||25 May 2021
||31 December 2021
|Responsible Officer: Manager Property, Procurement & Assets
||Chief Executive Officer
The purpose of this policy is to:
- provide policy and guidance to the City to allow consistency and control over procurement activities;
- demonstrate accountability to rate payers; provide guidance on ethical behaviour in public sector purchasing;
- demonstrate the application of elements of best practice in purchasing;
- increase the probability of obtaining the right outcome when purchasing goods and services; and
- minimise and manage risk in procurement.
This policy applies to all contracting and procurement activities at the City and is binding upon Councillors, City officers and temporary employees, contractors and consultants while engaged by the City.
This Procurement Policy is made under Section 186A of the Local Government Act 1989. This section of the Act requires the City to prepare, approve and comply with a procurement policy encompassing the principles, processes and procedures applied to all purchases of goods, services and works by the City.
This policy is supported by the Procurement and Contracts Management Manual.
Any non-conformance to this policy must be reported to the relevant manager and the Manager Property Procurement and Assets.
This section defines the key terms used in this policy.
Act - The Local Government Act 1989.
City - The City of Greater Geelong organisation, led by the CEO.
Council - The City of Greater Geelong Council comprised of elected councillors and led by the Mayor.
ELT - The Executive Leadership Team of the City, as constituted from time to time.
1.1 Treatment of GST
All monetary values related to this policy exclude GST except where specifically stated otherwise.
1.2 Role of Procurement
The role of procurement is to carry out activities relating to procurement in such a way that the goods, services and works are procured of the right quality, from the right source, at the right cost and be delivered on time and within budget, to achieve a value for money outcome for the City.
The Procurement team will lead and oversee the process for all of the City’s tender processes, acting as the council’s independent representative between the City and its potential suppliers
2 Effective Legislative and Policy Compliance and Control
2.1 Legislative Compliance
The Local Government Act requires the City to publicly tender contractual procurements over certain thresholds.
The key legislative requirements for this Policy include:
- section 186 of the Act (power to enter into contracts)
- section 186A of the Act (Procurement Policy)
- section 3C of the Act (Objectives of Council)
- section 208B of the Act (Best Value Principals)
- sections 77A, 77B, 78, 78A to 78E, 79, 79B to 79D, 80, 80A to 80C, 81, 95 and 95AA of the Act (Conflict of Interest)
- section 98 of the Act (Delegations)
- section 140 of the Act (Accounts and Records)
- The relevant provisions of the Competition and Consumer Act 2010 (Cth).
2.2 Conduct of Councillors and City Staff
Councillors and City Staff, in their carrying out of duties in relation to procurement, are to ensure they:
- Conduct themselves ethically and with integrity;
- Comply with the City’s Gifts and Hospitality Policy;
- Declare and effectively manage real, perceived and potential conflicts of interest;
- Maintain confidentiality and security of information; and
- Comply with the relevant Codes of Conduct:
- Councillor Code of Conduct;
- Staff Code of Conduct.
2.3 Tender and Quotation Processes
All tender and quotation processes shall be conducted in accordance with the requirements of this policy, the Procurement and Contracts Manual and any associated procedures, relevant legislation, relevant Australian Standards and the Act.
2.4 Fair and Honest Dealing
All prospective contractors and suppliers must be afforded an equal opportunity to tender or quote.
2.5 Accountability and Transparency
The City’s instrument of delegation determines the seniority levels of staff authority, required for expenditure on each instance of procurement.
Measures which intentionally seek to avoid the requirement to give public notice, for example contract splitting, placing multiple orders, seeking multiple quotations with a single supplier or engaging in effect a single supplier under different guises, are considered to breach the requirement to call public tenders where threshold values would otherwise be reached.
2.6 Disclosure of Information
Information received by the City that is Commercial in Confidence must not be disclosed and is to be stored in a secure location.
Councillors and City staff are to protect, by refusing to release or discuss the following:
- information disclosed by organisations in tenders, quotations or during tender negotiations;
- all information that is Commercial in Confidence; and
- pre-contract information including but not limited to information provided in quotes and tenders or subsequently provided in pre-contract negotiations.
