Suppliers guide for selling to HM Revenue & Customs (HMRC)

Contents

The purpose of this guide is to advise potential suppliers on how they can sell their products and services to HMRC. It will tell you something about our business, the types of goods and services we buy and how we buy them, our attitude towards buying from Small and Medium sized Enterprises (SMEs) and our prompt payment policy.

How purchasing is organised in HMRC

The vast majority of contracts of significant value or complexity are let by the Commercial Directorate. The Commercial Directorate is responsible for the provision of policy and best practice advice, support for specific procurement projects, as well as much of the procurement and contract management of goods and services in the Department. It identifies and places contracts and framework agreements for most of the centrally managed contracted services and supplies, including

  • Print
  • Stationery and office consumables
  • Office furniture and equipment
  • Consultancy
  • Hotel and conference accommodation
  • Travel and transport
  • Vehicle hire
  • Specialist goods and services
  • Professional services

How do we select suppliers?

Large value contracts for the Department are let by competitive tender, normally via the Official Journal of the European Union (OJEU). Those companies who qualify after the initial selection process will be invited to tender. The Department does not hold an approved supplier list, but with low value orders for goods and services, which are not available through existing contracts and framework agreements the following will be used to identify potential sources of supply:

  • Suppliers' catalogues
  • Trade information
  • Yellow Pages
  • National, local and trade press
  • Existing suppliers

The following thresholds will determine the procurement approach:

  • Up to £15,000, five oral quotes
  • £15,001 - £50,000, five written quotes
  • £50,001 - £80,000, mini-tender
  • Above £80,000, full competitive tender exercise in accordance with EU directives

The EU threshold, above which a full OJEU exercise should be carried out, is currently higher that £80,000 but this internal threshold provides a safety net and encourages good practice.

Advertisements and Invitations to Tender

The Department normally advertises its purchasing requirements in trade journals, specialist publications etc., and also in Government Opportunities and Contrax Weekly , published by BiPSolutions Ltd.

For larger requirements, for goods and services or works contracts subject to the EU rules on procurement, an advertisement will be placed in the OJEU. Larger contracts sometimes cover a requirement for HMRC as a whole & may also encompass the needs of other Departments or Agencies. These larger contracts are normally handled by one of the procurement units on behalf of all the participating Departments.

Advertisements and tender documents will always give a contact point from which to obtain further information. When issuing an Invitation to Tender we will be as explicit as possible in specifying our needs eg quality, technical capability/specification delivery and timescales and where applicable we also include technical and commercial questionnaires. All invitations will also include the HMRC Terms and Conditions of contract.

All procurements are conducted in a fair and open manner. Records are made at all stages in order that the procedure is fully auditable.

HMRC is in the process of adopting an e-sourcing tool, and much of its procurement activity will be carried out in this way (e-Sourcing)

Evaluation

We use a formal evaluation process to identify the supplier(s) who will provide the best overall value for money for the particular purchase, which is not necessarily the lowest price. The financial assessment of a tenderer will normally include the state of their tax affairs. Our tender evaluation is strictly controlled and conducted objectively and impartially.

During this process we may ask short-listed bidders to provide samples and/or demonstrate their products or services. Occasionally we also ask to visit all short-listed suppliers' premises for a tour of the facility. Presentations may be held on either the suppliers' or HMRC premises. In certain circumstances, 'reference site' visits may be made to the premises of other existing customers. The scoring may be amended at this point, if appropriate, and a record made of the reasons.

Award

When we have completed the evaluation of Invitations to Tender and reached our decision we will inform the successful and unsuccessful bidders in writing without delay.

It is our policy to always offer a debriefing with unsuccessful bidders and provide feedback on how they might improve their future competitive performance, as well as welcoming any comments on our performance & procedures.

As a result of a case in the European Court of Justice (ECJ), known as the 'Alcatel' case, the ECJ ruled that contract award decisions must be open to review before contract conclusion. This enables the award decision to be set aside by a court where an aggrieved supplier claims that the EU Regulations have been breached. For all procurements subject to the Regulations there is a mandatory 10 day 'standstill' period between the award decision and notification and the actual conclusion of the contract.

Enterprise Resource Planning (ERP) system

HMRC is committed to using electronic tools in support of its procurement activity and has developed an Enterprise Resource Planning programme for the purpose of trading electronically with suppliers. HMRC operates a purchase order mandatory policy, whereby official purchase orders will be issued by the ERP system in respect of all purchases it makes. This ensures that every invoice received can be matched to a purchase order and to the corresponding goods or services. Suppliers will need to have the capacity to accept purchase orders from the ERP system via email on a PDF attachment.

Prompt payment policy

The Confederation of British Industry (CBI) has issued a prompt payment code, which is widely recognised in the commercial world. We have adopted the principles of that code, which are followed by our purchasing and accounting staff.

