Exemption from Tender/Proposal/Quotation

Community Services Request for Exemption from the competitive requirements of the State Supply Commission’s Open and Effective Competition policy

[Text in red is instructions only and can be deleted after being read]

[Delete or fill in all blue areas as applicable through the Exemption Request]

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[State party name][Brief Description of Requirement]

EXPLANATORYNOTES:

The State Supply Commission’s Open and Effective Competition policy sets out the minimum competitive requirements that a public authority must meet in the procurement of products or services. In brief, the public authority must:

• request sufficient verbal or written quotations, or put the requirement to open tender through a public advertisement, dependent on the estimated total service agreement value.
• avoid bias in tender specifications;
• set a service agreement term that does not exceed 5 years; and
• advertise tenders with an estimated service agreement value in excess of $250,000 on the Tenders WA website, for a minimum of ten working days.

The policy also states that public authorities are not required to comply with these minimum competitive requirements for a procurement where the Accountable Authority considers that circumstances exist which support the minimum requirements not applying for the procurement and where justification for that decision is documented.

Similarly, the Delivering Community Services in Partnership Policy (DCSP Policy) provides thatin the delivery of Community Services, public authorities may at their discretion set aside the universal application of “market testing” by exercising the option of retaining an existing Not for Profit or Local Government service provider through a restricted process. The existing Not for Profit service provider would then become the Preferred Service Provider.

Where a public authority has determined that there is an ongoing need for a service, an existing Not for Profit or Local Governmentservice provider’s suitability for Preferred Service Provider status can be assessed by considering whether the service provider is:

• continuing to meet the ongoing need;
• meeting the agreed service specifications, quality standards and contractual requirements;
• operating efficiently and effectively; and
• actively engaged in continuously improving services to provide the best possible services to the community.

To ensure appropriate probity and accountability for decisions of this nature, public authorities must ensure that the review of a potential Preferred Service Provider is transparent and that the service provider proposed for Preferred Service Provider status is involved in the review.

Given the risks with setting aside market testing, decisions to award Preferred Service Provider (PSP) status must be approved by the Accountable Authority.

Short-term extension of a service agreement beyond its original term: The Accountable Authority must approve an exemption from the minimum competitive requirements if the public authority wishes to extend an existing service agreement beyond its total service agreement term (i.e. when all extension options available have been exhausted). This exemption request can be adapted as follows to request this approval:

• Section 1– Required Services, should address the current service agreement and the criticality of the requirement, the term of the extension, the value of the extension and the service provider’s willingness to extend;
• Section 2 - Justificationshould be included to justify the exemption;
• Section 3 - Recommendation and Undertaking should address how the service agreement extension will be formally executed; and
• Section 5 – Review and Approval can remain unchanged.

Service Agreements can only be extended PRIOR to their expiry. Service Agreements cannot be extended indefinitely. Prior to submitting this exemption request to the Accountable Authority, the public authority should communicate to the service provider(s) intention to extend (subject to approval), and seek the service provider(s)’ willingness to extend.

Refer to the State Supply Commission’s Buyer Alert of 27 May 2008 (available from ) for guidelines on extending service agreements.

1Required services

Provide details of the required services, accounting for all related services. If this exemption request relates to a program of services, provide details for each service (and where appropriate each service provider) for which an exemption is being sought. Include information on how long the current service provider has been providing the service and whether there has been any significant changes to the service during this period. If the program of services relates to multiple service providers, attach an appendix to the exemption request providing details of each service provider. Include details for each service provider for 1.1 Service Review;1.3 Service Agreement Value; 1.5 Likely willingness to continue to provide the services; and 2.1 Justification – exemption from minimum competitive requirements – Preferred Service Provider.

Anexemption on the grounds of [Preferred Service Provider / Sole Source of Supply / Similarly Sourced Service (within 12 months) / a need to develop capability as no service provider has the necessary skills / strategic considerations - viability of other funded services]is sought from the competitive requirements of the State Supply Commission’s Open and Effective Competition policy for the supply of[details of requirement - include specific service components where necessary].

For the intended exemption category explain the ongoing (identified) community need, and provide an indication of the criticality of the requirement and impact if the exemption is not approved.

The procurement of[requirement]from[Service Provider]is important to[state party name]as it will [detail how the procurement will contribute to the achievement of community outcomes for the state party].

In the event that this Request for Exemption is not approved the following impacts are likely: [details on how the community will be negatively affected].

