CL04-FM PROCUREMENT POLICY Page 1 of #

Transcription

1 CL04-FM PROCUREMENT POLICY Page 1 of # NORTH SYDNEY COUNCIL 2020 VISION COMMUNITY STRATEGIC PLAN OUR CIVIC LEADERSHIP Responsible Director: Finance and Information Management 1. STATEMENT OF INTENT 1.1 The intent of the Policy is to ensure procurement at best value for money, in keeping with applicable statute, regulation, policy and best practice, and to contribute to the achievement of Council s objectives. 2. ELIGIBILITY 2.1 The Policy applies to all councillors, staff and agents of Council and to any other entity involved in Council procurement. 3. DEFINITIONS This glossary is to be used as Council s corporate glossary for procurement terms. It serves as the glossary to the Corporate Manual accompanying the Policy. The terms used are mostly specific to procurement policy, and do not necessarily conform to general understanding or popular dictionary definition. 3.1 (The) Act - The NSW Local Government Act Section 55 of the Act governs Council s procurement under statutory tendering. Any other act specifically referred to herein will be given its full title. 3.2 Advertisement - The means of publicly calling for offers or expressions of interest. 3.3 Biased policy - Policy stipulating preferential treatment. It may be intended to support the achievement of Council objectives. 3.4 Call for offers or expressions of interest - The invitation of offers or expressions of interest from Proponents, whether publicly or directly. 3.5 Call-in power - The power of the Minister to refer any PPP to the PRC. 3.6 Cardholder - The holder or custodian of a Council credit card, fuel card or other card issued for procurement purposes. 3.7 CIWAS - The biennial Council Infrastructure Works & Associated Services contract. As per clause 169 of the Regulation, a list of Proponents for particular kinds of procurement prepared following a public call for offers.

2 PROCUREMENT POLICY Page 2 of Competition - A contest between two or more Proponents. As per NCP, competition is a means to promoting the public interest, rather than an end in itself. 3.9 Confidential information - Information that is intellectual property, proprietary, commercial-in-confidence or otherwise confidential Contract - A legally enforceable agreement between the Principal and the Contractor. This includes a properly executed purchase order Council - North Sydney Council Departmental Manager - The Manager of a Council department or the Manager s designated alternate Direct comparison - The call for offers from at least three Proponents for procurement with a dollar value equal to or greater than $25,000 and less than $75,000, and not generally governed by or conforming to section 55 of the Act or part 7 of the Regulation Direct negotiation - As per ICAC guidelines for managing risks in direct negotiations, the exclusive negotiation between Council and a Proponent without first undergoing a genuine competitive process. It is sometimes referred to as directly sourced, single-invited or non-competed contract. For the purpose of the Policy, direct negotiation is also the call for an offer from a Proponent for procurement with a dollar value less than $25, (The) Director-General - The Director-General of the DLG. Any other directorgeneral specifically referred to herein will be identified by the full title Discretionary tendering - The public call for offers for procurement with a dollar value equal to or greater than $75,000 and less than $150,000, and not generally a tender in accordance with part 7 of the Regulation (Divisional) Director - The Director of a Council division or the Director s designated alternate DLG - The NSW Government s Division of Local Government (formerly the Department of Local Government, now located within the Department of Premier and Cabinet) Dollar value - For the purposes of the Policy, an amount denominated in Australian dollars, signified by the $ symbol, and inclusive of any GST.

3 PROCUREMENT POLICY Page 3 of Electronic means - As per clause 164 of the Regulation, includes electronic communication within the meaning of the Electronic Transactions Act 2000 (NSW) Evaluation - The rational assessment of offers, with due consideration of merits and demerits Expression of interest - The formal expression by a Proponent of an interest in procurement. An expression of interest is usually sought with the intention of inviting select Proponents to make an offer Extenuating circumstances - Circumstances that might allow deviation from the usual procurement processes stipulated under the Policy. Extenuating circumstances, including emergency, are not defined by the Act. ICAC guidelines for managing risks in direct negotiations advise that in situations where a delay would threaten public health and safety, damage the environment or create a serious legal or financial risk, direct negotiation may be warranted. Poor planning or looming management deadlines do not constitute extenuating circumstances Formal tender document - As per clause 164 of the Regulation, a standard form document issued by Council for completion by Proponents in connection with the submission of offers to the Council Functional requirement - Formal identification of an objective or outcome that is to be met or supported. This excludes the prescription or proscription of a specific technology or item of equipment General Manager - Council s General Manager or the General Manager s designated alternate (The) Guidelines - DLG Tendering guidelines for NSW local government, October Any other guidelines specifically referred to herein will be given their full title. In exercising its functions, Council is obliged to take into consideration guidelines issued by the Director-General under section 23A of the Act GST - Goods and services tax ICAC - The NSW Independent Commission Against Corruption Information system - An information system within the meaning of the Electronic Transactions Act 2000, which is a system for generating, sending, receiving, storing or otherwise processing electronic communications. For the purposes of the Policy, Council s electronic content management system is an information system.

