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Procurement Policy 

Post Holder Responsible for Policy:
Associate Director of Procurement and Commercial Services
Directorate Responsible for Policy:
Finance & Procurement
Contact Details:

Salisbury District Hospital

01722 336262

Date Written:
16th July 2003
Date Revised:
October 2015
Approved By:

Approved by Operational Management Board

Ratified by Joint Board of Directors

Date Approved:

Approved 21st October 2015

Ratified 16th October 2015

Next Due for Revision:
31st October 2018
Date Policy Becomes Live:
1st November 2015

Version Information

Version No. Author Review Date Description of Changes
Interim Procurement Manager
October 2015
Policy overhaul, additional detail added.

Table Of Contents

Procurement Objectives
Product User/Evaluation Groups
Education & Training
Retention of Documents
Sale & Disposal of Surplus Items
Communication Plan
Equality Analysis
Audit Complaince & Appendices



Procurement is the process of acquiring goods and services, covering both acquisitions from third parties and from in-house providers. The process spans the whole life cycle from identification of needs, management of the process and through to its expiry.

The management of Procurement is essential to the efficiency and effectiveness of both clinical and support services. Patient care depends on the guaranteed availability of quality equipment, materials and services. Accountability for the expenditure of taxpayer’s money requires that sound economic decisions are taken in relation to procurement.

Salisbury NHS Foundation Trust recognises that the provision of quality patient care is supported by using cost effective procurement process which delivers value for money. This can be achieved by developing supplier and customer relationships that consider whole life cost, and ensure appropriate competition.

This philosophy has been endorsed by national audit reports; "Goods for Your Health" and HSC 1999/143 have provided indicative key performance indicators and focus for Procurement Teams at Trust Level.

Procurement performance at the Trust is reported monthly to the Director of Finance and twice a year to the Finance Committee. It recognises and endorses the key recommendations of the Best Practice Guidelines – NHS Procurement “Raising Our Game” and is aligned with the NHS Standards of Procurement, both published in May 2012. These documents are the framework around which improvements in procurement performance are measured and can be found here:


This policy sets out the principles that ensure the Trust provides an effective procurement process, good stewardship and value for money. The role of the Procurement Department can be defined as follows:

  • To lead and operate a comprehensive best practice supply management service, that adds value to the healthcare provision for patients by delivering value for money.
  • To deliver procurement services that are efficient, innovative, cost effective and continually developing for the overall benefit of the Trust and its patients.
  • This policy should be read in conjunction with the Trust’s 5 year Procurement Strategy, which provides the vision and direction for procurement, (subject to an annual review) and is linked to the Trust's service delivery plan. The annual procurement business plan is a summary of operational objectives to be achieved in order to meet the strategy.

Procurement Objectives


There are four main objectives of the procurement department within Salisbury NHS Foundation Trust:

a.         to provide end users with what they need, when they need it and at the best value for money.

b.       to protect the Trust and minimise risk through means of appropriate managerial and contractual arrangements.

c.          to provide the tax payer with value for money through expenditure on procurement, demonstrating through annual savings plans benefiting patient care.

d.         to support the Trust's core objective of providing the local community with excellent health care, maintaining its competitive advantage to be the hospital of choice.

The department’s activities are also influenced by:


The European Union (EU) Procurement Directives, and the Public Contracts Regulations that implement them in the UK, set out the law on public procurement. Their purpose is to open up the public procurement market and to ensure the free movement of goods and services within the EU.

The rules apply to purchases by public bodies and certain utilities which are above set monetary thresholds. They cover all EU Member States and, because of international agreements, their benefits extend to a number of other countries worldwide. Where the Regulations apply, contracts must be advertised in the Official Journal of the EU (OJEU) and there are other detailed rules that must be followed. The purchase of all goods and services are subject to the EU regulations regardless of whether they are capital or revenue funded. The regulations also specify thresholds over which the full OJEU must be applied.

