with the private sector may
be addressed, and sets up a mechanism for considering
other forms of partnership working, should they arise.
3. The Legal Context
In developing this paper the authors are aware of new
proposals by the DETR set out in a consultation paper
entitled “Working with Others to Achieve Best
Value”: a consultation paper on changes to the
legal framework to facilitate partnership working (dated
March 2001). “Working with Others” contains
proposals to facilitate both the creation of new and
innovative partnerships between the public and private
sectors, and the ability for both sectors to trade one
with another.
The provision of the new power to promote the economic,
environmental and social well being of an area in the
Local Government Act 2000 also encourages local authorities
to venture into new commercial areas in the interests
of the local community – although it does not
bestow additional powers for local authorities to trade.
“Working with Others” proposes substantial
change to the framework which governs local authorities’
power to trade, notably the repeal or redrafting of
the Local Authorities (Goods and Services) Act 1970,
which enables local authorities to supply certain named
bodies or organisations, but not including private sector
organisations. It is therefore expected that the legislative
context is about to change and this area must be kept
under review.
There are no proposals here to supply to private sector
organisations, only to buy with them in partnership.
The authors are not aware of legislation which prevents
joint cross sector procurement, provided that current
EC Procurement Directives are observed by each CBC member,
as required by the CBC Protocol. This document is based
on the premise that none of its recommendations is currently
prevented by law.
The process detailed in this document may lead to parties
being excluded from access to CBC contracts. Exclusion
from access to buying off CBC contracts does not affect
the eligibility of that organisation to bid to supply
any contract associated with CBC or its members and
to supply those requirements if successful. The creation
of a partner organisation is not intended or expected
to distort competition or to manipulate the market place.
4. Definitions
The following defined terms are shown in bold where
they first appear in the text.
Appropriate organisation:
An appropriate organisation is one which meets the
following criteria in order to be considered to have
access in part or whole to CBC contracts and processes.
An appropriate organisation shall:
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Carry out functions previously undertaken within
a CBC authority (hence appropriate organisations
may have been outsourced by a CBC Member);
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Through a contract with a CBC member, undertake
functions formerly undertaken by the CBC member
authority involving the procurement of goods, works
or services.
Operations which are part of CBC member authorities
and which are to be externalised may be considered in
advance in relation to being appropriate organisations
upon their transfer from the public sector.
There may be instances where an organisation may be
considered “appropriate” because it meets
these criteria; but another organisation in another
authority carrying out an identical function may not
be so considered. In such circumstances the Partner
Panel shall make a decision based on the Panel’s
own judgment of the benefit to CBC.
CBC member:
A full member of the Central Buying Consortium at the
time at which the appropriate organisation seeks access
to or continues to enjoy access to CBC contracts and/or
processes. Where the reference to a CBC member relates
to the origins of the appropriate organisation, this
may include predecessor organisations.
CBC’s mission:
“Our mission is to use collective strength, combined
expertise and co-ordinated purchasing to deliver best
value goods and services to the customers of our membership
at minimum cost to member authorities.” CBC Business
Plan 2000
CBC’s objectives:
“The purpose of the Consortium shall be to improve
the effectiveness, by co-ordination, of local authority
purchasing with the object of effecting savings in public
expenditure for the benefit of its members.” CBC
Constitution, 5th January 1995
Criteria for Access:
This means:
a) That the granting to an appropriate organisation
of access to CBC contracts shall bring benefit to the
members of CBC;
b) That, in order to gain acceptance as a partner organisation,
an appropriate organisation shall agree to adhere to
the CBC Constitution and Protocols, notably:
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Contract and operational procedures, and confidentiality
of information;
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Commitment to the effort required to be participate
in CBC activities;
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Adherence to the processes of CBC;
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CBC members and partner organisations shall not
work individually or together to the detriment of
another CBC member.
And shall further agree that:
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CBC contracts to which the partner organisation
may have access may only be used in executing specifically
identified contracts with CBC member authorities
and may not be used more widely without the agreement
of the CBC Management Committee; (deleted as being
impractical; but a partner must not work to the
detriment of a CBC member).
