Contract procedures manual · Contract procedures manual SM021 Second edition, Amendment 1...
Transcript of Contract procedures manual · Contract procedures manual SM021 Second edition, Amendment 1...
Contract procedures manual manual number: SM021
© NZ Transport Agency
www.nzta.govt.nz
Second edition
Effective from June 2013
ISBN 978-0-478-40763-4 (print)
ISBN 978-0-478-40762-4 (online)
Copyright information
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Disclaimer
The NZTA has endeavoured to ensure material in this
document is technically accurate and reflects legal
requirements. However, the document does not override
governing legislation. The NZTA does not accept liability for
any consequences arising from the use of this document. If
the user of this document is unsure whether the material is
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More information
Published 2013
ISBN 978-0-478-40763-1 (print)
ISBN 978-0-478-40762-4 (online)
If you have further queries, call our contact centre
on 0800 699 000 or write to us:
NZ Transport Agency
Private Bag 6995
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This document is available on the website at
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Contract procedures manual SM021
Second edition, Amendment 1
Effective from June 2013
Page i
Document management plan
1) Purpose
This management plan outlines the updating procedures and contact points for the document.
2) Document information
Document name Contract procedures manual
Document number SM021
Document availability This document is located in electronic form on the NZ Transport Agency website at
www.nzta.govt.nz
Document owner Project Services
Document sponsor Highways and Network Operations group
3) Amendments and review strategy
All corrective action/improvement requests (CAIRs) suggesting changes will be acknowledged by the
document owner.
Comments Frequency
Urgent amendments
(minor revisions)
Updates incorporated immediately they occur. As required
Review
(major revisions)
Amendments fundamentally changing the content or structure of the document will
be incorporated as soon as practicable. They may require coordinating with the
review team timetable.
At least annually
Notification All users that have registered their interest by email to [email protected] will be
advised by email of amendments and updates.
Immediately
4) Other information (at document discretion)
There will be occasions, depending on the subject matter, when amendments will need to be worked
through by the review team before the amendment is actioned. This may cause some variations to the
above noted time frames.
5) Distribution of this management plan
Copies of this manual management plan are to be included in the NZ Transport Agency intranet.
NZ Contract procedures manual SM021
Second edition, Amendment 1
Effective from June 2013
Page ii
Preamble
The content of the NZ Transport A Contract procedures manual (manual)
is based on the current best business practice. The manual will continue to
evolve and is subject to revision.
The manual owner shall be advised of any proposed amendments to ensure continuous
improvement in best practice. Where amendments are wished for, email proposed
amendments to the below address or write to the manual owner.
While all care has been taken in formulating this manual, the NZTA Board accepts no
responsibility for failure in any way related to the application of this manual, or any
reference documents noted in it. There is a need to apply judgement in each particular
set of circumstances.
Contract procedures manual SM021
Second edition, Amendment 1
Effective from June 2013
Page iii
Record of amendments
Amendments will be made to this manual periodically and recorded on this amendment control sheet. If you
wish to be notified by email when any amendment is made, please email [email protected] with your contact
details name, organisation and email address. Please also ensure that any subsequent changes to these contact
details are notified.
All individuals seeking to rely on the Contract procedures manual (SM021) or to implement it have a duty
to ensure that they are familiar with the most recent amendments. Note: minor amendments are not always
identified.
Amendment number
Description of change Effective date Updated by
1 Manual revised to Second Addition Amendment 1. Updates to part A and B. Full details of amendments are provided , Contract procedures manual.
July 2013 Richard Crawforth (Part A) / Katherine Scapolo (Part B)
PQM simple + price deviation adjustment
This is a trial evaluation method for professional service tenders only and is not included in the SM021 manual.
Please see PQM simple+PDA memos (T:\Region\Manuals and Forms\SM 021 Contract Procedures
Manual\PQM simple with PDA) for further information.
Queries/feedback
Any queries/feedbacks on this edition should be sent to [email protected] .
NZ Contract procedures manual SM021
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Effective from June 2013
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Table of contents
About this manual ix
Part A HNO procurement procedures introduction 1
1.0 Approval to proceed with a contract 5
1.1 Overview 5
1.2 Approval to proceed with contract 5
1.3 Procurement strategy 5
2.0 Request for tender (RFT) preparation 9
2.1 RFTs 9
2.2 Delivery model 11
2.3 Selecting a supplier selection method 12
2.4 Price/Non-price attributes selection 15
2.5 Pre-qualification for PW (PW only) 18
2.6 Liability and insurance for PS contracts (P only) 25
2.7 Insurance, bonds and retention for PW contracts (PW only) 27
2.8 Checking of contract documents 32
2.9 Shortlisting procedures 33
2.10 Interactive tender process 34
2.11 Commercial in confidence 35
2.12 Base estimate to be included in the RFT 35
3.0 Advertising and issuing of tender documents 36
3.1 Issuing of tender documents 36
3.2 Release of tender details 37
3.3 Communication during the tender period 37
4.0 Tender closing procedures 39
4.1 Tenders register and box 39
4.2 Remote tender closing 39
4.3 Receipt of tenders 41
4.4 Processing of late tenders 41
4.5 Opening of tenders 42
4.6 Preparation of the schedule of tenders received 44
4.7 Opening the price envelope 46
4.8 Modification and withdrawal of tenders 46
Contract procedures manual SM021
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Effective from June 2013
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5.0 Tender evaluation 47
5.1 Evaluation policy general 47
5.2 Conformity, tags and clarification 53
5.3 Dealing with comments on the base estimate received from tenderers 55
5.4 56
5.5 Subconsultants/Subcontractors and consortia 57
5.6 Non-price attribute evaluation 57
5.7 Supplier selection methods 65
5.8 Reports and recommendation 68
5.9 Approval to open price envelopes 69
5.10 Consider commercial issues prior to contract award 70
5.11 Approval to award contract 71
5.12 Preferred tenderer status 72
5.13 Tender debrief meetings 73
6.0 Contract award procedure 74
6.1 Contract file 74
6.2 Signing of contract documents 75
6.3 Who may sign the contract agreement 77
6.4 Who may sign the bond (PW only) 79
6.5 Assignment or novation of contracts 80
7.0 Contract payments 83
7.1 Introduction 83
7.2 Liquidated damages (PW only) 83
7.3 Application of liquidated damages delegations (PW only) 83
8.0 Contract close 84
8.1 Introduction 84
9.0 Appendices part A 86
Part B Internal operations procurement procedures 143
1.0 Overview 149
1.1 Introduction 149
1.2 Minor administrative purchases 150
1.3 Selection of procurement approach 151
1.4 Preparation of tendering documentation 154
1.5 Service delivery/contract model 155
1.6 Selection of supplier selection method 156
NZ Contract procedures manual SM021
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1.7 Process and timing 157
1.8 Shortlisting procedures 164
1.9 Confidentiality 165
2.0 Advertising and issue of procurement documents 166
2.1 Release of documents and information 166
2.2 166
3.0 RFP/RFT closing procedures 167
3.1 Overview 167
3.2 Tender register and box 167
3.3 Submission of proposals/tenders 167
3.4 Processing of late responses 168
3.5 Opening of responses 170
3.6 Pre-evaluation administration 171
3.7 Opening the price envelope 171
3.8 Modification and withdrawal of responses 172
4.0 Tender evaluation 173
4.1 Evaluation policy general 173
4.2 Conformity, tags and clarification 176
4.3 Dealing with comments received from proposers 177
4.4 177
4.5 Subconsultants/Subcontractors and consortia 178
4.6 Non-price attribute assessment 178
4.7 Presentation of proposals 181
4.8 Recommendation report 181
4.9 Post-evaluation administration 182
4.10 Release of information post-tender 182
5.0 Award of contract 183
5.1 Negotiation and development of contract documentation 183
5.2 Development of formal contracts 184
5.3 Liability and insurance for consultant contracts 186
5.4 Insurance, bonds and retention for office accommodation works
(Works) 187
5.5 Contract file 188
6.0 Signing of contract 189
6.1 Introduction 189
Contract procedures manual SM021
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6.2 Signing the contract 189
7.0 Contract management 190
7.1 Contract confidentiality 190
7.2 Assessing the performance of the supplier 190
7.3 Process for managing contracts 190
7.4 Contract variations 191
7.5 Process for contract variations 192
7.6 Assignment or novation 192
7.7 Changes after contract awarded 193
7.8 Where a change in control involves an assignment or novation or
subcontracting 194
7.9 Ending a contract 194
7.10 Contract evaluation reviews 194
7.11 Record keeping 194
7.12 Health and safety requirements of contractors 195
8.0 Alternative procurement options 196
8.1 Emergency procurement 196
8.2 Master Agreements 196
8.3 Syndicated procurement 197
8.4 All-of-government contracts 197
9.0 Appendices Part B 198
Contract procedures manual SM021
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Effective from June 2013
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About this manual
General
Status of this
manual
This manual details the procedures for procuring. The manual is split into two
parts:
Part A contains procedures relating to the contracting of professional services and
physical works and will generally be used for works contracted by the
Highways and Network Operations (HNO) group.
