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Training How to use the new suite of tender and contract documents December 2014 Procurement Transformation Division

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Page 1: Training How to use the new suite · ICT purchasing DSITIA has confirmed new documents can be used for ICT purchasing • Invitation to Offer and Request for Quote templates can be

Training

How to use the new suite

of tender and contract

documents

December 2014 Procurement Transformation Division

Page 2: Training How to use the new suite · ICT purchasing DSITIA has confirmed new documents can be used for ICT purchasing • Invitation to Offer and Request for Quote templates can be

Key drivers for the review and benefits

Introducing the new tender and contract documents

Comparing terms and conditions

ICT purchasing

Working with the new documents

How the documents fit together

Which contract to use

Contract negotiation and execution

Clause bank

Transition period

This session will cover…

1. Basic Purchasing Conditions

2. General Contract Conditions +

Contract Details

3. SOA

4. Invitation to Offer

5. Request for Quote

Page 3: Training How to use the new suite · ICT purchasing DSITIA has confirmed new documents can be used for ICT purchasing • Invitation to Offer and Request for Quote templates can be

Key benefits This has always been a ‘customer focus’

initiative. Documents have been designed with

‘problem solving’ in mind.

Key benefits of new documents

• Designed to enable outcomes

• Support Queensland Government Procurement

Strategy

• Make it easier to do business with Government

• Use Simplified language

• Reduce red tape

• Improve flexibility

• Improve capability

• Support value/risk approach

• Encourage innovation

116

Reducing # docs

Old New

45%

reduction

63%

reduction

66%

reduction

Page 4: Training How to use the new suite · ICT purchasing DSITIA has confirmed new documents can be used for ICT purchasing • Invitation to Offer and Request for Quote templates can be

• “It takes a little bit of time to get used to the new documents but the effort is worth it. The documents are

excellent - they are flexible and well drafted using very plain English. Samantha Mathers has been very

generous with her time providing excellent support to understand the documents. The new approach is a

credit to the Procurement Transformation Program centre of excellence” (DJAG and Wave 2 Sourcing

Team for Legal Services)

• “We can see real efficiencies achieved through the compilation of information from schedules i.e.

subcontractor, tenderers details, invitation to tender directly into the contract document for the supplier to

complete. This reduces paperwork and effort required for the tenderer and ultimately for the procurement

officer not needing to transpose all of this information from schedules into a separate contract document. The

questions within the documents for suppliers are relevant and direct.” (Ergon)

• “I am 100% behind what your team is trying to achieve as I too believe we have far too much red tape”

(DJAG)

• “Much better structure than the old RFO … many thanks!” (Health team that piloting the new ITO)

• [Re ITO] “…this is an excellent document and definitely heading in the right direction…” (Health)

• “I am working on a service based procurement activity and my client (who also attended the Q and A session)

is very keen to use the new templates and be part of the trial” (DCCDS)

• “The template changes proposed will provide all parties with a contract document to enable clear

identification of the requirements and responsibilities to fulfil performance outcomes. The modular structure

of the documents will allow flexibility to suit the procurement. The simplified terms and conditions should

enable easier understanding by all parties through succinct plain language.” (DETE)

Feedback so far

Page 5: Training How to use the new suite · ICT purchasing DSITIA has confirmed new documents can be used for ICT purchasing • Invitation to Offer and Request for Quote templates can be

SOA

(5 docs)

Short

Form

Contract

(3 docs)

Invitation

to Offer

(3 docs)

Conventional

Contract

(2 docs)

SOA

Details

SOA

Conditions

Comprehensive

Contract

Conditions

Contract

Details

General

Contract

Conditions Invitation

to Offer Definitions

Request

for Quote

Basic

Purchasing

Conditions

Simplifying tender and contract documents

From

To

Page 6: Training How to use the new suite · ICT purchasing DSITIA has confirmed new documents can be used for ICT purchasing • Invitation to Offer and Request for Quote templates can be

New go-to-market templates

Definitions and Interpretation

Invitation to Offer

• Replaces Invitation to Offer (template)—Sections 1-5

• Replaces Invitation to Offer (template)—Section 6 (Response Forms)

• Replaces Conditions of Offer—version 004—1 July 2012

• Replaces Standing Offer Arrangement—Invitation to offer (template)—Sections 1-5

• Replaces Standing offer arrangement—Conditions of offer—version 004—1 July 2012

Request for Quote

General Contract

Conditions

• Replaces Short-form conditions of contract—version 004—1 July 2012 (for purchase of

non-ICT goods or services)