4 PROCUREMENT POLICY Page 4 of Instalment contract - As per section 55(1)(h) of the Act and clause 164 of the Regulation, a contract requiring the payment of instalments by or to a council over a period of two or more years LGP - Local Government Procurement Pty Ltd, a person prescribed under clause 163(1A)(i) of the Regulation, and established by the Local Government and Shires Association of NSW Local preference policy - A biased policy restricting procurement to a particular geographical area (The) Manual - A complementary and interpretive document accompanying the Policy, and stipulating certain practices under the Policy. Any other manual or guidelines specifically referred to herein will be signified as such Market - The arena in which competition takes place (The) Minister - The NSW Minister for Local Government. Any other minister specifically referred to herein will be identified by the full title Must - In keeping with the DLG s internal audit guidelines, the term must is used herein to specify an unconditional requirement NCP - National Competition Policy: A microeconomic reform programme established by the Council of Australian Governments on the presumption that competitive markets generally best serve the interests of consumers and the wider community. Council s commitment to NCP stems from clause 7 of the associated Competition Principles Agreement NSROC - Northern Sydney Regional Organisation of Councils: a collaborative forum comprised of the seven member councils Hornsby, Hunters Hill, Ku-ringgai, Lane Cove, North Sydney, Ryde and Willoughby. NSROC also functions as a joint procurement arrangement NSW - New South Wales Offer - An expression of readiness to meet procurement requirements. An offer may take the form of a tender, quote or other such proposal Open tendering - The public call for offers by advertisement Order splitting - The division of procurement so as to pass under a threshold defined by the Policy PPP - Public-private partnership: as defined in section 400B of the Act, an arrangement between Council and a private person for the purposes of:

5 PROCUREMENT POLICY Page 5 of 30 Providing public infrastructure or facilities in which Council has an interest, liability or responsibility under the arrangement; and/or Delivering services in accordance with the arrangement. As further defined in clause 408 of the Regulation, PPP excludes, among other things, any contract between Council and a private person that would, but for a resolution by Council to enter into a PPP, be subject to the tendering requirements under section 55 of the Act PPP guidelines - DLG Guidelines on the procedures and processes to be followed by local government in public-private partnerships, 01 September As per section 400C of the Act, Council must comply with the PPP guidelines PRC - The (Local Government) Project Review Committee: as per section 400J of the Act, a NSW government committee established to review PPP projects called in by the Minister for that purpose (The) Policy - This procurement policy. It implies reference to applicable statute, regulation, policy and best practice. Any other policy specifically referred to herein will be given its full title Price - The amount payable for procurement. It is a component of total cost, including GST Private person - As defined in section 400B of the Act, any person other than: The government (including the state, the Crown and a minister of the Crown); A public or local authority (including a council or a state owned corporation); or A public sector employee or other person or body acting in an official capacity on behalf of the government or a public or local authority Procurement - The getting of goods and services. For the purposes of the Policy, procurement also refers to sale or disposal, including of land, and to any contract for procurement Procurement category - An ordering of procurement based on the requirements of statute, regulation, policy and best practice, and principally differentiated by dollar value Purchasing - Paying for or buying an item of procurement (The) Regulation - The Local Government (General) Regulation 2005, which governs implementation of the Act. Section 7 of the Regulation governs Council s procurement under statutory tendering. Any other regulation specifically referred to herein will be given its full title.

6 PROCUREMENT POLICY Page 6 of Relevant newspapers - As per clause 164 of the Regulation: A Sydney metropolitan daily newspaper; and Either or both: A newspaper circulating in Council s area; A newspaper circulating in the district where potential Proponents are likely to carry on business or reside Requirement - The formal identification of a need 3.56 Reverse auction - Competition between Proponents, similar to an auction, with an open bidding process in which each successive offer is usually lower in price and/or better value for money than the preceding offer Selective tendering The call for offers from Proponents: Responding to a public call for expressions of interest; or On a list of recognised Contractors for procurement of a particular kind Should - As per the DLG s internal audit guidelines, the term should is used herein to specify expected conformance unless, when applying professional judgment, circumstances justify deviation Significant project - As per clause 400B of the Act, with respect to a PPP: Any project with an estimated total cost of more than $50 million or such other amount as may be prescribed by the regulations; or Any project in respect of which Council s financial contribution, or its equity position, amounts to 25% or more of Council s annual revenue that is lawfully available for spending on facilities or services of the kind to which the project relates Specification - The formal identification of the preferred means to meet a requirement. Specifications may define functional, performance or technical parameters Statutory tendering - A call for offers generally for procurement with a dollar value of greater than or equal to $150,000 and generally a tender in accordance with part 7 of the Regulation Tender - A form of offer. Where tender is used in isolation, it refers to both statutory and discretionary tendering Total cost - Cost incurred in procurement, including at least:

