Obtaining Quotes for Goods and Services

How to do so

Middleton Railway Trust Ltd. (MRT) Policy Directive

Reference: FIN/1 (6/93)

Subject: Obtaining Quotations for Goods and Services.

For the attention of: All Council Members, All Project Officers. This Directive does not form part of the Safety Management System.

Previous versions of this Directive were as follows. Reference 6/93/1 was the initial version.

This version implemented the revised numbering scheme for directives, but made no other changes to the content.

This Directive contains the following sections: Introduction

Requirements

It is a responsibility of the Council, as Charity Trustees, to ensure that the MRT obtains proper value for money whenever goods or other services are purchased. This Directive specifies the procedures that must be adopted by members of the Council in certain specific cases in order to achieve this, and as far as possible the spirit of these procedures should be observed in all other cases as well.

Whenever any authority to purchase goods or services is given to any officer of the railway who is not a member of the Council, then the member of Council who brings to the Council the request for that authority is responsible not only for communicating to that officer the terms under which the Council has given that authority, but also the terms of this Directive as well.

Whenever goods or services are being obtained on a regular basis from one supplier or from a small number of suppliers, the officer obtaining them should periodically make comparisons between the suppliers, or where possible with quotations from other comparable suppliers, so as to ensure that amounts charged by the regular suppliers are not out of line with normal market costs.

Whenever quotations are obtained for the supply of goods or services, it should be made clear to the supplier providing the quotation that the MRT is not bound to accept the lowest quotation, and will consider other factors as well, such as the quality of advice or service that it is likely to receive.

Where goods or services are being obtained for a special project, and the value of those goods or services is likely to exceed £500, then the following procedures apply.
- The officer responsible for obtaining those goods or services should if possible obtain quotations or estimates from at least three different sources.
- Where the nature of the goods or services are such that it will not be possible to obtain quotations from at least three different sources, then the estimates must be brought to the Council for approval of the one which is to be accepted, even if the Council has already approved in principle the commitment of finance to that element of the project.

Policy Directive FIN/1 (6/93) continued

If the Council has already approved in principle the commitment of finance to that element of the project, then the officer obtaining the quotations has authority to accept the lowest, or to accept one which does not exceed the lowest by more than 5%, without further reference to the Council, but must report to the Council the amount of the quotation that has been accepted.
- If the officer obtaining the quotations wishes to accept one which exceeds the lowest by more than 5%, they must bring the quotations to the Council together with a case for the one that they wish to accept, in order to obtain approval from the Council for accepting that quotation. This must be done even if the Council has already approved in principle the commitment of finance to that element of the project.

It is important that suppliers who are being asked to provide quotations are not informed in advance of these procedures, or given any other information about the process by which quotations are to be considered that might lead those suppliers to adjust the quotation in ways that might result in the MRT obtaining poorer value for money.

Drafted by A. J. Cowling (Company Secretary), and approved on 8th June 1993.