PROCEDURE FOR REQUESTING AN EXEMPTION FROM THE TENDER PROCESS

REFERENCE

The University Purchasing Policy requires that:

For high-valued acquisitions (greater than $100,000) an RFP or Tender is required unless exemption has been obtained in writing from the Vice-President (Strategic Finance and Resources). Grounds for exemption may include the following: incumbent supplier, common standard, preferred supplier[1].

The University’s twin objectives in purchasing are to achieve value for money and fair trading. Tendering for larger value payments will normally achieve these objectives:

  • the tendering process increases competition, which is more likely to achieve the best value for money
  • tendering helps ensure opportunities are given to suppliers fairly and there is probity around the selection of the supplier.

Tenders are potentially costly exercises. The University policy balances the cost against the benefits, by only requiring tenders for purchases of > $100,000.

When an exemption for tender is sought, there are higher risks:

  • that the market has not been fully assessed, so higher prices may be paid and less value for money achieved.
  • there are also risks around suppliers receiving favourable treatment and claims that some suppliers are not being given an opportunity to compete.

Tender exemptions are only provided where it is demonstrated that these risks are being managed and the costs saved by not tendering outweigh the net risk.

The University financial policy 6.9 Tendering for goods and services. States inter alia

6.9.15 Exemption from tender/quotation process

6.9.15.1 The Vice-President (Strategic Finance and Resources) may certify that in certain instances it is not necessary to use tender procedures. Requests for exemption must be made in writing and must clearly state the reason(s) for seeking such exemption.

Associated policy(s)

  • Policy on the Authorisation of University Expenditure
  • Risk management policy
  • Delegations of Authority to Enter into Contracts
  • Contracts management

PROCEDURE

All applications for tender exemption are, in the first instance, to be sent to the Procurement Manager for review and recommendation to the Vice President (Strategic Finance and Resources) who is the approving delegate.

WORKFLOW

The exemption application is to provide sufficient information from the acquisition planning process (refer clause 6.2.1 Acquisition Planning in the Purchasing Policy). Information is to be succinct and the document should not exceed two pages. The headings below are to be used where appropriate:

  • Any consultation process related to acquisition including mention of any contractual relationships supporting the purchase.
  • The reason for acquisition
  • What supply market research was conducted
  • An overview of the business case for acquisition
  • A risk assessment and risk management overview
  • State the development procedure for specification of the acquisition
  • State what form of contract to be used
  • State the process for seeking quotes or tenders
  • State the management process for contract

TEMPLATE

A template is attached for use. Where there is insufficient space then use the headings within a Word document.

TIMELINES

Given the risk and complexity normally associated with complex acquisitions staff seeking exemptions from the tender process need to ensure that they allow adequate time for their application to be processed. It would be considered prudent to allow at least three weeks for an application to be processed.

DELEGATED AUTHORITY

In the absence of the Procurement Manager the request for exemption should be submitted to the Director Financial Services.

TEMPLATE APPLICATION FOR EXEMPTION FROM TENDER

The information below is provided for use as a set of template issues that the reviewing authority will need to have sufficient understanding of in order to consider the application for exemption from the tender process.

Provide a synopsis of the purpose and benefits of the acquisition.Mention any third partiessupporting/partnering in the purchase and timelines.

For example;The University may be partnering with other universities in a research project/program. Extensive discussions have been undertaken between all parties to agree on; equipment specification, utilisation, cost sharing etc

What supply, market research was conducted that has led to the decision to seek an exemption from the tender process.

National/international search for vendors/specialist service providers that has found only N? who have the experience and technical capacity to supply the item(s) to the specification required.

Risk assessment and risk management overview.

Have there been any risks identified that could arise from this exemption application and how are they to be managed. For example:

  • There are technical issues associated with test and acceptance of equipment(s) that put the project at risk
  • Management. To reduce these risks a panel of technical advisors from the user group have devised and will supervise a series of tests to ensure the equipment complies with the specifications and the contract will contain clauses that specifically address compliance with specification and remedial actions associated with non-compliance

What form of negotiations will take place with the preferred vendor(s)?

  • Direct negotiation with one or more vendors
  • Competitive tender process between the preferred vendors
  • Other?

What type of agreement will be used?

  • Service level agreement
  • Contract for services
  • Contract to supply and install to specification
  • Contract to supply and maintain
  • Other?

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