1

DFAT Procurement Operational Handbook

November 2012

2

CONTENTS

Foreword ............................................................................................................................................................................ 8

Introduction ........................................................................................................................................................................ 9

CHAPTER 1 Risk Management ........................................................................................................................................ 11

Section 1: Introduction .......................................................................................................................................................... 11

Section 2: Managing risk ...................................................................................................................................................... 11

Background....................................................................................................................................................................... 11

What is risk in procurement? ........................................................................................................................................... 11

How to manage procurement risks? ................................................................................................................................ 11

Procurement risk assessment .......................................................................................................................................... 11

Risk management monitoring .......................................................................................................................................... 11

Section 3: The procurement risk management process ........................................................................................................ 12

Background....................................................................................................................................................................... 12

Stages in procurement Risk management........................................................................................................................ 12

CHAPTER 2 - Probity .......................................................................................................................................................... 14

Section 1: Introduction .......................................................................................................................................................... 14

Scope and Application ...................................................................................................................................................... 14

Policy ................................................................................................................................................................................ 14

Section 2: Ethics and Probity in Procurement ....................................................................................................................... 14

Principles .......................................................................................................................................................................... 14

Practice: Ethics and Probity in Procurement .................................................................................................................... 14

Tips: Ethics and Probity in Procurement .......................................................................................................................... 15

Section 3: Code of Conduct in Procurement and Contracting ............................................................................................... 16

Practice: Code of Conduct in Procurement and Contracting ........................................................................................... 16

Section 4: Probity Guidelines for Evaluation Panel Members ............................................................................................... 17

Section 5: Probity Guidelines for Management of and Access to Procurement Records ...................................................... 18

Overview .......................................................................................................................................................................... 18

Roles and Responsibilities ................................................................................................................................................ 18

3

CHAPTER 3 - APPROACHING THE MARKET ........................................................................................................................ 19

Section 1: Introduction and scope ......................................................................................................................................... 19

Introduction...................................................................................................................................................................... 19

Scope ................................................................................................................................................................................ 19

Records Management ...................................................................................................................................................... 19

Stakeholder Consultation ................................................................................................................................................. 19

Section 2: Request for Tender, Expression of Interest and Select Tender ............................................................................. 22

Scope ................................................................................................................................................................................ 22

Preparing Approach to Market Documentation .............................................................................................................. 22

Drafting the RFT/EOI Document ....................................................................................................................................... 23

Developing the Draft Contract ......................................................................................................................................... 26

Other Internal Documentation ......................................................................................................................................... 27

Approaching the Market .................................................................................................................................................. 29

Out to market ....................................................................................................................................................................... 30

Probity .............................................................................................................................................................................. 30

Changes to Requirements ................................................................................................................................................ 30

Issuing Addenda ............................................................................................................................................................... 30

The next steps .................................................................................................................................................................. 31

The chapter on Evaluation and Selection of Suppliers provides guidance on receiving and evaluating submissions and

selecting a preferred supplier. ......................................................................................................................................... 31

Section 3: Mandatory Written Quotations $10,000 to Below $80,000 ................................................................................ 31

SCOPE ............................................................................................................................................................................... 31

Preparing Approach to Market Documentation .............................................................................................................. 31

Minimum documentation ................................................................................................................................................ 31

Other considerations ........................................................................................................................................................ 32

Approaching the Market .................................................................................................................................................. 32

Out to market ................................................................................................................................................................... 33

Closing the Approach to Market ...................................................................................................................................... 33

Section 4: Verbal Quotations $1,001 to $9,999 .................................................................................................................... 33

Scope ................................................................................................................................................................................ 33

4

Evaluate Offers and Select a Supplier .............................................................................................................................. 33

Obtain financial approvals and execute the contract ...................................................................................................... 33

Execute the contract ........................................................................................................................................................ 33

Section 5: Quotations from Panels........................................................................................................................................ 34

SCOPE ............................................................................................................................................................................... 34

Financial Approval for Forms of Order ............................................................................................................................. 34

Competitive approaches within a standing offer Panel ................................................................................................... 34

Closing the Approach to Market ...................................................................................................................................... 35

Section 6: Approaching Multi Use Lists & Whole of Government Arrangements ................................................................. 35

SCOPE ............................................................................................................................................................................... 35

Existing MULs and WoG Arrangements ........................................................................................................................... 35

Multi Use Lists .................................................................................................................................................................. 35

Whole of Government / Coordinated Procurement Arrangements ................................................................................ 35

Financial Approval ............................................................................................................................................................ 36

CHAPTER 4 EVALUATION & SELECTION OF SUPPLIERS ................................................................................................................ 38

Section 1: Introduction and scope ......................................................................................................................................... 38

Introduction...................................................................................................................................................................... 38

Composition of the Evaluation Board .............................................................................................................................. 38

Section 2: Receiving Submissions .......................................................................................................................................... 39

Receiving quotations ........................................................................................................................................................ 39

Receiving Tenders and Expressions of Interest ................................................................................................................ 39

Late Tenders ..................................................................................................................................................................... 39

Opening and registering tenders and EoI ......................................................................................................................... 40

Checking if tenders/EoIs are compliant............................................................................................................................ 40

Section 3 Evaluation of submissions and Short listing .......................................................................................................... 41

General evaluation tips that apply to all procurements .................................................................................................. 41

Additional tips for evaluating the procurement of goods ................................................................................................ 41

General evaluation tips that apply to EoI evaluation ....................................................................................................... 42

Clarifying Reponses .......................................................................................................................................................... 42

5

Short listing Suppliers ....................................................................................................................................................... 42

Short list Approval ............................................................................................................................................................ 43

Financial Viability Assessments ........................................................................................................................................ 43

Section 4: Selecting a Preferred Supplier .............................................................................................................................. 44

Completing the evaluation report and supplier recommendation .................................................................................. 44

Notifying Suppliers ........................................................................................................................................................... 44

Record Keeping ................................................................................................................................................................ 44

CHAPTER 5 HANDLING COMPLAINTS ........................................................................................................................................ 45

Section 1: Policy and Legislative Basis .................................................................................................................................. 45

Background....................................................................................................................................................................... 45

Policy ................................................................................................................................................................................ 45

Legislative BasIS................................................................................................................................................................ 45

Section 2: Departmental Complaints Handling Procedure ................................................................................................... 45

2.1 Receiving and Responding to a Complaint .......................................................................................................... 45

Independent Internal Review ................................................................................................................................................ 46

External Review .................................................................................................................................................................... 46

Chapter 6 - Contract Management .................................................................................................................................... 48

Section1: Introduction to Contract Management ................................................................................................................. 48

1.1 Purpose ............................................................................................................................................................... 48

1.2 Scope ................................................................................................................................................................... 48

1.3 Legislative and Policy Framework ....................................................................................................................... 48

Section 2: Contract Management -Principles ....................................................................................................................... 50

Criteria for a contract ....................................................................................................................................................... 50

Contract Management ..................................................................................................................................................... 51

Value for Money ............................................................................................................................................................... 51

Efficient, Effective and Ethical use of Resources .............................................................................................................. 51