The thresholds are currently:








However, it should be noted that the UK sterling thresholds are revised every two years, in line with fluctuations in exchange rates, with the next due January 2016.

More details can be found here:

We have a legal requirement to adhere to these regulations.

Specific roles and responsibilities are as follows:

The Director of Finance and Procurement has overall responsibility for ensuring good procurement practice throughout the Trust.

  • The Associate Director of Procurement and Commercial Services to report monthly to the Director of Finance and Procurement on procurement performance and twice a year to the Finance Committee, culminating with an annual report.
  • It is also the responsibility of the Procurement Department to develop procedures to cover all the Trust's non-pay expenditure that encompass the requirements of Standing Financial Instructions, Standing Orders, EU Procurement Directives and all specific NHS/DoH Policies.
  • Trust Managers have a key role in ensuring good procurement practice and therefore must be conversant with Standing Financial Instructions, Standing Orders and Standards of Business Conduct.
  • Staff involved in procurement must comply with Standing Financial Instructions, Standing Orders, EU Procurement Directives, Standards of Business Conduct, and Chartered Institute of Purchasing & Supply code of ethics and follow procedures outlined in the Procurement Manual.

There is a general duty on all public sector procurers to apply the key principles of public procurement. These require the delivery of value for money (VFM), appropriate quality and service to meet business needs, and appropriate governance (i.e., adherence to HM Treasury rules concerning the use of public money in procurement). It is the responsibility of all managers and staff involved with procurement to understand the above and strive for best value.

2.1 Ordering Probity

The placing of a physical order with suppliers prior to receipt of goods and invoice is good business practice. Standing Financial Instructions state that an official order must be placed in advance of receipt of goods.

A letter will be sent to anyone who does not follow correct procedures advising them that this is not in accordance with Standing Financial Instructions and that they could be held personally liable.

An order is a legally binding contract between the buyer and seller. It is important for both parties to understand which terms and conditions of contract they are working on. A formal order in advance of purchase means the supplier is working from the Trust's terms and conditions. Goods purchased without a formal order from the Trust results in the Trust working to the Suppliers Terms and Conditions of Contract which could be detrimental to the Trust.

The Department of Health is responsible for drawing up standard Terms and Conditions of contract for purchase within the NHS, and these should be used for all purchases, whether one off, or period contracts. These terms and conditions are available from the Procurement Department.

2.2 Trust Procedures and Standing Financial Instructions

The Trust currently operates three different ordering systems:

  •  JAC for Pharmacy
  • OPAS For Orthotics
  • Oracle for all other areas

For all products other than those covered by Pharmacy and Orthotics, an order must be raised in advance via Oracle with the following exceptions:

a) Rent and Rates, Telecomms

b) One off low value items under £100 (use Procurement Card)

c) Subscriptions – Procurement Card or Cheque Application Form

d) Specific product areas with the agreement of the Financial Controller and Associate Director of Procurement and Commercial Services

Authorisation for purchase is built within the Oracle systems and therefore purchases undertaken outside the agreed processes are undertaken outside the Trust Standing Financial Instruction, for which the Trust does not accept liability.

Invoices for items/services without a valid order number may be returned to suppliers or become the personal liability of the person who placed the order.




All procurement activity throughout the Trust will be conducted under the professional and ethical guidance provided by the Chartered Institute of Purchasing and Supply. Public Procurement Regulations will also be adhered to, in conjunction with local Trust Standing Orders and Standing Financial Instructions.

Prior to undertaking any competition, a review of goods or services available through National and Regional Contracts / Framework Agreements should be performed. A Framework Agreement is a centrally pre-tendered list of suppliers who are available for the Trust to contract with, without the need to follow a more strenuous tendering procedure (e.g. OJEU.) The Framework itself is not a contract but the ‘call off’ from the Framework is a contract. Frameworks can be used for services, supplies and works and used in conjunction with the OJEU procedures. and you can often award directly to a supplier as well as run a ‘mini-competition’ between suppliers capable of meeting the Trust’s need.