The City shall:
- establish a procurement management responsibility structure and delegations ensuring accountability, traceability and auditable procurement decisions;
- ensure that the City’s procurement structure:
- is flexible enough to purchase in a timely manner the diverse range of goods, works and services required by the City;
- ensures that prospective contractors and suppliers are afforded an equal opportunity to tender/quote;
- ensures that all participating prospective contractors and suppliers are treated fairly and equitably;
- encourages competition; and
- ensures that policies that impinge on the purchasing policies and practices are communicated and implemented.
The City’s standard methods for purchasing goods, services and works shall be by:
- purchasing card;
- purchase order following a quotation process;
- under contract following a tender or quotation process; or
- under purchasing schemes including collaborative purchasing arrangements with other councils and commercial schemes such as provided by Procurement Australia, Municipal Association of Victoria Procurement, Supply Clusters of Australia, State Purchase Contracts, Whole of Victorian Government Contracts and the Construction Suppliers Register.
3.3 Responsible Financial Management
The principle of responsible financial management shall be applied to all procurement activities. Where the tender sum exceeds budget allocation, the City will review scope of project or submit a report for expenditure variation to budget.
City staff must not authorise the expenditure of funds in excess of their financial delegations.
3.4 Probity Advisor/Auditor
Exemptions to this can be granted in circumstances where officers feel there is minimal risk to council. The authority for the exemption sits with the relevant Director, Manager and Manager Property, Procurement & Assets. All three must agree for the exemption to be granted.
4. Procurement Thresholds and Competition
The City’s procurement thresholds will be amended from time to time to alter minimum spend competition thresholds, but at all times clear guidelines will be provided. These will be decided based on the size and complexity of the proposed procurement activities.
In the event that a high-risk procurement activity is to be undertaken delegates are encouraged to seek process support from Procurement Services.
Purchase of all goods, services and works for which the estimated expenditure exceeds the compulsory tender thresholds pursuant to Section 186 of the Act, must be undertaken by public tender unless approved exemptions are available. There is no specific time limit applicable to the length of a contract which is subject to the thresholds. The City will determine the optimum period for the contract, on the basis of value for money and the efficiency and effectiveness of the procurement and then assess the value of the contract.
For purchases of goods, services and works having a total valuation of less than compulsory tender thresholds the City will maintain a formalised system of procurement guidelines.
4.4 Evaluation of Tenders and Quotations
All tenders and quotations are to be evaluated by an evaluation panel of no less than two persons, in a two staged process:
- Quantitative assessment of a weighted score totalling 100%; and
- Evaluation of price against weighted score
- VFMi = Tendered Price ÷ Weighted Score
4.5 Purchasing Cards
A select number of purchasing cards are available for the low cost and of high-volume purchases of goods and services. They must be used in accordance with the City’s Purchasing Card policy and are not to be used for personal use.
4.6 Petty Cash
A petty cash system operates to reimburse legitimate, urgent and operational business expenses incurred by City staff in the course of discharging their roles. The maximum claim for petty cash is $50 and must be authorised by the requesting officer’s supervisor.
Council may use the services of a third-party agent to undertake a tender on its behalf.
The City may enter into a contract, the value of which reaches the threshold amounts, for the provision of goods, services or works without first putting that contract to public tender, if it is resolved by a manager or above that the contract must be entered into because of an emergency. An example of an emergency is floods, bushfires, natural disasters, risk to persons or property, etc.
Contract and Scope variations must be approved in accordance with the CEO to Staff Delegations – Power to Approve Contract Variations. Variations should not exceed the available budget, and where the budget is exceeded there may be a requirement to submit a report to Council.
Coordinators & Superintendent Representatives may approve variations to contracts up to the lesser of these two options; 10% of the original contract value or a maximum of $30,000. Where the aggregate of all variations exceeds 10% or is greater than $30,000 they must be referred to the Manager for authorisation.
Managers/Superintendents may approve variations to contracts up to the lesser of these two options; 20% of the original contract value or a maximum of $100,000. Where the aggregate of all variations exceeds 10% or is greater than $100,000 they must be referred to the Director for authorisation.