Section 3: Developing a Contract .......................................................................................................................................... 53

Developing a Contract Checklist .................................................................................................................................... 53

Identify Resource Needs .................................................................................................................................................. 54

6

Assign Responsibilities...................................................................................................................................................... 54

Statement of Requirements ............................................................................................................................................. 54

Term of Contract .............................................................................................................................................................. 54

Contract Variations........................................................................................................................................................... 54

Dispute Resolution Procedures ........................................................................................................................................ 55

Indemnities ....................................................................................................................................................................... 55

Intellectual Property Rights .............................................................................................................................................. 56

Developing Performance Evaluation Checklists ............................................................................................................... 56

Reporting Requirements: Central Contracts Database .................................................................................................... 56

Contract Transition out Plan and Novation ...................................................................................................................... 56

Contract End Date ............................................................................................................................................................ 57

Payments .......................................................................................................................................................................... 57

Section 4: Formalising the Contract ...................................................................................................................................... 58

4.1 Formalising the Contract - checklist .................................................................................................................... 58

Financial Viability Assessment .......................................................................................................................................... 58

Contracting With Specific Types of Entities ...................................................................................................................... 58

Contract Negotiations ...................................................................................................................................................... 60

Contract Document Approval and Signing ....................................................................................................................... 60

Contract Options and Variations ...................................................................................................................................... 61

Monitoring of Contracts ................................................................................................................................................... 62

Section 5: Contract End ......................................................................................................................................................... 65

Evaluate Contract Performance at the End of Contract ................................................................................................... 65

Contract End ..................................................................................................................................................................... 65

Chapter 7 - Work Health & Safety in Procurement ............................................................................................................ 69

Policy and Legislative Basis ................................................................................................................................................... 69

Introduction...................................................................................................................................................................... 69

The WHS Framework ............................................................................................................................................................ 69

Specified Roles in the WHS Act ............................................................................................................................................. 69

WHS Act and Procurement ................................................................................................................................................... 70

7

Reasonably Practicable..................................................................................................................................................... 70

WHS issues to consider when procuring goods and services ........................................................................................... 70

Further information .............................................................................................................................................................. 71

8

FOREWORD

The DFAT Procurement Operational Handbook sets out the procurement policy for the department. The Handbook

provides departmental officers up to date policy and guidance on procurement and contracts governance matters. The

Handbook should be used in conjunction with other departmental policy documents such as the Chief Executives

Instructions (CEIs), Finance Management Manual (FMM) and other relevant Commonwealth and departmental guidelines

and templates.

The Handbook incorporates requirements under the Financial Management and Accountability Act 1997, the Financial

Management and Accountability Regulations 1997 and the Commonwealth Procurement Rules. Effective management of

the procurement process, from the conception of an idea through contract to project closure and evaluation, is vital to the

department in delivering its outcomes most efficiently and effectively.

The Chief Finance Officer (CFO) is the sponsoring authority for the Handbook. The ultimate objective of the Handbook is to

provide clear guidance on operational procurement and contract management processes and procedures in a user-friendly

and practical manner.

I trust you will find this document to be a useful and informative resource as you conduct your procurement activities in the

department.

Ann Thorpe

Chief Finance Officer

Department of Foreign Affairs and Trade

9

INTRODUCTION

OVERVIEW

The guidance provided in the HANDBOOK incorporates mandatory procurement requirements drawn from higher level

Commonwealth procurement guidance, in particular the Commonwealth Procurement Rules (CPRs). These requirements

are mandatory for all departmental officials. The HANDBOOK is the primary reference document for all departmental

officials involved in the procurement process. Departmental officials, for the purpose of this manual, include permanent

and non-ongoing staff and contractors involved in procuring goods and services on behalf of the department or using funds

of the department.

The CFO is the sponsoring authority for the HANDBOOK. Within CMD the HANDBOOK is maintained by the Procurement,

Travel and Comcover section (PTC) in the Finance Management Branch (FMB) with assistance from a wide range of

specialist areas.

COMMONWEALTH PROCUREMENT FRAMEWORK

Procurement conducted by Commonwealth appropriation-funded agencies is governed by a legislative and policy

framework comprising:

the Financial Management and Accountability (FMA) Act 1997;

the FMA Regulations 1997 ; and

the CPRs and related Department of Finance and Deregulation (DOFD) Finance Circulars.

FMA Regulation 7(2)) requires officials undertaking procurement to act in accordance with the Commonwealth

Procurement Rules (CPRs).

Procurement in the Department of Foreign Affairs and Trade is further governed by a series of policy and procedural

documents that apply in the following hierarchy:

Chief Executives Instructions (CEIs); and

Finance Management Manual (FMM)

The FMM Section 8.7 (Procurement) requires departmental officials performing duties in relation to procurement to

comply with the HANDBOOK.

WHAT IS PROCUREMENT?

Procurement encompasses the whole process of acquiring and utilising goods or services. It begins when the department

has identified a need and decided on its procurement requirement.

The procurement cycle continues through the processes of risk assessment, seeking and evaluating alternative solutions,

contract development and award, delivery of and payment for the goods or services and, where relevant, the ongoing

management of a contract and consideration of contract extension options and contract variations.

10

In addition to the acquisition of goods or services by the department for its own use, procurement also encompasses a

situation where the department, from its appropriations, is responsible for the procurement of goods or services for other

agencies, or for third parties (e.g. where we procure security services for a site and recover a portion of the cost from other

co-located agencies that benefit from the service).

WHAT IS NOT PROCUREMENT?

This Manual does not cover spending proposals that are not procurements.

While procurement relates to the acquisition of goods or services, it does not include:

grants (whether in the form of a contract or conditional gift);

investment (or divestment);

sales by tender;

loans;

purchases of goods or services for resale or of goods or services used in the production of goods for resale;

any property right not acquired through the expenditure of public money - for example, a right to pursue a legal claim for negligence;

statutory appointments;

appointments made by a Minister using the executive power - for example, the appointment of a person to an advisory board; or

the engagement of employees - such as under the Public Service Act 1999, the Parliamentary Services Act 1999 and the department enabling legislation, or under the common law concept of employment.

ROLES AND RESPONSIBILITIES OF PTC

Procurement functions within the department are highly devolved. The department employs procurement specialists to

assist staff in some line areas conducting a high number of and/or high value procurements. In line areas that do not have

dedicated procurement specialists (principally policy divisions and posts), procurement is undertaken by officers on a needs

basis with advice and assistance from PTC, budget and divisional coordinators or Senior Administrative Officers (SAO).

PTCs role involves providing policy advice on departmental procurement matters; procedural advice on high-value, and

high-profile procurements; setting and maintaining currency of the departments procurement policies and associated

guidelines and templates; and providing a governance framework for procurement and contract management matters in

the department through procurement policy oversight, strategic analysis of trends and reporting.

Departmental officers undertaking procurement should, in the first instance, refer to the HANDBOOK for advice regarding

the departments procurement policy, processes, guidance and templates.

