Small and Local Suppliers Policy

SMALL AND LOCAL SUPPLIERS PROCUREMENT POLICY

Last updated: March 2021 Policy owner: Jim Hemmington, Director of Procurement Department: Procurement

Small and Local Suppliers Last update: March 2021 Policy owner: Jim Hemmington, 1 Procurement Policy Director of Procurement

Summary

This document sets out the BBC’s policy for buying specifically from small and local suppliers, and sits alongside the BBC’s Purchasing Policy and the wider objectives of the BBC’s procurement activity, which are

✓ to optimise the way in which we engage with our suppliers in order to deliver value for money; ✓ simplify processes; ✓ raise service levels; ✓ reduce risks; ✓ deliver our social value and sustainability ambitions; and ✓ develop successful relationships.

The BBC is a national organisation with major centres across the United Kingdom. We buy a range of goods and services from a broad and varied mix of suppliers.

Small and local suppliers can be a valuable and flexible source of supply for the BBC, offering not just value for money but sometimes a more tailored service catering for niche or discrete business/local needs.

The BBC wishes to support small and local businesses, and help organisations looking to grow and expand their client base. In order to do so, we need to ensure that our policy: ✓ Aligns buying from small and local suppliers to the objectives of the BBC’s national deals; ✓ Complies with our obligations under the Public Contracts Regulations 2015 (the “Procurement Regulations”) which govern contracts above the UK Public Procurement thresholds in value; ✓ Ensures our arrangements with small and local suppliers meet our longer term business goals for example: o maximising economies of scale where appropriate; o reducing the number of suppliers we work with; o reducing supply risk to the BBC and engaging with organisations that support our corporate and social objectives; and ✓ Maintain fairness in, and transparency of, our buying decisions.

Section 1 of this document defines a small and local supplier for the purpose of this policy and Section 2 outlines the policy for buying from these organisations.

Appendix 1 consists of supplementary notes covering benefits of contracting with small and local suppliers, potential barriers for small and local suppliers and how to overcome them and the risk of dependencies between the BBC and small and local suppliers.

Appendix 2 includes a list of key BBC buildings and associated UK areas/regions. The policy will be reviewed on a regular basis to ensure it remains complete, current, and aligned to the BBC’s procurement activity.

Small and Local Suppliers Last update: March 2021 Policy owner: Jim Hemmington, 2 Procurement Policy Director of Procurement

5 key points of this policy

1. What is a small and local supplier

2. How small and local suppliers can engage with the BBC

3. Benefits of using small and local suppliers

4. Potential barriers and how to overcome them

5. Managing dependencies on small and local suppliers

Small and Local Suppliers Last update: March 2021 Policy owner: Jim Hemmington, 3 Procurement Policy Director of Procurement

Contents

Summary ...... 2 5 key points of this policy ...... 3 1. WHAT IS A SMALL AND LOCAL SUPPLIER? ...... 5 1.1 SMALL ...... 5 1.2 LOCAL ...... 5 2. THE POLICY ...... 5 2.1 EQUAL OPPORTUNITY ...... 5 2.2 LARGER CONTRACTS ABOVE PUBLIC PROCUREMENT THRESHOLD ...... 6 2.3 PURCHASES AND CONTRACTS OF UP TO PUBLIC PROCUREMENT THRESHOLD ...... 6 3. APPENDIX 1: SUPPLEMENTARY NOTES ...... 8 3.1 BENEFITS OF USING SMALL AND LOCAL SUPPLIERS ...... 8 3.2 POTENTIAL BARRIERS AND HOW TO OVERCOME THEM ...... 9 3.3 DEPENDENCIES ...... 12 4. APPENDIX 2: LIST OF KEY BBC BUILDINGS AND ASSOCIATED UK AREA/REGION ...... 13

Small and Local Suppliers Last update: March 2021 Policy owner: Jim Hemmington, 4 Procurement Policy Director of Procurement

SMALL AND LOCAL SUPPLIERS PROCUREMENT POLICY

1. WHAT IS A SMALL AND LOCAL SUPPLIER?

1.1 SMALL Where the organisation has fewer than 50 employees and has an annual turnover or balance sheet value, which is equal to or less than £8.2m/10m Euros (EU definition), they are deemed to be a Small supplier.

1.2 LOCAL Where the organisation’s operations are carried out within the same UK area/region as the procuring BBC office (a list of main BBC buildings and corresponding UK area/regions is attached at Appendix 2). In the case of a production on location, a “local” organisation will be one which operates in the UK area/region in which that production (or production office) is based.

2. THE POLICY

This policy sets the parameters and circumstances through which small and local organisations can work with the BBC.

As an overriding principle, and in conjunction with the BBC’s Purchasing Policy, all suppliers are required to contract on the basis of the BBC’s terms of trade which set out the BBC’s expectations in terms of working with its suppliers and ensure the parties are appropriately protected from a legal perspective.

