Disposals (Procurement Policy Section 7)
Disposal of Assets and Surplus Supplies
This section of the Procurement Policy provides guidance on the disposal of assets and surplus supplies. The disposal of land and buildings is dealt with by the Estates & Buildings Department.
The disposal of assets and surplus supplies should be undertaken in ways that demonstrate the University has achieved value for money, recorded an adequate audit trail and maintained the highest ethical standards during such disposals.
Departments should keep their holdings of assets and consumable stores under review (plant, machinery, laboratory and office equipment, etc.). Subject to any necessary authorisation, surpluses should be sold as quickly as possible. The Treasurer's authorisation must be obtained to dispose of all assets.
In disposing of assets, departments should ensure that they get the best possible price consistent with other value for money considerations e.g. the cost of time and effort required to increase proceeds from the sale only marginally.
Method of Disposal
Disposal should be arranged by a member of staff delegated by the Budget Officer responsible for the assets and/or supplies.
Disposal may be by means of:-
Materials with a scrap or resale value should be sold. The method of selling is dependent on the assets and/or supplies in question and their estimated current value. For certain items e.g. valuable plant or vehicles, sale by auction may be the best method of disposal in which case the auctioneers themselves should be appointed by means of competition. As the University has so many different types of assets and supplies which it might sell second hand, the processes for obtaining a purchaser cannot be prescriptive.
For example, if the assets are of a significant value i.e. more than £10,000, and are items which might be of interest to a number of buyers, it would be appropriate to place an advert in the local newspaper inviting interested parties to view the items at a certain date and time and then propose a written offer to the person responsible for the sale.
Alternatively, if the assets are of a significant value, i.e. more than £10,000, but only of interest to a limited number of buyers due to their specialist nature, it would be appropriate to approach potentially interested parties by letter or an invitation to tender, both of which should incorporate the conditions of sale which would apply to any eventual sale.
If the items are of little value, i.e. £200 or less, and of general interest, it would be appropriate to advertise the goods internally in the University and possibly in the local paper depending on the cost of placing the advert.
Whatever the method of selling employed it must be transparent, fair and designed to obtain the highest price.
It should be made clear to prospective buyers:-
- that it is in their interest to inspect the goods on offer before they submit their bid;
- how their offer should be priced (e.g. prices per lot, per kilo, etc.);
- whether the price offered should be exclusive or inclusive of VAT;
- that the seller reserves the right to reject all or part of any offer that might be made; that the goods are being sold under the conditions on the back of the form entitled "Sold Note".
‘Sold Note’ documentation can be downloaded from https://www.dur.ac.uk/procurement/local/staff/forms/
All sales should be properly documented using one of the two forms entitled "Sold Note". No sale should be entered into without a clear understanding between the buyer and the seller as to the price, payment terms and collection arrangements. Terms and conditions of sale are printed on the back of the forms entitled "Sold Note" (see section 5 below).
VAT should be charged according to the law i.e. at the normal rate on all sales unless in exceptional circumstances e.g. the goods are being sold to an educational establishment for research purposes.
Equipment must not be sold which is known to be unsafe unless sold as scrap or for reconditioning and the buyers must be made aware of the condition.
If goods have very little or no resale value, the Budget Officer, having obtained the Treasurer's approval, may decide to offer them as a gift. This process must also be fair and transparent and the form entitled 'Gifts of Second Hand Goods and Materials by the University of Durham' should be employed.
It is usually desirable to scrap or destroy surplus items which are, or which have contained, or which have been used with toxic, inflammable, or other hazardous substances or materials.
With destroying or dumping, great care must be taken to ensure compliance with all relevant government health and safety laws and regulations. In most cases a reputable contractor would have to be employed to dispose of the goods on behalf of the University.
Further advice on disposal of hazardous waste can be obtained from the Estates & Buildings Department.
A full audit trail of the disposal of assets and surplus goods must be retained in the department. This includes records of decisions and accounting transactions, a copy of the bid/tender results, a copy of the form entitled "Sold Note" employed and appropriate amendments to the Asset Register.
Sales must be fully documented with regard to:-
- the manner used for seeking bids and the population covered;
- the arrangements for receipt and scrutiny of the bids;
- the price offered by the highest bidder;
- the accounting arrangements for crediting the full proceeds to the University.
When goods are sold within the University it is equally important to use one of the two appropriate forms entitled "Sold Note" and to apply the conditions of sale on the back of these forms.
The University has introduced standard conditions of contract for:-
- the Sale of Second-Hand Goods and Materials to Consumers;
- the Sale of Second-Hand Goods and Materials to Non Consumers;
- gifts of Second-Hand Goods and Materials.
Documentation can be downloaded from the Procurement Service website at: https://www.dur.ac.uk/procurement/local/staff/forms/
The purpose of these conditions are to set out the terms that apply to a transaction and to limit the University's liability, particularly in respect of the disposal of electrical equipment. It is important that they are utilised and that these guidance notes are followed.
Liability for personal injury or death arising out of the University's negligence cannot be avoided.
To avoid liability under the Consumer Protection Act 1987, the University needs to retain records of the suppliers of all the equipment that it purchases, even after it has passed the equipment to another party. When selling or giving equipment, it is recommended that the name of the original supplier is provided to the recipient at the time of sale/gift.
To ensure the conditions are incorporated into the contract, the recipient of the equipment should be given the opportunity to read them prior to conclusion of the contract.
Sale of Second-Hand Goods and Materials to Consumers
A person is deemed to be a consumer if they are purchasing the equipment for personal use and not in the course of business.
The University is only able to limit its liability to consumers to a certain extent and hence it has been necessary to produce conditions that reflect this position.
The Sale of Second-Hand Goods and Materials to Non Consumers
Further liabilities can be excluded if the items are sold to non-consumers and additionally if they are sold for reconditioning or as scrap.
Gifts of Second-Hand Goods and Materials
Completion of this form will ensure that liability under the Sale of Goods Act 1979 (as amended by the Sale and Supply of Goods Act 1994) will not arise. It is relevant irrespective of whether the gift is to a consumer or non-consumer.
Further information or advice on the use of the standard conditions of contract is available from the Procurement Service.