INTRODUCTION
NOTE – THESE POLICIES HAVE BEEN SUPERSEDED. THE MOST CURRENT VERSION IS AVAILABLE UNDER PROCUREMENT POLICY.
The State Supply Commission's policy suite provides public authorities with direction and guidance on all aspects of purchasing and contracting for goods and services.
It recognises that procurement activities are not all the same and that public authorities need to decide how to best handle their purchasing within the context of their procurement needs, the business environment and broader Government objectives.
The policies are designed to find the right balance between prescription and empowerment to encourage public authorities to obtain best value for money. However, public authorities should be conscious of complexity, timeliness and level of risk in meeting their purchasing requirements.
Under the State Supply Commission Act 1991 (Act), the State Supply Commission has responsibility for “arranging and coordinating” the supply of goods and services necessary for the operations of all public authorities. One of the most important ways in which the State Supply Commission fulfils this responsibility is the development and issue of policies and guidelines pursuant to its function under section 5(a) of the Act.
Public authorities must ensure that the policy requirements outlined in the State Supply Commission policy suite are appropriately incorporated into their procurement processes and practices in relation to goods and services.
POLICIES AND GUIDELINES
The State Supply Commission policies provide a framework for goods and services procurement that reflect principles and arrangements fundamental to efficient and effective purchasing:
· Value for Money;
· Open and Effective Competition;
· Contracting Approvals;
· Common Use Arrangements;
· Integrity, Ethics & Probity;
· Environmental Procurement;
· Assuring Quality;
· Managing Procurement by Private Sector Providers;
· Disposal of Goods;
· Waivers of Supply Policy;
· Supplier Complaints and Communications;
· Forward Procurement Reporting; and
· Other Government Policies Impacting on Procurement.
The policies follow a consistent format comprising of four (4) clearly delineated sections as follows:
· Policy Statement: which provides a short and succinct statement of the policy directive, which has mandatory application for the purchase of goods and services by all public authorities subject to the State Supply Commission Act 1991. Public authorities must comply with these policy requirements unless an appropriate exemption or waiver has been provided by the State Supply Commission;
· Rationale: which provides a short description of the underlying principles and scope of each Policy;
· Guidelines: which provides guidance to public authorities in relation to the best practice interpretation and application of each Policy Statement. The Policy Guidelines are not mandatory; and
· Further Assistance and Advice: which provides contact details for further assistance with interpreting and implementing the policies.
PROCUREMENT USERS GUIDE
The State Supply Commission also maintains the Procurement Users Guide that acts as a useful 'how to' guide to government purchasing. These guidelines provide practical assistance and best practice advice to assist public authorities to effectively address all phases of the contracting process - from planning and forming a contract through to its management.
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GLOSSARY
In the State Supply Commission Policies and Guidelines, unless a contrary intention appears:
“Accountable authority” and “accountable officer” has the same meaning as defined in section 3 of the Financial Administration and Audit Act 1985.
“Act” means the State Supply Commission Act 1991.
“Agency Specific Panel Contracts” refer to those contracts consisting of a number of pre-qualified suppliers that individual agencies have established to provide goods and services in a nominated area over a period of time.
“Bid” means an offer by one party to enter into a legally binding contract with another party.
“Bona fide sole source of supply” means a situation where it has been clearly established that only one supplier can supply the requirement. This can be established either through a periodic test of the market or consultation with appropriate industry bodies, manufacturers and other sources of expertise.
“Business case” means the first stage of the planning process involving a rigorous assessment of all the costs, benefits, risks and options to test the project’s feasibility and objectives.
“Buyer’s Guide” means the document outlining the rules of access and buying in relation to common use arrangements or agency specific panel contracts.
“Commission” means the State Supply Commission, established under the provisions of the Act.
“Common Use Arrangement” means a whole of government standing offer arrangement, awarded to a single or a panel of suppliers for the provision of specific goods or services commonly used within Government. Common use arrangements are aggregated supply arrangements that enable public authorities and other specified parties to source goods or services.
“Contract management” means the process of actively managing the relationship with a supplier over the term of the contract to ensure that both parties meet their obligations and that value for money is achieved through satisfactory completion of the contract.