11

CHAPTER 1 RISK MANAGEMENT

SECTION 1: INTRODUCTION

A documented risk assessment must be completed and kept on file for all procurements valued at or above $50,000. The result of risk assessments is an important factor in determining the type of contract to be used. Division 1 of the Commonwealth Procurement Rules (CPRs) encourages officials undertaking procurements to have a documented risk management strategy that enables procurement officials and contract managers to examine the impact of each potential risk, meet any compliance standards, make better business decisions, plan proactive communications including management strategies and enhance the potential for the procurement success. The risk management process detailed in this chapter is consistent with the framework contained in the DFAT Risk Management Handbook. The Risk Management Handbook provides the foundation for implementing, monitoring, review and continual improvement of risk management across the department.

SECTION 2: MANAGING RISK

BACKGROUND

Managing risk is an integral part of good procurement practice. The application of a risk management process improves procurement outcomes by:

identifying and reducing exposure to risk;

providing greater certainty and insight to support decision-making; and

improving contingency planning for dealing with risks and their impacts.

WHAT IS RISK IN PROCUREMENT?

Risk is the possibility that an expected outcome will not occur or that an unforeseen event, usually detrimental to the outcome sought through the procurement process, will occur. Risk is usually measured by: consequences - what will happen; and likelihood - the chances of it happening.

HOW TO MANAGE PROCUREMENT RISKS?

Risk management identifies potential risks, analyses their consequences, and develops mitigations strategies. The aim is to achieve reliable planning, improved decision making and greater certainty of outcomes. The risk management process is applicable to all stages of procurement and is an integral part of good procurement management. Effectively managing risk can lead to significant savings in resources, timely delivery and improved quality of services and relationships with clients. This should also include consideration of industrial relations, ecologically sustainable development, Work Health & Safety (WHS) management and economic issues. Risk management activities should always add value to the procurement process. The effort expended in managing risk should be commensurate with:

the nature of the procurement;

the cost of the procurement;

the complexity of the procurement; and

the significance of the procurement to DFAT and the Commonwealth.

PROCUREMENT RISK ASSESSMENT

It is mandatory to prepare a risk management assessment, however the level of the risk assessment should be commensurate to the size and scope of the procurement. Consideration should be given to the requirement of the delegate, needs of the project, its corporate goals, the services it intends to secure, and the specific strategies adopted.

RISK MANAGEMENT MONITORING

As risks may change during the course of a procurement project, it is necessary to periodically review and, where necessary, update the initial risk assessment.

12

SECTION 3: THE PROCUREMENT RISK MANAGEMENT PROCESS

BACKGROUND

The process outlined in this section is largely sequential. In practice, however, it is often necessary to revisit previous stages as the process proceeds and to reconsider earlier decisions when new information becomes available. The DFAT Risk Management Handbook outlines the departments risk management process in detail. The following paragraph provides a summary of what each stage in the process entails.

STAGES IN PROCUREMENT RISK MANAGEMENT

ESTABLISHING THE RISK CONTEXT

This is the preparatory stage. It results in familiarity with the proposed procurement, and identifies key parameters and assumptions. Consider those factors which may influence performance of the procurement activity, and the risks that it will be exposed to. In particular:

What is the activity to be considered or decision to be made?

What are the circumstances of the activity?

Define the criteria against which to judge identified risks. In the planning stages of the procurement, the criteria will reflect strategic concerns. In the contract management stage the criteria are likely to concern efficient completion, cost control, quality and compliance. When identifying risk, it is often helpful to break the activity down into the major elements or stages. For example, procurement can generally be broken down into planning, approaching the market, evaluating submissions and contract management stages.

IDENTIFYING POTENTIAL RISKS

This stage identifies the risks that might affect each major element of the procurement process. The aim is to create a comprehensive list of risks and document what each involves. Consider all risks, whether or not they are under the control of the department. Think about what, why and how things might affect the action or decision. What can happen? Compile a list of the possible events that could have an unwanted or unintended effect on the procurement. Consider the full life-cycle of the good or service, and include problems that may arise after the goods are received or the service performed. How and why could it happen? Explore the events identified in the first question for their possible causes and implications.

ANALYSING RISKS

The next stage is to estimate the likelihood of a risk arising and its potential consequences. Determine the overall risk level by combining estimates of likelihood, and consequence in the light of existing controls. Existing controls are the management and other systems that are already in place to control risk. The analysis of likelihood and consequence may be undertaken to varying degrees of refinement, depending on the scale of potential risk and information available. The greater the potential risk, the greater the level of analysis required. The main questions are:

How likely is the event?

What are the consequences of the event?

What is the overall magnitude of the risk?

EVALUATING RISKS

Risk evaluation decides which risks need treatment, and determines priorities for treatment. Think about:

Which risks are acceptable?

Which risks should be avoided?

Which risks require treatment?

13

In the first instance, you should consider whether the risks are acceptable. This may determine whether the risk needs treatment or whether the activity should be undertaken. This assessment should take account of:

the importance of the procurement;

the degree of control that the department has over each risk, and

the overall impact of the risk (as assessed using the matrix). A risk treatment is unlikely to eliminate a risk completely. It is important that the residual risk is accurately identified and that there is a clear acceptance of this residual risk. The acceptable risks and the reasons why they are acceptable should be documented, together with the results of the assessment.

TREATING RISKS

Risk treatment must be appropriate to the significance of the risk and the importance of the activity. For high priority risks requiring treatment, this stage involves:

What are the potential treatment options?

evaluating and selecting appropriate options; and

What are the risk treatment plans? Risk treatment options may include:

avoiding the risk by either discontinuing the activity or using alternative means to achieve a similar outcome;

transferring the risk. Insurance is a common risk transfer strategy. Contracts and specific terms of a contract between DFAT and its service providers are the primary means of allocating risks between the parties involved in procurement; or

accepting risk when it cannot be avoided or transferred, or the cost of doing so would not be worthwhile. It is recommended that risk reduction or impact mitigation measures and monitoring be employed in these circumstances, as appropriate.

MONITORING AND REVIEWING RISKS

Few risks remain static. Consequently it is necessary to monitor risk treatment options or plan and the effectiveness of its implementation. It is not always sufficient to simply undertake a risk assessment at the procurement stage. Risk assessment relating to procurement should be regularly reviewed to ensure its ongoing relevance, and amended if circumstances change.

14

CHAPTER 2 - PROBITY

SECTION 1: INTRODUCTION

SCOPE AND APPLICATION

Policies and principles contained in this chapter apply to all DFAT employees and anyone providing services to DFAT in the capacity of a contractor or volunteer.

POLICY

Ethics and probity are to be integrated throughout the entire procurement process, from when a need is first identified through to the ongoing management of a contract.

SECTION 2: ETHICS AND PROBITY IN PROCUREMENT

PRINCIPLES

Probity is the evidence of ethical behaviour, and can be defined as complete and confirmed integrity, uprightness and honesty in a particular process. The principles underpinning ethics and probity in Australian Government procurement are:

Officials must act ethically, in accordance with the APS Values (set out in section 10 of the Public Service Act 1999) and Code of Conduct (set out in section 13 of the Public Service Act 1999), at all times in undertaking procurement.

Officials must not make improper use of their position.

