Policy & Implementation
Procurement Policy and Principles
1. Procurement Policy
Procurement is one of International Power’s key business processes, which has a major impact on the Company’s performance, costs and profitability. It provides the ‘gateway’ to a vast wealth of goods, materials and services in the world at large. International Power will seek: Company-wide networking of expertise and resources
- to retain the initiative through informed planning, active management of the supply market and collaboration with key suppliers
- focusing its specialist resources on areas of high added value.
This will be achieved by:
- recognising the commercial, technical and environmental implications of each procurement action;
- making procurement practices more effective and efficient,
- realising the full potential of the procurement capability within the business, to deliver continuously improving performance;
- bringing to bear all of the relevant skills within the Company on procurement decisions,
- innovating and adapting strategies and processes, to meet the constantly changing demands of the world-wide business environment,
- building collaborative advantage, by establishing mutually-beneficial relationships with key suppliers and other relevant agencies, ensuring an appropriate level of market testing and supplier capability,
- acting at all times with honesty and integrity,
- complying with all relevant laws to ensure there is no exposure to breaches of statutory duties,
- complying with budgetary control and financial management processes.
2. Procurement Principles
Only use procurement routes that have been specified through Local Management Instructions. All staff involved in procurement contribute to International Power’s success, by bringing relevant technical, commercial, financial and legal expertise to bear on procurement decisions and acting in accordance with the principles set down in this document.
APPROACH
Develop and maintain a business-focused, innovative and collaborative approach to procurement, within a framework of self-discipline and accountability. Ensure that International Power retains the initiative, through informed planning and active management of the supply market and by making best use of modern procurement tools and techniques. Collaborate fully with other staff across the business, to share knowledge and maximise the Company’s procurement potential. Adopt a common-sense approach to each procurement action, which is proportionate to the value of the transaction, its complexity and the commercial or financial risks involved. Seek legitimate opportunities to co-operate with external parties, for mutual benefit; ensuring, at all times, an appropriate level of market testing and adequate supplier capability. For strategically important and high value transactions, ensure that the technical, commercial and financial aspects of tender assessment are taken fully into account; considering such issues as criticality, through-life costing and value engineering, in addition to headline prices.
IMPACT
Seek to recognise and take account of the commercial, technical and environmental implications of each procurement action. Ensure that relevant aspects of procurement performance are measured in an appropriate and timely fashion, and that adverse performance is acted upon promptly. Comply with the Company’s budgetary control and financial management processes. Take sensible steps to reduce the health, safety and environmental risk associated with procurement actions.
CAPABILITY DEVELOPMENT
Enhance International Power’s capabilities and protect its critical competencies. Staff involved as procurement specialists: Identify and develop the International Power’s expertise; and, in particular, address skill gaps, leading-edge developments and areas of strategic risk. All Staff: Keep up-to-date through education and training relevant to your role within the procurement process.
SYSTEMS AND PROCEDURES
Make full use of the specific commercial benefits provided by each of the approved procurement routes. Comply with International Power’s framework of agreed systems and procedures, supplemented where appropriate by local management instructions, to secure the above objectives reliably and at minimum overall cost. Continuously seek to identify opportunities for improvement in International Power’s procurement processes, systems and procedures. Maintain appropriate records; ensuring that the security and confidentiality of procurement-related documents and information are adequately safeguarded.
3. Delegations of Authority
All procurement activities can only be carried out within the limits of financial delegations strictly complying with budgetary control and financial management processes.
ANTI-COMPETITIVE BEHAVIOUR
From time to time, buyers may become aware of supplier organisations apparently acting in concert to fix prices or divide up markets. More rarely, there may be arrangements between buyers from different organisations designed to put pressure on suppliers. Any such suspicions should be reported (with any supporting evidence) to your Manager who will investigate and decide on the necessary action.
LEGALITY
Our activities must fully respect all applicable UK and relevant European and International laws and regulations. We may use legal opportunities to optimise our tax burden. We will not be a party to the evasion of legally applicable taxes, customs duties or other charges, either by our suppliers or ourselves.
ETHICAL, SOCIAL AND ENVIRONMENTAL RESPONSIBILITY
Our procurement will be conducted so that any supplier that has the necessary abilities to be of service to us has a fair opportunity to secure our business. In particular, we must be on our guard to ensure that our procedures do not place unnecessary obstacles in the way of small companies, new companies, and companies owned or managed by members of minority or disadvantaged groups. We will, as far as is possible, work only with suppliers that our own customers would be prepared to trade with. We will therefore avoid using companies, at home or overseas, that exploit child or sweated labour, that disregard basic health and safety provision, that 'pirate' the intellectual property of others, or that wilfully and avoidably damage the environment. With regard to the environment, our purchasing choices will favour products showing clear environmental advantages unless there are significant reasons for not doing so. We have a responsibility to our suppliers. Wherever possible, when problems arise with a supplier's performance or behaviour, we will work with the company concerned to help them meet our requirements. We also have a responsibility to the community within which we work. Other things being equal, we prefer to use local suppliers where possible, and we will work with companies in the vicinity to improve their ability to meet our requirements.