“Contract management plan” means a plan containing all the pertinent information about how the contract is to be managed and which identifies and addresses all relevant issues through the life of the contract. This includes monitoring compliance with contract conditions, identification of milestones and key deliverables/outcomes, roles and responsibilities of participants, effective financial management and monitoring, monitoring of risks, project performance reporting requirements and transitional arrangements.
“Direct purchasing” means the procurement of goods and/or services whereby only one verbal or written quote is required to be obtained.
“Due diligence” means the formal stage during contract negotiation during which both parties have an opportunity to confirm their expectations and understanding. For the public authority, this involves independent verification of the preferred tenderer's claims relative to their ability to fulfill the contract.
”Expression of Interest” or “EOI” means the process of inviting suppliers to indicate their interest in submitting an offer to provide goods or services.
“General Conditions of Contract for the Supply of Goods and/or Services” means the standardised general conditions of contract for the supply of goods and/or services approved by the Commission that apply universally to different types of contracts.
“Integrity, Ethics & Probity” generally refers to uprightness, honesty, proper and ethical conduct and propriety in dealings. Within Government, this phrase is often used in a general sense to mean "good process" involving clear procedures, ethical behaviour, consistency with the Government's policies and legislation and transparent decision-making which is fair and can be justified.
“Line item” means a single unit, or multiples of the same unit, or all of the components that complete a system (ie all of the hardware and software required to establish a computer system), purchased from the same supplier.
“Local Supplier” means a business operating in Western Australia or which employs Western Australian workers.
“Official service” means the postal service undertaken by Australia Post.
“Preferred tenderer” means the tenderer whose offer is selected by the evaluation panel as representing best value for money and is recommended to be awarded the contract, subject to ratification by the approving authority and/or the outcome of successful negotiations and due diligence.
“Pre-qualified supplier” means a supplier who has undergone a robust preliminary assessment and is judged to have the required capacity, capability and experience to fulfill a subsequent contract.
“Private sector provider” means a private sector organisation that is engaged by a public authority to undertake purchasing goods or services on behalf of a public authority.
“Probity auditor” means an individual or organisation engaged to independently observe and review complex, high cost, politically sensitive or high-risk procurements. The auditor’s role is simply to audit for compliance with processes and policy and is not to validate the evaluation panel’s decision.
“Procurement” means the entire process by which all class of resources (human, material, facilities and services) are obtained and can include the functions of planning, design, standards determination, specification writing, preparation of quotation and tender documentation, selection of suppliers, financing, contract administration, disposals and other related functions.
“Procurement plan” means a project management tool that provides a framework for procurement that identifies a range of issues, including procurement opportunities and benefits, options for achieving required outcomes, market capability, stakeholders, quality requirements, performance measures, risk management issues and may also include elements of a business case. The procurement plan outlines the key issues that both determine and impact the procurement strategy and method adopted.
“Public Authority” means for the purpose of determining a public authority under the Act, a public authority is:
· a department of the Public Service of the State established or deemed to have been established under the Public Sector Management Act 1994; and
· an agency, authority or instrumentality of the Crown in right of the State.
“Public Benevolent Institution” means a body or entity that:
· has corporate status as an incorporated organisation under either the Associations Incorporation Act 1987 or the Aboriginal Councils and Associations Act 1976 or be a company limited by guarantee or by shares under the Corporations Act 2001 (Cth);
· is endorsed by the Australian Taxation Office as a PBI under the Income Tax Assessments Act (item 4.1.1 of the table listed in section 30-45);
· is funded directly or indirectly, partially or entirely by either the Commonwealth, State or Local Government or be in receipt of a Lotteries Commission grant; and
· is a non-profit organisation.
“Regulations” means the State Supply Commission Regulations 1991.
“Requests for proposal” means the process of publicly inviting offers to supply goods or provide services when the requirement is well-defined in terms of desired outcomes, but the process by which this is achieved is not predetermined and suppliers are encouraged to present flexible and innovative market-based solutions.