Officials should avoid placing themselves in a position where there is the potential for claims of bias.

Officials must not accept hospitality, gifts or benefits from any potential suppliers during a tender process.

Agencies must not seek to benefit from supplier practices that may be dishonest, unethical or unsafe.

All tenderers must be treated equitably. This means that all tenderers must be treated fairly - it does not necessarily mean that they are treated equally.

Conflicts of interest must be managed appropriately.

Probity and conflict of interest requirements should be applied with appropriate and proportionate measures informed by sound risk management principles.

Value for money outcomes are best served by effective probity measures that do not exclude suppliers from consideration for inconsequential reasons.

Confidential information must be treated appropriately during and after a procurement process.

External probity specialists should only be appointed where justified by the nature of the procurement.

The appointment of external probity specialists does not remove an agencys accountability for the procurement process.

PRACTICE: ETHICS AND PROBITY IN PROCUREMENT

IDENTIFICATION AND MANAGEMENT OF ACTUAL, POTENTIAL AND PERCEIVED CONFLICTS OF

INTEREST

A conflict of interest arises where an official, an adviser or a supplier has an affiliation or interest that might prejudice, or be seen to prejudice, his or her impartiality. The APS Code of Conduct requires APS employees to disclose, and take reasonable steps to avoid any conflict of interest (real or apparent) in connection with APS employment. Officials should seek to eliminate actual, potential and perceived conflicts of interest. When this is not possible (such as where it would exclude needed expertise or the conflict is so widespread as to be impossible to avoid completely), effective management strategies should be implemented.

15

Officials must be mindful of potential conflicts of interest that might arise and must not use their position to gain or seek to gain a benefit for themselves or any other person. Officials should strive to avoid situations in which there may be actual, potential or perceived of conflicts of interest including not allowing themselves to be improperly influenced by family, personal or business relationships. Effective management of conflicts of interest does not require conflicts to be avoided at all costs; rather, they must be managed appropriately.

PROCESS ADVISERS, PROBITY ADVISERS AND PROBITY AUDITORS

External probity experts may include process advisers, probity advisers and probity auditors:

A process adviser generally provides advice on the overall tender process to appropriately address any probity issues, as well as on specific probity related matters. Such an adviser could provide advice on drafting, implementing and monitoring compliance with a comprehensive procurement plan.

A probity adviser would typically advise on probity issues as they arise during a tender process, possibly in accordance with a probity plan that provides guidance on how probity is to be addressed during the procurement. If the probity expert is an adviser and will not be involved in auditing the process, they can offer advice and solutions if any problems occur.

A probity auditor seeks to report an objective opinion on probity issues, generally after the process has been completed. A probity auditor should not be called in during a process to try and remedy problems, but could provide sign-off after a problem has occurred to ensure the probity issues have been addressed and it is appropriate to continue with the process. If a probity expert is engaged as an auditor, they need to maintain their independence and objectivity, and should therefore not be involved in offering advice to solve any probity problems that arise during the tender process.

APPOINTING PROBITY EXPERTS

The appointment of probity experts must be treated as a separate procurement and be undertaken in accordance with the Commonwealth Procurement Rules (CPRs). External probity specialists should be appointed where justified, and not automatically just because an open tender process is being undertaken. The decision on whether to engage an external probity specialist should weigh the benefits of receiving advice independent of the process against the additional cost involved and include consideration of whether or not skills exist within the agency to fulfil the role. The role of a probity expert can be addressed within either a probity plan or a procurement plan. It is important that the probity plan is carefully drafted and all parties clearly understand the role a probity expert is being engaged to perform. Before the process commences, all parties should have a clear understanding about the level of assurance that the agency will be seeking from the adviser. Probity experts should be independent and free from conflicts of interest, and have a sound knowledge of all relevant government policies and procedures. Sign-off by external probity experts cannot replace officials own accountabilities and obligations in regard to the proper conduct of procurement activities.

TIPS: ETHICS AND PROBITY IN PROCUREMENT

Mechanisms for assuring probity should be applied sensibly in procurement processes, with the management of probity issues tailored to each individual process. Care should be taken to avoid setting requirements which are not intended to be followed or will require an obligation that does not deliver value for money. The tender evaluation criteria advertised in the request documentation must be used to evaluate the tenders and must be related to the tender response requirements. The tender evaluation criteria in the request documentation must not be altered during the evaluation process without a formal request documentation amendment process.

16

Sound records management is important to demonstrating that probity has been addressed appropriately in procurement process. Officials must appropriately protect confidential information and not use inside information (including intellectual property) provided to the agency in relation to the procurement, either for the material benefit of the official or for another person. It is important to clearly demonstrate that all decisions were made using proper and ethical processes. Again, proper documentation of the issue is important and external assistance may be warranted. Where elements of the APS Values and Code of Conduct are to be observed by a contractor, the relevant contract should explicitly state the obligation. People involved in the tender process should make written declarations of any actual, potential or perceived conflicts of interests prior to taking part in the process. These people should also have an ongoing obligation to disclose any conflicts that arise through until the completion of the tender process. The rules for the tender should:

make clear to tenderers what steps will be taken in the event of actual, potential or perceived conflicts of interest being identified (arising prior to and during a tender process) in relation to the tenderer;

make clear what steps will be taken in the event of actual, potential or perceived conflicts of interest being identified; and

include arrangements to deal effectively with incumbent suppliers (if any) during a tender process. Tender documentation, including any draft contract, should make clear the arrangements that will apply to any actual, potential or perceived conflicts of interest once a supplier is contracted. Disclosure requirements should be clear, with appropriate and proportionate measures, informed by sound risk management principles, included in the contractual arrangements to address any such conflicts of interest. Tender documentation should make it clear that late tenders will not be accepted.

SECTION 3: CODE OF CONDUCT IN PROCUREMENT AND CONTRACTING

PRACTICE: CODE OF CONDUCT IN PROCUREMENT AND CONTRACTING

Particular situations in which DFAT officials should exercise care include those where gifts, travel, or conflicts of interest could give rise to a perception of bias.

GIFTS AND HOSPITALITY

Officials must not improperly use their position to gain a benefit, gift or hospitality. Hospitality can include presentations, demonstrations, briefings and discussions, accompanied by meals. Travel and accommodation is covered at 3.1.2. Social contact with potential and known suppliers should be avoided during the period an Approach to Market (RFT, RFQ, verbal and written quotations etc) is underway and before contractual arrangements are finalised. Offers of hospitality and entertainment must not be accepted by DFAT staff during these times and must be disclosed in accordance with relevant DFAT guidelines.

17

TRAVEL AND ACCOMMODATION

Usually, DFAT provides for the business travel and accommodation requirements of its staff. A business may only provide travel and accommodation for DFAT staff in circumstances directly related to a formal contractual arrangement and where such an arrangement cannot be seen as creating a conflict of interest.