7 PROCUREMENT POLICY Page 7 of 30 Price; Buying costs; Other direct administrative costs; and Freight, duties and fees User requirement - Formal identification of the means by which an end user is to be supported in meeting a functional requirement. This may include the prescription or proscription of a specific technology or item of equipment Waste management - As per clause 170(4) of the Regulation, the storage, treatment, processing, collecting, removal, disposal, destruction, sorting or recycling of domestic waste and other waste 4. PROVISIONS 4.1 Standards: The following standards, listed in alphabetical order, complement Council policy, DLG tendering guidelines and any other applicable standards Accountability and Record Keeping - Procurement decision making must be clearly defined. All decision making must be open to challenge on a fair and reasonable basis. Full, accurate and timely records must be kept of all decision making. In addition to the requirements of statute and regulation, the standard of recordkeeping is governed by Council s knowledge management strategy and related policy and procedures Annual review of the Policy and the Manual - The Policy and the Manual must be reviewed annually to ensure conformance to current statute, regulation, best practice and Council s objectives Best value for money - Best value for money must be obtained through proper evaluation of the merits and demerits of an offer. Best value for money is not necessarily indicated by lowest price Business use only - All Council procurement utilising Council s purchase order system or corporate credit cards must be for Council business only. Any purchases of a private nature must be kept separate from Council purchases and must not be made on a Council purchase order or through the use of a Council corporate credit card Commitment - Procurement must not be initiated without a firm intention and capacity to proceed with a contract Competitiveness - Procurement must aim to promote the public interest through competition. Competitiveness must not be deemed to have been ensured where there has not been fair and reasonable testing of the market.

8 PROCUREMENT POLICY Page 8 of Confidentiality - Confidential information must not be disclosed: Without the written consent of the owner of that information; Without the written consent of the parties to a legal agreement governing the disclosure of that information; or Where, on balance, to do so would harm the public interest. Specific detail of a procurement matter must not be disclosed in advance of announcing the awarding of a contract Conformance to the Manual - In addition to conforming to the Policy itself, procurement must conform to the Manual accompanying the Policy Consistency - Procurement must consistently conform to this policy and related statutes, regulation and best practice. Whether in writing or verbally, information provided to Proponents in respect of a procurement item must be identical, and offers received must be evaluated on identical criteria Disclosure - Knowledge of anything that may materially affect the outcome of the procurement process must be properly disclosed in advance of decision making. Any potential or actual conflict of interest must be properly declared and addressed without delay Fairness - Procurement must ensure equality of opportunity through impartial decision making, and must exclude the improper gain or loss of any advantage. As per the NSW government code of practice for procurement, fairness does not imply universal satisfaction or forgoing the reasonable pursuit of legitimate self-interest Goodwill - Procurement must encourage business relationships based on open and effective communication, respect and trust, and include nonadversarial dispute resolution Legality - Procurement must be in keeping with governing statute and regulation No order splitting - Procurement must not entail any order splitting Planning - Procurement planning must: Be proportionate to the scale and complexity of procurement Consider the entirety of the procurement process; Ensure fitness for purpose; and Be completed prior to the call for offers.

9 PROCUREMENT POLICY Page 9 of Probity - Procurement must be conducted honestly, and in keeping with the expectations of the community. It must not entail any act or omission that would not seem fair and reasonable to a fair and reasonable person Risk Management - Procurement is among the riskiest of Council s activities, and must conform to Council s risk management framework. This includes the suitable insurance of any procurement Sustainability - In keeping with the objectives of Council s 2020 Vision strategic plan, procurement must be sustainable and operate within the quadruple bottom line (QBL) framework for consideration of economic, environmental, governance and societal factors Timeliness - Procurement must be carried out with due consideration for deadlines for meeting Council s objectives and obligations, and particularly with respect to any deadlines applicable under statute, regulation and the Policy Transparency - Without breaching confidentiality or otherwise harming the public interest, procurement must be open to scrutiny. 4.2 Process: Biased Procurement Policy - See also sections 1.6 and 1.7 of the Guidelines. Biased procurement policy, such as local preference policy, is not necessarily inconsistent with the principles of NCP, but has inherent risks for competitiveness, fairness and legality. Where Council wants to exercise bias in procurement, it must rely on a soundly reasoned and well defined policy that must: Form part of this Policy; Include proper and particular consideration of risks for competitiveness, fairness and legality; and Stipulate a maximum limit to the additional cost that may be borne in exercising bias In-house competition for procurement - See also section 55(2A) of the Act and section 2.5 of the Guidelines. Council may participate in the competition for its procurement. In doing so, Council must: Arrange independent evaluation of submissions; Advise competitors that Council is participating in the competition; and

