1. Purpose
1.1 Purpose
This Supplier Management Policy (“Policy”) articulates BBB’s approach to Supplier Management (sustainable procurement, contracting and supplier relationship management), reflecting on the increasing size, scale and maturity of BBB and the need to embed professional practice across the business to ensure long term Value for Money, where appropriate, on a whole life basis, and to protect and enhance BBB’s brand and reputation. BBB is committed to the wider community's social, economic and environmental well-being and will seek sustainable and social value outcomes relevant to the opportunity.
BBB expects Personnel to make commercially sound decisions in compliance with the relevant laws and government policies, to secure the right suppliers at the right price and proactively collaborate, as appropriate, to deliver the right goods and services to BBB.
This Policy must be read in conjunction with the supporting Standards (please refer to section 6 below).
1.2 Legal & Regulatory Obligations
This Policy, along with the supporting Standards, will ensure BBB meets all applicable legal and regulatory obligations in relation to the effective and sustainable management of spend and suppliers. This Policy recognises the relevance of the Companies Act 2006 and the duty to promote the success of BBB and have regard to the need to foster the company’s business relationships with suppliers, as well as customers and Personnel, and the need to maintain a reputation for high standards of business conduct.
BBB is a body governed by public law and is required to comply with the prevailing Public Contracts Regulations and consequently should act as a public sector organisation as far as procurement is concerned. All current and future associated legislation must be given consideration and acted on appropriately including for example (but not limited to) the Modern Slavery Act, Social Value Act and the UK General Data Protection Regulation (GDPR).
In addition to meeting its legal obligations, the BBB as an Arm’s Length Body (ALB) is required to meet the Government Functional Standards where applicable. This policy includes elements of the obligations relating to Government Functional Standard 008: Commercial, as applicable.
The Policy recognises that BBB will comply with Procurement Policy Notes issued by the Cabinet Office.
1.3 Risk Appetite and Risk Category
Risk appetite is the type and level of risk the BBB Board is willing to take to deliver its strategy and public policy objectives.
This Policy sits under the Level One Risk Category, Operational Risk. It aligns to the Level Two Risk Category, Third Party Risk, and encompasses the risk that ‘BBB does not procure, contract with or manage its external, third-party supply base effectively’.
BBB’s risk appetite in relation to Third Party Risk is Low- Medium.
2. Scope
This Policy, and the associated Standards, apply to all BBB entities, operations and Personnel (as defined in BBB’s Policy Governance Framework).
Note: A ‘Policy Owner Waiver’ is in place covering controls pertaining to Environmental, Social & Governance (ESG) requirments. This is to allow delivery againt the ESG roadmap for phase 0 and phase 1. This waiver applies to Commercial Operations and all business areas and is effective from 1st April 2023 until 31st March 2024. For further detail relating to this waiver, please contact Risk & Compliance.
Whilst Commercial Operations are accountable for the Procurement process (either directly or through supervision as appropriate), the relevant business area will remain responsible and accountable for ownership of the Business Requirements and Contracts.
All engagements with suppliers should be covered by a compliant Contract and all Contracts must have a nominated Contract Owner.
Note: whilst this Policy and accompanying Standards applies to contracts for external legal services, please refer to the ‘Procedure for engaging external law firm services’ which sets out the process for engaging an external law firm.
For the definition of abbreviations and additional terms please refer to Section 8.
3. Sustainable Supplier Management Principles
Read footnote text 1 BBB will embed the following principles of Sustainable Procurement in Procurement processes so they become an integral part of all relevant Contracts:
Accountability: BBB is accountable for our own impacts on society, the economy and the environment. In the context of Procurement, this specifically includes accountability for impacts on our supply chains, with a life cycle perspective on goods or services. BBB will, monitor these impacts by reviewing the environmental and social impacts through the implementation of indicators that will support monitoring suppliers on those areas.
Transparency: BBB is transparent in the decisions and activities that impact the environment, society and our organisation. In the context of Procurement, this specifically includes being transparent in our Procurement decisions and activities and encouraging our suppliers to be transparent. Transparency is the basis for stakeholder dialogue and collaboration.
