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Types of Contracts

These pages cover how the council manages its procurement, the types of works, goods and services that we buy, our financial thresholds and types of contracts.

Orders and contracts can range in value from a few hundred pounds to millions.

For example in 2005/06 the council's total non-payroll spending approximated £19 million. Our main spending of £13 million was on contractor payments for construction, building maintenance and improvement, play areas and ground improvements, refuse collection and other services. £0.3 million for energy costs, £1 million for legal and specialist consultancy services, £1.5 million for information technology, communications and related services and £3 million for other goods, supplies, equipment and services.

In order to get best value for money, a significant part of our procurement is carried out under direct contract. Some procurement is undertaken under joint or consortium arrangements. Many contracts, particularly for services, cover periods of more than one year.

Your relationship as a supplier with the Council may be determined by your business's:

  1. track record and financial position
  2. current contractual arrangements
  3. the products and services you offer

Most contracts are awarded after competition. Financial thresholds govern the types of approach that can be taken. The current thresholds are:

Contract Value (total lifecycle cost *)Procedure
Less than £15,000two quotations required, at least one of which must be from a local supplier where possible
£15,000 - £99,999three quotations required, at least one of which must be from a local supplier where possible
£100,000 - OJEUFull tendering process conducted via Kent Business Portal
On or above OJEU thresholdFully compliant OJEU process

* Total lifecycle cost relates to the annual value of the contract, multiplied by the total number of years (inclusive of extensions).

Highways, footpaths and related surfing work etc - please note that this is in relation to the Borough Council's requirements. The highway authority is Kent County Council.

Some of the different types of contracts:

  • Ad hoc Contract - A contract to satisfy a definite, one-off requirement for either products or services is normally used for higher value or complex contracts that necessitate a tendering exercise to take place and/or the use of special terms and conditions.
  • Framework Agreement / Call-Off Contract (or Framework Arrangement, Standing Arrangement, or Standing Offer) - A framework agreement provides for the supply of products or services over a given time period. It is not in itself a contractual agreement to supply, but is an enabling agreement providing agreed specifications, delivery terms, prices, and terms and conditions of contract. Once a framework agreement is in place, individual purchase orders can be placed against it under the agreed terms and conditions. The orders, once placed (ie accepting the terms of the standing offer), are contractual. Framework agreements do not specify definite quantities of goods or services that will be ordered against it, although indicative quantities are normally provided. Framework agreements are normally used to set up general supply arrangements with a supplier (eg use of a suppliers catalogue), or to set up central supply arrangements for use by local operational areas.
  • Service and Maintenance Contracts  - The two basic contract types above can be used to deliver both goods and services, although the content (eg terms and conditions) is often quite different. Maintenance contracts are essentially service contracts (eg total maintenance cover for a fixed period) or call-off contracts/framework arrangements (eg maintenance cover available on an 'as required' basis, for example, if breakdown occurs).
  • Capital Works Contracts - Capital works contracts are used for large-scale construction projects. These contracts are generally highly complex and involved.
  • Leasing vehicles, plant and equipment - Leasing contracts are sometimes used for this type of item.
  • Public Private Partnerships - These contracts are complex and extremely high value (over £5 million). They allow the public sector to benefit from private company investment.
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