CONFLICTS OF INTEREST

Officials should ensure that all interactions with businesses will be able to withstand public scrutiny. Examples of conflicts include officials involved in a procurement having material share holdings, controlling interests or management authority in an entity competing for the departments business, unauthorised disclosure or personal use of any information which would result in insider trading or a DFAT officials engaging in dealings with suppliers that may benefit a member of the officials family. Whether the conflict of interest can be avoided or not, officials must declare it promptly in writing to their supervisor and arrangements must be put in place to avoid or remove the conflict. This may include excluding the official from any further participation in a procurement process.

COMMERCIAL-IN-CONFIDENCE

Contracts with DFAT provide specific guidance on the identification and treatment of confidential material, personal information and freedom of information requirements. Information exchanged between DFAT and its business partners is frequently classified as Commercial-in-Confidence. As stated in the departments standard contracts, Commercial-in-Confidence information does not preclude the information being disclosed where there is a legal requirement to do so including the requirement to disclose information to the Parliament or its Committees. Officials must follow the need-to-know principle when handling information that is classified Commercial-in-Confidence.

SECTION 4: PROBITY GUIDELINES FOR EVALUATION PANEL MEMBERS

1. Do not provide information, verbally or in writing, to any individual or organisation concerning the tender process unless you have been specifically authorised to do (see below for details of the contact officer for the obtaining of authorisation).

2. Make clear in response to any inquiry that:

a. you cannot provide information concerning the tender process unless you are authorised to do so; and b. the inquiry cannot be made in-confidence and will be referred to the contact officer.

3. Maintain a record of any requests for information, and report to the contact officer.

4. If authorised to provide information to tenderers, ensure consistent information is provided to all potential tenderers. For procurements above the relevant procurement thresholds, this may include releasing addenda.

5. Do not disclose any confidential information about a potential tenderer to other potential tenderers.

6. If authorised to respond to tenderers after the tender closing date, do not discuss any information with a tenderer that comments on or makes a comparison with another tenderers proposal.

7. Ensure the security of all confidential information relating to the tender process.

8. Do not consider unsolicited references or submissions by tenderers outside those provided for in the tender process.

18

SECTION 5: PROBITY GUIDELINES FOR MANAGEMENT OF AND ACCESS TO PROCUREMENT

RECORDS

OVERVIEW

Maintaining the highest levels of confidentiality is essential to ensuring the probity and fair dealing in the departments procurement processes. All documents containing sensitive information relating to contract management in DFAT must be classified Commercial-in-Confidence and must be managed on a strictly need-to-know basis.

ROLES AND RESPONSIBILITIES

APS STAFF

APS staff are responsible for ensuring that:

only staff that have a genuine business requirement should have be able to access procurement and contract management information.

Non-APS personnel under their supervision who have a business need to access such records complete a declaration of no conflict of interest, and sign a confidentiality agreement if one does not already exist. Any conflict of interest or potential conflict of interest must be managed before providing access.

All disclosures of conflicts should be fully documented and retained on file.

NON-APS PERSONNEL

Non-APS personnel working in DFAT are not to be granted access to records concerning the management of a procurement or contract unless the access is authorised by the delegate or contract manager, who must be an APS officer with the appropriate delegation to do so. Non-APS personnel that have access to DFAT premises and / or systems must:

not engage in any practice, including an improper inducement, which gives anyone an improper advantage over another;

not engage in any form of collusive practice;

disclose, immediately, any actual or apparent conflict of interest and take steps to avoid that conflict. They must also promptly identify and disclose to the contract manager or delegate any actual, perceived or potential conflicts of interest involving themselves, their immediate family or any other relevant relationship; and

complete all details of any declaration of conflict of interest accurately and honestly.

19

CHAPTER 3 - APPROACHING THE MARKET

SECTION 1: INTRODUCTION AND SCOPE

INTRODUCTION

This chapter, Approaching the Market (ATM), takes you through the processes required to undertake an approach to the market in a manner that is compliant with Commonwealth and DFAT procurement policy.

SCOPE

This chapter encompasses the steps from preparing approach to market documentation, approaching the market and receiving proposals. Processes outlined in this chapter are to be used when undertaking the following Approach to Market (ATM) types:

Section 2: Request for Tender, Expression of Interest and Select Tender;

Section 3: Mandatory Written Quotations $10,000 to Below $80,000;

Section 4: Verbal Quotations;

Section 5: Quotations from Panels; and

Section 6: Approaching Multi Use Lists & Whole of Government Arrangements. This guide is presented in three stages for each ATM type:

Preparing to Approach the Market;

Approaching the Market; and

Receiving proposals. For information on evaluating and finalising the procurement process, refer to the DFAT Procurement Guide Evaluation and Selection. The DFAT Procurement Guide Contract Management provides further guidance regarding the establishment and management of contracts.

RECORDS MANAGEMENT

To ensure compliance with the DFAT Recordkeeping Policy, final approved documentation should be filed in accordance with DFATs Record Keeping Policy and General Disposal Authority (GDA) 25 of the National Archives Act.

STAKEHOLDER CONSULTATION

Consider which internal and external stakeholders need to be consulted. This consultation provides an opportunity to obtain agreement about the course of action you propose to take.

INTERNAL STAKEHOLDERS

If your procurement is politically or commercially sensitive you should notify the Procurement Travel and Comcover section (PTC) early in your planning process. You should also consider consultation with key internal stakeholders such as other work units, Senior Executive, DLB, Media Liaison etc. You must consult the following work units for certain types of procurements:

Property / Construction / Fit out: Overseas Property Office;

IT hardware and software: Information Management Division;

Security equipment: Diplomatic Security Branch;

Special Envoys: PTC;

Legal services: International Legal Division.

20

MINISTERS OFFICE

Consider whether you need to notify the Ministers office of the procurement.

EXTERNAL STAKEHOLDERS

You should consider consultation with key external stakeholders (such as other portfolio agencies etc) for procurements where they have a clear identified role in the procurement activity or where there are benefits in undertaking cooperative procurement approaches.

PROBITY ISSUES

It is prudent to ensure that stakeholders provided with information regarding the procurement do not have a conflict of interest. For example, they should not be prospective suppliers or in a close personal or commercial relationship with prospective suppliers.

21

QUICK GUIDE MINIMUM DOCUMENTATION REQUIRED FOR VARIOUS PROCUREMENT METHODS

For $80,000 and above unless exemptions apply For under $80,000

Procurement Process Stages RFT EoI Prequalified Tender* 3 Written Quotes Verbal Quotes

Number of Suppliers to Approach All Suppliers through Open ATM

All Suppliers through Open ATM

All Suppliers short listed from EoI Minimum 3 Minimum 2

Minimum Number of Proposals to be Obtained N/A N/A N/A Minimum 3 Minimum 2 Method of Approach to Market (ATM) / Method of Contacting Suppliers

AusTender Open Advertisement

AusTender Open Advertisement

AusTender Select Advertisement Verbal or in writing Verbal or in writing

Number of Days ATM to be Kept Open Minimum 25 Calendar Days

Minimum 25 Calendar Days

Minimum 25 Calendar Days

N/A N/A

Method of Receiving Proposals DFAT Physical Tender Box in R G Casey Building

DFAT Physical Tender Box in R G Casey Building

DFAT Physical Tender Box in R G Casey Building In writing Verbal

Minimum documentation to be provided to the market as part of the ATM

Conditions for Participation Yes Yes Yes N/A N/A

Minimum Content and Format Yes Yes Yes N/A N/A Draft Contract (including Statement of Requirement) Yes Yes Yes

Depending on Risk or Type of Procurement.

