1.2 This Policy covers all procurement and contracts with the exception of employment contracts.

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1 Council Policy Policy Title: Responsibility: Chief Executive First Adopted: 2009 Review Frequency: Three yearly or as required Last Reviewed: 26 January 2016 Next Review Due: 26 January 2019 Doc No File No C Policy Objectives 1.1 The objective of this policy is to provide a clear and transparent framework for all of Council s procurement and timed contract arrangements. This policy is to be read in conjunction with Council s Procurement Strategy and the Small and Local Suppliers Policy. 1.2 This Policy covers all procurement and contracts with the exception of employment contracts. 2 Definitions 2.1 ACENZ Association of Consulting Engineers New Zealand. 2.2 CNI (CENTRAL NORTH ISLAND) - Advertised in Wanganui, New Plymouth and Hamilton, in addition to Ruapehu District newspapers. 2.3 COMMON USE PROVISION (CUP) A clause which allows other agencies to join the contract on the same terms at a later stage. 2.4 COMPLEX PROCUREMENT - high value, high risk or complex procurement - >$100, EXECUTIVE SPONSOR - the member of the Executive Team who holds accountability f or the procurement process and associated support tools and policies (including this one). 2.6 EXTENSION where a term contract may have its term extended beyond the original contracted period including any renewals (see below) and usually agreed through approval of the appropriate Procurement Plan. 2.7 GETS - Government Electronic Tenders Service website ( 2.8 IPENZ Institute of Professional Engineers New Zealand. 2.9 PREFERRED SUPPLIERS LIST - the list of Preferred Suppliers maintained by Council (schedule 1). It includes suppliers that Council has found to be dependable for particular types of goods and services and there is a central register of the agreed terms and conditions for each supplier PROCUREMENT PLAN - the Procurement Plan is a detailed project plan to be completed for all complex and some simple, project or contract procurements to ensure risk, processes, costs and the supply market will be managed appropriately. Procurement

2 plans will be completed by staff with due reference to the prevailing Procurement Strategy which is available from the Procurement Administrator QUOTATION - the price and terms offered to Council for the supply of goods and services RENEWAL a period specified in the original contract whereby the term may be renewed for an additional period. Usually at Council s discretion and based on satisfactory supplier performance SIMPLE PROCUREMENT - low value, some risk procurement - >$25,000 and <$100, SYNDICATED PROCUREMENT - a group of agencies combining their needs and collectively going to market for common goods and services TENDER - a process where Council will invite two or more parties to submit their price, service offering and other terms and conditions for the supply of goods and services (Schedule 2) TERM CONTRACT - any financial arrangement entered into by Council involving an offer and acceptance for the supply of goods and services to Council for a defined period of time. 3 Principles 3.1 Procurement covers all the business processes associated with purchasing, spanning the whole cycle from the identification of needs through to the end of a service contract or the end of the useful life and subsequent disposal of an asset. 3.2 Public entities often work in a complex environment in terms of both the type and range of goods or services being procured. To be effective and efficient in procuring goods or services, entities need to be clear about the overall objective of the procurement and select a procurement method that will give them best value for money. To do this effectively, public entities must have a detailed understanding of what they are procuring, the value and risk of the procurement, and how important the procurement is to achieving their overall goals and business strategy. 4 Background 4.1 has developed its own procurement policies and procedures that reflect the value and risk of the procurement that it undertakes and that are appropriate to its overall business objectives and operations. This policy is referenced to the Office of the Auditor General Procurement Guidance Document It is intended to read in conjunction with Council s Procurement Strategy, and the Small and Local Suppliers Policy. 2

