NAPRANUM ABORIGINAL SHIRE COUNCIL POLICY STATEMENT Procurement Policy AUTHORITY: DELEGATION: NAPRANUM ABORIGINAL SHIRE COUNCIL. Authority in respect of this Policy is hereby delegated to CEO PURPOSE This document sets out the Council s policy for the acquisition of goods and services and the carrying out of sound contracting principles. This policy applies to the procurement of all goods, equipment and related services, construction contracts and service contracts (including maintenance). Council officers responsible for purchasing goods and services and officers with financial delegation must comply with this policy. It is the responsibility of all Council officers involved in the procurement process to understand the meaning and intent of this policy. Sustainable Procurement Sustainable procurement means that when buying goods and services organisations practicing sustainable procurement will consider: Strategies to avoid unnecessary consumption and manage demand; minimising environmental impacts of the goods and services over the whole-of-life of the goods and services; Suppliers socially responsible practices including compliance with legislative obligations to employees; Value for money over the whole-of-life of the goods and services, rather than just initial cost; the cost value of money and associated payback periods Council s procurement decisions should encompass the consideration of goods and services which have a lower impact on the environment and human health than competing goods and services from suppliers, and which are ethically and socially responsible in value for money considerations. Responsibility Council officers' financial delegation or responsibility for purchasing goods and services must comply with this policy. It is the responsibility of these Council officers to understand the meaning and intent of this policy. Scope All Council purchases must be carried out in compliance with Sound Contracting Principles of the Local Government Act 2009 section 106, and The Local Government Regulation 2012, in particular, section 198, Procurement Policy of the Regulation applies. Council s purchasing activities aim to achieve advantageous procurement outcomes by: Promoting value for money with probity and accountability; and Advancing Council s economic, social and environmental policies; and Providing reasonable opportunity for competitive local businesses that comply with Statutory: PROCUREMENT POLICY 2016 Page 1 of 6
relevant legislation to supply to Council; and Promoting compliance with relevant legislation. In accordance with Part 3, this policy incorporates relevant requirements regarding the acquisition of goods and services and the carrying out of the procurement principles as stated in the Act. Reference Local Government Act 2009, Sound Contracting Principles Local Government Regulation 2012 Definitions To assist in interpretation the following definitions for Sound Contracting Principles shall apply: Value for money Council must harness its purchasing power to achieve the best value for money. The concept of value for money is not restricted to the purchase price alone. The value for money assessment must include consideration of: Contribution to the advancement of Council's Key Strategic Priorities Fitness for purpose, quality, services and support; and Maintaining and disposal; and Internal administration costs; and Technical compliance issues; and Risk exposure; and, The value of any associated environmental or sustainable benefits. Open and effective competition Procurement should be open and result in effective competition in the provision of goods and services. Council must give fair and equitable consideration to all prospective suppliers. The development of competitive local business and industry Council encourages the development of competitive local businesses within the region first, the northern and central Queensland region second and then within Queensland. When price, performance, quality, suitability, legislative compliance and other evaluation criteria are comparable, the following areas may be considered in evaluating offers: Creation of local employment opportunities; More readily available servicing support; More convenient communications for contract management; Economic growth within the local area; Benefit to Council of associated local commercial transaction. Environmental protection One of Councils key Strategic Priorities is the promotional and adoption of Environmental Sustainability. In undertaking any procurement activity Council will: Promote the purchase of environmentally friendly goods and services that satisfy value for money criteria, taking into account the whole of life costs of the procurement transaction; and Foster the development of products and processes of low environmental and climatic Statutory: PROCUREMENT POLICY 2016 Page 2 of 6
impact; and Provide an example to business, industry and the community by promoting the use of climatically and environmentally friendly goods and services; and Encourage environmentally responsible activities by stipulating minimum environmental requirements in procurement documentation. Ethical behavior and fair dealing. Council officers involved in procurement are to behave with impartiality, fairness, independence, openness, integrity and professionalism in their discussions and negotiations with suppliers and their representatives. Background Council must prepare and adopt a Procurement Policy for each financial year pursuant to section 198 of the Local Government Regulation 2012. Policy Statement All procurement transactions must comply with the Local Government Regulation 2012. The dollar amounts quoted in this section are to be exclusive of GST. Council contracted suppliers shall be used in the first instance for all transactions, subject to availability of goods and services. Petty Cash Purchases up to $500 (exclusive of GST) may be spent out of petty cash, except as defined otherwise by the CEO in accordance with petty cash procedures and contractual arrangements. Purchase made up to $1000.00 (exclusive of GST) that are not made from petty cash Purchases must be made by placing a written purchase order. Purchases must be undertaken by: Accessing a Preferred Supplier Arrangement; or Accessing Inventory; or Accessing a Standing Offer Arrangement; or if none of the above is available Obtaining at least one verbal quote. Details of quotes received must be entered into Councils corporate accounting software. Purchases between $1001 - $14,999 (exclusive of GST) Purchases must be made by placing a written purchase order. Purchases must be undertaken by: Accessing a Preferred Supplier Arrangement; or Accessing Inventory; or Accessing a Standing Offer Arrangement; or if none of the above is available Obtaining at least two verbal quotes. Details of quotes received must be entered into Council's corporate accounting software. Medium Sized Contracts purchases between $15,000 and $199,999 (Exclusive of GST) The Regulation requires that Council invites written quotes before making a contract for the carrying out of work or the supply of goods and services involving a cost between $15,000 and $199,999. Statutory: PROCUREMENT POLICY 2016 Page 3 of 6