Full and fair opportunity: BBB will avoid bias and prejudice in all Procurement decision-making. Through competing Business Requirements, BBB seeks to ensure all suppliers, including local suppliers and small and medium-sized enterprises (SMEs), will have a full and fair opportunity to compete.
Respect for human rights: BBB respects internationally recognised human rights and complies with legislation. BBB expects suppliers to follow this principle and align their business practices with the UK Government Supplier Code of Conduct.
Innovative solutions: where permissible, BBB will seek solutions to address its sustainability objectives and encourage innovative procurement practices to promote more sustainable outcomes throughout our entire supply chain.
Focus on needs and outcome-based specifications: Contract Owners will work with Commercial Operations to review demand, buy only what is needed and seek more sustainable alternatives.
Integration: BBB will, where relevant and appropriate, seek to ensure that sustainability is embedded into all existing procurement procedures to maximise sustainable outcomes.
Analysis of all costs: through internal prioritisation, BBB will consider the cost incurred over the life cycle, Value for Money, and the costs and benefits for society, the environment and the economy resulting from our Procurement activities.
Continuous improvement: BBB will work towards continually improving its sustainability practices and outcomes and encouraging organisations in our supply chains to do the same.
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1
Please note, Active ‘Policy Owner Waiver’ is in place. Please contact R&C for further detail
4. Key Control Requirements
Read footnote text 2 The following key requirements of this Policy must be followed to ensure that BBB operates within the associated Standards and related procedures or processes.
4.1 Effective Sustainable Procurement processes and robust Supplier Relationship Management
BBB must effectively procure, contract and manage suppliers by:
- conducting Procurement in accordance with our Sourcing Strategy;
- embedding appropriate sustainability criteria in Procurement processes, Contracts and Supplier Relationship Management;
- entering into fit-for-purpose and sustainable Contracts;
- designing and operating appropriate supplier management controls which are consistently applied according to supplier importance;
- ensuring controls are suitably evidenced so they can be measured and reported on, by Commercial Operations to demonstrate BBB is operating within approved risk appetite and in accordance with our policies and standards;
- leverage our buying power where appropriate;
- managing suppliers more intelligently and commercially vs. a compliance and transactional based approach to comply with reference, where applicable, to the minimum mandatory UK Government Buying Standards (GBS) when buying goods and services;
- ensuring the appropriate supplier arrangements are subject to the Commercial Review Committee.
4.2 Sustainable Procurement supporting the UK’s transition to a Net Zero economy
Value for Money should be considered as the optimum combination of whole-of-life costs in terms of not only generating efficiency savings and good quality outcomes for BBB, but also benefitting society and the economy, whilst minimising environmental damage. BBB will seek to promote sustainability practices in relevant Procurement processes, aligning with BBB’s Net Zero ambition. Consequently, BBB will work with suppliers to seek to improve the sustainability performance of BBB as well as that of their supply chain in areas such as:
- Where permissible and compliant with Public Contract Regulations, favouring services with a low environmental impact and enhanced social value considerations;
- On a proportionate and priority basis, reviewing Contracts to identify potential to reduce carbon emissions and enhance sustainability outcomes and assisting suppliers in developing and implementing carbon reduction plans;
- On a proportionate basis, BBB will seek to require prioritised suppliers to provide a carbon reduction plan confirming the supplier’s commitment to achieving Net Zero by 2050 in the UK, and setting out the environmental management measures they have in place and which will be in effect and utilised during the performance of the Contract, along with a commitment to provide BBB with emissions reporting as required by BBB;
- BBB will encourage existing suppliers to bring forward options to enhance sustainability outcomes. BBB expects suppliers to support accurate reporting on product or service environmental and social impacts, by being open and transparent.
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Please note, Active ‘Policy Owner Waiver’ is in place. Please contact R&C for further detail.