• Replaces Short-form conditions of contract (referencing the Short form contract

schedule)—version 005—1 July 2012

Contract Details

• Replaces Invitation to Offer (template)—Section 6 (Response forms)

• Replaces Short-form contract schedule—version 005—1 July 2012

New

SOA Details

SOA Conditions

• Replaces Standing Offer Arrangement—Invitation to offer (template)—Section 6

• Replaces Standing Offer Arrangement—Deed of agreement—version 005—1 July 2012

• Replaces Standing offer arrangement conditions—version 004—1 July 2012

Introducing the new documents

Basic

Purchasing Conditions

Page 7: Training How to use the new suite · ICT purchasing DSITIA has confirmed new documents can be used for ICT purchasing • Invitation to Offer and Request for Quote templates can be

Basic Purchasing Conditions

Definitions and Interpretation

• A ‘single source of truth’ for definitions and interpretation clauses applicable to

multiple documents. This ensures consistency and reduces duplication.

• This contains details of the procurement, including a section for suppliers to

complete as part of their response to the ITO (Schedule A – Response).

• The terms and conditions that apply to the Invitation to Offer process are at the

back of the document (ITO Conditions).

• New version ITO is simplified, streamlined, easier to read and more flexible.

Invitation to

Offer

• NEW document for routine purchases of low value/low risk goods/services

• Basic Purchasing Conditions reduces red tape, and will make it easier to do

business with Government.

• Can be incorporated by reference in an order (e.g. purchase order)

New

• RFQ is a ‘Lite’ procurement process which is simple, streamlined and designed

to be a shorter process than ITO. New format will reduce red tape, be more

efficient and will make it ‘easier to do business’ (reduces tendering costs).

• The RFQ template can be used for low risk procurement. The terms and

conditions that apply to the RFQ process are at the back of the document (RFQ

Conditions).

• Based on DTMR ‘RFQ’ template that has proved successful for low risk

procurement.

Request for

Quote

New

New

Page 8: Training How to use the new suite · ICT purchasing DSITIA has confirmed new documents can be used for ICT purchasing • Invitation to Offer and Request for Quote templates can be

Contract Details

• Contains all of the key information that forms the contract with the supplier (in

combination with the General Contract Conditions).

• Clear as to what documents form the contract (which will assist contract

managers). Info captured has been simplified significantly. Easier to use.

• Provides enough flexibility for Agencies to include any special terms and

conditions specific to the Agency or the goods/services purchased.

• These replace the ‘Short Form’ contract conditions for goods and services.

• Agreed special conditions/amendments can be incorporated by identifying the

new clauses/amendments (in the Contract Details).

• Contract has been simplified significantly to create efficiencies for Government

and suppliers, reducing the cost of doing business with Government.

General Contract

Conditions

• Contain information specific to the SOA with the supplier.

• Identify the contract terms that apply when customers buy from the supplier.

• Terms agreed in the SOA Details ‘flow through’ to customer contracts (e.g.

pricing, liability caps). Customers can focus on placing orders.

SOA Details

• These are the ‘mechanics’ of how the SOA works (between Principal/Supplier).

• Significantly simplified compared to current SOA Conditions.

SOA Conditions

• Guidance notes developed for many of the documents to assist users (ITO,

RFQ, Contract Details, SOA Details) and will be continuously improved. ICT

specific guidance will also be incorporated.

Guidance Notes

New

Page 9: Training How to use the new suite · ICT purchasing DSITIA has confirmed new documents can be used for ICT purchasing • Invitation to Offer and Request for Quote templates can be

Comparing terms and conditions

• Formation

• Security

• Risk and title

• GST

• Price review

New General Contract Conditions (compared to Short Form):

New SOA Conditions (compared to previous SOA Conditions)

• Termination and

suspension

• Commissions, incentives

and collusion

• Criminal organisations

• Dispute resolution

• Liability

• Information

• Intellectual Property

• Confidentiality

• Privacy

• Insurance

Key features of Basic Purchasing Conditions

• Formation

• Risk and title

• GST

• Liability

• Intellectual Property

• Customer Data

• Confidentiality

• Privacy

• Insurance

• Termination

• Conflict of interest

• Criminal organisations

Page 10: Training How to use the new suite · ICT purchasing DSITIA has confirmed new documents can be used for ICT purchasing • Invitation to Offer and Request for Quote templates can be

• Supplier

• Basic Order

• Contract

• Details

Key features of definitions and interpretation

Key take-aways

The magic is in the Contract Details and SOA Details

• SOA

• SOA Order

• No definition of eligible Customer

(see SOA Conditions)

Definitions and Interpretation

• A ‘single source of truth’ for definitions and interpretation clauses applicable to

multiple documents. This ensures consistency and reduces duplication. It’s a

living document – new definitions will be added over time.