10 PROCUREMENT POLICY Page 10 of 30 Ensure clear physical and operational separation of the staff members managing the procurement from those staff members participating in the competition for the procurement Joint procurement arrangements - See also sections 55, 355 and 377 of the Act, and section 2.6 of the Guidelines. A joint procurement arrangement, such as may be made through NSROC, does not divest Council of its obligations under the Policy. Section 377 of the Act, which governs the general power of Council to delegate, does not enable Council to delegate the decision to accept or reject a statutory tender. When entering into a joint procurement arrangement, Council must: Undertake detailed forward planning; and Ensure from the outset a common understanding of, and shared commitment to, the arrangement by all parties to it Prescribed persons and contracts - See also section 55(3) of the Act, clause 163 of the Regulation and section 3.22 of the Guidelines. Certain persons and contracts are prescribed by the Act and the Regulation, and Council may use them as an alternative to the requirements under the procurement categories. LGP is a prescribed person PPP - See also sections 358 and 400B to 400N of the Act, clauses 408 to 410 of the Regulation, and all of the PPP guidelines. Council must not enter into, or carry out any project under, a PPP, except in accordance with part 6 of chapter 12 of the Act and in compliance with the PPP guidelines. Sections 400B to 400N of the Act apply regardless of the terms of any arrangement between Council and a private person. Any decision by Council in relation to entering into a PPP may only be made by resolution of Council. As per clause 409 of the Regulation, a proposal to carry out a project under a PPP is taken to have originated when Council resolved to investigate the proposed project and to develop the proposal with other parties. Council must not enter into a PPP unless Council has provided the Director-General with an assessment of the project to be carried out under the PPP. The General Manager must certify that the assessment complies with the PPP guidelines.

11 PROCUREMENT POLICY Page 11 of 30 In determining Council s financial contribution or equity position in relation to a PPP project, all elements of the project that Council provides must be taken into account, including: Land value; The provision of non-monetary goods and services; and Any costs associated with Council s contractual liability in the event of Council incurring a loss under the project. A PPP project that is carried out in stages must be treated as a single project. The PPP guidelines may also specify other circumstances in which related PPP projects must be treated as a single project. The Director-General is to advise Council that the project is required to be referred to the PRC if: It is a significant project; or The Director-General is of the opinion, having regard to the criteria specified in the PPP guidelines, that the project has a high risk. If the Director-General advises the Council that the project is not required to be referred to the Project Review Committee, Council may: Subject to obtaining the Minister s consent under section 358(1)(a) of the Act, enter into the PPP; and Subject to sections 400E to 400I of the Act, carry out the project that is the subject of the assessment. If a project is required or directed to be referred to the PRC, Council must not enter into a PPP to carry out the project, or proceed with the carrying out of the project under a PPP, unless: Council has provided the PRC with an assessment of the project in accordance with the PPP guidelines; and The PRC has reviewed the project and is satisfied that the requirements of the PPP guidelines have been complied with in relation to the project. Council must demonstrate to the PRC that the PPP guidelines have been complied with in relation to the project. If the PRC advises Council that it is satisfied that the PPP guidelines have been complied with in relation to the project, Council may: Enter into the PPP (if it has not already entered into it); or

12 PROCUREMENT POLICY Page 12 of 30 Subject to sections 400E to 400I of the Act, proceed with the carrying out of the project. The PRC s decision is final and cannot be reviewed by any court or tribunal. Compensation is not payable by Council to any private person as a consequence of Council being prevented, by the operation of sections 400B to 400N of the Act, from entering into a PPP or from carrying out a project under a PPP Enforceability of purchase order terms and conditions - All purchases must have an original purchase order so that Council s terms and conditions prevail and Council s interests are protected. Council s terms and conditions of purchase accompany each purchase order issued. If a Proponent unconditionally accepts Council s purchase order then the terms/conditions that accompany the purchase order will formally govern the transaction. Any Proponent request for amendment of Council s terms and conditions must be referred, without delay, to Council s procurement manager. Council staff members must not sign any Proponent s forms prior to evaluation by the procurement manager. Only in extenuating circumstances will the terms and conditions of the Proponent be agreed to over those of Council Procurement Categories: Statutory tendering - See also section 55 of the Act, part 7 of the Regulation, all of the Guidelines, and the provision on procurement by Council resolution. Section 55(1) of the Act and clause 163(2) of the Regulation mandate statutory tendering for a contract for procurement equal to or greater than $150,000, and relating to contracts of the following types: Instalment contracts; To carry out work that, by or under any act, is directed or authorised to be carried out by Council; To carry out work that, under some other contract, Council has undertaken to carry out for some other person or body; To perform a service or to provide facilities that, by or under any act, is directed or authorised to be performed or provided by Council; To perform a service or to provide facilities that, under some other contract, Council has undertaken to perform or provide for some other body;