Part B contains procedures for the procurement of goods and services related to
internal operations, and will generally be used by all groups (other than HNO) and for
expenditure from administration budgets.
Overview part
A
Part A details procedures for implementing the requirements of the Procurement
manual. It also covers the administrative requirements for contracts involving payments
for professional services and physical works.
The purpose of part A is to ensure compliance with the Procurement manual, the
Government Roading Powers Act 1989, the Land Transport Management Act 2003 and
may be issued from time to time in
relation to procurement.
Procedures relating to professional services (PS) or physical works (PW) only:
PS: This manual distinguishes procedures and requirements for PS only by referencing
the paragraphs/sections with PS as has been done for this sentence.
PW: This manual distinguishes procedures and requirements for PW only by
referencing the paragraphs/sections with a PW as has been done for this sentence.
Procurement of services and the purchasing of goods not subject to the
Procurement manual and funded by the administration budget should be done in
accordance with part B of this manual.
The provisions of part A are mandatory for all HNO contracts. Where questions or
matters as to its application arise, the guidance of the appropriate Procurement Support
team should be sought.
Wherever a financial limit is indicated in this manual it shall be exclusive of Goods and
services tax (GST).
Overview part
B
Part B deals with the procurement and contracting procedures associated with the
internal operations of the NZTA:
Any procurement that supports its day to day operations, including the procurement
of office supplies, vehicles and office equipment.
Procurement for the provision of decision-making advice that has an indirect impact
on transport infrastructure, which may include policy and strategic advice, education
and safety research.
Procurement of goods and services that support our obligation to provide New
Zealanders with access to the land transport system, such as manufacture and
distribution of licence plates, manufacture and distribution of media labels for
vehicles and bulk processing of letters for drivers and vehicle owners.
Procurement of advertising campaigns, communication and publications.
NZ Contract procedures manual SM021
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Effective from June 2013
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Overview part
B continued
In general these activities will be conducted in accordance with the Procurement
manual, procurement procedure 2: Planning and advice.
If you are unsure whether your procurement activity resides under part A or part B of this
manual, please email [email protected].
Legal services team.
Associated
manuals and
references
All advertising, tendering, closing of tenders, tender evaluation and acceptance of
tenders shall comply with the latest issue and any subsequent amendments or additions
of the following publications:
the
Project management manual (SM011)
State highway control manual (SM012)
Cost estimation manual (SM014)
State highway professional services contract proforma manual (SM030)
State highway construction contract proforma manual (SM031)
State highway maintenance contract proforma manual (SM032)
Prequalification for physical works application pack
HNO Portfolio Procurement Strategy
Manual of accounting policies and procedures
New Zealand Standard 3910:2003 Conditions of contract for building and civil
engineering construction (NZS 3910:2003)
Conditions of contract for consultancy services (CCCS) August 2009
This manual and any other applicable instruction issued.
Electronic copies of appendices to this manual can be found in: T:\Manuals and
Forms\Contract Procedures Manual\...
Contract procedures manual SM021
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Effective from June 2013
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Terminology
Adjusted evaluation
price
The tendered price less schedules fixed amounts and, the supplier quality premium (SQP) and alternative tender
premium (ATP).
Alternative tender Defined as a tender proposing alternative methods, forms or materials which might produce a different quality or
durability but within the scope specified in the request for tender (RFT).
Alternative tender
premium
Defined as the difference in price that the tendering authority is prepared to pay for the product offered by an
alternative tender compared to the minimum standard product specified in the RFT . Used in the evaluation of
alternative tenders in PW contracts.
Approved funding
allocation
This is the current approved funding allocation shown in the State Highway Project Financial Management System
(PROMAN) against the work unit that will fund this contract. It is the figure that is to be compared with the expected
contract estimate (which includes the tender price) to determine if the allocation is sufficient to award the contract.
Note that for multiple phase PS contracts this allocation will be for the first phase only and will therefore be less than
the expected contract estimate. It is expected that a separate allocation for the NZTA-managed costs will have been
set up against a separate work unit, and is not to be funded from this approved funding allocation, which will fund the
contract only. In the case of construction contracts this approved funding allocation excludes the NZTA-managed
costs, consent monitoring fees and all PS fees.
Asset manager Reference is made in this manual to the asset manager. For the purposes of this manual, this position will be held by
the officer or individual with delegated authority from the appropriate national office or regional manager. The asset
manager has responsibility for the development and/or delivery of the contract (network operations).
Base contract
estimate
The total sum of the elements that make up a contract estimate and including provisional sums but not including
escalation, a contingency allowance or the NZTA-managed costs (refer to SM014).
Base project phase
estimate
The sum of all base contract estimates making up the phase and including the NZTA-managed costs but still excluding
escalation and contingency allowance.
Type of quality- Procurement manual.
Closed contest Limited number of tenderers invited to submit a tender without public advertisement of contract.
Delegated authorities
schedule
The Delegated authorities schedule is a quick reference guide which list those delegated authorities (e.g. group
managers, Board) who are authorised, for example, to approve advertising, open price envelopes (at different contract
value level), for both PS and PW contracts.
Evaluation estimate Used in the evaluation of tenders is the base estimate less all scheduled fixed amounts including provisional sums,
contingencies and the NZTA-managed costs.
Expected estimate The base estimate including an allowance for contingency but excluding the NZTA-managed costs.
Note that escalation is only included in the expected estimate when it is used for funding applications. Reference to
expected estimate in this manual will generally include allowance for escalation (refer to SM014).
Expected contract
estimate
This is the expected estimate for the contract (prepared by the NZTA for PS contracts and by the consultant for PW
contracts), and includes an allowance for escalation and appropriate contingency but excludes the NZTA-managed
costs, consent monitoring fees and all PS fees for construction contracts. It is stated as the Expected Contract
Estimate figure on forms G, H and I in SM014.
Expected project
phase estimate
The sum of all expected contract estimates making up the phase (which include escalation and contingencies) and
including the NZTA-managed costs (consent monitoring fees and PS fees for construction phases).
Group Manager HNO For the purposes of this manual, although reference is made to this position, an officer designated by the appropriate
national office manager may have appropriate delegated powers and duties. The Group Manager of HNO is authorised
to approve contracts as set out in the Delegated authorities schedule.
NZ Contract procedures manual SM021
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Index Used in price quality method (PQM) simple and PQM special. Refers to the result of multiplying the non-price
attribute grade with the non-price weight.
Limited invitation to
tender
Limited number of tenderers invited to submit tender without public advertisement of contract. Referred to as closed
Procurement manual.