The invitation must be given to at least three (3) persons who Council considers can meet the requirements, at competitive pricing. Large Sized Contracts purchases above $200,000 (exclusive of GST) The Regulation requires that Council invites tenders before making a contract for the carrying out of work, or for the supply of goods and services involving a cost of more than $200,000.00. Council must invites tenders by: Advertising in a newspaper that circulates generally in the region; and Allow written tenders to be given to Council for at least 21 days after the advertisement is published. Expressions of Interest Council may invite expressions of interest before inviting tenders if: Council decides, by resolution, that it would be in the public interest to invite expressions of interest before inviting tenders; and Keeps a record of its reasons for making the resolution. Invitations for expressions of interest must be made by: Advertising in a newspaper that circulates generally in the region; and Allowing written expressions of interest to be given to Council for at least 21 days after the advertisement is published. After receipt of expressions of interest Council may: Prepare a shortlist from the persons who respond to the invitation for expressions of interest; and Invite written tenders from those persons. Exceptions for medium and large sized contracts The Regulation allows Council to enter into contracts without first inviting quotes, for medium sized contracts, and inviting tenders, for large sized contracts. Exception if quote or tender consideration plan prepared Council may enter into a medium or large sized contract without first inviting written quotes or inviting tenders if Council resolves to prepare a quote or tender consideration plan and prepares and adopts the plan. The quote or tender consideration plan must state: The objectives of the plan; and How the objectives will be achieved; and How the achievement of the objectives will be measured; and Any alternative ways of achieving the objectives, and why the alternative ways were not adopted; and The proposed terms of the contract for the goods and services; and A risk analysis of the market from which the goods or services are to be obtained. Exception for contractor on approved contractor list Statutory: PROCUREMENT POLICY 2016 Page 4 of 6
quotes or inviting tenders for services only, if the contract is made with a person who is on an approved contractor list. Council must appoint persons to an approved contractor list by inviting expressions of interest in the manner stipulated in clause 6.1.6 of this policy and in accordance with the Sound Contracting Principles. Exception for register of pre-qualified suppliers quotes or inviting tenders for services only, if the contract is entered into with a supplier from a register of pre-qualified suppliers. Prior to the formation of a register of pre-qualified suppliers Council must establish that: The preparation and evaluation of invitations every time that the goods or services are needed would be costly; and The capability and financial capacity of the supplier of the goods and services is critical; or The supply of the goods and services involves significant security considerations; or A precondition of an offer to contract for the goods or services is compliance with particular standards or conditions set by the Local Government; or The ability of local business to supply the goods or services needs to be discovered or developed. Exemption for preferred supplier arrangement quotes or inviting tenders for services only, if the contract is entered into with a preferred supplier under a preferred supplier arrangement. To enter into a preferred supplier arrangement Council must: Invite tenders as described in this policy; and Describe the terms of the preferred supplier arrangement; and Must give regard to the Sound Contracting Principles when selecting persons; and Ensure the terms allow for termination for the poor performance of the supplier; and Enter into the arrangement for a term greater than two years only if Council is satisfied that it will get better value for doing so. Exception for LGA arrangement quotes or inviting tenders for services only, if the contract is entered into under a LGA arrangement. A LGA arrangement is an arrangement that has been entered into by the LGAQ Ltd or a Council registered under the Corporations Act, if LGAQ Ltd. is its only shareholder. Other exemptions quotes or inviting tenders if: Council resolves that it is satisfied that there is only one supplier reasonably available; or Council resolves that, because of the specialized or confidential nature of the services that are sought, it would be impractical or disadvantageous for Council to invite quotes or tenders; or Statutory: PROCUREMENT POLICY 2016 Page 5 of 6
A genuine emergency exists; or The contract is for the purchase of goods and is made by auction; or The contract is for the purchase of second-hand goods; or The contract is made with, or under an arrangement with, a government body. Valuable non-current asset contract tenders or auction needed first Council cannot enter into a valuable non-current asset contract unless it first: Invites written tenders for the contract under s6.1.5 of this policy. Offers the non-current asset for sale by auction. Exceptions for valuable non-current asset contracts Council may dispose of valuable non-current assets other than by tender or auction if: The valuable non-current asset: Was previously offered for sale by tender or auction and was not sold. Is sold for more than the highest tender or auction bid that was received. The valuable non-current asset is disposed of to: A government body; or A community organisation. For the disposal of land: The land will not be rateable land after the disposal; or The land is disposed of to a person whose restored enjoyment of the land is consistent with Aboriginal tradition or Island custom. For the disposal of valuable non-current asset, other than land, by way of trade-in for the supply of goods or services to Council: The disposal is, or is to be, part of the contract for the supply. The Minister exempts Council from complying with section 177 of the Regulation. Delegations Only the Council officers holding the positions listed in Council Delegation Register - Financial, Procurement, and Acquittal Delegation are entitled to sign requisitions, and then only in accordance with their respective financial delegation limits. By signing a requisition/purchase order all officers are confirming that they have taken full notice of this policy and will comply with all of the requirements of this policy. The Delegation Authority is available on the Council s intranet. Review of Policy This policy will be reviewed when any of the following occur: The related documents are amended or replaced; Other circumstances as determined from time to time by a resolution of Council Notwithstanding the above, this policy is to be reviewed in accordance with Section 143 of the Regulation, for each financial year. Statutory: PROCUREMENT POLICY 2016 Page 6 of 6