Depending on Risk or Type of Procurement

Evaluation Criteria Yes Yes Yes N/A N/A

Minimum internal documentation to be prepared (and approved) before undertaking an ATM

Procurement Plan Yes Yes Yes N/A N/A

Evaluation Plan Yes Yes Yes N/A N/A

Pre-ATM Regulation 9 Yes Yes Yes N/A N/A

22

SECTION 2: REQUEST FOR TENDER, EXPRESSION OF INTEREST AND SELECT TENDER

SCOPE

This Section is presented in three stages:

preparing to approach the market;

approaching the market; and

receiving proposals.

REQUEST FOR TENDER (RFT)

All procedures outlined in this Section apply to Requests for Tender.

EXPRESSION OF INTEREST (EOI)

All procedures outlined in this Section apply to Expressions of Interest (EoI). An EoI is often the first step in a two-stage process and is usually followed by a Prequalified Tender. Minimum ATM advertising timeframes of 25 days apply to both an EoI and following Prequalified Tender.

PREQUALIFIED TENDER (PT)

All procedures outlined in this Section apply to Prequalified Tenders. A Prequalified Tender is often the second step in a two-stage process and is usually preceded by an EoI. Prequalified Tenders are ATMs to a select group of suppliers who have been:

shortlisted from an EoI; or

hold a specific license; or

are suppliers in a Multi Use List (MUL). Section 6: Approaching Multi Use Lists & Whole of Government Arrangements provides additional information regarding purchasing from MULs.

PREPARING APPROACH TO MARKET DOCUMENTATION

You have identified that the procurement method for your procurement is to approach the market through a Request for Tender (RFT) or a Prequalified Tender. Generally an RFT or Expression of Interest (EoI) is used for an open ATM. All open ATMs must be advertised on AusTender. The following topics and documents must be included as part of all RFT, EoI and Prequalified Tenders and must be prepared using relevant DFAT procurement templates.

Document Distribution Key Topics Covered (not limited to)

Request for Tender (RFT) All potential suppliers through AusTender.

Topics covered in RFT, EoI and PT:

minimum content and format requirements;

conditions for participation;

evaluation criteria;

any industry briefing information (if applicable)

insurance requirements;

tender rules such as closing dates, contact officer etc.

Expression of Interest (EoI) All potential suppliers through AusTender.

Prequalified Tender (ST) only potential suppliers shortlisted through an EoI; or only potential suppliers who are participants in an already established Multi Use List; or only all potential suppliers who hold a specific license.

Draft contract based on DFAT standard form contracts:

Distribution depending on the type of approach document (RFT, EoI) as outlined above.

Statement of Requirements; Insurance requirements; indemnities

23

The following documents must be prepared and approved by the relevant financial delegate (FMA Reg 9, FMA Reg 10, FMA s.44 delegate/s depending on the request) prior to any approach to market for above the relevant threshold procurements:

Document Distribution Key Topics Covered (not limited to)

Evaluation Plan Only DFAT APS officers Evaluation criteria; Weightings for evaluation criteria; Method of evaluation; Tender Evaluation Board details; Probity considerations; Governance and approval arrangements.

Deeds of Confidentiality and Conflict of Interest Declarations

Only DFAT APS officers

DRAFTING THE RFT/EOI DOCUMENT

MINIMUM CONTENT AND FORMAT REQUIREMENTS

Suppliers need guidance on minimum content and format (MCF) requirements to submit a tender response. MCF requirements are specified by DFAT in the RFT/EoI document. DFATs templates for RFTs and EoI contain the departments standard requirements. For example, the RFT template states that tenders must:

be presented in English;

unless otherwise specified, express all measurements in Australian legal units of measurement;

contain a Compliance Statement in accordance with Section 5, Schedule 3 (Tender Response);

Include a signed Tenderers Declaration for Compliance with the Fair Work Principles in the form set out at Section 7, Schedule 3 (Tender Response); and

include a signed Tenderer's Declaration in the form set out at Section 8, Schedule 3 (Tender Response). You should exercise care when inserting additional mandatory MCF requirements in your RFT / EoI. Please note that proposals that do not meet MCF requirements must be eliminated from further consideration. Further information is provided in the DFAT Guide Evaluation and Selection of Suppliers.

CONDITIONS FOR PARTICIPATION

Conditions for participation (CFP) are mandatory requirements, usually requiring a Yes or No response. A supplier that does not comply with a CFP must be excluded from further evaluation. CFPs describe minimum standards or essential characteristics that suppliers must meet for their submissions to be considered. DFATs templates for RFTs and EoI contain the departments standard requirements. For example, tenderers must demonstrate compliance with the following Condition for Participation:

the tenderer (and any of its proposed subcontractors) must not be named as not complying with the Equal Opportunity for Women in the Workplace Act 1999 (Cwlth).

If you wish to insert additional CFPs in your RFT/EoI, considerable care should be taken to ensure that the requirement can be evaluated through a simple yes/no analysis. If the supplier cannot answer yes or no, then it is unlikely that your requirement is a CFP. Instead you should include it as part of the evaluation criteria.

24

Example of a CFP:

If your requirement is for services in which the industry has certification standards, such as accounting services

which require that the personnel have a Certified Practicing Accountant (CPA) qualification, you may require the

suppliers to state if they have this qualification in the form of a Yes / No answer. You might then ask the

suppliers to provide evidence of the CPA qualification as part of the minimum content and format requirements..

Example of what is not a CFP:

The tenderer must have extensive experience providing accounting services to Commonwealth Agencies.

This is not a CFP because the response could be subjective. It would be better to include this question in the

Statement of Requirements or as one of the evaluation criteria.

CONTACT OFFICER

You must nominate a contract officer for all RFTs and EoIs. Contact information must include:

position of the contact officer;

generic email address (not the persons email address) o you should use or create a specific email address for your tender or panel. This email address

should ideally reflect the name of the process; o it is your responsibility establish a unique email address for the ATM. This can be done by

getting your delegate to email the Global Support Centre with a suggested title for the email account and a list of APS officers who should have access to the mailbox.

All contact from prospective tenderers MUST be in writing.

LODGEMENT DETAILS

The process and address for lodgment of responses must be specified in the RFT/EoI. Responses for Canberra based procurement processes must be submitted at the DFAT Tender Box in hard copy. Standard DFAT templates include the R G Casey Building tender box address. State Offices and Posts may nominate their own lodgment location as long as tenders can be kept safely and not be opened until after the nominated closing time for the process.

ELECTRONIC TENDER SUBMISSIONS

All RFT and EoI responses must be lodged in hard copy at the designated tender box. DFAT does not currently accept RFT and EoI submissions in any other format.

CONDUCTING INDUSTRY BRIEFINGS OR SITE VISITS

It is not mandatory to conduct industry briefings or site visits as part of the procurement process. You should

consult PTC if you are considering conducting industry briefings or site visits. You should also consult your

probity adviser if you have appointed one. It is important to ensure that all potential tenderers have equal

access to information about the tender.