3 5 Policy Statement 5.1 GENERAL CONDITIONS AND FORMS OF CONTRACT All monetary sums quoted in this document are GST Exclusive Written quotations shall be required for all procurements with an estimated value of $25,000 or more where there is not a preferred supplier A Procurement Plan that includes all relevant specifications and estimates shall be prepared for all complex and some simple procurement contracts and shall be approved by the Tenders Group or their delegate before tenders are called. (The procurement plan templates are available through RDC s intranet) Unless specifically approved through the procurement plan, all complex procurement shall proceed by way of quotation and tender. This will be advertised on GETS and CNI All term contracts shall be given a sequential number and this same number shall be used for the file reference Council will maintain general Terms and Conditions for all activities where a separate contract has not been agreed and signed by approved managers. Staff are not to accept suppliers terms and conditions unless approved by the relevant Manager Tenders may be let under a number of evaluation and selection methodologies as agreed through the Procurement Plan approval process (ie, lowest price conforming, price quality, quality only, shortlist then price or direct negotiation). Staff will use guidelines for each methodology as outlined in the New Zealand Transport Agency (NZTA) Procurement Manual The Procurement Plan and tender documents will include details of the evaluation process including quality criteria and weightings, when price will be opened, the evaluation team and scoring methodologies Tenders may be let offering a Syndicated Contract with a Common Use Provision (CUP) clause where other nominated organisations may procure the successful supplier goods or services under the same terms and conditions. The detailed methodology is available on the Ministry for Business Innovation and Employment (MBIE) web site Unless specifically approved otherwise through the procurement plan, Works Contracts for physical works will be let using existing approved terms and conditions or NZS 3910:2013 Conditions of Contract for Building and Civil Engineering Construction., NZS 3916:2013 Conditions of Contract for Building and Civil Engineering Design and Construct or NZS 3917:2013 Conditions of Contract for Building and Civil Engineering Fixed Term Unless specifically approved otherwise through the Procurement Plan then Works and other contracts for design and professional services will be let under ACENZ/IPENZ Conditions of Contract for Consultancy Services 2009 (CCCS). Relevant Managers may approve the use of the short form CCCS contract for contracts with a value less than $50, Where appropriate staff may propose the use of other established forms of contract through the Procurement Plan. These include: (a) The NEC3 (UK New Engineering Contracts v3). 3

4 (b) (c) (d) FIDIC (Federation Internationale des Ingenieurs-Conseils) suites of contracts. All of Government (AoG) contracts managed by MBIE. Sub contracts and materials purchase agreements managed by Council master contractors All contracts greater than $1,000,000 will be subject to legal review of the contract and tender documents by Council s preferred solicitors For other contracts general conditions shall be determined by the appropriate Manager. 5.2 RETENTIONS Retentions appropriate to the type of contract will be specified in the Contract documents. 5.3 LENGTH OF TERM OF CONTRACT The Procurement Plan for term contracts for goods and services will detail the proposed length of term and renewal periods (if any). For clarity, a Procurement Plan may propose a negotiated extension of a contract that has run its term, including any renewals, provided that the proposed approach will deliver better value for money for Council than a competitive process Council will not issue contracts with an initial term longer than five years unless specifically approved through the Procurement Plan (including 3 rd party agencies such as NZTA when appropriate) Term contracts may include the provision to negotiate a renewal (at Council s absolute discretion) for a period no longer than the original term. This provides for Council to be able to issue contracts with a maximum term of ten years through standing delegations Any proposal for an initial term longer than five years, or a renewal longer than five years can only be approved by full Council. 5.4 SERVICE DELIVERY REVIEWS Any contract for services will be reviewed in accordance with section 17A of the Local Government Act 2002 (amended on 8 August 2014).The triggers for these reviews are as follows: (a) When considering significant changes to service levels. (b) Within two years of expiration of a contract or other binding agreement to deliver a service. (c) The passing of six years since the last review under section 17A There are two statutory circumstances where a review is not necessary (even when triggers have been activated). These are: (a) There is a contract or other agreement in place that cannot reasonably be changed within two years. (b) It can be justified that the costs of doing the review outweigh the benefits. Delegations 6.1 Delegations as per the Delegations Manual. 4