Manager PS For the purposes of this manual, although reference is made to this position, an officer designated by the Group
Manager of HNO may have appropriate delegated powers and duties as provided for in this manual and the Delegated
authorities schedule.
Maximum risk
consequence
Used in PQM special and refers to the sum of all the risk premiums associated with the individual risk parameters.
Monetary values Monetary values quoted or implied in this manual are in New Zealand dollars and shall be exclusive of GST.
National Manager PS For the purposes of this manual, although reference is made to this position, an officer designated by the appropriate
national office manager may have appropriate delegated powers and duties and is authorised to make contract
recommendations and approvals as set out in the Delegated authorities schedule in this manual.
Net present value The whole life value of the project when all future benefits and costs (such as maintenance) are evaluated and
discounted in accordance with the procedures outlined in the current version of the Economic evaluation manual.
Non-price attribute Refers to the quality attributes used in the tender evaluation marking forms: relevant experience, track record,
relevant skills, resources and methodology.
Non-price attribute
weight
Refers to the total weight provided for the non-price attributes. The sum of the non-price weight and the price weight
has to be 100 percent.
Procurement manual
Procurement manual defines procurement procedures to be used for all contracts funded from the
National Land Transport Fund.
PACE Performance Assessment by Coordinated Evaluation (PACE) is the performance evaluation system used by the NZTA
to assess contracts.
Pre-qualification
classification level
The pre-qualification system includes four pre-qualification classification levels A through D. Level A is the highest
classification and D the lowest.
Price weight This is the weight given to the price attribute when evaluating a tender. The sum of the non-price weight and the price
weight has to be 100 percent.
Project manager For the purposes of this manual, this position will be held by the officer or individual with delegated authority from the
appropriate national office or regional manager. The project manager has responsibility for the development and/or
delivery of the project (capital improvements).
PROMAN Financial Management system used by the HNO group.
PQM special Price q
Procurement manual.
PQM simple Price quality method simple is a type of price quality supplier selection method as referred to in
Procurement manual.
QUEST Health and safety training scheme.
Request for tender
(RFT)/Request for
proposal (RFP)
A document that details the contract requirements and conditions for tendering.
Risk parameter Used in PQM special. Refers to certain risk factors or attributes that can affect the costs. Generally sourced
from the risk register.
Contract procedures manual SM021
Second edition, Amendment 1
Effective from June 2013
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Risk premium Used in PQM special. Refers to the dollar premium assigned to each risk parameter. It represents the maximum costs
that can occur if a risk was not managed properly (assessed by the tendering authority).
Sponsor For the purposes of part B of this manual is the internal NZTA person for whom the contract is being arranged and
who maintains oversight of the area of the NZTA business where the output of the contract will be applied.
State Highway
Manager
For the purposes of this manual, this position will be held by the officer or individual with delegated authority from the
appropriate national office manager and may have appropriate delegated powers and duties. The State Highway
Manager has regional responsibility for land transport management and is authorised to make contract
recommendations and approvals as set out in the Delegated authorities schedule in this manual.
Supplier quality
premium
difference in quality between tenderers.
Supplier selection
method
Method of supplier selection previously known as evaluation method.
Target price Procurement manual.
Team administrator For the purposes of part B of this manual this position will be held by the Corporate Support team administrator that
has the responsibility for administering tenders on behalf of the Corporate Support Procurement team.
Tendering authority Refers to the agency tendering a contract.
Tenders secretary For the purposes of this manual, this position will be held by the officers or individuals with delegated authority from
the appropriate national office or regional manager to undertake the administration of the tender process and the
maintaining of the tender/contract records within the office.
Traditional delivery
model
Procurement manual.
Weighted sum The sum of all the non-price att
Weighted sum
margin
The result of deducting the lowest weighted sum from all other weighted sums and inclusive (i.e. the lowest weighted
sum will be zero). This forms a relative comparison between tenderers. Used in PQM simple and PQM special.
NZ Contract procedures manual SM021
Second edition, Amendment 1
Effective from June 2013
Page xiv
Abbreviations
AOG All-of-government
ATMS Advanced traffic management systems
ATP Alternative tender premium
CCCS Conditions of contract for consultancy services (August 2009)
CCTV Closed-circuit television
GETS Government Electronic Tendering Site
HNO Highways and Network Operations group
KPIs Key performance indicators
LPC Lowest price conforming
MRC Maximum risk consequence
MSQA Management, surveillance and quality assurance
NCCE National certificate in civil engineering
NPV Net present value
NTT Notice to tenderer
NTST Notice to specific tenderer
NZS 3910:2003 New Zealand Standard 3910:2003 Conditions of contract for building and civil engineering construction
NZTA NZ Transport Agency
PACE Performance Assessment by Coordinated Evaluation
PET Pre-qualification Evaluation team
PI Professional indemnity
PL Public liability
PQM Price quality method of tender evaluation
PS Professional services
PSMC Performance-specified maintenance contract
PW Physical works
RCA Road controlling authority
RFI Request for information
RFP Request for proposal
RFT Request for tender
ROI Register of interest
Risk and insurance sub-VAC Risk and insurance sub-Value Assurance Committee
SIA Statement of Interest and Ability
SOMAC Standard maintenance contracts
SQP Supplier quality premium
TET Tender Evaluation Team
VAC Value Assurance Committee
VAG Value assurance gate
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 1
Part A HNO procurement procedures introduction
1.0 Approval to proceed with a contract 5
1.1 Overview 5
1.2 Approval to proceed with contract 5
1.3 Procurement strategy 5
2.0 Request for tender (RFT) preparation 9
2.1 RFTs 9
2.2 Delivery model 11
2.3 Selecting a supplier selection method 12
2.4 Price/Non-price attributes selection 15
2.5 Pre-qualification for PW (PW only) 18
2.6 Liability and insurance for PS contracts (PS only) 25
2.7 Insurance, bonds and retention for PW contracts (PW only) 27
2.8 Checking of contract documents 32
2.9 Shortlisting procedures 33
2.10 Interactive tender process 34
2.11 Commercial in confidence 35
2.12 Base estimate to be included in the RFT 35
3.0 Advertising and issuing of tender documents 36
3.1 Issuing of tender documents 36
3.2 Release of tender details 37
4.0 Tender closing procedures 39
4.1 Tenders register and box 39
4.2 Remote tender closing 39
4.3 Receipt of tenders 41
4.5 Processing of late tenders 41
4.5 Opening of tenders 42
4.6 Preparation of the schedule of tenders received 44
4.7 Opening the price envelope 46
4.8 Modification and withdrawal of tenders 46
5.0 Tender evaluation 47
5.1 Evaluation policy general 47
Section Page
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 2
5.2 Conformity, tags and clarification 53
5.3 Dealing with comments on the base estimate received from tenderers 55
5.4 56
5.5 Subconsultants/Subcontractors and consortia 57
5.6 Non-price attribute evaluation 57
5.7 Supplier selection methods 65
5.8 Reports and recommendation 68
5.9 Approval to open price envelopes 69
5.10 Approval award contract 70
5.10 Approval award contract 71
5.11 Preferred tenderer status 72
5.12 Tender debrief meetings 73
6.0 Contract award procedure 74
6.1 Contract file 74
6.2 Signing of contract documents 75
6.3 Who may sign the contract agreement 77
6.4 Who may sign the bond (PW only) 79
6.5 Assignment or novation of contracts 80
7.0 Contract payments 83
7.1 Introduction 83
7.2 Liquidated damages (PW only) 83
7.3 Application of liquidated damages delegations (PW only) 83
8.0 Contract close 84
8.1 Introduction 84
9.0 Appendices part A 86
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 3
Part A deals with procurement of professional services (PS) and physical works (PW) and:
provides administrative guidelines
defines actions/processes that are to be undertaken, and
describes the required documentation for each.
Each action/process undertaken must be documented in a clear and orderly manner.
Contract process The NZ Transport Agency (NZTA) follows a process in tendering, awarding and administering
contracts for PS and PW. The procedures for each stage of this process are discussed in the
following relevant sections.
