Case Helsinki City Education Department - purchasing process

1. Case Helsinki City Education Department - purchasing process Susanna Sarvanto Training Manager HAUS, Finnish Institute of Public Management Ltd

2. Presentation • Education Department • Procurement organisation – City of Helsinki • Procurement organisation – Education Department • Rules and regulations • Decision making • Purchasing process in the Education Department • Challenges – purchasing of services • Local governments (municipalities) and appeal procedure

3. The City of Helsinki Education Department -tasks • The Education Department is responsiblefor • general education and for some morning and afternoon care activities for schoolchildren • Finnish-language vocational education and training, workshop activities intended to unemployed young people and adult education and training • Education means not only teaching but also books, materials, equipment, school transport and healthy and safe education environment including for example renovation of school buildings, cleaning of schools and school lunches

4. The Education Department – some statistics • The Education Department provides Services for a total of about 70 000 pupils and students • The City of Helsinki maintains 161 schools and 3 vocational institutions • In 2003, the net expenditure from the City of Helsinki Education Department’s operational finances amounted to EUR 385,3 million • In addition, a total of EUR 54.6 million was spent on school construction and renovation projects and for purchases of movables

5. Procurement organisation – City of Helsinki • Purchases are partly centralized • The City Board of Helsinki decides products (goods) and services to be purchased centralized. CB also decides which department ”collective procurement unit” takes care of the purchasing of these products and services including competitive tendering and framework agreements • Collective procurement units: for example Supplies Department, Helsinki Energy • Other purchases: by the concerned Department itself or partly in cooperation with the Supplies Department on the bases of separate assignment

6. Rules and regulations • All Departments have to follow: • EU-directives and national legislation on public procurement • City´s own rules, regulations and instructions • Procurement rules and regulations • General terms and conditions for procurement • Terms and conditions for the procurement of information technology • Departments have also made more specified instructions, contract models, models for procurement proposals and decisions etc. for their own special needs

7. Procurement organisation in the Education Department (1) • Partly centralized purchases • Procurement Team has the overall responsibility of the Department´s competitive tendering processes, procurement instructions, training on procurement issues, development of the procurement process, supervision of the purchases • Purchases can made made by the different sections of the Department but can also be taken care by the Procurement Team

8. Procurement organisation (2) • The Procurement Team also • has the responsibility to purchase (incl. competitive tendering) and order certain items • assists Department´s various sections in the different stages of the procurement process (planning the purchases, drafting invitations to tenders, planning the award criteria and evaluations of tenders etc.) • gives assistance in contractual isusses • Role of the assested section is -as an expert of the subject matter -especially to define the product or service to be purchased as well as its expected quantitative and qualitative criteria

9. Decision making - purchasing City Education Committee • Highest decision making authority • It has delegated parts of its decision making powers to the officials of the Educuation Department based on procurement value • Official has within the limits of the budget and delegated purchasing power to make procurement decisions of the products and services of which the collective procurement unit has not made purchasing agreement

10. Decision making - orders Head of the Education Department • Has authorized certain persons in the Education Department to enforce procurement decisions • Right to order • from the suppliers and service providers which have been selected in the competitive tendering • within the limits of the authorization • in accordance with the terms and references of the purchasing agreement/contract

11. Purchasing process • Stages of the purchasing process have been defined: ”check –list” for a due process • In addition, for every stage of the process the preparation and decision making responsibilities, rules and regultions to be followed and model documents to be used have been defined • Also the final document which should be as a result of each stage has been defined

12. Main stages of the process (1) • Planning of the purchase • budget, need, objective, estimated value, preliminary description of the product/service to be purchased • knowledge of the products and services is needed but brings challenges to the procurement personnel • chosing the right method for the purchase: EU-competition, national competetion, order from a City´s other Department/unit, order based on the framework agreement, exceptionally direct assignment?

13. Main stages of the process (2) 2. Realization of the purchasing method • if tender process is needed, chosing the right purchasing procedure in accordance with EU-directives and/or national legislation • crucial: invitation to tender, award criteria, eligibility of tenders and tenderers, evaluation of the tenders • preparation by the Procurement Team and/or by the section concerned, authority to sign invitation to tender linked to the decision making powers

14. Main stages of the process (3) 3. Decision making and remedies • proposal by the expert on subject matter, decision making powers as delegated • crucial: reasoning of the decision, service of decision, appeal instructions • Contract/order • Invoicing process • Monitoring the contract, delivery of products and the quality of services

15. Some important factors • equal and non-discriminating treatment • ethics –both officials´ and tenderers´ • impartiality and disqualification • main rule is that the official concerned makes him/herself the decision concerning the question of his/her impartiality and disqualification • publicity • Act on the Openness of Government Activities • documentation and document management • registration and archives

16. Challenges – purchasing services (1) • Municipality is responsible for arranging services for its memebers • Municipality can arrange services by • producing services itself • in cooperation with other municipals • purchasing (tendering process) all or partly the needed services

17. Challenges – purchasing services (2) • Decisions on these arrengements have impacts on markets, municipalities personnel and its members • Purchasing of services is demanding • definding the contents and qualitative objectives, normally better service cannot be negotiated afterwards • right balance between the technical (quality) and economical award criteria • evaluation of tenders • quality control and contract monitoring is essential

18. Local goverments and appeal procedure • Municipal appeal process differes from that in the ministries and central government • Ministries, central government: appeal to the Market Court, possibility also to sue for damages in the lower court • Municipal procurement decisions have to be noticed according to the Act on Public Procurement and the Finnish Local Government Act to all tenderers and also to the members of the municipality according to the FLGA. • Appeal: in addition possibility to claim for correction of the decision from a municipal organ (for example City Education Committee)

19. It is important to realize that • local governments often have to make procurement decisions which have impacts on individuals´ lives, for example in the social, health and education sector • economy plays also an important role when making purchases • succesfull purchasing requires a wide range of professional skills