1. Purpose
1.1 Purpose
This Supplier Management Policy (“Policy”) articulates the British Business Bank’s (the “Bank”) approach to Supplier Management (sustainable procurement, contracting and supplier relationship management), reflecting on the increasing size, scale and maturity of the Bank and the need to maintain professional practice across the business to ensure long term Value for Money, where appropriate, on a whole life basis, and to protect and enhance the Bank’s brand and reputation. The Bank is committed to the wider community's social, economic and environmental well-being and will seek sustainable and social value outcomes relevant to the opportunity.
The Bank expects Colleagues to make commercially sound decisions in compliance with the relevant laws and government policies, to secure the right suppliers at the right price and proactively collaborate, as appropriate, to deliver the right goods and services to the Bank.
This Policy must be read in conjunction with the supporting Standards (please refer to section 6 below).
1.2 Legal & Regulatory Obligations
This Policy, along with the supporting Standards, will ensure the Bank meets all applicable legal and regulatory obligations in relation to the effective and sustainable management of spend and suppliers. This Policy recognises the relevance of the Companies Act 2006 and the duty to promote the success of the Bank and have regard to the need to foster the company’s business relationships with suppliers, as well as customers and Colleagues, and the need to maintain a reputation for high standards of business conduct.
The Bank is a body governed by public law and is required to comply with the prevailing Public Contracts Regulations and Procurement Act and consequently should act as a public sector organisation as far as procurement is concerned. All current and future associated legislation must be given consideration and acted on appropriately including for example (but not limited to) the Modern Slavery Act, Social Value Act and the UK General Data Protection Regulation (GDPR).
In addition to meeting its legal obligations, the Bank as an Arm’s Length Body (ALB) is required to meet the Government Functional Standards where applicable. This policy includes elements of the obligations relating to Government Functional Standard 008: Commercial, as applicable.
The Policy recognises that the Bank will comply with Procurement Policy Notes issued by the Cabinet Office and Cabinet Office Controls.
1.3 Alignment to Risk Appetite
Risk appetite is the type and level of risk the BBB Board is willing to take to deliver its strategy and public policy objectives.
This Policy sits under the Level One Risk Category, Operational Risk and Resilience. It aligns to the Level Two Risk Category, Third Party Risk, which is defined as ‘the risk of failing to procure and manage third party relationships and risks appropriately’.
The Bank’s risk appetite in relation to Third Party Risk is Medium. For further detail please see the Risk Management Framework.
2. Scope
a. In Scope
This Policy, and the associated Standards, apply to all Bank entities, operations, subsidiaries and Colleagues.
Whilst Commercial Operations are accountable for the Procurement Cycle (either directly or through supervision as appropriate), the relevant business area will remain responsible and accountable for ownership of the Business Requirements and Contracts and managing supplier relationships.
Note: whilst this Policy and accompanying Standards apply to contracts for external legal services, the procurement of external legal services is not undertaken by Commercial Operations. The procurement, contracting, and supplier relationship management activities, pertaining to external legal services, are conducted by BBB Legal. Please refer to the ‘Procedure for engaging external law firm services’ which sets out the process for engaging an external law firm.
This Policy and associated Standards do not apply to third party supplier spend with an aggregate value of less than £10,000 excluding VAT.
b. Out of Scope
The engagement of lenders, intermediaries, and other organisations that work in partnership with the Bank to deliver our products and programmes is outside the scope of this Policy as they fall within exemptions from the Public Procurement Regulations or Procurement Act.
For the definition of abbreviations and additional terms please refer to section 8.
3. Supplier Management Principles
The Bank will embed the following principles in the Procurement Cycle, so they become an integral part of all relevant Contracts:
Accountability: In the context of Procurement, this specifically includes accountability for impacts on our supply chains, with a life cycle perspective on goods or services. The Bank will, monitor these impacts by reviewing the environmental and social impacts through the implementation of third-party monitoring services and indicators that will support monitoring suppliers on those areas.
Transparency: The Bank is transparent in the decisions and activities that impact the environment, society and our organisation. In the context of Procurement, this specifically includes being transparent in our Procurement decisions and activities and encouraging our suppliers to be transparent. Transparency is the basis for stakeholder dialogue and collaboration.