Directors may approve variations to contracts up to the lesser of these two options; 30% of the original contract value or a maximum of $200,000. Where the aggregate of all variations exceeds 30% or is greater than $200,000 they must be referred to the CEO for authorisation.
In the case of large projects, Directors could seek special CEO delegation to increase from the maximum variation limit of $200,000. Once delegate approval has been obtained the Superintendent will issue the approval letter to the Contractor.
4.10 Ministerial Exemption
The Minister for Local Government may exercise his or her discretionary power to approve an arrangement for the purposes of the Act, a contract that the City wishes to enter into without first exposing that contract to public tender. Ministerial exemptions will only be sought in exceptional circumstances.
4.11 Request for Quote Exemptions
In circumstances where three quotes cannot be sought, the CEO holds the relevant delegation to approve an exemption from quoting.
In the event that an exemption is sought, endorsement of the exemption must be obtained by both the Director Governance, Strategy and Performance and Manager Property, Procurement and Assets prior to seeking CEO approval.
5 Risk Management
The City is to manage all aspects of its procurement processes in accordance with it adopted Risk Management Policy and in such a way that all risks, including Occupational Health and Safety, are identified, analysed, evaluated, treated, monitored and communicated to the standard required by the law, in accordance with Australian Standards.
Procurement risk is the potential for failures of a procurement process designed to purchase services, products or resources. Common types of procurement risk include fraud, cost, quality and delivery risks.
5.2 Supply by Contract
The provision of goods, services and works by contract potentially exposes the City to risk. The City will minimise its risk exposure by measures such as:
- standardising contracts to include current, relevant clauses;
- ensuring the contract or purchase order reflects the tender pricing;
- requiring security deposits where appropriate;
- referring specifications to relevant experts;
- requiring a correctly executed contractual agreement before commencement;
- use of or reference to relevant Australian Standards (or equivalent); and
- effectively managing the contract including monitoring and enforcing performance.
- Only Contract templates approved by the City’s Governance and Legal Teams are to be used or entered into by the City .
5.3 Supply by Purchase Order
Where procurements are arranged following a quotation process, a Purchase Order must be raised on Oracle and issued to the supplier/service provider prior to the goods, services or works required being provided.
5.4 OH&S and Other Mandatory Requirements
The City requires all contractors, service providers and volunteers to comply with all OH&S legislative requirements. These are mandatory requirements and non-compliance will disqualify prospective suppliers. Suppliers must provide evidence of certification or policy when providing goods, services or works, prior to the commencement of the delivery of these goods, services or works.
5.5 Disability Considerations
The legislative requirements of the Disability Act 2006 and Regulations 2007 and the City’s Disability Action Plan, are to be considered by City staff to ensure that procurement processes and decisions do not directly and indirectly discriminate against people with a disability.
5.6 Dispute Resolution
All City contracts shall incorporate dispute management and alternative dispute resolution provisions to minimise the potential for legal action.
5.7 Contract Management
The purpose of contract management is to ensure that the City, and where applicable its customers, receive the goods, services or works provided to the required standards of quality and quantity as intended by the contract.
6 Sustainable Value
6.1 Economic and Social Sustainability Considerations
The City is committed to buying from local businesses where such purchases may be justified on value for money grounds, while remaining compliant with the Competition and Consumer Act 2010 and other fair-trading legislation requirements.
Where practicable, the City will fully examine the benefits available through purchasing goods, services or works from suppliers/contractors within the Geelong Region, by applying a weighted score component of 10 percent for local content of total weighted score in tenders and quotations.
The City is committed to procurement that supports local businesses and economic diversity and viability by:
- generating local employment;
- taking into account the life cycle of products purchased;
- building relationships and encouraging purchasing by contractors from local suppliers; and
- fostering innovation and emerging sectors.
