This page sets out:
- how procurement at HMRC is organised
- how potential suppliers can share their ideas and influence what and how we buy via pre-market engagement events
- the type of goods and services HMRC buys and how it buys them
HMRC’s attitude towards greater engagement with buying from Small and Medium sized Enterprises (SMEs)
HMRC’s sustainable procurement policies
HMRC’s Prompt Payment Policy
HMRC is committed to the very highest standards of procurement best practice, and to promoting government policies such as value for money and transparency.
HMRC values feedback to improve our procurement process and customer-supplier relationships.
If you are a current or prospective supplier, and would like to provide feedback, contact us at:
Common Operations Team (Governance & Assurance)
HMRC Commercial Directorate
5W Ralli Quays
3 Stanley Street
Salford M60 9LA
Supplying to HMRC
How purchasing is organised in HMRC
The vast majority of HMRC contracts of significant value or complexity are let by the Commercial Directorate. Commercial Directorate is responsible for providing support for specific procurement projects, as well as much of the procurement and contract management of goods and services in the department.
HMRC also has specialist teams supported by Commercial Directorate to contract manage major IT and estates contracts, including those established under the private finance initiative. These teams are also responsible for some IT and estates related procurement activity.
HMRC is responsible, on behalf of Crown Commercial Service for the government-wide procurement of print and office solutions under the centralised category procurement (CCP) programme.
Although there are clear benefits from doing business with the government, it is important to be aware of the differences there might be in this market. In general, you should expect bidding procedures to be more exacting since, unlike the private sector, the aim is to ensure value for money for the taxpayer.
How HMRC selects suppliers
The first stage for selecting a supplier is to prepare and agree the specification for the goods and services required to see if these can be procured from an existing enabled contract or framework agreement.
Where this is not possible, the following thresholds will determine the procurement approach:
- low value orders up to £10,000 – five written quotes
- £10,001 to £100,000 – mini-tender exercise advertised on Contracts Finder
- above £100,000 – full competitive tender exercise advertised in the Official Journal of the European Union (OJEU) and/or on Contacts Finder in accordance with the EU Procurement Directives
The department does not hold an approved supplier list, so for low-value orders for goods and services, the following will be used to identify potential sources of supply:
- suppliers’ catalogues
- trade information
- telephone directories
- national, local and trade press
The EU threshold, above which a full OJEU tender exercise should be carried out, is currently £118,133, but our internal thresholds provide a safety net and encourage good practice.
More general information about tendering for public sector contracts can be found on the Tendering for Public Sector Contracts website.
Advertisements and Invitations to Tender (ITTs)
All HMRC ITT opportunities are advertised on Contracts Finder. Additionally, for larger requirements, for goods and services or works contracts subject to the EU rules on procurement, an advertisement will also be placed in the OJEU. Larger contracts may encompass the needs of other departments or agencies and will be enabled for them to use.
Advertisements and tender documents will always give a contact point from which to obtain further information. Where HMRC uses a two-stage tender (restricted) procedure, it will issue a selection questionnaire (SQ) to enable applicants to be selected to be invited to tender. However, in line with the government’s aim to reduce the burden on SMEs and encourage them to bid for public sector work, HMRC will use the one-stage tender ‘open procedure’ where appropriate, which removes the need for a separate SQ stage.
HMRC routinely uses an eSourcing tool called SAP to manage its procurement exercises.
All ITTs will include the technical specifications and timescales, and will be the subject of the applicable HMRC standard terms and conditions for goods and services.
Suppliers and those organisations looking to bid for public sector contracts should be aware that if they are awarded a new government contract, the resulting contract between the supplier and the government will be published. In some circumstances, limited redactions will be made to some contracts before they are published in order to comply with existing law and for the protection of national security. For more information about the government’s commitment to transparency read Letter to Cabinet Ministers on transparency and open data (7 July 2011)
In line with this commitment, HMRC is committed to publishing the following information relating to procurement and contracts:
Terms and conditions
The standard terms and conditions for goods and services reflect Cabinet Office terms and conditions and have been modified for use with the eSourcing tool.
Sustainable Procurement at HMRC
Sustainable purchasing (or procurement) is a process whereby organisations meet their needs for goods, services, works and utilities in a way that achieves value for money and generates benefits not only to HMRC, but also to society and the economy too, while minimising damage to the environment.
Our goal is to become a national leader within government on sustainable procurement. More widely via the Procuring the Future: Sustainable Procurement National Action Plan for the UK, our ambition is to be amongst the leaders on sustainable procurement in the EU.
Further information relation to sustainable procurement in HMRC can be found in the ‘HMRC Sustainable Procurement Strategy’ link below, containing detailed information on:
- embedding sustainable procurement into our actions
- leading by example
- environmental policy
- raising the bar
- building capacity
- removing barriers
- capturing opportunities
- race equality
- collaboration within government
- measuring and reporting success
Small and Medium Enterprises (SMEs)
There are increasing opportunities for SMEs to do business with government departments. HMRC tries to ensure that companies are invited to tender for work which is compatible with their capacity and capabilities, in line with government policy to encourage small firms. Where appropriate, requirements are divided into smaller lots to encourage participation by SMEs.
The following information is designed to help SMEs engage more easily with HMRC and Government in general.