Process chart The following diagram identifies the stages in the tendering and contract administration process
for PS and PW.
RFT preparation
Advertising and issuing
tender documents
Tender closing
procedures
Contract award
procedures
Contract close
Contract payments
Approval to proceed
with a contract
Tender evaluation
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 4
Part A: Delegated authorities schedule
* or RMT.
NOTE:
1) Value assurance gate (VAG) process approvals are in addition to delegated authority approvals. It is the
responsibility of the project manager/asset manager to ensure all steps required under the VAG process are
undertaken as given in SM011.
2) Delegations are valid for contract estimates and tender prices under the 95th percentile of the NLTP budget. If
values are over 95th percentile of the NLTP funding refer to the HNO Consolidated Instrument of Sub
delegations.
3) Stated levels of delegation to approve contract variations are cumulative.
PS
Value limit up to $0.5 million up to $2 million up to $5 million over $5 million
Procurement strategies Highway Manager BUDMT* VAC
Advertise tenders Highway Manager
Open price envelopes Highway Manager National Manager Network Outcomes
Contract award (including
approval and execution of the
contract)
Highway Manager VAC
PS Contract variations
Value limit up to $0.2 million up to $0.5 million over $0.5 million
Contract variations of original
contract value (including
execution of any written variation
to give effect to the variation)
PM/CM Highway Manager National Manager Network Outcomes
PW
Value limit up to $5 million up to $20 million over $20 million
Procurement strategies Highway Manager BUDMT* VAC
Advertise tenders Highway Manager
Open price envelopes Highway Manager National Manager Network Outcomes
Contract award (including
approval and execution of the
contract)
Highway Manager VAC
PW Contract variations
Value limit up to $2 million up to $5 million over $5 million
Contract variations of original contract
value (including execution of any written
variation to give effect to the variation)
Project
manager/Contract
Manager
Highway Manager National Manager Network
Outcomes
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 5
1.0 Approval to proceed with a contract
1.1 Overview
1.1.1 Introduction Before any tender can be advertised, sufficient financial approval must be held to cover
the base estimate, contingencies, escalation, resource consent modification fees and the
NZTA-managed costs. There must also be intent to complete the proposed works. The
intention would usually be that the project would form part of the National Land
Transport Plan (NLTP).
1.1.2 Authority to
contract
The NZTA's authority to enter into contracts is provided for in section 25 of the Land
Transport Management Act 2003.
1.1.3 Types of
contracts
The NZTA can be the principal for the following types of contract:
state highway PS contracts
state highway PW contracts, including:
state highway design construct contracts where the contractor both designs and
constructs the work
performance-specified maintenance contracts (PSMC).
1.2 Approval to proceed with contract
Contract numbers shall be obtained from the tenders secretary. If a consultant is
preparing the request for tender (RFT) a contract number will be provided on request to
the project manager.
Approval to proceed with the engagement of a supplier is required from the appropriate
manager once the RFT has been prepared. The forms given in appendix I for PS and
appendix II for PW, are to be used for this purpose. It is the responsibility of the project
manager or the asset manager, and not the tenders secretary to ensure that this form is
completed and the necessary approvals obtained.
1.3 Procurement strategy
Procurement manual requires a procurement strategy to be completed for
every project prior to tendering. The purpose of the procurement strategy is to document
the strategic context and considerations in the choice of delivery model, supplier
selection method and other key procurement criteria. The strategies should as a
minimum include:
description of what is being purchased
assessment of the competition in the supplier market
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 6
assessment of the markets capability to deliver the outputs
assessment of the available delivery models and reasoning for the use of the one
adopted.
The content and detail required in the strategies is dependent of the project size and risk.
The diagram below illustrates the procurement strategy hierarchy and the strategies
required for different types of project.
Portfolio procurement strategy
Stage 2 –
Procurement plan(s)
for individual
contract(s)
Stage 1 – Regional asset
management procurement
strategies
Stage 1 – Large project
procurement strategies
Stage 1 – Regional block
procurement strategies
Stage 2 – Basic
procurement plan(s)
for individual
contract(s)
Stage 2 – Large
project rocurement
plan(s) for individual
contract(s)
1.3.1 Procurement
strategies for
state highway
improvement
projects
The Highways and Network operations (HNO) group has two procurement strategy routes
which are outlined below.
1. Procurement strategies for projects with estimated <$5 million
Projects with estimates <$5 million require a basic strategy which outlines the delivery
model, supplier selection method, key tender information, budget and funding allocation.
These details are recorded by completing appendix I of PS or appendix II of PW. The high-
level information for these projects will be contained in the regional block project
procurement strategy. A regional block project procurement strategy template (appendix
XXVI) should be used as the basis of the strategy and has guidance notes to assist in its
development.
2. Procurement strategies for projects with estimated >$5 million
Projects with estimates >$5 million require strategies with a greater level of detail
regarding the procurement methods chosen and at two points in the project development.
The first procurement strategy is required at the initial stages of the project after the initial
investigation phase has been complete. This is called the stage 1 strategy and outlines the
high-level consideration in the choice of delivery model and the details of PS procurement
as applicable. The stage 1 procurement strategy template (appendix XXVIII) should be
used as the basis of the strategy and has guidance notes to assist in its development. The
second strategy is call the stage 2 strategy and is required before the procurement of PW.
The strategy confirms the delivery model determined in the in the stage 1 strategy is still
correct and provides details of the procurement of the PW supplier. The stage 2
procurement strategy template (appendix XXIX) should be used as the basis of the
strategy and has guidance notes to assist in the development.
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 7
1.3.2 Procurement
strategies for
state highway
asset
management
projects
Regional asset management procurement strategies
Each region should produce a high level strategy for all asset management projects.
For further details and the latest procurement Strategy template please contact the
Project Services team.
Asset management project procurement strategies
This strategy contains the projects specific information for each project such as
delivery model, supplier selection method, key tender information, budget and funding
allocation and can cover both PS and PW depending on the tendering programme. For
further information and the latest asset management project procurement strategy
Template contact the Project Services team.
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 9
2.0 Request for tender (RFT) preparation
2.1 RFTs
2.1.1 Introduction This topic deals with the procedures to be followed during the preparation of RFTs.
The RFT should be carefully tailored to each project so it may be easily understood and
clear to a competent and experienced supplier.
If specific information is required in a tender that would not be normal for an
experienced tenderer to supply, then it must be clearly stated as a requirement in the
RFT.
The relevant mandatory require Procurement
manual must be followed as applicable.
PS: RFTs are generally prepared by the NZTA. The project manager or the asset
manager may use a consultant to undertake the preparation or assist in this
process.
PW: RFTs are generally prepared by the network management, project or other
consultant separately engaged by the NZTA as appropriate.
2.1.2 Where a
consultant is
used
Any consultant who prepares an RFT shall be precluded from tendering for that contract.
2.1.3 Proforma
contract
documentation
Proforma contract documentation for PS (State highway professional services contract
proforma manual (SM030)), PW --- capital (State highway construction contract proforma
manual (SM031)), and PW --- maintenance (State highway maintenance contract proforma
manual (SM032))are issued as standard documentation and must be used as the basis
for the respective RFTs.
2.1.4 Short-form
contract
agreement
Where the direct appointment or closed contest procurement processes are used:
PS: the standard form contract (SM030) must be used as the basis for the RFT.
PW: the minor works contract proforma as detailed in SM031 must be used as the
basis of the RFT.
When either of these procurement methods are used the project manager or the asset
manager must still ensure that appendices I and V, and all supporting information such
as a contract estimate, are prepared and the necessary approvals obtained.
2.1.5 Contract
document
deposit
An NZTA officer responsible for preparation of the RFT or person named as project
manager, or asset manager in the RFT shall determine whether a refundable deposit is
required when issuing tender documents to prospective tenderers. This deposit is to be
refunded on return of the documents in good condition or on receipt of a valid tender.