PURPOSE OF INDUSTRY BRIEFINGS

Industry briefings are usually only conducted if the procurement subject matter is very complex. The industry briefing is used to explain the procurement and ensure that suppliers have understood the requirement. Industry Briefings can sometimes be useful to:

explain certain aspects of the statement of requirement;

25

avoid uncertainties on the part of potential bidders;

clarify any problems or difficulties potential bidders may have;

clarify for procurement staff the abilities and capabilities of the marketplace; and

provide a forum to promote mutual understanding of each partys position and requirements.

PURPOSE OF SITE VISITS

A site visit is usually conducted where suppliers are not able to accurately respond to the RFT/EoI unless they have visited the site. For example, suppliers that wish to respond to a building fit-out may need to see the interiors of the building because the floor plans may not provide sufficient information.

INDUSTRY BRIEFING/SITE VISIT DOCUMENTATION

An industry briefing or site visit can be either optional or mandatory for tenderers to attend. Where mandatory, it must be stated as a condition for participation in the ATM document. All tenderers that do not attend the mandatory briefing or site visit must be eliminated from further consideration as they will not have complied with the conditions for participation. In all instances, whether mandatory or optional, relevant details of industry briefings or site visits must be specified in the ATM document and should be brought to the attention of suppliers through the AusTender advertisement and, if required, any other media advertisement.

PROBITY WHEN CONDUCTING INDUSTRY BRIEFINGS/SITE VISIT

You should consider the following factors when conducting an industry briefing or site visit:

require attendees to provide their details (ie. company name, name, position, contact details) for information , security purposes and, where applicable, registering in the Visitor Management System;

appropriate venue - you may need to book a meeting room;

if you are expecting a large number of attendees you may wish to limit the number of people attending on behalf of each tenderer.

A checklist is attached at Attachment 1 Industry Briefing Checklist.

ATTENDANCE REGISTER

An attendance register containing relevant details should be prepared. DFAT should ensure that all attendees sign the register.

NON-ENGLISH SPEAKING BACKGROUND

Potential respondents who may not be conversant in English are welcome to bring an interpreter with them to ensure that they do not miss opportunities to ask questions and seek clarification.

EVALUATION CRITERIA

Evaluation criteria are at the core of the evaluation process and are used to establish the capability and capacity of suppliers to meet the departments requirements. Evaluation criteria also provide information to the supplier about what you are looking for in a supplier. Generally, as the value, risk and complexity of procurement increases, so does the importance of the evaluation criteria. Great care needs to be taken in the choice of evaluation criteria. Evaluation criteria should be measurable, clear and transparent. The DFAT RFT / EoI template lists general criteria. You can change these criteria as required to meet your evaluation needs.

26

DEVELOPING EVALUATION CRITERIA

Evaluation Criteria may be weighted or a combination of weighted and non-weighted criteria.

WEIGHTED CRITERIA

Weighted evaluation criteria should be measurable, clear and transparent and align with the statement of requirements. Each criterion should be scored using a scoring system. A standard 5 or 10 point scale is recommended, based on how well the offer satisfies the criterion (eg. 2/5 or 3/10). Weighted Criteria: Must Total 100%

Weighted criteria (Total 100%)

Criteria Examples to check suitability

Capability

Infrastructure - whether the tenderer has the internal infrastructure to support delivery of the good/service e.g. enough manpower, support etc

a) Organisation structure and profile of top management team b) Quality Assurance systems/procedures c) Staff training and WHS policies/procedures d) Demonstrated experience delivering similar goods / services.

Capacity Experience - relevant experience and organisational capacity to deliver

Personnel - the relevant experience, extent and availability of personnel specified for the project

Proposal Timeframe - delivery/response times

a) The degree to which the project proposal or proposed project methodology will achieve the desired project performance b) outcomes/deliverables set out in the Statement of Requirement [SOR] c) Risks inherent in the offer

NON-WEIGHTED CRITERIA

Non-weighted criteria often include cost, financial viability risk, agreement with contractual terms, and special value add features of the tender.

CHANGING EVALUATION CRITERIA DURING THE APPROACH TO MARKET

Where there is a requirement to change the evaluation criteria or plan (including weightings) prior to closing an approach to market, you must consult PTC. You will also have to issue an addendum to communicate the change, extend the timeframe, or potentially cancel the procurement. Allow the industry sufficient time to address any changes in their submissions before the tender closing time

DEVELOPING THE DRAFT CONTRACT

A draft contract MUST be attached to and distributed with all RFT/EoI. For an open ATM, the RFT/EoI document and draft contract must be attached to the advertisement on AusTender. The draft contract should be based on DFATs standard form contracts. Prospective suppliers need to know the departments terms and conditions when formulating their proposal and price.

27

DEVELOPING THE STATEMENT OF REQUIREMENT

The Statement of Requirement (SoR) is part of the contract. You should use the departments Statement of Requirement template included in DFATs standard form contracts as the basis for preparing your SoR. A well written SoR will present the departments requirement in a manner that addresses the following key areas:

Functional: characteristics that define the function or duty to be performed, e.g. an automated recordkeeping system;

Performance: characteristics that define the performance required, e.g. an automated recordkeeping system that allows multiple users to edit the same record at the same time; and

Technical: characteristics that define the technical and physical specifications, e.g. an automated records keeping system that allows multiple users to edit the same record at the same time and is based on the Microsoft Active Directory server platform.

Where possible, requirements should include goals and objectives which translate to outcomes and outputs rather than simply being focused on processes. For example, in the SoR tell suppliers what property or services you want provided rather than how to provide the service.

OTHER INTERNAL DOCUMENTATION

PROCUREMENT PLAN

All procurements valued at or above $80,000 must have a procurement plan that is approved by the relevant financial delegate before proceeding to a formal approach to market (RFT, EoI etc). A procurement plan differs from a business case in that a business case explains why procurement is being undertaken, while the procurement plan explains how the procurement will be undertaken. The procurement plan maybe attached to the request for approval to approach the market if required. The DFAT Procurement Plan Template can be used to prepare your Procurement Plan. The procurement plan must summarise the following: 1. Introduction: 2. Purpose; 3. Background; 4. Justification for the procurement: 5. Analysis of market and possible suppliers; 6. Proposed method of procurement; 7. Evaluation criteria; 8. Indicative Tender Evaluation Plan; 9. Probity plan; 10. Confidentiality measures (mandatory for procurements with risk rating of high and above); 11. Indicative timetable;

ADDITIONAL GOVERNANCE ARRANGEMENTS

Procurements that are highly sensitive or carry a risk rating of high or above may require additional governance arrangements such as steering committees or secretariats to assist in procurement and decision making processes.