Evaluation of the range of items held on the NHS Supply Chain catalogue should also be undertaken. Benchmarking price, quality and service of proposed purchases with other Trusts also proves valuable and is supported by the Procurement Department.

Through using the Procurement Department’s contacts in other Trusts, there may be the opportunity for both formal and informal collaboration. For some products and services, combining demand can improve the commercial outcome and ensure better value for the Trust.

Authorisation Levels For Electronic Requisitioning System

All staff authorised to approve the purchase of goods or services, and signing of invoices where appropriate, will be allocated to one of the following six authorisation levels:

Level 1 - Up to and including £500 per total requisition (e.g. nurses, ward assistants, staff with requisitioning responsibility in smaller departments)

Level 2 - £501 - £5,000 per total requisition.

The actual level of authority will depend on the work area and the following are examples: -- - £1,000: requisitioning staff in larger departments

- £2,000: ward sisters

- £3,000: supervisory levels in departments, requisitioners in theatres, staff club manager

- £5,000: catering manager, medical physics manager, deputy head in genetics

Level 3 - £5001 - £15,000 per total requisition.

- £10,000: DSNs, DMs, heads of larger departments

- £15,000: Director of Facilities

 Level 4 - Up to £20,000 per total requisition.

: Finance Manager, Financial Controller

Level 5 - Up to £100,000 per total requisition.

: Chief Operating officer, Director of HR, Director of Nursing, Medical Director

Level 6 - Over £100,000 per total requisition.

(but subject to any other limits approved by the Trust Board):

Chief Executive, Director of Finance


Once it is established that specific goods or services cannot be sourced through the above mentioned routes, the Trust should seek to obtain best value for money through competition.

This procedure is conducted in line with the Procurement Strategy, the Trust Procurement Environmental Policy and the Trust Standing Financial Instructions/Standing Orders. The Procurement Department will be happy to lead tendering exercises for you and, in line with the DoH eProcurement Strategy, utilise online tendering portals.

Each tender must have a clear specification or scope and a strong scoring system agreed prior to the issue of documentation. The most economically advantageous tender (MEAT) will be awarded the business, provided that the total amount falls within the agreed budget. This scoring mechanism will be the basis for all debriefs to unsuccessful bidders. Guidance will be given by the Procurement Department in constructing the evaluation criteria, examples of which can be found in the Appendix. Details of operational procedures relating to procurement can be found in the Procurement Manual.

All purchases/contracts which exceed the relevant European financial thresholds (except those where appropriate National Contracts are in place), will be advertised in the Official Journal of the European Union (OJEU), through the Procurement Department.

Failure to comply with Trust rules could result in disciplinary action. Failure to comply with EU procurement could result in:

a) The High Court setting aside a contract

b) High Court claims for damages from companies denied the ability to participate in competitive tenders

c) Infringement proceedings in the European Court of Justice

For purchases which fall below the OJEU threshold, potential alternative sources can be found through placing an electronic notice through the Procurement department on to the Government Opportunities website.

Tendering for goods and services

In order to ensure best value for money it is essential that competitive quotations or tenders are obtained. This is the case whether an Item is to go onto the Trust catalogue or not. In determining the number of quotes or tenders to obtain consideration should be given to the likely volume of the goods or services to be required in the year ahead and subsequent years. The following are the quotation and tender requirements based on total life time costs (ie goods + x years maintenance) or total value over contract period:

  • Up to £2,000 – one quote required
  • From £2,001 - £3,000 – no less than three quotes
  • From £3,001 - £20,000 – no less than three written quotes against a formal specification using the Trust Quotation Form
  • From £20,001 - £50,000 – No less than four formal tenders
  • Greater than £50,000 – no less than six formal tenders
  • Over OJEU level will require publication in the Open Journal of the European Union

For more information on the number of firms to invite to tender and tendering limits please see the Trusts Standing Financial Instructions.