5 Annotations Date Description 14 September 2010 Policy adopted in conjunction with Procurement Strategy and Local Supplier Policy. June 2011 Policy reformatted no textual changes. 26 January 2016 Policy reviewed and name changed from Contracts Policy to for clarification. Principles, Background and Policy Statement sections extensively rewritten and expanded. Receipt of tenders section moved to a schedule. Preferred suppliers list added as a schedule. 5

6 SCHEDULE 1 PREFERRED SUPPLIERS LIST Preferred Suppliers List (Dec 2015) 3 years expenditure Supplier Grand Total Avg Service Purchase method Inframax Construction Ltd Total 20,343,502 6,781,167 Road maintenance Competitive tender Veolia Water Total 9,970,837 3,323,612 Water systems Competitive tender maintenance Inland Revenue Department Total 5,080,479 1,693,493 Tax Legislative fiat Westpac Business Banking Total 5,066,318 1,688,773 Bank loan Interest competitive tenders GHD Limited Total 4,937,759 1,645,920 professional services Competitive tender Computershare Investor Services Limited 4,129,247 1,376,416 Bond Interest Competitive tender Total J & J Walters Ltd total 4,018,288 1,339,429 Road reseals Competitive tender Enviro Waste Services Ltd Total 3,592,286 1,197,429 Rubbish collection etc Competitive tender Jilesen Contractors Limited Total 3,340,965 1,113,655 Road maintenance Competitive tender Downer New Zealand Limited Total 3,196,783 1,065,594 Road maintenance Competitive tender Downer Edi Works Ltd Total 2,563, ,338 Parks maintenance Competitive tender Stringfellow Contracts Limited Total 1,549, ,482 Road reconstruction Competitive tender Eagle Technology Group Ltd Total 1,257, ,221 Computer maintenance Competitive tender Wanganui District Council Total 1,164, ,097 Pipiriki road sealing Competitive tender King Country Energy Limited Total 953, ,884 Electricity supply Competitive tender The Lines Company Limited Total 931, ,414 Electricity supply Monopoly Supplier with published T&C Total 926, ,824 Rates etc Monopoly Supplier with published T&C AON New Zealand Total 822, ,012 Insurance Competitive tender Visit Ruapehu Total 785, ,817 Regional Tourism Council vote with performance Alf Downs & Son Ltd Total 702, ,089 Street light maintenance Competitive tender Horizons.MW Total 692, ,813 Rates, RMA fees etc Monopoly Supplier with published T&C Total Leisure Concepts Total 643, ,426 Pool operation Competitive tender Le Pine & Co. Total 623, ,672 Legal advice Many small opinions. Reliable supplier. Gary Jacobs Limited Total 593, ,798 Building Maintenance Competitive tender Audit New Zealand Ltd Total 573, ,153 Audit Legislated Monopoly Supplier with published T&C Byfords Construction 2014 Ltd Total 492, ,180 Road maintenance Competitive tender Ruapehu Alpine Lifts Total 489, ,128 Road maintenance Value tested by comparison. Only supplier Quotable Value Ltd Total 455, ,715 Valuations Legislated Monopoly Supplier with published T&C Ruapehu Property Services Ltd Total 414, ,052 Property Maintenance Competitive tender Mulch And Mow Ltd Total 408, ,047 Road mowing Competitive tender Central Business Development Limited 366, ,331 i-site contract Competitive tender Total Gillard Motors Ltd Total 355, ,486 Vehicle maintenance Competitive tender Telecom New Zealand Total 338, ,810 Phones Legislated Monopoly Supplier with published T&C Aecom New Zealand Limited Total 302, ,929 RMA certifications Values checked by comparisons Lexel Systems Limited Total 240,185 80,062 IT Operations Competitive tenders King Country Quarries Limited Total 223,135 74,378 Gravel supply Competitive tenders Fuji Xerox New Zealand Ltd Total 219,783 73,261 Copiers Competitive tenders Origen Technology Ltd Total 206,525 68,842 Software maintenance Competitive tenders Bri-Ken & Associates Ltd Total 202,414 67,471 Culvert inspections Competitive tenders Manawatu-Wanganui Lass Ltd Total 181,234 60,411 Subscription enables Insurance purchases with cohort Buildcon Solutions Ltd Total 180,523 60,174 Building certification Values checked by comparisons Taumarunui Hire Centre Total 152,708 50,903 Minor equipment hire Only supplier Allan Tong Limited Total 151,453 50,484 Pool painting Competitive tender