2.1 EQUAL OPPORTUNITY

The BBC does not discriminate in favour of, or against, any particular group or type of suppliers, regardless of their location, size, or position in the market.

We encourage new sources of supply and innovation from all suppliers capable of and wishing to supply the BBC, and select suppliers on the basis of their ability to demonstrably provide on-going value for money. We support small organisations that may have potential to become key suppliers of the future and local suppliers where we have a local presence in the community.

While the BBC operates an open and non-discriminatory supply policy, it can sometimes be challenging for small and local suppliers to engage because: ✓ as a national organisation, we often buy on a national basis to maximise savings through economies of scale, which can lead to contracting with larger suppliers with national networks; and

Small and Local Suppliers Last update: March 2021 Policy owner: Jim Hemmington, 5 Procurement Policy Director of Procurement

✓ we are subject to legislation in the way we buy through the Procurement Regulations, which means we must aggregate spend where feasible into larger contracts that can be a barrier for smaller suppliers.

There are a number of potential barriers to entry for small and local suppliers. Ways to navigate these are outlined in the supplementary notes section (Appendix 1).

2.2 LARGER CONTRACTS ABOVE THE PUBLIC PROCUREMENT THRESHOLD

Contracts above the value of public procurement threshold for supplies and services are usually covered by the Procurement Regulations and advertised in the United Kingdom’s Find a Tender e- notification service (“FTS”) and Contracts Finder. Details regarding compliance to these Regulations are available here.

The buying strategy for these contracts will consider: a) whether the BBC will set a turnover threshold for prospective suppliers, so that the BBC contract is no more than a third (or similar) of the annual turnover of the supplier. A threshold will not be set where this could have a negative impact on choice and the quality of the supply market. This threshold will be set where: ✓ there could be a business continuity risk if the BBC contracts with a supplier with a potential high dependency on the BBC; or ✓ the market is mature with many established suppliers and a financial threshold may assist in de-risking the procurement. b) whether the requirements can be split into smaller lots (i.e. chunks of spend / type of purchase that reflect a local area, or region, or niche requirement) so that small and local organisations can bid.

The BBC alerts suppliers to current opportunities via Contracts Finder and our website.

2.3 PURCHASES AND CONTRACTS OF UP TO THE PUBLIC PROCUREMENT THRESHOLD

Ad hoc buying and contracts up to the public procurement thresold are subject to various buying routes depending on the requirements and must be in conjunction with the BBC’s Purchasing Policy.

Typically local organisations tend to serve only the relevant BBC offices by virtue of their proximity to these offices, although this does not limit their ability to serve the wider BBC, simply because they are classed as “local”. For this type of spend small and local suppliers are able to engage with the BBC in three ways:

IN SUPPLYING A ONE-OFF PURCHASE OF UP TO £5,000 These are classed as incidental, low value purchases where a negotiated framework agreement, national or regional contract is not always available or necessary. These purchases do not typically affect business continuity.

Small and Local Suppliers Last update: March 2021 Policy owner: Jim Hemmington, 6 Procurement Policy Director of Procurement

In such cases, if spend with one supplier becomes more regular and of higher value, e.g. expected or retrospective spend with a single supplier exceeds or is anticipated to exceed £50,000 per annum, the Procurement team may consider the benefits of running a simple competitive exercise to ensure fairness within the locality and establish more formal arrangements with a small number of small and local suppliers. The Procurement team will determine the approach and process for such arrangements.

IN SUPPLYING LOW TO MEDIUM VALUE PURCHASES (£5,000 TO £50,000) ON A REGULAR BASIS This spend is deemed regular in that suppliers are fulfilling an on-going requirement (daily, weekly, monthly, etc.), for example consumable items, or niche services, that cumulatively could reach a total spend of up to £50,000.

Given the regularity of this spend; it is possible that the type of goods or services being purchased may affect business continuity if they are not fit for purpose, or delivered to the BBC’s required standards. This may also create for the BBC a dependency on a small and /or local supplier, or conversely the supplier may come to rely heavily on BBC business. The risk of such dependencies will be monitored and managed by the Procurement team.

In these circumstances, the BBC may choose to run a simple procurement process to ensure best value for money is being delivered and that potential competing small and /or local suppliers see equal opportunity to be given a chance to bid. The Procurement team will identify the appropriate approach and process for such arrangements, including the minimum contractual provisions that need to be in place.

IN SUPPLYING GOODS AND SERVICES ABOVE £50,000 AND BELOW THE PUBLIC PROCUREMENT THRESHOLD This spend is most likely of a regular nature, longer term. It may cover goods or services which affect business continuity if not fit for purpose or delivered to the BBC’s requirements. A longer term contract or the setting up of an appropriate framework contract may be required.