13 PROCUREMENT POLICY Page 13 of 30 For the provision of goods or materials to Council (whether by sale, lease or otherwise); For the provision of services to the council (other than a contract for the provision of banking, borrowing or investment services); For the disposal of Council property (excluding land); Any other contract, or any contract of a class, prescribed by the Regulation. Although there may be no statutory or regulatory obligation to do so, Council should consider using the statutory tender process where: The procurement would appear to a fair and reasonable person to be controversial, contentious or politicallymotivated; It would appear to a fair and reasonable person that prospective Proponents have been unfairly excluded from the procurement. Statutory tendering must conform to the provisions for open or selective tendering. Statutory tender specification and evaluation documents must be submitted to the Procurement Panel for review. Following evaluation of offers, a report must be made to Council recommending that Council resolve to either: Accept one of the offers; or Reject all of the offers. An offer made under statutory tendering must not be accepted or rejected other than by resolution of Council. In either case, the recommendation must remain confidential pending Council s resolution. If there are valid extenuating circumstances, direct negotiation may take place by Council resolution Discretionary tendering - See also section 55 of the Act, part 7 of the Regulation, all of the Guidelines, and the provisions on statutory tendering and procurement by Council resolution.

14 PROCUREMENT POLICY Page 14 of 30 Where the procurement value is expected to be equal to or greater than $75,000 and less than $150,000, tenders must be sought through a public call for offers. Discretionary tendering must conform to the provisions for open or selective tendering. Discretionary tender specification and evaluation documents must be submitted to the Procurement Panel for review. An offer made under discretionary tendering must not be accepted without the endorsement of the General Manager. Should an offer be received that exceeds the threshold for statutory tendering, that offer must not be accepted other than in conformance with the statutory tendering provision. Namely, a report must be made to Council recommending that Council resolve to accept the offer. Such an offer must not be accepted other than by resolution of Council. The recommendation must remain confidential pending Council s resolution. If there are valid extenuating circumstances for discretionary tendering, direct negotiation may take place with the authorisation of the General Manager Direct comparison - See also section 55 of the Act, part 7 of the Regulation, and all of the Guidelines. Where the procurement value is expected to be equal to or greater than $25,000 and less than $75,000, written offers must be sought from at least three Proponents. An offer made under direct comparison must not be accepted without the endorsement of the relevant divisional director. Should an offer be received that exceeds the threshold for direct comparison, that offer must not be accepted other than by conformance to the applicable higher procurement category. If there are valid extenuating circumstances for direct comparison, direct negotiation may take place with the authorisation of the relevant divisional director Direct negotiation - See also section 55 of the Act, part 7 of the Regulation, and all of the Guidelines.

15 PROCUREMENT POLICY Page 15 of 30 Where the procurement value is expected to be less than $25,000, direct negotiation may take place with the authorisation of the relevant departmental manager. An offer made under direct negotiation: That is made under extenuating circumstances for statutory tenders must not be accepted or rejected other than by Council resolution; That is made under extenuating circumstances for discretionary tenders must not be accepted without the endorsement of the General Manager; That is made under extenuating circumstances for direct comparison must not be accepted without the endorsement of the relevant divisional director; or Must not otherwise be accepted without the endorsement of the relevant departmental manager. Should an offer be received that exceeds the threshold for direct negotiation, that offer must not be accepted other than by conformance to the applicable higher procurement category Exemptions: Sections 55(3) of the Act exempts from statutory tender a contract: Specified and made by a prescribed person, the State Contracts Control Board, or the Department of Administrative Services of the Commonwealth; Entered into with the Crown (whether in right of the Commonwealth, a State or Territory), a Minister of the Crown, a statutory body representing the Crown, or another council; For purchase or sale of land; For purchase or sale at public auction; For the leasing or licensing of land by the council, other than the leasing or licensing of community land for a term exceeding five years to a body that is not a non-profit organisation, as per section 46A of the Act; For the employment of a person as an employee of Council; Where, because of extenuating circumstances, remoteness of locality or the unavailability of competitive or reliable tenderers, Council decides by resolution (which states the reasons for the decision) that a satisfactory result would not be achieved by inviting tenders; For which, because of provisions made by or under another Act, Council is exempt from the requirement to call for tenders; Made in a case of emergency ( emergency is not defined by the Act);