The Contracts Finder is a free service that is the main source of information on government procurement opportunities with a value greater than £10,000. You can use this to access and search for closed tender and contract documentation that has been published by government departments and agencies, as well as opportunities to bid for government work.
The Federation of Small Businesses website gives small businesses information on dealing with government, research findings and information on any new initiatives.
Learn Direct offers online training course for SMEs on how to win government contracts. In conjunction with the Cabinet Office, HMRC plans to help meet the government’s aspiration that 25% of spend should go to SMEs.
The HMRC eSourcing tool allows suppliers’ SQ and ITT responses to be provided and evaluated electronically.
Further information about eSourcing can be found in the standard HMRC Tendering Instructions below, containing detailed information on:
- conditions of tender
- mandatory standstill period
- publication of contract award
- competitive procurement exercise evaluation, including the use of eAuctions - eAuction supplier guidance is available in the document below
New buying and invoicing technology
HMRC introduced an enhanced SAP Ariba Source to Pay platform on 11 November 2019. If you are a supplier contracted to HMRC you should have been contacted to be put onto the Ariba network – if you have not, please contact us as the way that we process purchase orders and invoices has changed.
If you are a contracted supplier who is already on the network and have a query or need further support, please contact us.
If you would like more information about how we select suppliers and advertise ITTs, please see ‘How HMRC selects suppliers’ and ‘Advertisements and Invitations to Tender (ITTs)’.
This guidance has been provided so that suppliers who are interested in participating in an HMRC sourcing event and/or have been successful in being awarded a contract are aware of how to register on the Ariba Network to be able to transact purchase orders and invoices with HMRC.
Prompt Payment Policy
HMRC is committed to paying suppliers and organisations promptly.
HMRC has a mandatory purchase order policy – suppliers should always request a purchase order number to allow invoices to be paid promptly. Invoices without purchase orders will not be paid.
- consistently exceed the government’s target to pay 80% of undisputed invoices within 5 days. We aim to pay all compliant goods and services invoices as soon as they have been authorised by the HMRC official(s) responsible for the purchase order/contract
- adopt the principles of The Confederation of British Industry (CBI) prompt payment code
- pay suppliers in accordance with the terms of their contract, usually 30 days from receipt and verification of a valid invoice
All invoices quoting a valid purchase order number should be sent in PDF format to the bill to ‘email address’ provided on the purchase order to ensure HMRC can match it to the original order/contract. In particular, all information requested on the purchase order or as specified in the contract must be included to avoid delays in payment. Where the supplier lets a subcontract in connection with an HMRC contract, they must include similar prompt payment terms to the above in respect of payments to the subcontractor.
The HMRC prompt payment performance report shows the percentage of invoices that are paid promptly, and is published quarterly.
The Revenue and Customs Digital Technology Services (RCDTS) prompt payment performance report shows the percentage of invoices that are paid promptly, and is also published quarterly.
Enterprise Resource Planning (ERP) system/e-trading system
The ERP/e-trading system provides access to electronic catalogue and non-catalogue ordering systems for the purchase of goods and/or services. The system configuration is workflow-based in order to control access to content and approval of requisitions and orders, in line with HMRC’s financial approval limits.
Further information and conditions relating to the use of HMRC’s e-trading system can be found in the ‘HMRC e-Trading System Overview’ document link below, containing detailed information on:
- ordering systems and e-ordering
- catalogue and non-catalogue items
- electronic catalogues
- changes to catalogue content
- purchase order mandatory policy
- purchase order references
- payment of invoices
Freedom of Information Act 2000
The Freedom of Information Act 2000 (FOI) provides a statutory general right of access to information held by public authorities, or by those providing services for public authorities. This means that we have certain obligations under the Act to provide information when requested, provided that the information is not exempt from disclosure under the provisions of the Act.
We are committed to meeting responsibilities under FOI, while respecting commercial relationships with contractors. Due consideration will be given to the potential impact on the commercial position of any of our contractors when responding to a request for information which may concern them.
All information submitted to the client may be subject to disclosure to a third party in response to a request for information under the Act.
How this may affect contractors
HMRC may receive requests for information specifically concerning its commercial relationship with its contractors. We will consult with the contractor(s) concerned prior to responding to a request whenever reasonably practicable.
Contractors tendering for HMRC work will be asked in the tender documentation to identify any information they consider to be exempt from disclosure under the Act.
If HMRC receives a request to disclose the information identified, it will:
- consider whether the information is, in fact, exempt
- consider whether the public interest in maintaining the exemption outweighs the public interest in disclosing the information (unless the information benefits from an absolute exemption)
- consult with the contractor prior to disclosure of information whenever reasonably practicable
HMRC will not be liable for any loss or damage suffered by contractors, whether in contract, tort or any other way as a result of HMRC disclosing information in response to a request made under FOI, if the information is not specifically considered by both HMRC and the contractor to be exempt under the provisions of the Act.
Contractors should note that if they provide HMRC with any information marked ‘confidential’ or equivalent, this does not mean that HMRC accepts any duty of confidence by virtue of that marking.
Exemptions from disclosure
The 2 main exemptions under the Act, which have particular relevance to procurement or contractual information are:
- section 41 - information provided in confidence
- section 43 - information that is a trade secret or which, if released, may prejudice someone’s commercial interests
Contractors can obtain further information on the Freedom of Information Act 2000 from the website of the Information Commissioner who is responsible for enforcing the Act.