2.1 This policy seeks to: define methods by which Council can acquire works, goods & services

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1 Procurement Policy 1. Introduction 1.1 The contents of and the commitments that Council makes in this policy are not intended to be and should not be interpreted to be any more than a statement of the Council s general position in relation to those matters, and to facilitate its aspirations wherever it is reasonable to do so. 1.2 In compliance with section 49 of the Local Government Act 1999 (Act), Council should refer to this policy (Policy) when acquiring works, goods and services. 1.3 We are an organisation undergoing significant change, including a commitment to being a Council of excellence; reviewing service efficiency, effectiveness and compliance with the law and becoming an actively learning organisation. The Chief Executive Officer and Directors have made this commitment explicit through the review of our organisational values; they are our guiding principles and guide the behaviours of all staff: 2. Purpose Courageous being prepared to make tough decisions and address issues directly and constructively Inspirational make a difference, show leadership and be an example of the changes we want to see Curious challenge existing practices, strive to get to the core of issues, be open to suggestions or complaints and actively encourage learning Positive have a can-do attitude, focus on solutions and make positive self and organisational changes Connected communicate with others, foster relationships within and outside of teams and departments and our community Accountable seek and accept responsibility for decisions and actions, learn from mistakes and help other do the same. 2.1 This policy seeks to: define methods by which Council can acquire works, goods & services demonstrate accountability and responsibility of Council to ratepayers be fair and equitable to all parties involved enable all processes to be monitored and recorded ensure that best possible outcome is achieved for the Council. 1 Date Printed: 12 June 2014

2 2.2 However, this policy does not cover: non-procurement expenditure such as sponsorships, grants, funding arrangements, donations and employment contracts the sale and disposal of land and other assets owned by the Council. 2.3 Council aims to achieve advantageous procurement outcomes by: enhancing value for money through fair, competitive, non-discriminatory procurement promoting the use of resources in an efficient, effective and ethical manner making decisions with probity, accountability and transparency advancing and/or working within Council s economic, social and environmental policies providing reasonable opportunity for competitive local businesses to supply to Council appropriately managing risk and ensuring compliance with relevant legislation. 3. Policy Principles 3.1 Council must have regard to the following principles in its acquisition of goods and services: Encouragement of open and effective competition Obtaining Value for Money This is not restricted to price alone An assessment of value for money must include, where possible, consideration of: (a) (b) (c) the contribution to Council s long term plan and strategic direction any relevant direct and indirect benefits to Council, both tangible and intangible efficiency and effectiveness of the proposed procurement activity 2 Date Printed: 12 June 2014

3 (e) (f) (g) (h) (i) (j) (k) the performance history, and quality, scope of services and support of each prospective supplier fitness for purpose of the proposed goods or service whole of life costs Council s internal administration costs technical compliance issues risk exposure the value of any associated environmental benefits Probity, Ethical Behaviour and Fair Dealing In all procurement activity, we will behave with impartiality, fairness, independence, openness and integrity in all discussions and negotiations Accountability and Transparency In our decisions regarding procurement we will be responsible for decisions, actions and resulting outcomes able to give and provide documented evidence of reasons for the decisions made Ensuring compliance with all relevant legislation To proactively support local business and industry to provide jobs within Onkaparinga in recognition of the economic and social benefits that this brings Environmental protection Council will seek to: a) provide leadership to business, industry and the community in promoting the use of environmentally sensitive goods and services b) identify environmental performance criteria in specifications for goods and services and consider these in our purchasing decisions 3 Date Printed: 12 June 2014

4 4. Definitions Work Health Safety c) select energy (including fuel) and water efficient products by considering star ratings and consumption measures d) purchase goods that minimise lifecycle greenhouse gas emissions including manufacture, transport, operation and disposal e) promote the efficient use of resources through products that are made from recycled materials and/or minimise the generation of waste to landfill f) purchase products and services that will not release toxic substances that can affect human health and/or the environment during their life cycle g) avoid the purchase of products that contribute to habitat destruction. Council will align our procurement activities with the requirements of the WHS legislation and our WHS Contractor Management Policy. Authority to Work Form a form used to engage a supplier to deliver works, goods or services under a Panel (Standing Offer) Contract. Contract a formal agreement for the delivery of specified goods, works or services. Council Solutions a joint purchasing authority comprising the cities of Adelaide, Charles Sturt, Marion, Onkaparinga, Salisbury and Tea Tree Gully where those councils may cooperate and participate in procurement activities. Exempt Supplier a supplier who has been approved according to internal procedure to be exempt from raising a purchase order. Financial Delegation the power delegated to an officer pursuant to section 44 of the LGA for expenditure of funds under Section 137 of the LGA. GST has the meaning attributed in A New Tax System (Goods and Services Tax) Act LGA Local Government Act Panel Contract a long term standing offer contract under which council may engage contractors periodically. Procurement Australia a procurement company where members may cooperate and participate in procurement activities. Purchase Order a record generated by our finance system to engage a supplier to deliver work, goods or services. 4 Date Printed: 12 June 2014