16 PROCUREMENT POLICY Page 16 of 30 To enter into a PPP, or, if Council has entered into a PPP, a contract entered into by Council for the purposes of carrying out a project under the PPP, but only to the extent that the contract is part of the project that has been assessed or reviewed under sections 400B to 400N of the Act; or That is an environmental upgrade agreement within the meaning of part 2A of the Act. As many of the Policy provisions descend from the statutory tendering requirements, these exemptions may also be more broadly applicable. Refer to the relevant provisions herein for particular detail Extenuating circumstances - including emergency, may warrant exemption from some provisions of the Policy. A claim of extenuating circumstances must be carefully considered and the reasoning fully documented, and must not be deemed valid unless it has been endorsed by the Procurement Panel. Refer to the relevant provisions herein for particular authorisation requirements Estimation and aggregation - In considering the applicable procurement category, estimation must be inclusive of total cost. Prior to procuring a supply with an estimated value equal to or greater than $15,000 over the contract period, the Council staff member procuring the supply must, with Council s purchasing manager, investigate possibilities for aggregation of like procurement across Council. In the event that procurement is aggregated, the Council staff members procuring the supply must share responsibility for ensuring conformance to the Policy Requirements and specifications - See also sections 3.3 and 3.4 of the Guidelines. Requirements and specifications must principally reflect Council s identified needs, and must not be designed to meet the capabilities of a particular Proponent. Functional and performance specifications should be relied on where technical specifications would likely: Reduce the focus on functional requirements; Require disproportionate resources to prepare; Encourage bias, particularly towards the capabilities of a particular Proponent; Discourage innovation. Where Council does not have the technical capability to develop procurement requirements and specifications, consideration should be

17 PROCUREMENT POLICY Page 17 of 30 given to obtaining the advice of a suitable Consultant. A Consultant acting in such a role must be excluded from direct or indirect participation in any related offer. Proponents may be encouraged to make alternative offers that do not fully meet prescriptive requirements and specifications but provide innovative solutions and better value for money. Council must specify the circumstances in which alternative offers will be considered Tender documents - See also clause 170 of the Regulation, and section 3.6 of the Guidelines. Tender documents must consist of: Conditions of tendering, including requirements and specifications; and General conditions of contract. Tender documents must advise: Details of the procurement; The evaluation criteria, including price, timing, OHS, necessary qualifications and certifications, experience (including in delivering procurement for Council) and capacity to fulfil requirements; The name and contact details of a person to whom requests for information concerning the procurement may be addressed; and Whether there are formal tender documents that must be submitted and information as to how they may be obtained. If the proposed procurement is to be under an instalment contract, tender documents must also advise: Details of the instalments to be paid by or to Council; The period over which the instalments are to be paid; and The intervals between payment of the instalments. If the proposed procurement is for waste management of the same kind as provided under a contract in force immediately before the call for offers, tender documents must also specify the information which must be submitted about the continuity of employment of those workers employed or engaged by the Contractor under the contract in force, including at least: A statement as to whether or not the Proponent intends to offer those workers employment or engagement if the offer is accepted; and

18 PROCUREMENT POLICY Page 18 of 30 If employment or engagement is offered, relevant details of the terms and conditions that will be offered, including at least: Details of remuneration, preservation of accrued or accruing leave and other entitlements; Hours of work, working conditions and rights to negotiate working conditions under the Industrial Relations Act 1996; The conduct of training with respect to industrial rights and occupational health and safety; Duration of the employment or engagement; and Rights with respect to trade union membership. All reasonably practicable steps must be taken to inform prospective Proponents of any tender document amendments made after issue Advertisement - See also part 7 of the Regulation, and section 3.5 of the Guidelines. All advertisements must at least: Be published in relevant newspapers; Express the purpose of the procurement; Specify the name and contact details of a person to whom requests for information concerning the procurement may be addressed; and A deadline for response. For expressions of interest, the advertisement must also call any willing Proponent to express an interest to Council by a deadline that is at least 25 days after the date of first publication of the advertisement. For open statutory and discretionary tenders, the advertisement must also: State where and when tender documents can be obtained; State the purchase price of tender documents; and Call any willing Proponent to make an offer to Council by a deadline that is at least 25 days after the date of first publication of the advertisement Expressions of interest - See also clause 168 of the Regulation, and section 3.5 of the Guidelines. Council may publicly call for expressions of interest prior to calling for offers. Council may thereafter:

19 PROCUREMENT POLICY Page 19 of 30 Call for offers from all Proponents expressing an interest, or such of them as Council thinks able to fulfil the proposed requirements; or Decline to call for offers from any of those Proponents expressing an interest. In either case, the outcome of the expression of interest process need not form a separate report to a meeting of Council. Where offers are called for, Proponents must be given: A submission deadline of at least 21 days from the date of the call for offers; and Details of where and when tender documents can be obtained and the price of the tender documents Selective Tender List - See also clause 169 of the Regulation, and section 3.5 of the Guidelines. Council may establish a list of Contractors interested in tendering for procurement of a particular kind by calling for expressions of interest. All expressions of interest received must be evaluated, and evaluation must include: Experience in fulfilling requirements for the particular kind of procurement, including previous performance for Council; and Capacity to fulfil requirements for the particular kind of procurement. Following evaluation of an expression of interest, Council must either: List the Proponent as a Contractor interested in a particular kind of procurement, based on acceptance of some or all of the expression of interest; or Reject some or all of the Proponent s expression of interest. Council may subsequently call for a tender for a particular kind of procurement from a listed Contractor on the basis of: Capacity to fulfil requirements for the particular kind of procurement; and The number of occasions that the Contractor has been called on to tender for similar procurement.