The sum charged is typically limited to costs of printing and distribution.
2.1.6 National
register of
consultants
(PS only)
The NZTA National Office maintains a national register of consultants, according to
their field of expertise, class of work and areas of operation. Any consultant shall be
permitted to submit a new entry to the register or update their existing entry at anytime.
The register will be updated monthly.
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 10
2.1.7 Number of
tender
submissions
The RFT must specify the number of copies of each submission that must be submitted. The project manager or the
asset manager should select the appropriate number to ensure that two clear copies are retained for inclusion in
the signing sets and that each member of the Tender Evaluation team (TET) has a copy. Making additional copies
of tenders received is undesirable and should be avoided as far as possible.
2.1.8 TET members
to be named
The names of the individuals forming the TET are to be stated in the RFT for transparency
purposes.
2.1.9 Alternative
tenders
Every RFT must state whether alternative tenders will be considered or not. If alternative
tenders will be considered, the RFT must clearly articulate the scope for alternative
tenders. A non-alternative tender must also be submitted if an alternative tender is
submitted.
Provision should be made in the RFT to require tenderers to consult with the NZTA
regarding their alternative proposal prior to tender closure. This may be done through
interactive meetings or submitted directly to the NZTA. The information presented in the
consultation is to be kept strictly confidential.
The alternative tender must be clearly identified and presented with sufficient
information to allow the alternative to be evaluated.
It is important to emphasise that alternative tenders must still conform to the specified
contract scope. The RFT must stipulate that alternative tenders include the following:
A statement to the effect that it is submitted as an alternative tender.
A general description of the physical nature and a clear statement of the scope of the
alternative proposed.
The alternative product details, design, proposed methodology and how it differs from
the method or product specified in the RFT.
The benefits and/or disadvantages, and evidence of previous success.
The social and environmental advantages and/or disadvantages, and evidence that
tangible benefits to the client can be derived from them.
The experience and current capabilities of the tenderer to implement the works.
The risks to the NZTA and consequential flow on effects.
Whether the alternative tenders may be considered in combination with their own
non-alternative tender or other conforming alternative tenders.
The price (in the price envelope).
Alternative proposals submitted in response to the RFTs must be treated as being of
potential advantage to that tenderer. Detail of any innovative ideas from such proposals
must not be revealed in any revised RFT in relation to the project where re-tendering is
invited.
2.1.10 Price envelopes Each tenderer is only to submit one price envelope, tender form and schedule unless
expressly requested by the NZTA or where alternative tenderers are permitted.
Contract procedures manual SM021 Part A Appendix VI
Second edition, Amendment 1
Effective from June 2013
Page 11
2.2 Delivery model
2.2.1 Types of
delivery model
The types of delivery model commonly used are:
traditional (staged delivery)
design construct (design and build)
full delivery (shared risk) early contractor involvement (ECI), competitive alliance
and project alliance
supplier panel.
For further information on delivery models the Project management manual
(SM011) and the Procurement manual should be referenced.
2.2.2 Selection of
delivery model
Project risk and potential for innovation are the key criteria for selecting a
procurement, or development and delivery model. There is no definitive point for moving
from one procurement model to the next, rather the trend is to move to less traditional
delivery models as the potential for innovation and transfer of risk to the supplier
increases.
When the quantum and severity of risk that can be allocated to the supplier is low, and
the potential to add value or innovate is also low, use of a traditional model is preferable.
As potential for both innovation and transfer of risk to suppliers increase, the design and
construct model becomes preferable. The full delivery model is preferable over the
design and construct model when the potential for both innovation and transfer of risk
to the supplier are high. This concept is illustrated in the figure below:
Delivery model selection diagram
For further information on delivery model selection refer to SM011 and the Procurement
manual.
Contract procedures manual SM021 Part A
First edition, Amendment 1
Effective from June 2013
Page 12
2.3 Selecting a supplier selection method
2.3.1 Introduction The Procurement manual refers to supplier selection methods and explains the parameters for their use. Tender evaluation for each method shall be in accordance with the requirements of the Procurement manual.
2.3.2 Direct
appointment
method
Direct appointment is an expedited procedure of evaluation that may only be used for contracts valued at $200,000 or less and where the risk that the works or services will not be satisfactorily completed is low. The direct appointment method can be used for contracts which are valued over $200,000 if it can be shown that greater value for money can be obtained by using this method as stated in the Procurement manual section 10.11. The Manager Project Services will consider value for money arguments on a case by case basis and recommend approval to the HNO Value Assurance Committee (VAC) via endorsement of a Procurement Strategy. Direct appointment is the preferred method of engaging suppliers for contracts valued at $200,000 or less.
PS: The procedure would normally involve negotiation with one consultant, selected
for the appropriate class of work from the national register of consultants, using
the short-form contract agreement detailed in SM030. Alternatively a
simple request for a methodology and price, from one consultant selected for the
appropriate class of work from the national register of consultants, using the
short-form contract agreement. If consideration is given to more than one
supplier the procedures prescribed in the Closed Contest supplier selection
method must be followed.
PW: The invitation to tender may be brief but must be in writing and include tender
information and a specification of the work to be done. For PW contracts the minor
works contract proforma as detailed in SM031 should be used with amendments
as appropriate. . If consideration is given to more than one supplier the procedures
prescribed in the Closed Contest supplier selection method must be followed.
2.3.3 Closed contest
method
The closed contest method is an expedited procedure of supplier selection that is typically used on contracts valued up to $400,000. It should only be used where the scope of work required is well defined and as a result there is a high confidence that the price will be less than $400,000 and the risk of unsatisfactory completion of the work is low. The invitation to tender must be in writing and include tender information and a specification of the work to be done. The evaluation of tenders should be consistent with either the LPC, PQM simple or Brooks Law supplier selection methods detailed in this manual. Where available a minimum of three suppliers must be invited to tender.
PS: Consultants should in first instance be selected from the national register of
consultants.
PW: Contractors should in first instance be selected from the register of pre-qualified
contractors.
Exemptions from the monetary limits above may be granted by the National Manager PS in cases where increased value for money can be achieved using this method. To gain exemption the National Manager PS must approve the Procurement Strategy for the contract.
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 13
2.3.4 Lowest price
conforming
(LPC) tender
method
PS: This method may be applied to PS where the scope of service required is well
defined and as a result there is a high confidence that contract price will be
$400,000 or less. It is expected that the use of this method for PS supplier
selection would be rare.
PW: This method may be used on projects up to a value of $5 million. It can be used for
projects of higher value that are deemed to be straightforward, low-risk works. The
LPC method can be used in conjunction with pre-qualification. If prequalification is
used some or all non-price attributes may be omitted.
Where LPC is used the base estimate must be included in the RFT for transparency purposes.
2.3.5 Target price
method
(purchaser
nominated price)
This method may be used where outputs are difficult to specify or quantify and should typically only be used for strategy studies, feasibility studies, transportation studies, and investigations. The RFT specifies the price to be paid for the contract.
2.3.6 Brook's law
method (type
of quality-
based method)
PS: This method may be used where there is a risk that the assignment will not be
completed adequately by some consultants and the best quality consultant
available, at a negotiated reasonable cost, must be engaged.
For particularly complex projects or contracts having outputs that are difficult to
specify precisely law method may be used.
Note that a simplified Brook s law method may be used for contracts valued at
$200,000 or less (expedited procedures).
PW: This method may be used where a full delivery procurement model has been
selected and the project outputs are difficult to specify.
The approval of the appropriate State Highway Manager or National Manager as
appropriate is required prior to the use of Brook s law evaluation for either PS or
PW tenders.
Note: The law method is a type of quality-based supplier selection method. Other
variants exist and are used by the HNO group with the appropriate approval.