5 Quotation a proposal, bid or offer that is submitted in writing in response to a Request for Quotation (RFQ). Request for Expressions of Interest (REOI) the first stage of a two-stage process, in which suppliers are invited by public advertisement to register interest for the supply of goods and services. Potential suppliers may then be short listed for a Select Tender Process. Request for Proposal (RFP) a process in which potential suppliers are invited by public advertisement to submit proposals for the supply of works, goods or services by public advertisement. Potential suppliers may then be short listed to directly negotiate a contract. Request for Quotation (RFQ) a process for inviting quotes from potential suppliers for goods, works or services required to achieve a stated outcome. Request for Tender (RFT) a process in which an invitation to potential suppliers to submit offers for clearly described goods, works or services is publicly advertised. Risk the potential for something to go wrong, including that the expected outcome will not be achieved. Select Tender a process in which selected potential suppliers are invited to submit offers or proposals for goods, works or services. It can be used as the second stage of a twostage procurement process. Tender a proposal, bid or offer that is submitted in response to a Request for Tender. 5. Procurement Methods 5.1 Generally, open and fair competition is best achieved by undertaking an open tender process so that all interested parties have an opportunity to bid. However, there may be procurements in which a tender process will not necessarily deliver the most advantageous outcome for the Council. In such instances, other market approaches may be more appropriate. 5.2 The Council may, having regard to its Procurement Principles and any other factors considered relevant by the Council, in its absolute discretion determine to utilise one or more of the following procurement methods: Direct Purchasing This is where Council purchases from a single source, without first obtaining competing bids This method may be suitable for low value, low risk goods and services, and where the supplier already has a successful service history with the Council Request for Quotations (RFQ) 5 Date Printed: 12 June 2014

6 This is where Council obtains quotation/s from prospective suppliers for purchases This method may be suitable for simple, largely price based purchases Requests for Expressions of Interest (REOI) This is where Council issues an open invitation for suppliers to express an interest for supply of works goods and/or service This method may be used where there is potentially a large market for the proposed works goods and/or service, and the Council would like to be able to prepare a short list of suppliers who will then be invited to participate in a select tender Requests for Proposal (RFP) This is where Council issues an open invitation for suppliers to submit a proposal for supply of works, goods or services This method may be used where there may be constraints on funds available or the exact nature or scope of the works goods or services is not known and Council would like potential suppliers to be able to submit proposals as to the extent or nature work goods or services that can be achieved Council may then directly negotiate a contract with one or more suppliers Request for Tenders (RFT) This is where the Council issues an invitation to suppliers to tender for the supply of works goods and/or service Council may issue a Select Tender: (a) (b) where it has already issued a REOI, or where it has reasonable grounds for only dealing with a select group of potential suppliers Otherwise, Council may issue an Open Request for Tender Panel contracts 6 Date Printed: 12 June 2014

7 This is where the Council establishes panel arrangements (or standing offer) with a select group of suppliers. This occurs after the Council has completed an open request for tender process required in accordance with clause of this Policy, and can include either: (a) (b) a standing offer from a pool of suppliers for the provision of works, goods and services on agreed terms, or the prequalification of certain suppliers who may or may not be engaged on terms to be agreed Once a panel has been established, the Council may purchase the particular works goods and/or service through such panel arrangements Strategic alliances This is where the Council undertakes procurement through contract arrangements already established and administered by other organisations, including: (a) (b) (c) (d) Local Government Association Procurement Council Solutions (Formerly G6 Purchasing Group) Procurement Australia State Government contracts. 6. Records 6.1 The Council must in accordance with legislative and organisational requirements keep appropriate records of all purchases and in particular the reasons for entering into contracts not resulting from a competitive process. 6.2 All purchases require a purchase order except: where the supplier has been pre-approved and registered as an Exempt Supplier or the purchase is made using a direct method reimbursed by petty cash or purchase card. 7. Exemptions from this policy 7.1 This Policy contains general guidelines to be followed by the Council in its procurement activities. There may be emergencies, or procurements in which a 7 Date Printed: 12 June 2014

8 procurement process will not necessarily deliver best outcome for the Council and other market approaches may be more appropriate. 7.2 In certain circumstances, the Council, Chief Executive Officer or an officer of Council who is a Manager or Director, within their financial delegation, may waive application of this Policy and pursue a method which will bring the best outcome for the Council. The reasons for waiving application of this Policy must be recorded in writing. 7.3 Situations where it may be appropriate to waive application of this policy are: 8. Delegations Emergency situations threatening life and or property Continuation of work or service under an existing purchasing arrangement (ie variations/extensions to existing orders or contracts) Work, goods or service has already been subject to a recent competitive process (less than 6 months ago) and the pricing is still valid Work, goods or service is being provided under an existing purchasing arrangement (ie warranty, servicing, maintenance or defects liability) The supply market is known to be limited The supplier is registered as an Exempt Supplier Where it can be demonstrated that a procurement process will not deliver best outcome for Council. 8.1 All purchases must be approved in accordance with financial delegation. 8.2 Financial delegation for approval of a contract variation must take into consideration the total value of the contract, including any and all variations. 9. Negotiation 9.1 In any decision process to procure works, goods or services, Council reserves the right to negotiate with any supplier. 10. Local business & industry support 10.1 Council will support the development of local competitive businesses and industry by: When issuing requests for quotation for purchases where multiple quotes are being sought, that at least one invitation is made to an Onkaparinga business (if available). 8 Date Printed: 12 June 2014

9 any Request for Proposal, Request for Expressions of Interest or Request for Tenders, a qualitative evaluation criteria for local suppliers will be included in the evaluation process. 11. Further Information 11.1 This Policy will be published on the Council s website This policy will be reviewed every 3 years However, Council may revise or review this Policy at any time (but not so as to affect any process that has already commenced). 12. References Local Government Act 1999 A New Tax System (Goods and Services Tax) Act 1999 WHS Contractor Management Policy LGA Procurement Handbook Guide Procurement Policy - Local Government Association 13. Attachments Responsible officer(s)/department(s): Adopted/approved by: Les Tulloch, Team Leader Procurement Services, Property & Commercial Council Date approved/adopted: 29 April 2014 Next review: March 2017 Date(s) of previous review(s): March 2014 ECM number: City of Onkaparinga PO Box 1 NOARLUNGA CENTRE SA Date Printed: 12 June 2014

10 Telephone: Website: 10 Date Printed: 12 June 2014