Procurement in a nutshell – supplier code of conduct
3rd October, 2017
This week's update takes a look at the Government's recently published Supplier Code of Conduct (the "Code").
This has been introduced by the Government with the intention of helping suppliers understand the standards which are expected of them when they are contracting with the Government.
In accordance with this, the Code outlines the minimum standards of behaviour which suppliers should aspire to meet in such processes.
General Overview
The Code is centred on the idea that suppliers are an extension of government business and tax payers expect the Government to ensure that suppliers act fairly and ethically.
Accordingly, the Code exists so suppliers can understand the behaviours that are expected when they work with government. Ultimately, the overall objective of the Code is to encourage improved performance throughout government supply chains.
There are three main focus areas to the Code, each consisting of a number of individual requirements:
Employees and Service Users
Respectful treatment: Both government staff and service users have the right to respectful treatment. As such, no discrimination, harassment or victimisation in the workplace will be tolerated in connection with any service supplied.
Professional behaviour: Suppliers must be prepared to build up relationships of trust with staff and other suppliers involved in delivery. Likewise, suppliers should be able to “speak out without fear of consequence” in instances where either government officials or suppliers are failing to uphold the required values.
Human rights and employment law: The Code stresses that suppliers must comply with all applicable human rights and employment laws throughout their whole supply chain. In addition, there must be robust means of ensuring this requirement is fulfilled.
Business Practices
Management of risk: All attempts must be made to ensure that risk is placed with the party most able to manage it. Furthermore, the Code states that there must be shared intelligence of supply chain risks so the chain can work together to best address these.
Continuous improvement: Suppliers must be seen as using recognised industry practices and should look to continuously improve their goods and services to ensure the highest standards are always achieved.
Value: The Code clarifies that the Government is accountable to the taxpayer and, in line with this citizens expect the Government to obtain the best possible contract value and to be able to demonstrate the long term benefit to the UK tax payer. On this basis, suppliers should not exploit a monopoly position by imposing opportunistic pricing. Suppliers are expected to work in good faith to resolve disputes in a prompt and fair manner with as little litigation as possible.
Sustainable procurement: Suppliers should be aware of and be prepared to support the Government in complying with its legal and contractual obligations under social value legislation in the delivery of the wider policy that sits behind the contract. Furthermore, suppliers must be prepared to assist in the understanding and reduction of environmental impact.
Confidentiality: Suppliers are expected to comply with any contractual requirements to protect sensitive information. Supplier’s party to any confidential information must handle that information with the same care and sensitivity as that protected in the contractual provisions.
Standards of Behaviour
Ethical behaviour: The highest standards of business ethics are expected from suppliers and their agents in the supply of goods and services funded by the public. Civil Servants must uphold the Seven Principles of Public Life and the Government expects fully reciprocal behaviour from suppliers.
Counter Fraud and Corruption: Likewise, the code states that the Government demands adherence to anti-corruption laws, including the Bribery Act 2010 and anti-money laundering regulations. There will be a zero tolerance policy for any form of corrupt practices. Suppliers throughout the chain must have robust processes to ensure subcontractors also comply with these laws.
Transparency: Suppliers must be open and honest in their dealings with government also, where contractually required, there must be full disclosure of the cost, revenue and margin information.
Treatment of Subcontractors: Suppliers must treat subcontractors fairly; they must not pass unreasonable levels of risk to the subcontractors who cannot reasonably be expected to manage or carry those risks. Furthermore, no barriers must be created for small to medium sized enterprises.
Why is this important?
This Code firmly establishes the minimum standard for all suppliers involved in government contracts. Consequently the Code will facilitate a move towards an efficient and open supply process.
Ultimately the Government is accountable to the taxpayer and any contract it enters into may be publicly scrutinised to ensure good ethics and value for money.
The Code helps to ensure suppliers are best positioned to maintain the same values and standards as the Government, thus assisting them in public procurements.
How can I find out more?
If you have any queries on the issues raised or on any aspect of procurement, please contact us via our procurement hotline on 0191 204 4464.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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