2.3.7 PQM simple
(type of price
quality
method)
Price quality method (PQM) simple uses a mathematical model to translate the non-
price attribute grades of each tenderer to an explicit dollar value, the supplier quality
premium (SQP). The SQP shows how much the NZTA is prepared to pay to secure a
higher quality tender relative to the lowest quality tender.
This method may be considered for use on all PS and PW contracts.
Generally alternative tenders are not to be provided for in PS contracts however where
the project manager/asset manager determines a benefit in allowing for alternative
tenders, PQM simple may be used. Alternative tenders, where allowed, are valued using
a dollar premium known as the alternative tender premium (ATP).
Note that a simplified procedure may be used for contracts valued at $200,000 or less
(limited invitation to tender).
For transparency purposes, the base estimate must be specified in the RFT, as it will be
used in the calculation of the SQP.
Refer to appendix XXV for guidelines on pre-tender preparation required for the tender
evaluation process prior to the issue of the RFT. The evaluation procedure is described
in section 5 Tender evaluation of this part.
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 14
2.3.8 PQM simple
(type of price
quality
method)
continued
PQM simple has two contract proforma variations for PW tenders:
PQM simple (basic) which does not provide for alternative tenders.
PQM simple (advanced) which provides for alternative tender submission and
evaluation, interactive tendering, consultative processes and cooperative
approaches. Other differences are in insurance, surety, resource consent, quality
plan and probity requirements.
Note: These are not different supplier selection methods.
2.3.9 PQM special
(type of price
quality
method)
PQM special is typically used where there is high importance placed on quality and the
reduction of risk. PQM special allows for a more discerning quality and risk valuation to
be undertaken especially for larger projects.
This model also translates the non-price attribute grades of each tenderer to an explicit
dollar value, the SQP. However, unlike PQM simple, the SQP is extracted from a risk
profile.
The SQP still shows how much the NZTA is prepared to pay to secure a higher quality
tender relative to the lowest quality tender but with PQM special, there is a higher
emphasis on risk issues.
This supplier selection method may also be used for smaller contracts where the
complexity of the project or quantum of risk warrants a greater focus on specific areas
in the evaluation.
The following must be specified in the RFT for PQM special:
Risk parameters.
SQP for a nominal 10 percent difference in non-price attributes for each risk
parameter and the total.
The base estimate for transparency purposes, even though it is not used in the
tender evaluation.
These inputs must be prepared prior to the issuing of the RFT. Refer to the guidelines in
appendix XXV for more details. The evaluation procedure is shown in section 5 Tender
evaluation of this part.
Alternative tenders where allowed are valued using a dollar premium known as the
ATP.
PW: PQM special should be used in conjunction with pre-qualification for all PW
tenders.
The approval of the appropriate State Highway Manager or National Manager PS as
appropriate is required prior to the use of PQM special.
2.3.10 Pre-
qualification
with PW
tenders (PW
only)
Pre-qualification can be used for all PW tenders.
Where pre-qualification is used, the project manager/asset manager must nominate
one or more of the pre-qualification categories and levels required to tender.
The project manager/asset manager shall consider the scope of work, nature, special
features of the works, the NZTA's objectives and the risk profile of the works for each
contract when selecting which categories and level of pre-qualification to specify.
Contract procedures manual SM021 Part A Appendix VI
Second edition, Amendment 1
Effective from June 2013
Page 15
2.4 Price/Non-price attributes selection
2.4.1 Price/Non-
price
weighting
selection
When using a price quality supplier selection method it is important to select the
correct price/non-price weighting. A sensitivity analysis should be undertaken to
determine the price/non-price weightings. It is suggested that the SQPs generated for
a range non-price attributes grades be considered. The supplier market and the likely
non-price attributes grade variance should also be considered. Previous tenders may
give an indication of the likely range in non-price attributes grades. The graphs and
table below illustrate the SQP generated for a range of variances in non-price attributes
scores and non-price weightings.
SQP sensitivity testing for PS tenders
SQP sensitivity testing for PW tenders
0
10
20
30
40
50
60
70
80
2 4 6 8 10 12 14 16 18 20
Non-price attributes score range
SQP
as %
of e
valu
atio
n es
t'
Price Weight 20%
Price Weight 25%
Price Weight 30%
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
2 4 6 8 10 12 14 16 18 20
Non-price attributes grade range
SQP
as %
of e
valu
atio
n es
t' Price Weight 50%
Price Weight 60%
Price Weight 70%
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 16
Price/Non-price
weighting selection
continued
The graphs are read by selecting the non-price attributes score range you wish to consider on
the x-axis and reading the SQP as percentage of the evaluation price for the different price
weightings from the y-axis (e.g. for PS with non-price attributes score range of 10 the SQPs are:
price weight 20% = 40% of evaluation est. = 30% of evaluation est.
price weight 30% = 23% of evaluation est.
The analysis can be used to consider the potential SQPs generated by the different non-price
weighting and select the correct weighting depending on the premium the NZTA is prepared to
pay for a higher quality supplier on the project.
This analysis should also be available to the TET prior to the evaluation, so they can understand
the SQP generated from the non-price attributes grades. Sharing this analysis with the TET
should mean adjustments to the calculated SQPs as part of the sanity check are less frequent.
Selection of price/non-price weightings for HNO contracts must be within the ranges shown in
the table below unless approval is obtained from National Manager PS via an approved
procurement strategy.
Type of works being tendered Allowable total non-price attributes weighting range
PS 70-80%
PW 30-50%
2.4.2 Non-
price attributes
selection
Procurement manual defines six non-price attributes which can be used in price
quality and quality-based evaluations. The HNO group routinely uses five of these non-price
attributes (NPAs):
relevant experience
track record
relevant skills
methodology, and
resources (PW only).
The sixth of the non-price attributes, financial viability, is only available for use on HNO
contracts with the approval of the National Manager PS.
The use of the five core non-price attributes in evaluations is explained in section 5.7 (part A) of
this manual.
The use of relevant skills, methodology and relevant experience attributes is mandatory for all PS
and PW contracts when using a price quality or quality based evaluation method (without
prequalification). The use of track record is optional for both PS/PW contracts and use of
resources is optional for PW contracts. However the mandatory requirement to use NPAs does
not apply when using prequalification (i.e. any of the NPAs may be omitted when using
prequalification).
The default position for all NZTA PW contracts is to include one or more prequalification levels.
The following table provides guidance on the correlation between the prequalification level, the
The NPAs
selected should also reflect the associated specific contract risks that are also linked to the
selection of an appropriate prequalification level.
Contract procedures manual SM021 Part A Appendix VI
Second edition, Amendment 1
Effective from June 2013
Page 17
Non-price
attributes
selection
continued
Prequalification level
Recomm
ended supplier
selection methods
Non-price attribute options Recom
mended num
ber
NPA
s
Relevant
experience
Track record
Relevant skills
Resources
Methodology
A (>$20M) PQM 4-5
A PQM 2-3
B LPC/PQM 0-2
C LPC 0-1
D LPC 0
Exceptions to the above are permitted, but with the expectation that most contracts would
operate within the recommended number of NPAs. The supplier selection methods used
with prequalification are explained in section 2.5.6 (part A) of this manual.
When using a price quality evaluation method in combination with a limited number of
NPAs, the NPAs utilised become more sensitive. It is important that sensitivity testing is
done in selecting an appropriate overall quality price weighting (e.g. a quality weighting of
higher than 30% on a PW contract is not likely to be appropriate for contracts with two or
less NPAs selected).
The choice of NPAs and their weightings should be based on the contract specific characteristics, including risk and size. It is recommended that any NPA included is given a minimum weighting of five percent when used for PQM evaluations.
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 18
2.5 Pre-qualification for PW (PW only)
2.5.1 Registration
of
contractors
for pre-
qualification
The pre-qualification registration system for contractors has been devised to ensure that
only contractors who have demonstrated their ability to perform to the predetermined
standards, can tender for the PW contracts on state highways. Pre-qualification is
suitable for most PW contracts.