In this case, a full procurement process will most likely be run by the BBC. For these requirements a small and local supplier may supply to the BBC in a number of ways: ✓ directly with the BBC where the type of services are appropriate to their organisation and skill set; ✓ bidding as sub-contractors to a larger prime contractor or as a part of a consortia arrangement – particularly where the requirement forms part of a larger national contract; or ✓ by getting involved as a sub-contractor post the procurement process, where a national supplier is seeking to expand their local presence.

Small and Local Suppliers Last update: March 2021 Policy owner: Jim Hemmington, 7 Procurement Policy Director of Procurement

3. APPENDIX 1: SUPPLEMENTARY NOTES

3.1 BENEFITS OF USING SMALL AND LOCAL SUPPLIERS

Small and local suppliers may be better placed to offer benefits such as:

✓ a more responsive service; ✓ reduced need for transportation (and associated reduced carbon emissions); and ✓ more tailored solutions and supply arrangements.

The use of small and local suppliers and the empowerment of these organisations to develop and expand their businesses could potentially result in a stronger small and local supplier sector in the regions the BBC operates leading to potentially increased competitiveness in the longer term.

BETTER VALUE

Because of their size or flexibility of location/type of premises, small and local suppliers can have lower administrative costs when compared with a larger competitor, reducing the cost of overheads and consequently the overall cost of supply.

BETTER AND SPECIALISED SERVICES

Local suppliers may specialise in a particular product or service, for example local catering. Because of their emphasis on specialisms or excellence in a certain area they will often be better placed to supply a higher quality product or service and to tailor their service to meet the BBC’s specific needs.

INNOVATION

Small and local suppliers could

✓ bring more innovation (e.g. technological) to the products or services delivered, ✓ be able to be agile and move quickly to embrace new developments in the market, especially where they are a niche provider of these products or services.

CONTRIBUTING TO THE DEVELOPMENT OF LOCAL ECONOMIES

Small and local suppliers consistently contribute to development of local economies and have been identified by the Government as being central to the development of well-being within UK regions. By placing business with these types of suppliers, the BBC will also indirectly contribute to development of local communities and their economies.

Small and Local Suppliers Last update: March 2021 Policy owner: Jim Hemmington, 8 Procurement Policy Director of Procurement

3.2 POTENTIAL BARRIERS AND HOW TO OVERCOME THEM

Many potential small and local suppliers may be discouraged from tendering for BBC opportunities because of a number of perceived or real barriers. Some of these barriers as well as guidance on how to overcome them are outlined below.

The BBC will seek to reduce the impact of such barriers, where it is appropriate and it can do so legally, without discrimination and without taking unnecessary risk.

FINDING OPPORTUNITIES

Small and local suppliers may not know about or have the resources to search the FTS or Contracts Finder , where contracts above the public procurement threshold in value are advertised – unless exempt) on a regular basis. Additionally, they may not know where to look for or who to talk to about lower value procurements (below public procurement thresholds).

Guidance In order to have the maximum visibility, the BBC will endeavour to: ✓ ensure that opportunities are published on the BBC website and Contracts Finder; ✓ provide information for potential tenderers on the BBC website where suppliers will have access to view and register an interest in existing opportunities or just register for future opportunities; ✓ where appropriate, opportunities will also be listed in specific trade press or contact lists for local supply markets, as well as public procurement portals (e.g. Procurement Scotland); ✓ the BBC Procurement team will also work to better understand the local supply market by, for example, identifying and mapping existing and potential local suppliers, their products, services and capabilities; and ✓ hold regional and local procurement road-shows in order to meet and understand the local supplier market and manage expectations regarding BBC opportunities.

PROCUREMENT PROCESS

Small and local suppliers may perceive the procurement process as long, overly complex and costly and have difficulties in competing with larger organisations.

From the very start of the procurement process, the BBC will endeavour to: ✓ ensure that it has clearly formulated its requirements prior to engaging with the market on any procurement which is subject to the Procurement Regulations; ✓ ensure that the procurement process proposed to be used is suitable for the size and complexity of the requirement; ✓ provide information within the tender documentation that explains the procurement process and what is required from the suppliers;

Small and Local Suppliers Last update: March 2021 Policy owner: Jim Hemmington, 9 Procurement Policy Director of Procurement

✓ include a timetable within the tender documentation, including information relating to deadlines and other key dates (such as dates for clarification questions) and make sure suppliers are kept up to date with any changes; ✓ provide clarification upon request on the evaluation criteria being used, and ensure that as much detail as possible is available; ✓ provide a single contact point for suppliers, and ensure that point of contact is available to respond to all queries; ✓ run procurements in a timely fashion in order to keep procurement costs to a minimum; and ✓ ensure that all tender debriefs provide useful information on the advantages of their own tenders and the relative advantages of the successful tender to ensure lessons are learned for tendering in the future.