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Where the partner organisation has substantial
volumes of its own, there is an expectation that
these will be included in appropriate CBC contracts
except where there are overriding local reasons
to the contrary.
Detriment:
Section 6 states that “A partner organisation
shall have access to CBC contracts provided that there
is no detriment to other CBC members.”
This clause is likely to require interpretation.
A CBC member may perceive that they have suffered or
may suffer detriment as a result of a partner organisation
having access to CBC contracts. That member may, as
a result of their perception, raise a dispute under
the disputes procedure.
Those involved in considering the merits of the claim
will have the following guidance in mind:
i) That CBC exists to foster the interests of its local
authority members;
ii) That the concept and processes of the CBC should
be strengthened and not undermined;
iii) That extending access to contracts to private sector
organisations introduces complexities where a balance
of interest has to be struck;
iv) That CBC operates within the law and expects its
partners to do so, and that there is no intention to
distort competition;
v) That credible partnerships will only be formed with
organisations whose commercial objectives are compatible
with, rather than in conflict with, those of the CBC;
vi) That both public and private sector users of CBC
contracts will consider the commercial value of sharing
high quality value for money contracts as a driver for
continued collaboration and avoidance of conflict;
vii) That members and partners will seek to avoid areas
of conflict arising, and manage positively those which
do arise;
viii) A conflict which is other than at the margins
for which a partner is held primarily responsible would
tend to undermine the partner’s continued access
to CBC contracts, and could lead to the termination
of its relationship with CBC;
ix) Partner organisations can expect CBC members to
take a similar approach to partners. A conflict which
is other than at the margins for which a member is held
primarily responsible would be subject to action by
CBC to dissuade the member from its actions, and could
lead to measures which might include expulsion from
CBC;
x) That arrangements to “police” the issue
of detriment shall be commensurate with the nature and
impact of the conflict; shall be addressed responsively
and effectively; and shall seek to ensure that the underlying
concept of collaboration is upheld.
Partner organisation:
This refers to an appropriate organisation which has
been admitted to access to CBC contracts/processes in
part or whole.
Partner Panel:
The Partner Panel shall be established by the CBC Management
Committee in order to make recommendations concerning
the admittance of appropriate organisations as partner
organisations. The Partner Panel shall consist of appropriate
named individuals with experience of the workings of
CBC. Individual members of the Partner Panel shall not
be able to consider issues relating to their own authority
as Panel members.
The Partner Panel will keep the arrangements with partner
organisations under review and shall receive and consider
complaints made by CBC members about the working of
the arrangements. The Partner Panel will make appropriate
recommendations to the Management Committee.
Unanimous Support of the Management Committee:
Decisions requiring the unanimous support of the Management
Committee shall normally require the support of each
and every member of the Management Committee, but it
may also include such other processes as are in force
at the time, such as allowing deputies to vote, or seeking
votes within a prescribed time period from those who
are absent.
Where there is a vote which refers to the continued
access to CBC for an existing partner organisation,
and this has arisen as a result of a complaint by a
CBC member, then the vote of that CBC member shall not
be required provided the vote of all other members is
unanimous.
5. Access Process:
An appropriate organisation shall need to pass successfully
through an Access Process if they are to be admitted
(or, in the case of a former member operation, be allowed
to continue) to be a partner organisation which may
take part in the contracts/processes of the CBC in part
or whole.
An appropriate organisation which seeks to take part
in the contracts/processes of the CBC shall need to
be sponsored by the CBC member to which they are contracted.
Where the appropriate organisation is contracted to
a number of CBC members, it will need to be sponsored
by one such member.
The CBC member shall in the first instance be satisfied
that the appropriate organisation is likely to meet
CBC’s criteria for access to CBC contracts/processes.
The CBC member shall recognise that access by the appropriate
organisation to CBC is not guaranteed, and that no such
guarantee should be implied in any contract.
The CBC member shall submit a written application for
access to the CBC chairman at that time, who will refer
the application to the Partner Panel.
The Partner Panel shall consider the application in
a timely fashion, and shall consult with the applicant
CBC member, the wider CBC membership, and the appropriate
organisation, and such others as they consider appropriate.