6.2 Other Local and Social Considerations
Depending on the procurement type, there may be a necessity to apply additional criterion factors to quotations and tendering, including an appropriate weighting (i.e. 5%-10%) based on the following:
- G21 (GROW)
Aboriginal and Torres Strait Islanders
- A part of social procurement is to include opportunities of employment for residents within the low socioeconomic regions of Geelong in the delivery of goods or services; and
- The City will identify opportunities to work with social enterprises and other not-for-profit businesses in the G21 Region which deliver social outcomes as part of doing business, either directly or as part of our supply chain.
Recycled Content and Environment Consideration
- The City will identify opportunities to work with Aboriginal and Torres Strait Islanders businesses or enterprises engaged as a contractor or sub-contractor or supplier; and/or
- The City will identify opportunity for an individual who identifies as Aboriginal or Torres Strait Islander as a result of the provision of goods, services or works to the City of Greater Geelong.
Gender Equity Considerations
- The City will consider the use of recycled materials in relation to goods or material being purchased, including construction materials for the City’s Works programs; and
- Consideration of the environmental impact are to include:
- Reducing greenhouse gas emissions;
- Use of recycled materials;
- Recycling of used material;
- Reducing waste to landfill;
- Reducing water consumption;
- Encouraging improved environmental management;
- Select products/services that have minimal impact on natural resources and biodiversity; and
- Improving our ability to adapt to climate change.
Other Social Outcomes
- The City commits to ensuring that everyone in the Geelong municipality, regardless of their gender identity have access to equal power, resources and opportunities, and are treated with dignity, respect and fairness.
- The City will seek to identify opportunities to address any perceived imbalances that can be impacted via our procurement activities
Clever and Creative
- The City is aware that individual suppliers may have their own social outcomes which they support. Prospective suppliers will be encouraged to provide details of what social outcome they support and how.
Small Business Charter
- The City of Greater Geelong is working toward being recognised regionally, nationally and internationally, as a clever and creative city-region. Delivering a clever and creative future will influence the City’s connections and design, its prosperity and creativity, and increase its resilience through sustainable solutions.
- All tenders and quotations are to have a weighting of 5% of the total weighted score for Clever and Creative and scored relative to the innovation of the solution offered in responses
- The City has signed the VSBC’s Small Business Friendly Charter, officially becoming a small business friendly council.
- As a small business friendly council, the City commits to:
- Reducing payment times for small business suppliers;
- Working with small businesses to manage the impacts of infrastructure projects;
- Streamlining the approval process for starting a business; and
- Helping set up and support local business networks.
Implementation of this Policy
Monitoring and reporting
Advice and assistance
The Responsible Officer for this policy manages the provision of advice to the organisation regarding this policy.
A person who is uncertain how to comply with this policy should seek advice from this person or from their Manager.
The City must retain records associated with this policy and its implementation for at least the period shown below.
||Retention / Disposal Authority
|Certified copies of records
||As per PROV
Section 186A(7) of the Act requires that this policy must be reviewed at least one in each financial year, a Council must review the current procurement policy and may, in accordance with section 186A amend the procurement policy.
- Procurement and Contracts Manual
- Councilors - Code of Conduct Policy
- Confidential Information Procedure
- Fraud Control Policy
- Gifts & Hospitality Policy
- Goods & Services Tax Policy
- Occupational Health & Safety Policy
- City Safe – Heat and UV Radiation Procedure
- Risk Management Policy
- Staff Code of Conduct Policy
- Council Purchasing Card Policy
- Environment Management Strategy
- Sustainable Water Use Plan
- Local Government Act 1989
- Competition and Consumer Act 2010
- Human Rights and Responsibilities Act 2006
- Disability Act 2006 & Regulations 2007
- G21 Region Opportunities for Work Strategic Plan
- Contract templates:
- Major Works (AS 4000-1997)
- Design & Construct Works (AS 4902-2000)
- Supply of Equipment with Installation (AS 4910-2002)
- Consultancy General Conditions – Single Assignment
- Consultancy General Conditions – Ongoing Assignment
- Services General Conditions
- Ongoing Provision of Physical Services
- General Conditions – Purchase of Goods
- IT Products and Services
VFM i = Value for Money, where the lowest VFM will represent the lowest price resulting from the formulae, and would determine Preferred Tenderer based on this principle.