5. Non-Compliance
Compliance with this Policy and the associated Standards is mandatory. All identified breaches of this Policy must be reported via the Risk Incident Portal on the BBB Intranet. Breaches will be assessed by the Policy Owner to determine the further action required and may include disciplinary action in accordance with the BBB’s Disciplinary Policy.
6. Supporting Policies and Standards
Supplier Management Policy
Procurement Standards
IT Outsourcing Standards
Contracting Standards
Contract Management and Supplier Relationship Management Standards
- Disciplinary Policy and Procedure
- Gifts and Hospitality Policy
- Anti-Bribery and Corruption Policy
- Delegated Financial Authorities Policy
7. Policy Controls
This Policy applies to all business units. Risks relating to specific Contracts and suppliers should be included in respective risk registers including the appropriate Xactium risk reference. These associated controls, and any subsequent controls as they become relevant, should be applied. Save in respect of the Commercial Review Committee, oversight of controls will reside with Commercial Operations.
| Control Reference | Control Title | Frequency |
|---|---|---|
| C-SMP-1 | Supplier Categorisation through segmentation | Continuous |
| C-SMP-2 | Compliant Contract in place for all supplier engagements | Continuous |
| C-SMP-3 | Procurement pipeline incorporates categorisation int | Quarterly |
| C-SMP-4 | Key personnel identified for all Contracts | Quarterly |
| C-SMP-5 | Commercial Review Committee | Ad-hoc |
8. Definition of Terms
BaU: business as usual or accepted standard ways of working.
Business Requirements: the subject matter at the root of the need to engage with a third-party supplier, whether for goods or services and whether underpinned by a specification, scope of works or any other definition of outcomes or expectations.
Cabinet Office Controls: the Cabinet Office spend controls process relating to obtaining advance approval to spend money on specific activities.
Commercial Review Committee (“CRC”): is an advisory sub-committee of the Executive Committee with the authority to operate and make recommendations within its defined governance across applicable supplier management activity.
Contract: a legally binding agreement (including variations, extensions, change control and contractual notices) with a third-party supplier for goods or services.
Contract Owner: the nominated individual responsible for a Contract including the performance of the Contract and day to day Contract Management activities.
Contract Management: the proactive process to ensure that BBB facilitates the delivery of expected contract outcomes through appropriate monitoring, measurement, and facilitation of Contract performance.
Net Zero: refers to achieving a balance between the amount of greenhouse gas emissions produced and the amount removed from the atmosphere.
Outcome-based specifications: focuses on the desired outputs of a service in business terms, rather than a detailed technical specification of how the service is to be provided; this allows providers scope to propose innovative solutions.
Procurement: in the context of this Policy means the relevant process undertaken to select and enter into a Contract with third-party suppliers for goods or services.
Procurement Cycle: end to end cyclical process from identification of need, through market research, market engagement, Procurement process, contracting, contract management, supplier relationship management, exit and/or repeating the cycle.
Segmentation: is the process, via a segmentation assessment form, BBB uses to categorise its suppliers into four categories: critical, high, medium and low by reference to supplier criticality, importance and spend.
Supplier Relationship Management: is the act of managing a supplier in line with the Contract,focussing on performance, understanding and mitigating risk and driving Value for Money as well as supporting the business to foster the appropriate partnership.
Sourcing Strategy: is the set of directions and rules that define the way in which BBB plans its sourcing activities (procurement, contracting and supplier relationship management) over a specified period to deliver BBB’s objectives whilst maximising the value from our sourcing arrangements.
Sustainable Procurement: a process whereby organisations meet their needs for goods, services and works in a way that achieves value for money on a whole life basis and generates benefits not only to the organisation, but also to society, the economy, and the environment.