The Partner Panel will consider whether the appropriate
organisation meets the appropriate criteria for access.
The Partner Panel shall also investigate whether potentially
contentious issues have been adequately addressed. The
Partner Panel shall make recommendations to the CBC
Management Committee, which will reach a decision as
to whether or not the appropriate organisation shall
have access to the contracts/processes of the CBC in
part or whole.
In the event that the Partner Panel makes a recommendation
to the CBC Management Committee that some form of access
to CBC contracts/processes be allowed, then any such
proposal shall be made in writing and agreed only with
the unanimous support of the Management Committee. An
appropriate organisation admitted to such access shall
be referred to as a partner organisation.
The obligations of partners should be formalised, i.e.
confirmed in writing before entry to CBC processes.
Failure by a former member operation to pass successfully
through such a process shall mean that access to CBC
shall be withheld or withdrawn as determined by the
Management Committee.
6. Management of Access to CBC Contracts/Processes
The responsibility for the management of the partner
organisation shall in the first instance lie with the
sponsoring CBC member.
A partner organisation shall have access only to those
activities of CBC for which they are providing a purchasing
service to CBC members. A partner organisation shall
have access to CBC contracts provided that there is
no detriment to other CBC members.
The partner organisation shall be able to undertake
responsible roles within the CBC process provided that
they adhere to the CBC protocols, but a partner organisation
shall not be eligible to take a seat with voting rights
on the CBC Management Committee.
Where contract volumes rely significantly upon partner
organisations, it is important that the appropriate
tender documentation should be clear about the nature
of such volumes and should not leave CBC exposed in
the event that the partner organisation loses its contract
with the CBC member, or loses its access to CBC contracts.
7. Disputes
In the event of a dispute arising between any CBC member
and the partner organisation, then the CBC member or
the partner organisation may refer the matter to the
CBC chairman, who may discuss the matter with the parties
concerned and seek a resolution. In the event that the
chairman’s authority is involved, then the vice-chairman
shall undertake this.
The Partner Panel may consider that the issue under
consideration brings the continued access to CBC contracts/processes
of the partner organisation into doubt. It may then
recommend to the Management Committee that it should
reconsider whether the partner organisation should continue
to enjoy access. The partner organisation shall only
continue to enjoy access with the unanimous support
of the Management Committee, excluding that CBC member
which originated the complaint. In the absence of this
degree of unanimity, then access to CBC will be withheld
or withdrawn as determined by the Management Committee.
There may be occasions when a Partner Organisation,
its parent or subsidiary companies or a consortium of
organisations of which it is a member, would wish to
tender for the supply of goods or services to one or
more CBC Member(s). The Partner Organisation has a responsibility
to disclose this to the CBC Member who has sponsored
access, giving full details of the proposed bid in terms
of its exact nature, timing and scope of the intended
work (other than proposed price and terms). Disclosure
should take place at the earliest stage and always prior
to a bid having been made. The CBC Member must promptly
inform the Partner Panel which will urgently consider
the position and may request that the Partnering Organisation
withdraw in full or in part from the work of the consortium
for the duration of the tender. The Partner Panel may
at its discretion allow the Partner Organisation to
continue to carry out the business of CBC but may require
it to withdraw from particular activities, or to absent
itself from particular agenda items during the course
of consortium meetings. The Partner Organisation must
comply with these requests or withdraw from the tender
process.
8. Developing similar arrangements in the future
There may be situations concerning partnerships which
depart from the framework envisaged in this document.
The Partner Panel will continue to monitor these developments
and will if necessary make recommendations to the Management
Committee to amend these proposals. The Management Committee
will consider such proposals and such an amendment will
require the unanimous support of the Management Committee.
Drafted by Steve Gilbey and Tony Hall, May 2001
Modifications incorporated from Management Committee
Members, June 2001
Agreed subject to one modification at the Management
Committee Meeting held on 3rd July 2001; absentees consulted
and unanimous agreement achieved on 13th August 2001.
Sections 4 and 6 subsequently modified as a result of
the Management Committee decision on 23rd January 2002
that attempting to limit a partner’s use of CBC
contracts was unworkable.
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