1.1Service Review(Delete if for a new service)

A service review was undertaken on [date] the results of which are attached as Appendix [number]

1.2Term

[The proposed service agreement term, including any options to extend the term, can be up to five years.]

The proposed service agreement term is [number] months/years. There will be [number] options to extend the term, available at the absolute discretion of the [state party name], each option having a [number]month/year duration. [delete sentence if no extension options]

[If the proposed total contract term is longer than 5 years insert the rationale for the extended term - this becomes part of the request for exemption - exemption beyond term.]

1.3Service AgreementValue

The estimated totalservice agreement value of the procurement over the proposed term of the service agreement (including all extension options) is $[value](GST inclusive).

The value has been determined by[insert rationale for how the value has been determined, e.g. based on current rates with indexation applied; etc]

[Include one of the following options:]

[Option 1:]A fixed price for all services required under the proposed service agreement will be sought, and the service agreement will be awarded at a fixed price.

[or Option 2:]Prices for the services will be sought on a unit basis (i.e.number of hours). However a maximum service agreement value of $[value] (including GST) will apply to the service agreement.The maximum service agreement valueis based on [details on how the ceiling or cap was determined - e.g. past service agreements/experience].

1.4Availability of funding

The availability of appropriate funding has been confirmed by [state party officer name], [state party officer title].

1.5Likely willingness to continue to provide the services(delete if a new service)

[State party officer name], [state party officer title]willdiscuss the ongoing need for the services with[Preferred Service Provider's name/s]and seektheir willingness to enter into a new service agreement, subject to the approval of this exemption.

2Justification(Delete whichever options are not relevant)

2.1Exemption from minimum competitive requirements– Preferred Service Provider

[Provide detailed information explaining and documenting the exceptional circumstances that justify PSP status and exemption from competitive requirements.]

The State Supply Commission’s Open and Effective Competition policy sets out the minimum competitive requirements that a public authority must meet in the procurement of products or services. In brief, the public authority must:

• request verbal or written quotations, or put the requirement to open tender through a public advertisement, dependent on the estimated total service agreement value.
• avoid bias in tender specifications;
• set a service agreement term that does not exceed 5 years; and
• advertise tenders with an estimated service agreement value in excess of $250,000 on the Tenders WA website, for a minimum of ten working days.

The policy also states that public authorities are not required to comply with these minimum competitive requirements for a procurement where the Accountable Authority considers that circumstances exist which support the minimum requirements not applyingfor the procurement and where justification for that decision is documented.

Where a public authority enters into a contracting arrangement to purchase a community service from a not-for-profit organisation (in accordance with the requirements of the Delivering Community Services in Partnership Policy) (DCSP Policy), the minimum competitive requirements will not apply where the Accountable Authority considers that:

• There is a need to develop capability with a particular provider as no service provider has the necessary skills.
• An existing service provider is meeting its contractual obligations, provides value for money and can be retained under preferred service provider provisions of the DCSP Policy.
• There are strategic considerations, such as the viability of other funded services that make direct negotiation desirable.

Where the Accountable Authority enters into direct or preferred service provider negotiations, justification for that decision must be documented.

[Service Provider's Name] is continuing to meet its contractual obligations, represents value for money and will be retained under preferred service provider provisions of the Delivering Community Services in Partnership Policy.

[Provide justification in accordance with PSP Determination criteria, addressing the points below]

• Assessment

Outline the assessment conducted to determine the suitability of the existing service provider to be considered for preferred service provider status. This must determine whether the service provider is:

• continuing to meet the identified need;

[Is there an ongoing community need for this service? Does the service continue to align with your Agency's / Department's goals and objectives?]

• meeting the agreed service specifications, quality standards and contractual requirements;

[Have the services been delivered in accordance with the service specifications? Have agreed outputs being delivered? Have service-specific outcomes been achieved? Did the service providermeet its reporting requirements?]

• operating efficiently and effectively; and

[Has the service provider met the KPIs? What are the indications that the service provider is effective and efficient? Does the service model represent contemporary best practice?]

• actively engaged in continuously improving services to provide the best possible service to the community.

[Has the service provider demonstrated an innovative approach to service delivery over the life of the agreement? Does it continually improve its services? Is there evidence that the service provider has engaged with the community? For example, does it seek feedback from its clientsto ascertain how satisfied they are with the service?]

• Service Provider Involvement

What involvement did the service provider have in the preferred service provider assessment?