20 PROCUREMENT POLICY Page 20 of 30 Where tenders are called for, listed Contractors must be given: A submission deadline of at least 21 days from the date of the call for tenders; and Details of where and when tender documents can be obtained and the price of the tender documents. Council may also adopt a list of recognised Contractors prepared by another public authority, provided the authority prepared the list following the publication of a similar advertisement CIWAS Tender - Council must biennially conduct an open statutory tender for fixed rates for procurement of a particular kind on an as required basis. No more than three Proponents are to be accepted and listed for any particular kind of procurement. Any use of the CIWAS contract as a selective tender list must conform to the selective tender list provision Submission and custody of tenders - See also clauses 171 to 174 and 177 of the Regulation, and sections 3.10, 3.11 and 3.15 of the Guidelines. The Proponent must submit a complete and legible tender in accordance with the conditions of tender. If a tender is submitted by electronic means, those means must be secure and preclude subsequent alteration of the tender. For the purposes of the Policy, such submission by electronic means is extended to include a tender submitted by facsimile and received directly and securely into Council s information system. A tender submitted by secure and inalterable electronic means must be stored on an information system in such a manner, whether by means of password protection or otherwise, that it is accessible only to an Appropriate Person. A tender submitted in writing must be sent or delivered in a sealed envelope. If a tender is otherwise submitted by facsimile, or by electronic means that are not secure or inalterable, the entire tender must be printed out upon receipt and sealed in an envelope. For tenders other than those submitted by secure and inalterable means, Council must: Provide a secure tender box; and Ensure that, until the tender opening: All such tenders received are kept in the tender box;

21 PROCUREMENT POLICY Page 21 of 30 The tender box is readily available during Council s business hours for the submission of tenders in person by Proponents; and The tender box is in a safe and secure place. Where there are extenuating circumstances, a deadline for submission may be brought forward from that normally required under the Policy. A shortened deadline must be no less than 7 days after the first publication of the advertisement or other call for offers. Where there are extenuating circumstances, a deadline for submission may be extended beyond that originally advertised or otherwise advised in the original call for offers. All reasonable steps must be taken to advise the extended deadline to those who have received tender documents or otherwise been called on to make an offer. In either case, the variation to the deadline must be by: Resolution of Council, where it is the variation of a deadline for statutory tenders; Decision of the General Manager, where it is the variation of a deadline for discretionary tenders; Decision of the relevant divisional director, where it is the variation of a deadline for direct comparison; or Decision of the relevant departmental manager, where it is the variation of a deadline for direct negotiation. Council must not consider a tender that is not submitted to the council by the deadline for submission, unless: The Proponent is able to satisfy Council that formal tender documents and all other requisite essential information were posted or lodged at a Post Office or other recognised delivery agency before the deadline for submission; and Council actually receives those documents within such period as it decides to be reasonable in the circumstances. A tender that is so considered must be marked or otherwise noted as a late tender. Council must consider a tender transmitted to it by facsimile machine or electronic means, but only if: In the case of transmission by electronic means, that means of transmission was specified in the relevant tender documents The transmission was received before the deadline for submission; and

22 PROCUREMENT POLICY Page 22 of 30 The tender is complete Communication with Proponents - See also sections 3.9 and 3.13 of the Guidelines. For procurement generally: Questions and answers about a specific Proponent s innovative solution must not be communicated to any other Proponent; Where a briefing or site visit is held in regard to a particular tender, an attendance register and minutes, including questions and answers, must be kept and circulated to all attendees following the briefing or site visit; and During briefings or site visits, there must be no isolated communication with any potential Proponent. Any question by a potential Proponent must be asked, and the answer given, before all in attendance. For tenders: Communication with potential Proponents must only be undertaken by the contact person listed in the public advertisement of the tender and the tender documents; Unless impractical, all communication to Proponents must be provided in writing simultaneously to all Proponents in respect of a question regarding the tender. A copy of the question, but not details of the source of the question, must be circulated with the answer; and Answers to tender questions must refer to the relevant clause(s) in the tender documents. If there is no clause relevant to the question, the answer must be provided as an addendum to the tender documents. Immediately following the deadline for tender submissions, and prior to the announcement of the successful tender: A Proponent must not communicate with Council other than to notify Council of a mistake or anomaly; Council must not communicate with a Proponent other than to seek clarification of an aspect of the tender. Communication with a Proponent must only be by unanimous decision of the Evaluation Panel. All Proponents must be given the opportunity to provide clarification on that aspect of the tender; Clarification must only be sought: If information received in a tender is unclear or open to interpretation; and This information is necessary to properly evaluate tenders.