For example, where work is of a highly specialist nature, resulting in insufficient pre-qualified
contractors being able to undertake the work and leading to lack of competition, then the
project manager/asset manager may elect not to require pre-qualification.
Pre-qualification shall not be used for PS contracts.
2.5.2 Work
categories
The pre-qualification system classifies contractors according to their ability to meet
specified quality levels within four PW categories. Each work category has four possible
quality levels, where A is the highest and D is the lowest, to give 16 prequalification
classification levels:
Classification level
Work categories A B C D
1. Routine and minor works 1A 1B 1C 1D
2. Surfacing 2A 2B 2C 2D
3. Bridge construction 3A 3B 3C 3D
4. Construction 4A 4B 4C 4D
2.5.3 Classification
levels
The classification levels are determined by the technical complexity of the project, the cost,
risks involved, the type of temporary traffic management that is anticipated, the
environmental issues and sensitivities that must be considered, the health and safety
management system that must be followed, and also the type of partnering that the project
may require.
The project manager/asset manager will determine what classification level the contractors
should have successfully met to satisfy the project requirements. For any contracts that
include work which crosses more than one category (e.g. construction and surfacing), the
project manager/asset manager may elect to require pre-qualification for more than one
classification level.
The four levels are:
Level A is the highest classification. Typically, level A projects:
Need the highest quality management system to ISO 9000.
Technically complex requiring specialist appreciation and understanding.
Involve full partnering and cooperation with all parties.
Complex and sensitive environmental management issues.
Are considered high risk.
Capable resources and experience to carry out projects usually over $5.0 million
(indicative only).
Contract procedures manual SM021 Part A Appendix VI
Second edition, Amendment 1
Effective from June 2013
Page 19
Classification
levels continued
Level B:
Quality management system having certification to QEST and TNZ: TQS1 and
evidence of working towards ISO 9000 certification.
Technically complex requiring technical appreciation and understanding.
Limited surveillance required and the contractor adheres to the principles of
partnering.
Complex environmental management issues.
Are considered medium to high risk.
Capable resources and experience to carry out projects estimated at between
$2.5 and $5.0 million (indicative only).
Level C:
Quality management system that provides current certification to QEST and
TNZ: TQS1.
Not technically complex but requiring technical appreciation and
understanding.
Minimum surveillance on cooperation and pro-active partnering.
Simple environmental management issues.
Are considered low to medium risk.
Capable resources and experience to carry out projects estimated at between
$0.5 and $2.5 million (indicative only).
Level D is the lowest classification and applies to those projects that:
Need only a simple level of quality control.
Technically simple, routine or repetitive.
Minor levels of surveillance and support.
Does not involve sensitive environmental management issues.
Are considered low risk.
Capable resources and experience to carry out projects usually less than $0.5
million.
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 20
2.5.4 Work
categories
Contractors are classified in accordance to their expertise in four work categories that
may include some or all of the following scopes of work. The list given is only a
guideline and may not be exhaustive in covering all the works requirement:
1. Routine and minor works
Pavement maintenance:
o Patching and repairs, including potholes.
o Shoulder maintenance, including flanking.
o Routine maintenance and repair of surface water channel, and subsoil
drainage.
o Stream clearing and debris removal, to maintain water courses through
culverts.
o Repair minor scour in water channels and other drainage facilities.
o Renewal or installation of culverts with a diameter less than or equal to
600 millimetres. Repair dropouts and/or slips that do not require restriction
of a traffic lane, provided they do not need urgent attention to remove a
threat to road safety or the road structure.
o Repair to scour, degradation or aggradations threatening roads, bridges or
other roading-related structures which has accumulated over time.
o Repair to any other deficiency which has developed from events occurring
over a period of time.
o Replacement of wearing and running course metal on unsealed roads.
o Grading of unsealed roads
Traffic services
o Provision and maintenance of signs and road markers.
o Provision and maintenance of pavement markings.
o Operation and maintenance of traffic signals.
o Operation and maintenance of traffic monitoring equipment, such as area-wide
traffic control systems and closed-circuit television (CCTV).
o Operation and maintenance of emergency telephones on motorways.
o Maintenance of guardrails and sight rails.
o Replacement of traffic signal and surveillance equipment with an equivalent but
state of art facility.
Carriageway lighting
o Provision and maintenance of operation of lighting on local roads.
o Provision and maintenance of operation of lighting on state highways.
o Provision and maintenance of operation of belisha beacons and floodlights at
pedestrian crossings.
Vegetation control
o Protection planting projects.
o Toe weighting of unstable slopes.
o Drainage installed to drain incipient slips.
o New works which protect existing roads from sea or river damage.
Amenity/safety maintenance
o Snow clearing and ice control.
Contract procedures manual SM021 Part A Appendix VI
Second edition, Amendment 1
Effective from June 2013
Page 21
o Vegetation control.
o Litter collection on rural roads.
o Removal of, protection against, graffiti on roading structures.
o Removal and cleaning up crash debris and spillages (excluding hazardous
substances which are responsibility of emergency services).
o Cleaning channels, sumps and cesspits.
Traffic management
o Provision and operation of advanced traffic management systems (ATMS).
o Provision and operation of variable message signs.
o Provision and operation of local area traffic management schemes.
o Provision and operation of surveillance devices.
o Provision and operation of weighing devices.
Minor safety
o Small isolated geometric improvements.
o Intersection improvements.
o Traffic calming measures.
o Lighting improvements.
o Power pole relocation.
o Provision of guard railing.
o Sight benching to improve visibility.
o Pedestrian crossings.
o Stock underpasses.
o Formation of trailer parks.
2. Surfacing
Reseals/seal extension
o Conventional chip reseals including second coat seals.
o Void filling seal coats.
o Texturing seals.
o Other approved special purpose chip seals.
o Asphaltic surfacing.
3. Bridge construction
Bridge maintenance/repairs
o Repair of bridge retaining walls.
o Replacement of timber decks.
o Replacement of damaged or deteriorated structural members.
o Sand blasting and painting of structural members.
o Foundation protection.
.
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 22
Bridge construction
o Replacing bridge structure.
o Widening an existing bridge.
o New bridge
Work categories
continued
4. Construction
Rehabilitation/pavement treatment
o Removal and replacement of the existing pavement material.
o Rip and relay.
o Chemical stabilisation.
o Unbound granular overlays not exceeding 70 millimetres over high spots.
o Treatments involving ripping and/or reshaping, including stabilisation of the
existing pavement material.
Drainage improvements
o Repair and replacement of kerb and channel.
o Installation of water channels and subsoil drainage.
o Renewal or installation of culverts with a diameter greater than 600
millimetres.
o Routine maintenance and repair of surface water channel and subsoil drainage.
o Stream clearing and debris removal; to maintain water courses through
culverts.
Road construction
o New road realignments.
o Re-grading.
o Widening.
o Intersection improvements
o Approaches to bridge renewals.
o New retaining structures.
o Tunnels.
Contract procedures manual SM021 Part A Appendix VI
Second edition, Amendment 1
Effective from June 2013
Page 23
2.5.5 NZTA Operator
rating system
To be eligible for prequalification contractors must have at least a 4 star rating on the
prequalified, failure to do so will trigger a performance review as detailed in section 2.5.9.
For further information on the NZTA Operator Rating System go to www.nzta.govt.nz
(http://nzta.govt.nz/commercial/assistance/ors/index.html).
2.5.6 Performance
criteria
When applying for pre-qualification contractors are required to supply information with
their application under the following performance criteria:
quality assurance
traffic management
environment management
health and safety
project management
quantum or size of work
cooperation and proactive partnering.
2.5.7 Evaluation
methodology
The supplier selection method used with prequalification will be determined by the
following:
1. For contracts with an estimated out-turn cost of less than $5 million, which are
considered low risk in all aspects, the HNO group will use the LPC supplier selection
method.
