How The UK PSC Register Affects Procurement

The Register of People with Significant Control Register came into effect in April of this year. On the surface of things, the majority of businesses won’t be affected, other than the registration requirements. However, in the case of procurement, there is one thing every business owner absolutely must know.

That is…

How the Public Register of those with significant control will correlate to the Bribery Act 2010.

Back in 2011, Ruth McNaught, Solicitor of Harper Macleod LLP, wrote on the Govopps.co.ukwebsite about the Bribery Act 2010 and its Effect on Procurement. In that article, Ruth wrote:

“Regulation 23⁽¹⁾ sets out the mandatory disqualification criteria: a contracting authority must treat a prospective bidder as ineligible and not select that bidder if it, or its directors, has been convicted of (among other things) conspiracy; corruption; bribery; fraud; or money laundering.

The contracting authority must have actual knowledge that the bidder, its directors or any other person who has powers of representation, decision or controlof the economic operator has been convicted of these offences.”

As you can see from the information above, the persons with control in a business has been for a while now, a factor in the procurement process. What’s happening now though is with the register being publicly accessible, it will tighten the Bribery Act further by giving all commercial businesses access to information they’d previously only be able to acquire through some deep digging around and probing for information.

With the PSC register, anyone is able to get the names of each person with significant control of a business, making it much more accessible for commercial enterprises to know exactly who they are doing business with.

For the purposes of commercial contracts within procurement, where anyone named with control is known to have practiced unethical business in the past, it could rule your business out of the tendering process completely.

Back in 2011 when the Bribery Act came into effect, it set the UK as a global leader of anti-corruption, setting the bar for the highest of ethical standards. This new PSC register takes things a step further to champion the UKs strong ethical standards.

In order to comply with the Bribery Act 2010, the government issued guidance for businesses. You can find those guidance notes here. Section seven is important as it puts responsibility on business owners, requiring organisations to take active measures on preventing bribery from happening in commercial organisations.

The guidance notes don’t go further to give measures that business owners can take to prevent it however we did find a good resource at theQCA.com website, which you can view here.

All government publications regarding the People with Significant Control Register can be found here.

With the strengthening of anti-corruption legislations, and tougher sentencing, with the potential for disbarment as a company director, it’s putting a lot of pressure on SMBs to carefully consider who they have aboard their organisations and to ensure they are compliant with all relevant legislations, which is now not only relevant to business owners but also extending to those they trust with control over how business is conducted.

Anyone with significant control in any business must be trustworthy and most certainly not convicted of any offences relating to unethical trading, in particular in relation to the Bribery Act 2010.

As a member of the Chartered Institute of Procurement and Supply, we ensure that every supplier we deal with upholds the same high ethical standards as our firm, for which the PSC register will be able to help us trust who we partner with. There will be other businesses using the register too. It’s for this reason we advise business owners to carefully check who they are associated with as it could impact on tendering processes.

Image courtesy of theqca.com.

The Real Teamwork Required For Cost Efficient Buying Processes

The Real Teamwork Required For Cost Efficient Buying Processes

Business transactions are far more complex than most staff members give the finance team credit for. It seems to be only the professionals in organisations that really get just how complex purchasing can be.

Then there’s the purchasing word itself. There are some professionals with a heavy dislike for the term purchasing; taking the view, rightly so that it is a transactional based buying process, when in reality, procuring products and services takes a whole spectrum of issues into consideration.

Purchasing departments often have buyers appointed to deal with commercial contracts and make all the buying decisions. There comes a point in larger enterprises though when buyers just can’t keep up.

When that time comes, procurement departments are put in place and those staff in there must be team players, because there’s a list of other team members they will need to work well with alongside, with everyone acting in the best interest of the business.

6 Teams involved in the buying process

1. End users

Every team member must have tools to get their job done, but rarely do they get to buy the tools they need. They need approval from the finance department and then the finance team pass the information to the procurement team to get started with the purchasing.

End users should always be involved in purchasing decisions because they know the tools they need to get the job done.

2. Finance department

This is the department that the majority of staff thinks has money to throw around. In reality they’re working to tight budgets and juggling figures left, right and centre to stay within the assigned budgets.
To get budgets going further, procurement teams are often in place to ensure they get the best value and services they can for the money going out.