              3.1 Sourcing Cycle

The procurement process spans a life cycle from identification of need, through the selection of suppliers and providers, to post-contract award management. A typical procurement process is shown below


      3.2   Contract Monitoring

Key contracts will be regularly monitored to ensure that the Trust gains full value from the supplier, ensuring that suppliers adhere to agreed policies and performance indicators.

3.3   Ethics

All staff involved with procurement must undertake to comply with the ethical code of purchasing provided by the  Chartered Institute of Purchasing and Supply.

Fair Trade

The Trust will endeavour to satisfy itself that all purchases are made from organisations advocating fair trade. It will not support purchases from organisations which exploits labour.


The Trust has an environmental policy and a separate Procurement environmental policy can be found on the intranet. Consideration of the impact of all purchases on the environment will be made in all tenders.

Equality Analysis

Within each tender the equality impact will be assessed and will form part of the overall scoring as appropriate.

Local Trading

Where appropriate and in accordance with Public Procurement guidelines, the Trust will seek to support the regional economy using local suppliers.

Suppliers wishing to introduce their product range to the Trust must comply with the Trust's policy for Representatives on Site.

Awarding of Contracts

Will be undertaken by the Procurement Department in conjunction with the user department, based on whole life costing, taking full consideration of value for money and the benefits for patient care.

Debriefing of unsuccessful bidders will be led by a representative of the Procurement department, supported by user departments as appropriate.

         3.4  Freedom of Information

Public Sector Contracts

When entering into contracts the Trust will refuse to include contractual terms which purport to restrict the disclosure of information held by the Trust and relating to the contract beyond the restrictions permitted by the Act.  Unless an exemption provided for under the Act is applicable in relation to any particular information, the Trust will be obliged to disclose that information in response to a request, regardless of the terms of any contract.

When entering into contracts with public or non-public authority contractors, the Trust may be under pressure to accept confidentiality clauses so that information relating to the terms of the contract, its value and performance will be exempt from disclosure.  The Trust will reject such clauses wherever possible.  Where, under exceptional circumstances, it is necessary to include non-disclosure provisions in a contract, the Trust will agree with the contractor a schedule of the contract which clearly identifies information which should not be disclosed and include provision that The Trust will be responsible for determining in its absolute discretion whether any of the content of the contract is exempt from disclosure in accordance with the provisions of the FOIA.

Any acceptance of such confidentiality provisions must be for good reasons and capable of being justified in the public interest and to The Information Commissioner.

It is for the Trust to disclose information pursuant to the Act, and not the contractor.  The Trust will take steps to protect from disclosure by the contractor, information which the authority has provided to the contractor which would clearly be exempt from disclosure under the Act, by appropriate similar contractual terms.  In order to avoid unnecessary secrecy, any such constraints will be drawn as narrowly as possible and according to the individual circumstances of the case.  Apart from such cases, the Trust will not impose terms of secrecy on contractors.

Accepting Information in Confidence from Third Parties

The Trust will only accept information from third parties in confidence if it is necessary to obtain that information in connection with the exercise of any of the authority's functions and it would not otherwise be provided. 

The Trust will not agree to hold information received from third parties ‘in confidence’ which is not confidential in nature. Again, acceptance of any confidentiality provisions must be for good reasons, be in the public interest and be capable of being justified to the Information Commissioner.

Information will be made available upon request within the remit of the prevailing NHS Terms and Conditions of Contract and the guidelines of the Freedom of Information Act.




Capital Control Group

Under the chairmanship of the Director of Finance and Procurement, this group considers and prioritises capital bids for equipment, which have been supported by the relevant sub group, and advise the Joint Board of Directors and Trust Board accordingly. The Trust Board approves the annual Capital Programme and monitors it in year. 