“Request for public tender” means the process of publicly inviting offers to supply goods or provide services involving specifications and detailed documentation.
“Risk management” means applying the principles of risk management to the tasks of identifying, analysing, evaluating, treating and monitoring risk.
“Small supplier” means those businesses that employ less than 20 people.
“Specifications” means a detailed description of the public authorities procurement requirement and consequently what the supplier is required to comply with in order to provide the goods or services.
“State Tenders Committee” is an administrative committee appointed by the Minister responsible for the Act. The State Tenders Committee is an endorsing body, not an approving authority.
“Sufficient quotations” means an adequate number of bids from bona fide sources of supply so as to ensure open and effective competition.
“Supply Policy” or “Supply Policies” means supply policies issued under and in accordance with section 28 of the Act.
“Request documentation” means the documentation utilised for Requests for Tenders, Requests for Proposals or Expressions of Interest.
“Total Contract Price” means the potential total cost of a contract taking into account the total life of the contract, including all contract extensions and lifecycle costs. Where a panel contract is in place the total contract price is the total estimated value, based on projected utilisation, over its life.
“Totally exempt authorities” means those public authorities with full exemption under section 20 of the Act.
“Valuer General” means the Valuer General’s Office established under the Valuation of Land Act 1978.
“Verbal quotations” means a verbal process of inviting offers to supply goods and/or services involving a limited number of potential suppliers.
“WA Government Contracting Information Bulletin Board” means the Government’s electronic medium providing direct access to Government contracting information, including early tender advice to suppliers, advertising of tenders, electronic tender lodgement and award of Government contracts valued at $10,000 and above.
“Written quotations” means a written process of inviting offers to supply goods and/or services involving simple documentation and a limited number of potential suppliers.
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COMMON USE ARRANGEMENT
POLICY STATEMENT
Where a Common Use Arrangement (CUA) has been established, all public authorities must use these arrangements as their exclusive source of supply for the goods and services covered by the CUA, unless otherwise authorised in accordance with this Policy.
A Buyers Guide will be developed for each CUA and all purchases made against a CUA must be made in accordance with the relevant Buyers Guide.
The Commission’s approval must be obtained for any Buyers Guide prior to the commencement of any CUA.
Procurement Plans for CUAs
A formal procurement plan shall be developed for each CUA and submitted to the State Tenders Committee for endorsement.
Exemptions from Purchasing from CUAs
Exemption from the requirement to purchase from a CUA, or any aspect of an associated Buyers Guide, is only available where:
· a public authority exercises the Regional Purchasing Discretion, as detailed in the Buy Local Policy, to purchase from regional suppliers up to a value of $50,000 per line item, provided that there is no local regional supplier available under a relevant CUA; or
· a public authority needs to purchase outside a relevant CUA due to the existence of an emergency situation that threatens life, property or equipment. The decision to purchase outside the relevant CUA must be subsequently notified to the Commission.
In exceptional circumstances, the Commission may grant prior specific approval in writing to purchase outside a CUA or provide an exemption from any aspect of an associated Buyers Guide. Such approval will only be given on a case-by-case basis.
When exercising the Regional Purchasing discretion, public authorities must ensure that potential suppliers are requested to quote according to the same standard of specifications contained in the CUA.
Specialised CUAs
CUAs will usually be established as a whole-of-government arrangement. However, they may also be established to meet the specialised requirements of one or more public authorities. Other public authorities may access these specialised CUAs provided that the initial tender for the CUA was conducted on that basis.
Purchase of Goods and Services Outside Scope of a CUA
Goods and services that are not within the scope of the original CUA tender specification are not to be purchased on a CUA.
Public Benevolent Institutions Access to CUAs
Public Benevolent Institutions (PBIs) approved by the Commission will be given access to procurement of goods and services from selected CUAs.
The Department of Treasury & Finance and the relevant suppliers will determine which CUAs that the PBIs may access.
RATIONALE
CUAs are aggregated supply arrangements that enable public authorities and other authorised parties to source common and routinely required goods and services. They are standing offers from suppliers to supply goods and services for a period of time based on specified terms and conditions, which may include agreed prices.