Ethics (Procurement Policy Section 3)

The Ethics of Purchasing

This section of the Procurement Policy addresses the ethical requirements of all Durham University staff when involved in purchasing. It is imperative that the integrity, impartiality and independence of the University is maintained by strict compliance with the procedures described herein.

In order to maintain integrity, impartiality and independence all members of staff involved in purchasing should ensure they comply with the following best commercial practice when involved in purchasing. This policy is in accordance with the Ethical Code of the Chartered Institute of Purchasing and Supply (CIPS) and is adopted by organisations both within and outside the public sector.

1. Fair Dealing

• All suppliers should be treated equally before a contract is awarded. There should be fair competition with no favouritism or bias towards any one supplier.
• Suppliers should never be deliberately misled.
• Suppliers must be treated with honesty and in an even handed manner.
• Negotiation must be conducted in a professional and responsible manner. Suppliers should not be pressurised or engaged in Dutch Auctions (see note below).

Note

A Dutch Auction is an unprofessional practice whereby the Buyer discloses Supplier A's price to Supplier B and the Supplier B's price to Supplier A and so on until the Buyer is satisfied with the price obtained.

2. Written Records

Budget Officers must ensure that records on all contracts and purchase orders awarded, with a value exceeding £5000, are retained for a period of seven years. Information recorded should include:-

• The suppliers invited to bid.
• Information disclosed in telephone conversations with bidders before the quotation return date.
• The suppliers shortlisted and the criteria for the shortlist.
• Details of negotiations.
• Details of supplier appraisal, e.g. which references were taken if any.
• Details of any supplier visits.
• Criteria for contract award.
• All purchasing decisions must be accounted for. For example, if the same supplier is constantly used the department or college must be able to demonstrate that they have regularly tested the market.
• Buyers should ensure that they follow the procedures in Section One of the Procurement Policy.

3. Confidentiality Of Information

The information provided by suppliers in tenders or quotations is' Commercial in Confidence' and should never be revealed to a third party without explicit permission.

4. Declaration Of Interest

Any personal interest or connection that the Buyer or Originator may have with a supplier should be declared to the Registrar of the University using the appropriate declaration form. Copies of the form and guidance notes are available from the Registrar’s Office.

In cases of doubt, the Registrar should be consulted on what to declare. In such circumstances, advice will be based on the principle that if the financial or other interest is likely to interfere or, if publicly known, might be perceived as being likely to interfere with the exercise of the Buyer or Originator’s independent judgement, it should be declared.

The declaration of personal interest also includes any interest that any colleague or third party may deem to impinge on the impartiality of the Buyer or Budget Officer.

5. Acceptance of Business Gifts

On no account should money offered by suppliers ever be accepted. From time to time suppliers will offer gifts to Buyers and other members of staff involved in purchasing. Gifts offered may include holidays/day trips, football tickets or presents such as items of clothing or bottles of alcohol. Gifts are particularly common at Christmas.

Gifts other than those of a promotional nature and of very small intrinsic value must not be accepted.

Should a supplier send or leave a gift for the Buyer or another member of staff without their acceptance, the gift should be returned to the supplier or raffled within the department at Christmas or another convenient time.

All offers of gifts, whether or not accepted, must be reported to the Budget Officer responsible and to the Procurement Service.

The Director of Procurement will maintain a register of gifts and hospitality received where the value is in excess of £30.  Members of staff in receipt of such gifts or hospitality must notify the Director of Procurement (or other designated officer) promptly by completing the Declaration of Gifts or Hospitality Form.

This register will be maintained and used to identify companies who persistently offer inappropriate gifts or hospitality so that this can be addressed.

6. Acceptance of Hospitality

Suppliers are enthusiastic to build relationships with Buyers and other members of staff involved in purchasing on an informal basis with a view to obtaining future business. To this end it is common commercial practice to offer lunches to Buyers, or offer to pay for them to stay in hotels.

It is accepted that informal contacts can sometimes benefit mutual understanding and efficient business conduct. It is the Buyer's responsibility to ensure that the scale and frequency of such hospitality should not exceed modest proportions. Any hospitality accepted should be reported to the Budget Officer and to the Procurement Service as identified in para. 5 above. The Buyer should ensure that any hospitality accepted from the supplier cannot be perceived by the supplier or any other third party as influencing the business decision.

7. Further Information

Further guidance on specific situations as and when they arise can be obtained from the Procurement Service.