INDICATIVE TIMETABLE

The Timeline for the procurement should be developed early in the process using P3M3 principles. Depending on the complexity of the procurement, you should plan on the process anywhere from six (6) to eight (8) months from inception to completion. The example provided below is based on the timeline for an above the relevant threshold procurement of reasonable complexity:

P

A

R

T

2

P

R

E

P

A

R

I

N

G

Y

O

U

R

A

P

P

R

O

A

C

H

T

O

M

A

R

K

E

T

P

A

R

T

2

P

R

E

P

A

R

I

N

G

Y

O

U

R

A

P

P

R

O

A

C

H

T

O

M

A

R

K

E

T

P

A

R

T

2

P

R

E

P

A

R

I

N

G

Y

O

U

R

A

P

P

R

O

A

C

H

T

O

M

A

R

K

E

T

28

Key Planning Milestone (All days are working days)

Cumulative Days

From the indicative contract signing date, count back 15 days. This period is to allow for contract negotiations, updating of contract terms and execution of contract.

15 days

From the date of commencement of contract negotiations, count back 30 days. This is the period after tender close and finalising evaluation recommendations. During this period, the Tender Evaluation Board would assess all compliant tenders, prepare an evaluation report and secure delegate approval to commence contract negotiations with shortlisted suppliers.

45 days

From the date of tender close count back 25 days. This is the minimum duration for which tenders must be kept open on AusTender.

60 days

From date of tender release count back five (5) days if you require advertise the tender on media other than AusTender. OR From date of tender release count back one (1) day for PTC to release (advertise) the tender only on AusTender.

65 days

From date of forwarding tender documents (for release) to PTC count back 30 days required for preparation of tender documents and pre-approach to market FMAA Regulation 9 for the spending proposal and tender documentation including draft contract.

95 days

Count back 30 days from commencement of preparation of tender documents for approval of procurement project. This includes preparation and approval of a procurement plan.

125 days

Count back 30 days from commencement of preparing the procurement plan to allow time for identifying and defining the procurement need and procurement method. This includes further developing the concept, market research and considering alternate methods of procurement such as procuring from an existing panel.

155 days

TOTAL DAYS

155 days

EVALUATION PLAN

A formal evaluation plan is required for all approaches to market. The evaluation plan should be finalised and approved by the Evaluation Committee and relevant delegate before an approach to market. You should use the departments evaluation plan template as the basis for preparing your evaluation plan. Further guidance is held within the Evaluation Plan template. The evaluation plan includes key matters about the evaluation process such as evaluation criteria (including weightings), Evaluation Board and probity requirements.

29

EVALUATION BOARD

The role of the evaluation board is to evaluate the responses received and make a recommendation, to the financial delegate, regarding the preferred supplier. The committee should be structured on the following basis:

the committee should be comprised of at least three individuals, one of which takes on the role of chairperson;

members should possess the necessary technical/subject matter knowledge to effectively assess submission;

each member should possess a sound understanding of departments procurement-related probity guidelines.

PROBITY PLAN

The DFAT Procurement Guide Probity in Procurement provides guidance regarding probity principles. The majority of procurements undertaken will generally use the DFAT evaluation plan template which incorporates a section on probity. If your procurement is high risk, commercially sensitive or politically sensitive you may need to seek expert probity advice and draft a separate probity plan that details how the process will be managed with particular references to how probity risks will be managed. [Contact GCL if you require expert probity advice.]

APPROACHING THE MARKET

Formal approaches to the market must not be undertaken without approval. Once all documentation has been approved by the appropriate delegate you need to approach potential suppliers to invite them to tender for the work.

APPROACHES TO BE OPEN FOR 25 DAYS

In most cases, open approaches to market must be advertised on AusTender and be open for submissions for at least 25 calendar days. If the procurement has already been listed on the DFAT Annual Procurement Plan for at least 30 calendar days, the mandatory open approach period for that procurement can be reduced to no less than 10 days. The delegate has the discretion to increase approach open times based on the complexity of the procurement.

MANDATORY ADVERTISING ON AUSTENDER

All open ATMs such as RFTs and EoIs must be published in AusTender through PTC. AusTender, www.tenders.gov.au, is the Australian Governments procurement information system. It is mandatory under the Commonwealth Procurement Rules for DFAT, as an FMA agency, to publish on AusTender advertisements of all open approaches to market (ATM). In Australia, it is generally the case that only procurements valued at or above $80,000 are undertaken as open ATMs (open tenders).

OTHER MEDIA ADVERTISING (NON-AUSTENDER)

All open approaches to market must be advertised on AusTender. In addition to this, an open approach to the market can also be advertised in the media. AusTender is generally well known across the commercial market in Australia. Media advertising is often used where there is a niche market or an industry that would generally not use the internet for day to day business. The content of your media advertisement must be the same as what is provided on AusTender. Your media advertisement must direct suppliers to the AusTender website for further information.

30

HOW TO ADVERTISE IN THE MEDIA

All ATM advertising must be placed with Adcorp, the whole-of-government contract provider. You should inform PTC regarding media advertising requirements as soon as possible to avoid missing booking deadlines.

COMMUNICATIONS WITH SUPPLIERS ABOUT AN APPROACH TO MARKET

When answering questions from suppliers regarding the advertisement date or a proposed RFT/EoI, you should state that all open business opportunities are advertised on AusTender, www.tenders.gov.au. Suppliers can register on AusTender to receive email notifications of particular categories of open business opportunities or to receive notifications of all opportunities.

OUT TO MARKET

PROBITY

It is a legal requirement that all suppliers are given the same, clear information at the same time and essential that any change in requirements is not perceived as favouring a particular supplier or group of suppliers. Tenderers are advised through the RFT/EoI document that additional information may not be sent to them directly, but will be published as addenda on AusTender. The RFT/EoI document states that the department will not respond to any request for clarification from a Tenderer, if received less than five (5) business days prior to the closing time.

PUBLISHING RESPONSES TO QUESTIONS FROM SUPPLIERS

All questions from potential suppliers must be received in writing to the contact officer through the mechanism specified in the RFT (e.g. email). All clarifications and responses to questions must be de-identified so that a suppliers commercial position is not compromised by including information that identifies the supplier.

CREATE A REGISTER OR FILE TO RECORD COMMUNICATIONS WITH ANY THIRD PARTY

You must file all correspondence and file notes pertaining to suppliers that request further information and clarification regarding the request documentation. It should at a minimum record:

the time and date of contact;

the name of supplier representative and DFAT representative;

the contact details for supplier representative;

the question asked and answer provided; and

whether, and how, the question and answer were published to other prospective suppliers.

CHANGES TO REQUIREMENTS

An addendum must be published on AusTender if DFAT identifies a need to change DFATs statement of requirements or the procurement process outlined in the RFT. You must contact PTC in the first instance to discuss changes in requirements and the need for issuing addenda. In some circumstances, you may have no other choice but to cancel a procurement process or extend the tender closing time where changes are considered material and would result in the industry not having sufficient time to respond in a timely and adequate manner.

ISSUING ADDENDA

All suppliers that have registered for the RFT / EoI and accessed the documents will receive an automatic email notifying them of the addenda and providing instructions regarding accessing them.

31

PROBITY ADVISER

Where there is an appointed probity adviser for your process, it is strongly recommended that the probity adviser attend briefings/site visits and that he or she clears any information prior to its dissemination, including script