Value for Money: in the context of this Policy is the evidenced-based approach to ensuring appropriate goods and services are procured at appropriate cost reflecting on market conditions and contract and relationship management expectations
| Ref: C-SMP001 | Details |
|---|---|
| What does the control aim to achieve? | Clear categorisation of all third-party suppliers using BBB’s segmentation model, establishing appropriate procurement, contracting, contract management and supplier relationship management treatment. |
| Description | Working with Commercial Operations, the business should consider and complete a segmentation assessment form for all suppliers enabling the completion of the scoring matrix to determine supplier category. |
| Who does the control relate to? | All Contract Owners and supplier relationship leads |
| Who operates this control? | Commercial Operations in conjunction with all business areas |
| What tools/systems are used? | Contract Management System (Atamis), segmentation assessment form |
| Outputs shared with? | Risk & Compliance, ExCo, BRC, EARC |
| Related Policy | N/A – Policy Level Control |
| Related Standards | Procurement Standards, Contracting Standards, Contract Management and Supplier Relationship Management Standards |
| Ref: C-SMP002 | Details |
|---|---|
| What does the control aim to achieve? | Mitigation of contractual risks through ensuring that all Contracts with third-party suppliers are covered by appropriate terms and conditions, ensuring contract objectives, KPIs and SLAs are recorded, and performance can be tracked. |
| Description | Working with Commercial Operations, the business must ensure that all engagements of third-party suppliers are covered by appropriate Contracts and this should be considered before entering into any Contract. |
| Who does the control relate to? | All Contract Owners |
| Who operates this control? | Commercial Operations in conjunction with all business areas |
| What tools/systems are used? | Contract Management System (Atamis) |
| Outputs shared with? | Risk & Compliance, ExCo, BRC, EARC |
| Related Policy | N/A – Policy Level Control |
| Related Standards | Procurement Standards, Contracting Standards, Contract Management and Supplier Relationship Management Standards |
| Ref: C-SMP003 | Details |
|---|---|
| What does the control aim to achieve? | Through determining the supplier category, procurement effort will be triggered at appropriate time in advance of need and the extent of research and options consideration will be more proportionate to the need. |
| Description | Based on categorisation, market research, options generation and procurement approach decisions will be made at appropriate time in advance of need. |
| Who does the control relate to? | Commercial & Procurement |
| Who operates this control? | Commercial & Procurement |
| What tools/systems are used? | Contract Management System (Atamis) |
| Outputs shared with? | Risk & Compliance, ExCo, BRC, EARC |
| Related Policy | N/A – Policy Level Control |
| Related Procedure | Procurement Standards, Contracting Standards, Contract Management and Supplier Relationship Management Standards |
| Ref: C-SMP004 | Details |
|---|---|
| What does the control aim to achieve? | The identification of key personnel with accountability and responsibility for all Contracts based on categorisation and Standards guidance. |
| Description | For every Contract, a Contract Owner and supplier relationship lead will be identified, and they will be aware of the expectations of them in terms of Contract Management and Supplier Relationship Management activities. |
| Who does the control relate to? | All Contract Owners and supplier relationship leads |
| Who operates this control? | Commercial Operations in conjunction with all business areas |
| What tools/systems are used? | Contract Management System (Atamis), segmentation assessment form |
| Outputs shared with? | Risk & Compliance, ExCo, BRC, EARC |
| Related Policy | N/A – Policy Level Control |
| Related Procedure | Procurement Standards, Contracting Standards, Contract Management and Supplier Relationship Management Standards |
| Ref: C-SMP005 | Details |
|---|---|
| What does the control aim to achieve? | Ensuring that the applicable sourcing arrangements arein line with the Sourcing Strategy and that accordingly BBB is managing taxpayers’ money efficiently within a robust sourcing strategy framework. |
| Description | For the applicable sourcing arrangements, the CRC will review and make recommendations on the execution and delivery of the BBB Board approved strategic objectives in line with the Sourcing Strategy. |
| Who does the control relate to? | CRC and all Contract Owners and supplier relationship leads |
| Who operates this control? | CRC chaired by the GC or CEO nominated delegate |
| What tools/systems are used? | Contract Management System (Atamis), CRC templates and governance processes |
| Outputs shared with? | Risk & Compliance, ExCo, BRC, EARC |
| Related Policy | N/A – Policy Level Control |
| Related Procedure | Procurement Standards, Contracting Standards, Contract Management and Supplier Relationship Management Standards |