- Irrespective of the size or nature of a procurement, officials must seek to achieve value for money in accordance with the CPRs.
- Officials must ensure they conduct procurements in accordance with their entity's Accountable Authority Instructions and relevant Operational Guidelines, which in turn must be consistent with the CPRs.
- Due Diligence activities should be conducted across the procurement lifecycle and for the duration of a contract.
Step 1: Plan the Procurement Based on an Identified Need
- Determine the objectives for the procurement.
- Detail a clear scope of requirements.
- Consult entity Central Procurement Area for advice were appropriate.
- Seek specialist advice, where appropriate.
- Research the market to understand capabilities and restraints.
- Ensure probity arrangements are considered where appropriate.
- Document relevant decisions and justifications relating to the procurement.
- Understand and incorporate Australian Government transparency requirements.
Step 2: Scope the Procurement
- Determine whether the goods or services to be purchased are subject to coordinated procurement arrangements that must be used.
- Determine if the relevant entity already has a panel that could be used.
- Consider whether there are opportunities for cooperative procurement.
- Undertake detailed research of the market if appropriate.
- Estimate the value of the procurement – this must be done.
- Where procurements are unable to be valued or reliably valued, they must be treated as if they are over the relevant threshold.
- Unless a specific exemption applies, entities must comply with the Division 2 – Additional rules for procurements at or above the relevant procurement threshold.
Step 3: Determine the Procurement Method
- Involves a one-stage (ie Request for Tender), or multi-stage (eg an Expression of Interest followed by a Request for Tender), open approach to the market.
- Is the 'default' for all procurements valued above the relevant thresholds ($80,000 for non-corporate Commonwealth entities)
- Must be advertised on AusTender.
- Involves procurement based on quotes being sought directly from one or more suppliers.
- Includes what was previously referred to as 'sole source' and 'select' or 'restricted' source procurements.
- Can be undertaken for any procurement under the relevant thresholds where it represents value for money.
- Can only be used for procurements above the relevant thresholds where it is specifically allowed by the CPRs. The value and reasons for the direct source must be documented.
Step 4: Prepare to Approach the Market
- Put in place appropriate governance arrangements.
- Identify the contract characteristics of your procurement
- Prepare tender evaluation plan and request documentation, that appropriately incorporate Procurement Connected Policies.
- Where applicable, ensure you include:
- consideration of relevant regulations and/or frameworks;
- application and verification of standards;
- the consideration of broader economic benefits of the procurement to the Australian economy .
- a requirement for tenderers to disclose their ultimate parent entity’s country of tax residency in their submission for procurements greater than $200,000 (GST inclusive) (see the Department of the Treasury website)
- Seek delegate clearance / approval to approach the market.
Step 5: Approach the Market
- Notify the market – for open tenders this involves (as a minimum), publishing the opportunity on AusTender.
- For open tenders, ensure the minimum time requirements of the CPRs are met.
- Include essential information (eg. closing time, lodgement mechanism, evaluation criteria and methodology, process rules, contact officer and the possibility of an industry briefing, site visit, and/or mid-term review) in the request documentation to enable suppliers to develop and lodge competitive and compliant submissions.
- Include a draft contract and statement of compliance in the request documentation.
- Use appropriate limitation of liability and standard contract clauses where available.
- Do not use unnecessary mandatory language (i.e. 'must', 'will'), jargon and acronyms from the request documentation.
- Ensure clarifications or additional materials are made available to all potential suppliers in a timely and equitable manner.
- Do not materially change the evaluation plan after the opening of submissions.
Step 6: Evaluate Submissions and Conclude the Tender Process
- Deal with unintentional errors in tenders in accordance with the CPRs.
- Deal with late tenders in accordance with the CPRs.
- Ensure the procurement process is/was fair, equitable and will stand up to scrutiny, including that the evaluation is conducted in accordance with the Tender Evaluation Plan.
- Ensure the process is consistent with the CPRs, including in relation to handling complaints.
- Undertake a financial viability assessment(s) of the preferred supplier(s) if necessary.
- Provide sufficient documentation and information to the delegate to enable them to make an informed decision.
- If required by your entity's Accountable Authority Instructions, obtain delegate approval in accordance with s18 of the PGPA Rules and two signed copies of the contract (one for the entity, the other for the service provider).
- Advise unsuccessful tenderers and where requested provide a debrief.
- Report contracts valued at $10,000 (GST inclusive) and over on AusTender.
Step 7: Manage the Contract
- Develop a contract management plan to assist the entity to understand and implement obligations under the contract.
- Assess contract extension options on a value for money basis in accordance with the terms of the contract.
- Ensure compliance with the Supplier Pay on-Time or Pay Interest Policy.
- Appropriately consider and, as appropriate, issue contract variations.
- Consider any obligations that survive the contract end-date or termination of the contract such as confidentiality.
- Officials should consult their entity's central procurement team early in the planning process, for advice on meeting obligations under the Framework and the entity's Accountable Authority Instructions.
- Officials must ensure that any specifications are based on performance and functional requirements and any international standards, rather than technical specifications. Specification by reference to a particular product or proprietary intellectual property, such as trademarks, copyrights and patents should also be avoided. Where such references are necessary, words such as 'or equivalent' must be included in the specification.
- Ensure the delegate is aware of the intended approach to market and, depending on the nature, complexity and risk of the procurement, is involved in the planning stages of the procurement.
- Procurements should be sufficiently flexible to enable innovative and value-enhancing approaches to be considered as part of the evaluation process.
- Entities should generally not accept risks which another party is better placed to manage, and where an entity is best placed to manage a particular risk, it should not seek to inappropriately transfer that risk to a supplier.
- Entities should ensure there is appropriate separation of procurement duties and responsibilities, for example by having different officials responsible for: evaluating submissions and subsequently recommending a potential supplier; and approving the spending of relevant money.
- If a procurement is valued at or above the relevant thresholds, entities need to ensure they consider where relevant:
- Entities need to determine how this is incorporated into the request documentation, what information tenderers are required to provide, and how this will be evaluated.
- Officials should consider issues and potential costs involved with the complete procurement cycle and not just the tender process. This includes ownership of the goods or services and disposal at the conclusion of the contract.
- Under the CPRs, limited tendering refers to approaching one or more potential suppliers directly, regardless of whether or not the procurement is above the relevant procurement threshold or exempt. Limited tendering is not always appropriate for procurements under the procurement threshold and, scope, scale, level of risk and market conditions must be considered to determine an appropriately competitive procurement process.
- Procuring external specialist advice will impose additional time and cost on the procurement. Officials should ensure that they identify any requirements for external expertise in the planning stages of the procurement to manage schedule, budget and delegate approval risks.
- Care must be taken when specifying any conditions for participation, as the CPRs require entities to reject any tenders that do not meet those conditions for participation.
- Conditions for participation must be limited to any specific legal, commercial, technical and financial abilities of the supplier that are necessary to fulfil the requirements of the procurement. Any requirements that do not fall under these categories cannot be considered a condition for participation in accordance with the CPRs.
- Conditions for participation are not to arbitrarily limit competition by introducing factors that discriminate against a supplier or group of suppliers that would otherwise be competitive and capable in the procurement process.
- Financial viability assessments are point-in-time assessments of a potential supplier's current financial viability. A financial viability assessment does not guarantee the supplier will not default or become financially unviable in the future.