3. The procurement team

In large organisations, there are buyers appointed. These are people who many think have a whale of a time doing their job because all they do is buy stuff.
Sounds fun!
That’s far from the truth as you may well know, because business transactions require contracts to be put out to tender, procurement compliance, knowledge of commercial contract law and many other factors.

4. Legal teams

It’s rare for in-house legal teams to be involved in buying processes but it has been known to happen with large contracts.
The public sector especially given the huge amount of sums involved in many projects.
Housing development, and commercial developments where there’s significant oversight of legal compliance required often need the input of either an in-house legal team or a legal advisor on retainer to oversee projects ensuring everything is done above board.

5. HR departments

In case you’re a student, we’re talking about Human Resources here. This is the team that does the hiring and firing, ensuring that when the firing stage comes, the employer isn’t going to lose a legal battle if an employee takes them to a tribunal for unfair dismissal.
Where HR comes into the procurement process is with regards to uniforms, and perhaps PPE equipment, for which staff will raise concerns with HR who then liaise with other teams to get whatever equipment is required. This department will also be responsible for attracting and retaining top talent within the company.

6. Marketing teams

When there’s corporate branding required, the marketing team will have input into the buying or hiring process of equipment when it’s going to strengthen and/or promote the brand.
When anything affects a brands image or reputation, the marking team is there to capitalise on opportunities to ensure the business interests are maximised for growth.

In conclusion

With all the teams and members involved in them, it’s easy to see how things become far more complex than they need to be. Buying decisions are not made instantaneously and there are some contracts that can be put out to tender, taking months to go through terms and conditions, whilst always ensuring legal compliance throughout.
That’s the process of the larger corporations, so as you’ll imagine, without the right teams in place, small businesses will have a hard time getting the best value on services bought because they don’t have all those people in-house to work through everything.
If your company is one or more team members short, or lack the specialist knowledge you need to procure the best services at the most cost efficient price – outsource it, because it’s far more cost efficient.
For small to medium sized businesses, it’s rare that you’ll be able to get the best value without input from different teams with collective knowledge and negotiation skills.
Does your company need a specialised cost cutting exercise done?
Call the Procurement Group on 0800 0193 244 or click the link below to contact us.
https://procurementgroup.co.uk/contact/

The Real Teamwork Required For Cost Efficient Buying Processes

Business transactions are far more complex than most staff members give the finance team credit for. It seems to be only the professionals in organisations that really get just how complex purchasing can be.

Then there’s the purchasing word itself. There are some professionals with a heavy dislike for the term purchasing; taking the view, rightly so that it is a transactional based buying process, when in reality, procuring products and services takes a whole spectrum of issues into consideration.

Purchasing departments often have buyers appointed to deal with commercial contracts and make all the buying decisions. There comes a point in larger enterprises though when buyers just can’t keep up.

When that time comes, procurement departments are put in place and those staff in there must be team players, because there’s a list of other team members they will need to work well with alongside, with everyone acting in the best interest of the business.

6 Teams involved in the buying process

1.  End users

Every team member must have tools to get their job done, but rarely do they get to buy the tools they need. They need approval from the finance department and then the finance team pass the information to the procurement team to get started with the purchasing.

End users should always be involved in purchasing decisions because they know the tools they need to get the job done.

2.  Finance department

This is the department that the majority of staff thinks has money to throw around. In reality they’re working to tight budgets and juggling figures left, right and centre to stay within the assigned budgets.

To get budgets going further, procurement teams are often in place to ensure they get the best value and services they can for the money going out.

3.  The procurement team

In large organisations, there are buyers appointed. These are people who many think have a whale of a time doing their job because all they do is buy stuff.

Sounds fun!

That’s far from the truth as you may well know, because business transactions require contracts to be put out to tender, procurement compliance, knowledge of commercial contract law and many other factors.

4.  Legal teams

It’s rare for in-house legal teams to be involved in buying processes but it has been known to happen with large contracts.

The public sector especially given the huge amount of sums involved in many projects.

Housing development, and commercial developments where there’s significant oversight of legal compliance required often need the input of either an in-house legal team or a legal advisor on retainer to oversee projects ensuring everything is done above board.