• Value for Money

Why will re-engaging the current Service Provider to provide the services represent value for money?

The State Supply Commission's Value for Money policy requires that public authorities achieve the best value for money outcome in the procurement of goods and services.

Achieving best value for money outcomes requires a public authority to:

- ensure procurement activities are aligned with Government policies, objectives and strategies;

- actively supports whole of government initiatives;

- consider cost and non-cost factors, where relevant, and makes a value judgment about the best outcome. Non-cost factors may include service provider capability, compliance with specifications, risk exposure and service continuity.

2.2Exemption from minimum competitive requirements – Only one service provider exists with the skills and experience necessary

[Provide justification, addressing the points below]

• Why is it essential that the services be supplied by that particular supplier? If there are alternatives, why are they not viable potential suppliers?
• What research have you undertaken that supports the assertion that the supplier is the sole supplier of the required services? Has recent market testing (through a publicly advertised request for tender) been undertaken, that supports this assertion?

2.3Exemption from minimum competitive requirements – A recent open call for submissions has been conducted and the preferred service provider offered the best value for money. [recent is within the previous 12 months]

[Provide justification, addressing the points below]

• Which process was undertaken (Competitive Quotes, Open Tender)?
• What were the specific details of the procurement (brand/model/task undertaken)?
• What was the total service agreement value and service agreement award date?
• Where were the services required (delivery location)? How does it compare with the delivery location for this requirement?
• Justify that there is a reasonable expectation that the market has not changed.

2.4Exemption from minimum competitive requirements – No service provider exists with the necessary skills and there is a need to develop such.[delete if not applicable]

[Provide justification, addressing the points below]

• What research has been undertaken that supports the assertion that no service provider exists with the necessary skills to provide the required services?
• Why has the service provider been chosen for the development of skills to provide the required services? Were any other service providers considered and why weren’t they suitable?
• Do you have written confirmation from relevant internal and external sources that support the argument? Have any potential service providers confirmed in writing that they do not have the necessary skills required to provide the services?

2.5Exemption from minimum competitive requirements - There are strategic considerations, such as the viability of other funded services that make direct negotiation desirable. [delete if not applicable]

[Provide justification, addressing the points below]

• What other services are currently being delivered by this service provider?
• What research has been undertaken that supports the assertion that there are viability issues with other services delivered by this provider?
• What will be the effect to the viability of this (or other) services?
• Were any other service providers considered and why weren’t they suitable?
• How was the decision reached? What was taken into consideration?

3Recommendation and Undertaking

It is recommended that the [Accountable Authority or delegate title] of [state party name] approve this exemption request, to directly engage[Service Provider] for the provision of[description of services]. The [state party name] will then be required to fulfil all obligations under the State Supply Commission policies from which it is not exempted under this document.

[Select one of the following options:]

[Option 1: If the estimated total service agreement value is under $5 million (GST-inclusive)]Subject toapproval of this exemption request, a formal Request document (based on Department of Finance templates) will be prepared and issued to the identified Preferred Service Provider. The approved exemption will be added to the [state party name] exemption register.

[or Option 2: If the estimated total service agreement value is $5 million or above (GST-inclusive)]Following a decision being taken by the Accountable Authority on this exemption request, a procurement plan will be submitted to the Community Services Procurement Review Committee for endorsement, and then submitted to the [Accountable Authority or delegate title] for approval. A formal Request document (based on Department of Finance templates) will then be prepared and issued to the identified Preferred Service Provider. The approved exemption will be added to the [state party name] exemption register.

[Select one of the following paragraphs to directly follow on from Option 1 or Option 2 above as applicable:]

[If the estimated total service agreement value is under $5 million (GST-inclusive)] Following receipt of the formal Offer in response to the Request,an evaluation report will be prepared for approval by the[Accountable Authority or delegate title]. The report will include details of the value for money analysis of the submitted Offer.Following approval of the report, a letter of acceptance will be issued establishing the service agreement and the service agreement award details will be published on Tenders WA.

[If the estimated total service agreement value is $5 million or above (GST-inclusive)]Following receipt of the formal Offer,an evaluationreport will be prepared, including details of the value for money analysis of the submitted Offer. The report will besubmitted for review by the Community Services Procurement Review Committee prior to seeking approval of the report by the [Accountable Authority or delegate title].Following approval of the report, a letter of acceptance will be issued establishing the service agreement and the service agreement award details will be published on Tenders WA.