23 PROCUREMENT POLICY Page 23 of 30 Council s communication with a Proponent must not result in any Proponent gaining an unfair advantage over another Proponent; and The Proponent must not be allowed to alter the tender Tender opening - See also clauses 175 and 177 of the Regulation, and sections 3.12 and 3.15 of the Guidelines. Immediately following the deadline for tender submission, the Appropriate Person must open the tenders in the presence of: At least two persons designated by the General Manager or Document Management Services Manager for the purpose; and Such Proponents and members of the public as wish to attend the opening. A member of the public who attends the opening of tenders is entitled, on request, to be informed as to whether the council has received a particular tender and also the total number of tenders received. As soon as practicable after the tenders for a proposed contract have been opened, the Appropriate Person must: Record the names of the Proponents and the amounts that appear to have been tendered for the contract; Prepare a tender list specifying the names of the Proponents in alphabetical order, and including such other information as the Appropriate Person considers appropriate; and Display the tender list in a place where it can be readily seen by members of the public Evaluation - See also clauses 176 to 178 of the Regulation, and sections 3.3, 3.4, 3.14 and 3.15 of the Guidelines. Evaluation of offers must generally conform to the standards expected by the Policy. Where procurement proceeds under extenuating circumstances, there should still be some form of evaluation, with reference to such relevant market information as is available. The evaluation methodology, criteria and associated weightings must be finalised during planning. Evaluation must be consistent with the requirements and specifications and aim to identify the offer that represents best value for money. Weightings must not be advertised, as to do so might unduly influence the construction of offers. Tenders that do not conform to conditions of tendering may be rejected on that basis. A tender that does not conform to conditions of tendering must be marked or otherwise noted as nonconforming.

24 PROCUREMENT POLICY Page 24 of 30 Council must evaluate tenders as soon as practicable after the tenders have been opened, using the evaluation criteria in the conditions of tendering. Additionally, in considering tenders submitted for a waste management contract, Council must take into account whether or not existing workers will be offered employment or engagement on terms and conditions comparable to those applicable immediately before the tender was submitted. At any time before Council accepts any tenders submitted, a Proponent may vary the tender: By providing further information by way of explanation or clarification; or By correcting a mistake or anomaly. Such a variation may be made either: At the request of Council; or With the consent of Council at the request of the Proponent, but only if, in the circumstances, it appears reasonable to Council to allow the Proponent to provide the information or correct the mistake or anomaly. If a tender is so varied, Council must provide all other Proponents whose tenders have the same or similar characteristics as that tender with the opportunity of varying their tenders in a similar way. Council must not consider a variation of a tender that would substantially alter the original tender. Where a Proponent submits a tender with qualifications or departures, the qualifications and departures may be considered as anomalies. In the alternate, if the qualifications and departures would alter the value of the tender to council, that alteration may be assessed and the tendered price adjusted for the purposes of comparison of tenders. When let, the contract would be for the tendered price, in the knowledge that Council must expend further funds to have the works comply with the requirements in the tender documents. If considered nonconforming, the Proponent may be asked to withdraw the qualification or departure, and if withdrawn, the tender may be considered further. If a nonconforming qualification or departure is not withdrawn, the entire tender may be treated as nonconforming. Alternative offers must not be accepted from Proponents who have not also submitted a conforming tender. Where a Proponent offers an alternative, other offers for that alternative must not be sought from

25 PROCUREMENT POLICY Page 25 of 30 other Proponents. Information contained in an alternative offer must not be used as the basis for a subsequent call for offers Procurement by Council resolution - See also sections 10A, 55 and 377 of the Act, part 7 of the Regulation, and sections 1.3, 3.16 and 3.17 of the Guidelines. A decision to accept a statutory tender must only be made by Council resolution as section 377 of the Act does not permit delegation of this task. Following evaluation of tenders, a report must be made to Council recommending that Council resolve to either: Accept one of the offers; or Reject all of the offers. If direct negotiation is proposed, then the report must recommend that Council resolve to enter into direct negotiation. Recommendations must: Be supported by all information necessary for Council to make an informed decision; and Remain confidential pending Council s resolution. Confidential information must form a separate confidential attachment to the publicly available report. A meeting of Council or Council committee may be closed to the public where information is to be disclosed that would, if disclosed publicly: Confer a commercial advantage on a person with whom Council is conducting (or proposes to conduct) business; Prejudice the commercial position of the person who supplied it; Confer a commercial advantage on a competitor of Council; or Reveal a trade secret. If Council resolves to enter into direct negotiation, the resolution must state Council s reasons for: Declining to invite fresh tenders or expressions of interest; and Determining to enter into direct negotiation with a particular Proponent or Proponents.