5.  HR departments

In case you’re a student, we’re talking about Human Resources here. This is the team that does the hiring and firing, ensuring that when the firing stage comes, the employer isn’t going to lose a legal battle if an employee takes them to a tribunal for unfair dismissal.

Where HR comes into the procurement process is with regards to uniforms, and perhaps PPE equipment, for which staff will raise concerns with HR who then liaise with other teams to get whatever equipment is required. This department will also be responsible for attracting and retaining top talent within the company.

6.  Marketing teams

When there’s corporate branding required, the marketing team will have input into the buying or hiring process of equipment when it’s going to strengthen and/or promote the brand.

When anything affects a brands image or reputation, the marking team is there to capitalise on opportunities to ensure the business interests are maximised for growth.

In conclusion

With all the teams and members involved in them, it’s easy to see how things become far more complex than they need to be. Buying decisions are not made instantaneously and there are some contracts that can be put out to tender, taking months to go through terms and conditions, whilst always ensuring legal compliance throughout.

That’s the process of the larger corporations, so as you’ll imagine, without the right teams in place, small businesses will have a hard time getting the best value on services bought because they don’t have all those people in-house to work through everything.

If your company is one or more team members short, or lack the specialist knowledge you need to procure the best services at the most cost efficient price – outsource it, because it’s far more cost efficient.

For small to medium sized businesses, it’s rare that you’ll be able to get the best value without input from different teams with collective knowledge and negotiation skills.

Does your company need a specialised cost cutting exercise done?

Call the Procurement Group on 0800 0193 244 or click the link below to contact us.

https://procurementgroup.co.uk/contact/

Image courtesy of emaze.com.

Is China Really To Blame For The Collapsing Steel Industry?

Is China Really To Blame For The Collapsing Steel Industry?

On the surface of things, when things go wrong, almost automatically, someone has to be at blame. It’s almost human nature.

If you watched South Park, you’re likely to recall the song ‘Blame Canada” featuring parents taking a stance over what’s wrong with America’s youth; Canada’s to blame. The UK seems to have a South Park approach to blame China for the nose-diving direction the steel industry has taken.

If you take a step back from the current situation the steel sector’s landed in – which is a truly sad state of affairs with a bleak outlook for the future – although there is chatter that tech could revive the UKs steel sector – the demise could probably have been seen a mile off, years back.

It’s an industry that consumes high energy so every steel manufacturer has been at the mercy of energy prices. We all know how those have been going; great for the suppliers and poor for the consumers.

Tack on the green issues, tax burdens and agenda from government to cut carbon emissions, it’s no surprise that there’s not much in the way of help and support to the steel manufacturers.

The steel industry is calling for the scrapping of the ‘lesser duty’ rule in favour of tougher penalties to stave off foreign competitors flooding European countries with cheap steel imports.

Something the UK government is opposed to.

It would appear the UK steel workers must be feeling their message is falling on deaf ears in the UK when they’ve already taken to Brussels to lobby the European Commission. There’s far more our government could be doing right now that would have an immediate impact on the industry and it’s something private sector firms could all be helping with – prioritising local trade in their company procurement policies.

The public sector is highly regulated and has to abide by the Official Journal of the European Union (OJEU), however, in the private sector, there’s less red tape inviting competition.

Compete for quality over quantity.

The entire fall of the steel industry is because of imports and exports. In 2014, the UK imported 687,000 tonnes of steel from China, and overall imports from the EU were 4.7 million tonnes. The UK produces 12 million tonnes of steel per year.

The point is, there’s plenty of steel and the industry has part responsibility for the collapse. While foreign markets focused on quantity with mass production and export, the UK has stuck to quality consistently and that’s came at a premium. Were they actually advertising high-grade steel or just steel? Perhaps some importers were not aware of the quality differences. In any case, the quality option’s soon to be gone.

The worrying aspect of steel imports is the number of things it’s used for. The construction of buildings, homes, hospitals, vehicles, electric appliances and the galvanised steel drums used for transporting oils and other liquid flammables.

It makes you wonder what our new buildings will be like twenty years from now. Especially given the effect climate change is having, with bridges built centuries ago now collapsing under the unforgiving nature of the storms.

Years from now, companies may well look back on their decision to import cheap steel with regret for compromising on quality in a bid to save on overheads

Is China Really To Blame For The Collapsing Steel Industry?