Full and fair opportunity: The Bank will avoid bias and prejudice in its Procurement decision-making. Through competing Business Requirements, the Bank seeks to ensure all suppliers, including local suppliers and small and medium-sized enterprises (SMEs), will have a full and fair opportunity to compete.
Respect for human rights: The Bank respects internationally recognised human rights and complies with legislation. The Bank expects suppliers to follow this principle and align their business practices with the UK Government Supplier Code of Conduct.
Focus on needs and outcome-based specifications: Contract Owners will work with Commercial Operations to review demand, buy only what is needed and seek more sustainable alternatives.
Integration: The Bank will, where relevant and appropriate, seek to ensure that sustainability is embedded into procurement planning.
Analysis of all costs: through internal prioritisation, the Bank will consider the cost incurred over the life cycle, Value for Money, and the costs and benefits for society, the environment and the economy resulting from our Procurement activities.
4. Key Requirements
The following key requirements of this Policy must be followed to ensure that the Bank operates within the associated Standards and related procedures or processes.
4.1 Effective Sustainable Procurement processes and robust Supplier Relationship Management
BBB must effectively procure, contract and manage suppliers by:
- Contract Owners engaging with Commercial Operations in a timely manner, and before commencing the Procurement Cycle;
- conducting Procurement in accordance with our Commercial Principles;
- Segmentation being conducted on all Business Requirements;
- embedding appropriate sustainability criteria in the Procurement Cycle;
- all engagements with suppliers being covered by a compliant Contract and all Contracts must have a nominated Contract Owner;
- entering into fit-for-purpose and sustainable Contracts;
- undertaking Contract Management and Supplier Relationship Management activities on a proportionate basis;
- designing and operating appropriate supplier management controls which are consistently applied according to supplier importance;
- ensuring controls are suitably evidenced so they can be measured and reported on by Commercial Operations to demonstrate the Bank is operating within approved risk appetite and in accordance with our policies and standards;
- leverage our buying power where appropriate;
- managing suppliers more intelligently and commercially vs. a compliance and transactional based approach to comply with reference, where applicable, to the minimum mandatory UK Government Buying Standards (GBS) when buying goods and services.
4.2 Sustainable Procurement supporting the UK’s transition to a Net Zero economy
The Bank will seek to promote sustainability practices in our supply chain in areas such as:
- Where permissible and compliant with Public Contract Regulations or Procurement Act, favouring services with a low environmental impact and enhanced social value considerations;
- On a proportionate and priority basis, reviewing Contracts to identify potential to reduce carbon emissions and enhance sustainability outcomes and assisting suppliers in developing and implementing carbon reduction plans;
- On a proportionate basis, the Bank will seek to require prioritised suppliers to provide a carbon reduction plan confirming the supplier’s commitment to achieving Net Zero by 2050 in the UK, and setting out the environmental management measures they have in place and which will be in effect and utilised during the performance of the Contract, along with a commitment to provide the Bank with emissions reporting as required by the Bank;
- The Bank will encourage existing suppliers to bring forward options to enhance sustainability outcomes
- The Bank expects suppliers to support accurate reporting on product or service environmental and social impacts, by being open and transparent.
5. Non-Compliance
Compliance with this Policy and the associated Standards is mandatory. All identified breaches of this Policy must be reported via the Risk Incident Portal on the Bank’s Intranet. Breaches will be assessed by the Policy Owner to determine the further action required and may include disciplinary action in accordance with the Bank’s Disciplinary Policy.
6. Aligned Standards
Supplier Management Policy
Procurement Standards
IT Outsourcing Standards
Contracting Standards
Contract Management and Supplier Relationship Management Standards
Supporting Policies
- Disciplinary Policy and Procedure
- Gifts and Hospitality Standards
- Anti-Bribery and Corruption Policy
- Delegated Financial Authorities Policy
- Conflicts of Interest Policy
- Data Protection Policy
- Information and Data Governance Policy
- Information Security Policy
- Business Resilience Policy
7. Key Controls
A key control or a combination of controls which manages the inherent exposure of a risk to an accepted residual level and within the defined risk appetite. The key controls relevant to this policy are contained in the table below.