Medical Equipment

Through a range of sub groups organised by the Medical Devices Management Committee, under the chair of a Consultant, bids for medical equipment are considered and prioritised. They will receive professional support from procurement in defining the procurement plan, best value and development of a policy for equipment standardisation and product rationalisation.

Information Technology Systems

Under the chairmanship of the Director of Informatics, this group will consider and prioritise bids for the purchase, lease and or installation of all IT equipment, software and IT systems, and will advise the Chief Executive accordingly. In addition all purchases, or introductions to the Trust by any means, of IT equipment, software and IT systems, outside of the capital bid process must also obtain prior approval from the Director of Informatics. Priority will be given to projects which have obtained appropriate approval and where approval has not been obtained, the deployment or installation of the IT item/s in question may be denied.

Buildings and Works

Under the chairmanship of the Facilities Director, this group considers and prioritises bids for developments and improvements to the fabric of the Trust.


Product User/Evaluation Groups


These groups are set up on an ad hoc basis to evaluate products and ensure standardisation, best value and best practice. Please see our Suppliers and their Representatives Code of Conduct policy for further details.




The Trust is committed to exploiting electronic methods of communication, procurement and commerce both within the Trust and with Suppliers. All requisitions and orders should be placed using the Trust electronic ordering system, in order to minimise administrative costs, and to improve management reporting.

We have a well developed inventory and stock management system which is used for the requesting and ordering stock, and for managing the stock we have in-house.

Salisbury NHS Foundation Trust are committed to the NHS’s e-Procurement Strategy.


Education & Training


Training and development is provided to procurement staff to enable them achieve competencies satisfying the requirements of the Cabinet Office Review on NHS Procurement, including but not limited to support through professional qualifications, such as CIPS.

Procurement also support training for the rest of the Trust on procurement topics such as specification writing and regulations.




The Trust will share information and best practice with other parts of the Health Service and Public Sector to measure the cost and effectiveness of its procurement processes.

Benchmarking is an important part of the procurement process and the transparency and sharing of pricing information is supported in the NHS Terms and Conditions of Supply. There is an online portal which has been set up for NHS procurement staff to share innovation and pricing details.




The Trust will work with other NHS or Public Sector partners where appropriate to investigate the use of joint or consortium contracts when cost or service benefits can be identified.

Collaborative organisations include:




Retention of Documents


All documentation will be kept either electronically or on file in accordance with the NHS recommendations in HSC1999/053. Documents will be retained electronically via the Trust’s IT infrastructure in the Procurement Drive.


Sale & Disposal of Surplus Items


11.1 Sale

All items in working order, which are no longer required, should be advertised to other departments through the Trust intranet. The Trust does not accept any liability for the sale of goods, and the disclaimer form must be completed.

Once established that the Trust does not have a requirement for goods, they may be offered for purchase to a Trust employee. Contact should be made with procurement to determine the most appropriate method for sale, including Silent Auction, Sealed Bid or Donation. Most of this is managed through the Trust’s recycling centre.

All goods are sold as seen and the Trust does not accept liability for the sale of these items. Proceeds are directed back into Patient Care.

Surplus items which are not of interest to staff, e.g. obsolescent goods, are donated to charitable organisations in the third world. The arrangement for this is undertaken through Procurement.

11.2    Disposal

Advice must be sought from Estates Technical Service for disposal of all items, taking reference from the Trust's Waste Policy.




All staff involved with the procurement process must be fully conversant with this policy, and all related policies and procedures.


Communication Plan


This policy will be communicated through the Trust Cascade Brief, the Operational Management Board, Broadcast and will be available on the Trust Intranet.

This Policy will also need to be published on the Trust’s external website.


Equality Analysis


Salisbury NHS Foundation Trust aims to design and implement services and policies that meet the diverse needs of its services, population and workforce, ensuring that none are placed at a disadvantage over others. This document has been assessed against the Trust's Equality Impact assessment Tool. This document has been assessed as not relevant to the duty.


Audit Complaince & Appendices





 Implementation Plan




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