We are committed to pay suppliers in accordance with the terms of their contract with us which is usually 30 days from receipt of a valid invoice. In order to meet our contractual obligation, it is important that your invoice provides the details required for us to match it to the original order/contract. In particular, it is essential that you provide all information requested on the purchase order or as specified in the contract. If any of this information is missing, it may delay payment.

Where the supplier lets a sub-contract in connection with an HMRC contract then it must include similar prompt payment terms to the above in respect of payments to the sub-contractor.

Approved supplier list

HMRC does not maintain an approved supplier list.

Small and Medium sized Enterprises (SMEs)

There is increasing opportunity for small and medium sized enterprises to do business with Government departments. We try to ensure that companies are invited to tender for work, which is compatible with their capacity and capabilities, in line with Government policy to encourage small firms. Where appropriate, requirements are divided into smaller lots to encourage participation by SMEs

Useful Links:

Federation of Small Businesses – the website gives small businesses information on dealing with Government, research findings and information on any new initiatives.

SIMAP - the website provides background information on procurement in the EU

Small Supplier, Better Value – the report outlines the benefits of dealing with small firms, some of the challenges they face, and what public sector procurement staff can do to help.

Supply2.gov.uk

Environmental policy

We are fully committed to playing our part in the preservation of natural resources and in preventing environmental pollution. Our policy is to carry out our business so that we take full account of the needs of the environment, and includes action to reduce energy and water consumption, ensure paper is used economically and that recycled paper is used wherever it is practical and economic to do so. We also aim to reduce the use of ozone depleting substances.

Our purchasing policy pays proper regard to environmental issues whilst still securing best value for money. Details of any environmental requirements that suppliers need to be aware of will always be included in our Invitation to Tender documents.

Race equality

The Race Relations Act 1976, as amended by the Race Relations (Amendment) Act 2000 (the RRA) gives HMRC a statutory duty to promote race equality. To this end, the RRA requires HMRC to have due regard to the need to:

  • eliminate unlawful racial discrimination
  • promote equality of opportunity
  • promote good relations between people from different racial groups

In order to fully comply with its duty under the RRA, HMRC will take steps to ensure that its procurement activity and resulting contracts also promote race equality.

Some cautionary advice

Although there are clear benefits from doing business with the Government, it is important to be aware of the differences there might be in this market. In general, you should expect bidding procedures to be more exacting since, unlike the private sector, our aim is to ensure value for money for the taxpayer.

Making a complaint

If you want to make a complaint against HMRC, there is a formal process for doing this at:

How to complain to HM Revenue & Customs

Useful external publications & information

  • Official Journal of the European Union (OJEU) -Published by the European Union, only on CD-Rom and is available by subscription from UK agents such as:
  • The Stationery Office
  • Website: www.tsonline.co.uk
  • Address: P.O. Box 29, Norwich, NR3 1GN,
  • Tel: 0870 600 5522
  • email: subscriptions@theso.co.uk
  • Business Information Publications (BIP) Ltd
  • Website: www.bipcontracts.com
  • Address: Park House, 300 Glasgow Road, Shawfield, Glasgow, G73 1SQ
  • Tel: 0141 332 8247
  • email: bip@bipcontracts.com
  • Contrax Weekly & Government Opportunities - Contract announcement available by subscription from BIP Ltd (this link will open a new window) in CD, Internet & paper forms.
  • Tenders electronic daily (TED) (this link will open a new window) - (is the Internet version of the Supplement to the Official Union and the quickest way of accessing over 700 invitations to tender published daily. Access to TED is free of charge. If you have any questions on the publication of a particular notice and/or on searching for notices in general, you can contact the TED Helpdesk: Email: Ted.webmaster@opoce.cec.eu.int Fax: (+352) 2929-42700
  • (Systeme d' Information pur les Marches Publics) SIMAP - Internet site provides background information on procurement and links to other sites with procurement opportunities across the European Union and beyond.
  • Small Business Service SBS Website gives small businesses information on dealing with the Government, research findings and new initiatives being taken forward.
  • The Department of Trade and Industry (DTI) (this link will open a new window) publish a range of free booklets designed to help small firms grow and survive. DTI Publications Orderline, Admail 528, London, SW1W 8YT, Tel: 0870 150 2500, Minicom: 0870 150 2100, email: dtipubs@eclogistics.co.uk
  • The Office of Government Commerce (OGC) have a number of website which provide useful information:
  • OGC website (this link will open a new window) - (see selling) have published a guide 'Tendering for Government Contracts', which sets out the opportunities & benefits within the public sector and offers advice on how to bid for Government contracts.
  • code for central civil government purchasers (this link will open a new window) a published guide to 'working with suppliers' to be shared with suppliers. This sets out the core values for working with suppliers and is a statement of good practice generally.