7 SCHEDULE 2: THE TENDER PROCESS 1.1 Time Allowance for Tenders The call for tenders shall remain open long enough to allow adequate time for response. 1.2 Physical Document Delivery Tenders shall either be placed in a locked tenders box located at the front counter of office nominated in the tender, or posted to Council prior to the closing date and time. All posted tenders shall immediately be endorsed with date and time upon receipt and placed in the sealed box until the close of tenders. Late tenders will not be accepted Tenders shall be opened by Administration in the presence of at least one responsible member of the Unit by whom the tender has been called. All bids received shall be scheduled at the time of opening In the case of multiple tenders received from one tenderer, a copy of all the papers shall be made before they are put on separate files All bids received shall be scheduled at the time of opening of the tenders and the schedule shall be initialled by the person from the Unit concerned. 1.3 Tenders Received by Fax Tenders received by FAX may have issues with confidentiality and timing. FAXs are not always received in Taumarunui immediately after being sent If tenderers wish to submit offers or parts of offers by FAX then Council will endeavour to assist on an all care no responsibility basis It is recommended that tenderers are advised to phone the Tender Administrator immediately prior to sending the FAX If the Administration Department agrees to accept the tender then it will then take the FAX, place it in a sealed envelope and place it in the tender box They will then phone the tenderer to state they have acted in accordance with this procedure The tenderer should be advised to assume the documents are not submitted until the phone call is returned At least an hour must be allowed for this procedure The FAX number for tenders is Tenders Received by If tenderers wish to submit offers or parts of offers by then Council will endeavour to assist on an all care no responsibility basis It is recommended that the tenderers are advised to phone the Tender Administrator immediately prior to sending the The Tender Administrator will then print the and place it in a sealed envelope and place it in the tender box. He or she will then phone the tenderer to state they have acted in accordance with this procedure The tenderer should be advised to assume the documents are not submitted until the phone call is returned. At least an hour must be allowed for this procedure.

8 1.4.5 Tenders received by may be password protected and the password sent to Council separately immediately prior to the closing time of the tender In order for the tender to be accepted as being on time both the tender and the password must arrive at Council before the deadline The address for tenders will be as stipulated in the tender documents. 1.5 Presentation and Acceptance of Tenders All tenders shall be subject to the following checking procedures: (a) Check that tenders are in accordance with the requirements of the tender document. (b) Any tags are to be discussed with the tenderer and removed prior to consideration. (c) Check arithmetic. (d) Check that the tendered price is realistic. (e) Check the tender is in accordance with the competitive pricing procedures where necessary Following evaluation an acceptance report with a recommendation for the preferred tenderer shall be prepared summarising the tendered prices, quality attributes (if used) and supplier quality premium (if used) and be: (a) Signed by the evaluating officer. (b) (c) Signed by the Manager concerned. Approved by the Chief Executive or the Tender Review Group with appropriate authority as determined by the financial delegation from Council. 1.6 Notification to Tenderers Tenders shall be accepted or rejected as appropriate, and the following information supplied to all tenderers who have submitted complying bids where applicable: (a) The dollar value of the range of complying tenders. (b) The quality score range of complying tenders. (c) The name of the successful tenderer. (d) The successful price, (adjusted for supplier quality premium where appropriate) In the event of no tender being awarded, all tenderers will be informed accordingly, but no information will be supplied on the prices received Contract agreements shall be signed by the Council and the Contractor. (a) Relevant Delegations. (b) As per Delegations Manual. 8