New

• Consequential loss

• Cap on liability

• Confidentiality

• GST

• Insurance

• IP default

Page 11: Training How to use the new suite · ICT purchasing DSITIA has confirmed new documents can be used for ICT purchasing • Invitation to Offer and Request for Quote templates can be

ICT purchasing DSITIA has confirmed new documents can be used for ICT

purchasing

• Invitation to Offer and Request for Quote templates can be used for ICT purchasing

• New General Contract Conditions (and Contract Details) can be used as an alternative to the

GITC framework to purchase low risk ICT products and services under $1 million.

• Risk to be assessed using value risk matrix.

• Suppliers do not need to be GITC accredited if the General Contract Conditions are used.

• You may need to add some special conditions to deal with any ICT specific issues.

This will make it easier for customers and suppliers to do business for the

purchase of low risk ICT products and services <$1 million

• New SOA documents cannot be used to establish an SOA for ICT products/services yet:

The current ICT Standing Offer Arrangement documentation that utilises GITC must continue to

be used, until it is reviewed (work in progress, to be completed by the end of 2014)

• Guidance Notes will be updated to include guidance for when the ITO, RFQ or General Contract

Conditions / Contract Details are being used for ICT purchasing

• For more information contact ICT Strategic Sourcing on (07) 3719 7695 or email

[email protected] .

Page 12: Training How to use the new suite · ICT purchasing DSITIA has confirmed new documents can be used for ICT purchasing • Invitation to Offer and Request for Quote templates can be

Basic Purchasing Conditions

Basic purchasing conditions

• Purpose and when to use them

• How to incorporate basic purchasing

conditions

• Key features and terms

• Changes are not recommended

(unless they are minor)

• NEW document for routine purchases of low value/low risk

goods/services

• Basic Purchasing Conditions reduces red tape, and will

make it easier to do business with Government.

• Can be incorporated by reference in an order (e.g. P.O.)

New

Page 13: Training How to use the new suite · ICT purchasing DSITIA has confirmed new documents can be used for ICT purchasing • Invitation to Offer and Request for Quote templates can be

General contract conditions plus

contract details

• They replace the ‘Short Form Conditions of Contract’

• When to use / not to use (see guidance material)

• Key features / terms (material changes from old –v- new)

• How to use the Contract Details:

• Contains specific information about the contract being established

• Flexibility to amend standard terms and conditions in customer

details

• Contract manager’s dream!

• Guidance notes

How to use the General

Contract Conditions

General Contract

Conditions

Contract Details

Definitions and

Interpretation

Page 14: Training How to use the new suite · ICT purchasing DSITIA has confirmed new documents can be used for ICT purchasing • Invitation to Offer and Request for Quote templates can be

Standing Offer Arrangements Conditions and details

• Guidance notes

• Making changes

• SOA for ICT products/services

How to

create a SOA

Contract (between Customer

and Supplier)

SOA Conditions

Definitions and

Interpretation

SOA Details

SOA Details SOA Conditions Customer Contract

• Contains specific information

about a SOA

• Flexibility built in – can amend

the SOA Conditions or the terms

of Customer contracts.

• Changes to ts and cs ‘flow

through’ to customer contracts

(only need to negotiate them

once, at SOA level).

• ‘SOA Orders’ – flexibility in how

you define / describe this.

• The mechanics of how

the SOA works

• ‘Eligible customers’ that

can purchase under the

SOA

• Unusual for SOA

Conditions to need

modification

• In SOA Details identify the

contract that applies

between the supplier and

customers when they place

orders under the SOA.

• Select the contract of ‘best

fit’ based on value and risk

• Make it easy for customers

to place orders.

Page 15: Training How to use the new suite · ICT purchasing DSITIA has confirmed new documents can be used for ICT purchasing • Invitation to Offer and Request for Quote templates can be

Invitation to offer

• Structure: Response Schedules –v- Contract Details

• Key features and ‘tips’

• Contract selection – maximum flexibility.

• Preparing Response Schedule A

• Schedule B – Innovation and alternative offers

• Guidance notes

• This contains details of the procurement, including a section

for suppliers to complete as part of their response to the ITO.

• New version ITO is simplified, streamlined, easier to read and

more flexible.

Invitation to

Offer

Page 16: Training How to use the new suite · ICT purchasing DSITIA has confirmed new documents can be used for ICT purchasing • Invitation to Offer and Request for Quote templates can be

Request for quote

• RFQ is a ‘Lite’ procurement process which is simple,

streamlined and designed to be a shorter process than ITO.