PREQUALIFICATION CRITERIA

Small and local suppliers may be relatively recently established and not have an extensive track record, therefore may have difficulty providing the required evidence of financial standing, or not have a large enough turnover to qualify for certain types of procurements.

Guidance The BBC will consider the nature, size and specific risks of every procurement and will ensure that the requirements for demonstrating financial standing are appropriate and relative to the risks of the individual procurement.

UNDERSTANDING THE REQUIREMENTS Small and local suppliers that have not bid in a public sector environment previously may have concerns about the process.

Guidance

The BBC will provide specific information about exactly what it expects to receive as a part of a tender, by providing as much information as possible within the documentation released as a part of the tender, including: ✓ making requirements clear and focused on outputs and outcomes and avoiding over or under- specification; ✓ being clear regarding what the supplier will need to do to respond to the requirements, e.g. the type of information necessary and the format in which this information will need to be provided; and ✓ ensuring clarity regarding how questions can be raised by suppliers in the event that they have any queries on the requirement.

SUBCONTRACTING

In some cases, small and local suppliers may prefer to act as sub-contractors to a prime contractor, particularly where they can provide innovative and specialist products and services. The decision to

Small and Local Suppliers Last update: March 2021 Policy owner: Jim Hemmington, 10 Procurement Policy Director of Procurement

employ a certain subcontractor is mostly of a commercial nature and will therefore ultimately lie with the prime contractor.

Guidance Whilst taking care not to intervene and unduly influence decisions which should lie solely with the prime contractor, the BBC will help in making the supply chain more visible, by:

✓ advertising sub-contracting opportunities on the BBC’s supplier websites;

✓ organising open supplier meetings that allow prime contractors and small and local suppliers as potential sub-contractors to meet and network;

✓ where appropriate, ensure that prime suppliers adopt supply chain management practices that integrate, incentivise and reward good performance in the supply chain;

✓ be open to consortia bids from prime, larger suppliers and small and local suppliers; and

✓ develop appropriate information databases regarding the performance of small and local suppliers as a part of the supply chain.

LARGER AND LONGER CONTRACTS

One of the current trends in public sector procurement is for larger and longer contracts. This may deter small and local suppliers from bidding.

In ensuring that the procurement is packaged to deliver the best value for money, the BBC will:

✓ consider the scope of its procurements on a case by case basis. In doing so, the BBC will consider if it is appropriate to package requirements separately, in lots of services or as one service; and

✓ where commercially appropriate, endeavour to structure its contracts to allow for additional demand to be supplied from other sources, if this is considered to be the best option at a particular moment in time.

CASH FLOW

The BBC is an approved signatory of the Prompt Payment Code, a code of practice launched by the Department for Business Enterprise in 2008. The BBC will always ensure it pays its suppliers on previously agreed contractual terms (for the most up to date version, please see here . Where appropriate, the BBC may consider variations of its standard terms to facilitate prompter payment.

Small and Local Suppliers Last update: March 2021 Policy owner: Jim Hemmington, 11 Procurement Policy Director of Procurement

3.3 DEPENDENCIES

The BBC will evaluate the risks of purchasing from /partnering with small and local suppliers on a case by case basis in order to ensure that it does not become unacceptably dependent on a small and local supplier. To this end, the BBC may carry out annual reviews of existing contracts with small and local suppliers in order to evaluate the relationships. This will include potentially reviewing the on- going financial health of a supplier, the levels of insurance and liability required, and the amount of work being requested from individual suppliers.

Small and Local Suppliers Last update: March 2021 Policy owner: Jim Hemmington, 12 Procurement Policy Director of Procurement

4. APPENDIX 2: LIST OF KEY BBC BUILDINGS AND ASSOCIATED UK AREA/REGION

BBC Building Address UK area / region

BBC Birmingham The Mailbox 102-107 Wharfside West Midlands Street, Birmingham B1 1AY

BBC Salford BBC MediaCityUK, Salford North West M50 2QH

BBC Surrey Broadcasting Broadcasting Centre, Guildford, South East Centre Surrey GU2 7AP

Belfast Broadcasting House Broadcasting House, Ormeau Belfast Avenue, Belfast BT2 8HQ

Bristol Broadcasting House Broadcasting House, South West Whiteladies Road, Bristol BS8 2LR

Glasgow Pacific Quay 40, Pacific Quay, Glasgow,G51 Scotland 1DA, Scotland

BBC Cymru Wales 3 Central Square, Cardiff, CF10 Wales 1FT

London Broadcasting House Portland Place, London W1A London 1AA

Small and Local Suppliers Last update: March 2021 Policy owner: Jim Hemmington, 13 Procurement Policy Director of Procurement