This Policy applies to all business units. Risks relating to specific Contracts and suppliers should be included in respective risk registers including the appropriate Xactium risk reference. These associated controls, and any subsequent controls as they become relevant, should be applied.
| Library Reference | Control Title | Description |
|---|---|---|
| C_LIB_3rdP_01_2 | Approved Supplier Management Policy and associated Standards | The Supplier Management Policy and associated Standards "Policy" articulate the Bank's approach to sustainable procurement, contracting and supplier relationship management. The Policy is reviewed and updated in line with schedule to reflect necessary changes |
| C_LIB_3rdP_02_6 | Maintenance of a procurement pipeline and contracts register | Through maintaining a procurement pipeline and contracts register, which includes the supplier category, procurement effort will be triggered at the appropriate time in advance of need and the extent of research and options consideration will be proportionate to the need |
| C_LIB_3rdP_02_9 | Key personnel identified | Suitable key personnel are required to manage performance, understand and mitigate risk, drive value for money and foster appropriate relationships with suppliers. As such, key personnel will be identified with accountability and responsibility for all procurements, contracts and supplier relationships in accordance with Policy. The key personnel, as appropriate, will be responsible for the procurement of, contract review of supplier contracts, contract management and supplier relationship management activities. |
| C_LIB_3rdP_02_5 | Supplier categorisation through segmentation / Supplier Segmentation Assessment | Clear categorisation of all suppliers into critical, high, medium, low by reference to supplier criticality, importance and spend is undertaken by the business unit via the segmentation assessment form and in line with the Bank's segmentation model. Segmentation is completed at the start of a new contract and then reviewed annually, at a minimum. |
| C_LIB_3rdP_05_1 | Cabinet Office Spend Controls Approvals Process | Process maps in place to support compliance. Atamis incorporates datapoints to capture the need for approval and when approval has been sought. Regular sessions established with DBT. |
| C_LIB_3rdP_03_2 | Contract review process | Contract Owner in conjunction with the procurement lead will review the contract terms and conditions to ensure suitability. Where stipulated, with reference to the two stage test, a contract specialist/manager will undertake a commercial contract review providing robust commercial and contractual law advice in respect of applicable contracts |
| C_LIB_3rdP_03_1 | Oversight in line with Treatment Standards | SRM in conjunction with business owners provide oversight in line with the Treatment standards which are a set of minimum assurance activities designed proportionately with reference to a supplier's segmentation to mitigate risk, drive value and track performance against contractual terms |
| C_LIB_3rdP_02_2 | Commercial Manual | Commercial manual supplements the Supplier Management Policy and is a suite of processes, procedures, templates, governance, and ways of working covering procurement, contracting, supplier relationship management and commercial MI. Raises awareness and provides colleagues with lots of tools to support them in procure, contract and manage. It also includes quality assurance process executed within Commercial Operations. |
| C_LIB_3rdP_02_1 | Internal Commercial Advice | Commercial advice including how to: detail business requirements, performance metrics, develop and execute a suitable and compliant procurement strategy, select the most suitable contract terms and conditions and apply appropriate due diligence on suppliers. |
| C_LIB_3rdP_01_4 | Management Information and Reporting | Management Information and reporting on procurement, ESG, contracting and supplier relationship management activities and any escalations or risks whether emerging or crystalising are reported on a monthly basis to ERC and a live feed from PowerBI is available to individual ExCo members at all times. Ad hoc management information and reporting also adopted as necessary. |
| C_LIB_3rdP_02_7 | Procurement options and strategies / compliant routes identified | On a proportionate basis, with reference to procurement complexity and criticality appropriate procurement options and strategies are agreed / designed in conjunction with business owners taking into consideration market conditions, ESG considerations, procurement options and value for money to achieve the best outcomes for the Bank |
| C_LIB_3rdP_02_8 | Procurement to Legal escalation process | The contract review process is subject to the “Procurement to Legal Escalations Process” which is managed by Commercial Operations. Where the Procurement to Legal Escalations Process is triggered, the Contract Lead will work with the Contract Owner and BBB Legal to obtain legal input on the Contract in question. Similarly, this process will ensure approval is sought from DBT as required. |
| C_LIB_3rdP_02_4 | Training and Awareness | Commercial team to attend suitable training and to design and deliver training for business owners. Training and awareness covers procurement, contracting, supplier relationship management, governance and process. |
| C_LIB_3rdP_02_3 | Use of suitable E-Systems | The use of a compliant e-procurement system for running procurement exercises including requests for information, tender process, exchanging supplier communications and the issue of procurement notices. And, the use of a commercial lifecycle tool which allows the recording of procurement pipelines, contract records and repository, contract administration and management and supplier due diligence and relationship management and reporting. Use of third-party tools to monitor and reports on suppliers |
8. Definition of Terms
Business Requirements: the subject matter at the root of the need to engage with a third-party supplier, whether for goods or services and whether underpinned by a specification, scope of works or any other definition of outcomes or expectations.