New format will reduce red tape, be more efficient and will

make it ‘easier to do business’ (reduces tendering costs).

Request for

Quote

New

• When to use the RFQ template

• Structure

• Contract selection – maximum flexibility

• Key features and ‘tips’

• Guidance notes

Page 17: Training How to use the new suite · ICT purchasing DSITIA has confirmed new documents can be used for ICT purchasing • Invitation to Offer and Request for Quote templates can be

How the documents fit together Basic

Purchasing Conditions

Definitions and

Interpretation

To buy goods/services using

Basic Purchasing Conditions

To buy goods or services

(using new General Contract

Conditions - no tender process)

General Contract

Conditions

Contract Details

Definitions and

Interpretation

Tender process (ITO or RFQ) using new General Contract Conditions

ITO for a Standing Offer Arrangement

Contract* (between Customer

and Supplier)

SOA Conditions

Definitions and

Interpretation

SOA Details

Invitation to Offer +

General Contract

Conditions*

Contract Details

Definitions and

Interpretation + Invitation to Offer or RFQ

* See note below re flexibility in contract selection

* Customer selects which contract to use – these docs can be replaced with alternative contract e.g. General Contract

Conditions, Basic Purchasing Conditions, Comprehensive Contract Conditions (coming soon), Social Services Contract, GITC etc.

Place order +

Page 18: Training How to use the new suite · ICT purchasing DSITIA has confirmed new documents can be used for ICT purchasing • Invitation to Offer and Request for Quote templates can be

Our new suite of documents gives you flexibility to choose the contract that is the

‘best fit’ for what you are buying. How do you know which contract is the right one?

• Judgment call based on an assessment of value / risk

• Value /risk matrix will provide some guidance but won’t give you the answer

• Consult with experienced procurement advisors or legal if unsure

Tools to help you:

Guidance note Decision tree

Which contract should I use?

Basic

Purchasing

Conditions

General

Contract

Conditions

Comprehensive

Contract

Conditions

Bespoke

Contract

RISK Lowest Highest

Page 19: Training How to use the new suite · ICT purchasing DSITIA has confirmed new documents can be used for ICT purchasing • Invitation to Offer and Request for Quote templates can be

Agencies now have flexibility in how they formalise contracts

For general and comprehensive contract conditions and SOAs:

• Supplier and customer both sign the Contract Details OR

• Supplier signs the contract and customer confirms in writing that the supplier’s offer

has been accepted.

Steps to take if there is negotiation with the supplier about what is in the

contract details:

• Step 1: update the contract details to reflect what has been agreed

• Step 2: send the updated version to the supplier to sign again

• Step 3: customer/principal accepts the updated contract details

For basic purchasing conditions:

• Customer places an order referring to the basic purchasing conditions

• Contract is formed when the Supplier accepts a Basic Order, or provides the

goods/services

set out in a Basic Order

Contract negotiation and execution

Page 20: Training How to use the new suite · ICT purchasing DSITIA has confirmed new documents can be used for ICT purchasing • Invitation to Offer and Request for Quote templates can be

Clause bank is under review. Possible

clauses could include:

• excluding consequential loss

• alternative clauses for capping liability

• alternative clauses re ownership of

intellectual property rights

• financial security clause

• performance guarantee clause

• price review clauses (e.g. using CPI)

• business continuity clause

• ICT specific clauses

• transition out services

• contractor clauses

Additional Provisions will be reviewed for

other ideas

Clause bank

Other possible precedents:

• Deed of novation

• Deed of variation

• Confidentiality deed

Clause bank provides a list of clauses that

could be used in contracts which have

been approved by legal services. This

would help relieve pressure on legal teams

by allowing users to incorporate these pre-

approved clauses.

Page 21: Training How to use the new suite · ICT purchasing DSITIA has confirmed new documents can be used for ICT purchasing • Invitation to Offer and Request for Quote templates can be

Agencies have time to transition to the new documents

• Three to six months for Agencies to transition to new documents

• Older versions will remain on HPW website during transition period

• Once transition period ends, old documents will be moved to archived documents

Recommendations to agencies

• Use the new documents for new procurement activities where possible

• For contract renewals, consider moving suppliers across to the new contract documents

• Identify people within your Agency that can be the first point of contact for others

• Deliver training to your broader teams in how to use the new documents.

Next steps

• Keep us informed of your progress

• Provide feedback

• Join ProQr on QG Yammer

Questions?

[email protected]

Transition period