Cabinet Office Controls: the Cabinet Office spend controls process relating to obtaining advance approval to spend money on specific activities.
Commercial Principles: are the set of principles that guide the way in which the Bank plans its sourcing activities (procurement, contracting and supplier relationship management), and identifies commercial opportunities to deliver the Bank’s objectives whilst maximising the value from our third-party arrangements.
Colleagues: Individuals working at or for the Bank including Permanent Employees, Fixed Term Contract, Apprentices, Interns, Secondees-out, Secondees-In, Board Members, Non-Executive Directors, Contractors, Temps and Professional Services. and anyone else who may access and use Bank information for the Bank’s purposes.
Contract: a legally binding agreement (including variations, extensions, change control and contractual notices) with a third-party supplier for goods or services.
Contract Owner: the nominated individual responsible for a Contract including the performance of the Contract and day to day Contract Management activities.
Contract Management: the proactive process to ensure that the Bank facilitates the delivery of expected contract outcomes through appropriate monitoring, measurement, and facilitation of Contract performance.
Net Zero: refers to achieving a balance between the amount of greenhouse gas emissions produced and the amount removed from the atmosphere.
Outcome-based specifications: focuses on the desired outputs of a service in business terms, rather than a detailed technical specification of how the service is to be provided; this allows providers scope to propose innovative solutions.
Procurement: in the context of this Policy means the relevant process undertaken to select and enter into a Contract with third-party suppliers for goods or services.
Procurement Cycle: end to end cyclical process from identification of need, through market research, market engagement, Procurement process, contracting, contract management, supplier relationship management, exit and/or repeating the cycle.
Segmentation: is the process, via a segmentation assessment form, the Bank uses to categorise its suppliers into four categories: critical, high, medium and low by reference to supplier criticality, importance and spend.
Supplier Relationship Management: is the act of managing a supplier in line with the Contract, focussing on performance, understanding and mitigating risk and driving Value for Money as well as supporting the business to foster the appropriate partnership.
Sustainable Procurement: a process whereby organisations meet their needs for goods, services and works in a way that achieves value for money on a whole life basis and generates benefits not only to the organisation, but also to society, the economy, and the environment.
Value for Money: in the context of this Policy is the evidenced-based approach to ensuring appropriate goods and services are procured at appropriate cost reflecting on market conditions and contract and relationship management expectations.
Version control
| Version Date | Author | Description | Approved by | Date approved | Date published |
|---|---|---|---|---|---|
| 1.0 | Chris Cliffe FCIPS MIoD [SRM Consultant] | New Policy to supersede existing Procurement Policy | Board Risk Committee | 9th September 2020 | |
| 2.0 | Head of Commercial & Procurement and Senior Supplier Relationship Manager | Policy and Standards BaU updates and Outsourcing, DIOR project inclusions | Board Risk Committee | 15th October 2021 | 15th November 2021 |
| 3.0 | Head of Commercial & Procurement | Policy and Standards annual review and introducing sustainability | Board Risk Committee | 8th March 2023 | 3rd April 2023 |
| 4.0 | Commercial & Procurement Director | Policy & Standards review | Board Risk Committee | 11th March 2025 | April 2025 |