2. For contracts with an estimated out-turn cost of less than $5 million, which are
considered complex or high risk, or contracts with an estimated out-turn cost of more
than $4.5 million the HNO group will use the PQM supplier selection method.
2.5.8 Application
for pre-
qualification
registration
For details and information on how to apply for a Pre-qualification application pack refer to the
website www.nzta.govt.nz and search re-qualification application pack .
2.5.9 Review of
c
performance
The Pre-qualification Evaluation team (PET) will use the interim and final performance
assessment by coordinated evaluation (PACE) reports to monitor the performance of pre-
qualified contractors.
monitor the safety performance of prequalified contractors. Contractors must hold a
Performance reviews are undertaken by the PET in consultation with the project manager/
asset manager, supervising consultant and the contractor where performance is inadequate.
2.5.10 Inadequate
performance
Performance is considered inadequate if:
the total PACE score (interim or final) for any of the four main criteria categories
(management, production, health and safety, or administration) average 40 percent or
less, in which case a performance review will be undertaken. Inadequate performance of
subcontractors may trigger review of main cont -qualification.
In addition the PET, in discussion with the project manager/asset manager, will make a
decision on whether a performance review is necessary when:
three or more (in total) of the individual PACE criteria are 40 percent or less,
two or more in any one category are 40 percent or less, or
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 24
Penalties for inadequate performance can apply to any or all the NZTA egions and involve
any of the following:
Warning any recurrence will lead to automatic suspension or improvement required
with a specified timeframe.
Downgrading supplier downgraded and required to re-submit application to reverse
downgrading.
Suspension pre-qualification withdrawn for a set period (nationally or regionally).
Rescind registration pre-qualification withdrawn for a set period and application must
be resubmitted.
2.5.11 Pre-
qualification
database
The current list of pre-
website (www.nzta.govt.nz/resources/prequalified-contractors/index.html).
Contract procedures manual SM021 Part A Appendix VI
Second edition, Amendment 1
Effective from June 2013
Page 25
2.6 Liability and insurance for PS contracts (P only)
2.6.1 General The requirements for liability and insurance, for PS contracts, are set out on the
Highways Information Portal, General and special conditions for the provision of professional
services and in SM030. Insurances are accepted in principal from those insurance
companies on the NZTA-approved list. This list is available on the NZTA website. The
NZTA requires bond and insurance companies to hold an A rating or better from an
approved rating agency. Suppliers wishing to nominate insurers or bond companies not
on this list must first obtain written approval from the risk and insurance sub-
VAC ([email protected]). It is the responsibility to ensure that any bond
or insurance company has an A rating or better from an approved rating agency.
A current list of New Zealand insurers approval rating is available from the rating
schedule available from the Insurance and Superannuation Unit (ISU). The ISU is an
operational unit of the Ministry of Economic Development (www.isu.govt.nz).
2.6.2 Liability and
insurances
For default liability and insurance levels (minimum requirements) refer to section E
General and special conditions of contract (SM030).
Other liability and insurance levels for approval include:
Risk and insurance sub-VAC approval (appendix XXIII for PS)
Some contracts require approval from the risk and insurance sub-VAC prior to
advertising of tender, for example:
contracts where the consultancy fees are estimated in excess of $1 million
tunnels and bridges where the total project estimate exceeds $5 million
any project where the total project estimate exceeds $15 million
all design and construct (refer to PW requirements).
Any other project where the NZTA project manager/asset manager considers it
necessary, e.g. any project that includes unusual or non-standard activities, service
providers in close proximity (gas pipelines, railway) and consultancy services relating to
new technology.
2.6.3 Changed
insurance
requirements
after award
If for any reason the project manager/asset manager believes that insurance
requirements should be amended during the currency of any contract (e.g. if the value of
the contract increases significantly) then such proposed amendments must be first
submitted to the risk and insurance sub-VAC for approval (refer to appendix XXIII for
PS).
2.6.4 Uninsured
consultants
engaged in
minor
contracts
Consultants engaged in minor contracts (up to $200,000) who require insurance, but do
not hold and are not practically able to procure such insurance can be provided with
PI/PL insurance by the NZTA.
NZTA has a facility to purchase $5,000,000 of Public Liability and up to $500,000 of
Professional Indemnity from the NZTA Insurance Broker. Further information and contact
on the Highways Information Portal.
2.6.5 Decreasing or
waiving
insurance
requirements
The NZTA SHM (or equivalent) may decrease or waive the PL and/or PI insurance
requirements where:
the suppliers actions or recommendations are extremely unlikely to have an impact on rd parties; and
the supplier will not be undertaking site visits or working on/near the State Highway;
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 26
and
the supplier will not be working from the NZTA office; and
no design work is involved (for example facilitating workshops, minor
phone/internet research, business advice relating only to processes).
Full PI and PL insurance requirements are required where:
the
goals, objectives and 3rd parties; or
the supplier will be undertaking site visits or working on/near the State Highway;
or
design work is being undertaken (for example audits and reviews, major
research/surveys, business advice that could affect strategic direction)
For further advice please contact the Project Services team.
Contract procedures manual SM021 Part A Appendix VI
Second edition, Amendment 1
Effective from June 2013
Page 27
2.7 Insurance, bonds and retention for PW contracts (PW only)
2.7.1 Introduction Insurance of the contract works and a contractor s bond are required for a PW contract. This topic details the policies NZTA follows concerning insurance and bonds for PW
contracts.
2.7.2 Insurance The provisions for insurance of the contract works are set out in New Zealand Standard 3910:2003 Conditions of contract for building and civil engineering construction (NZS 3910:
2003) section 8. Current policy concerning the administrative provisions is as follows:
Public liability under section 8.3.1 ($5 million) extended where necessary to include cover required by the Forest and Rural Fires Act 1977, except where special risks
require more cover.
Public liability under section 8.3.2 arising from the use of any motor vehicle not less than $5 million.
For maintenance contracts, including resealing, no insurance of the contract works and materials is required except as noted below.
For construction contracts (rehabilitation, earthworks, bridges, etc) insurance cover
of the contract works and materials is required.
2.7.3 Insurance
certificate
approval
The NZTA requires the insurance company providing the public liability and contract
works insurance cover to sign the insurance certificate. No proof of construction machinery and motor vehicle insurance is required.
2.7.4 Approval for
insurance
levels by risk
and insurance
sub-VAC
Risk and insurance sub-VAC approval (refer to appendix XXIII for PW or ECI).
Some contracts require insurance levels to be approved by the risk and insurance sub-VAC prior to advertising of tender.
The project manager/asset manager shall submit their proposal to the insurer
for review, and thereafter to the risk and insurance sub-VAC for approval (via [email protected]) for the following contracts:
Any contract where the estimate exceeds $15 million.
Contracts for tunnels and bridges where the estimate exceeds $5 million.
All design and construct contracts.
All term maintenance contracts where the individual annual turnover of any one
contract will exceed $10 million. Term maintenance contracts are agreed to be limited to general highway maintenance including pavement reconstruction.
Any other contract where the project manager considers it necessary, e.g. any
project that includes unusual or non standard activities or construction areas of known existing defects such as underlying mines, asbestos dumps.
All contracts where the estimate is less than $15 million but which exceed $15 million
once the tenders have been received must be referred to the risk and insurance sub-VAC prior to work commencing.
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 28
Approval for insurance
levels by risk and
insurance sub-VAC
continued
Any contract where construction work is contemplated on significant strategic parts of the
NZTA asset, such as, the Auckland Harbour Bridge, Newmarket Flyover, Thorndon
Elevated Motorway, Christchurch Lyttleton Road Tunnel. While the NZTA does not insure
any aspect of the roading network, bridges or tunnels, in such cases it is possible that the
NZTA may need to insure the asset being worked on. Note that this would only apply to
contracts where the structure supporting the asset was being worked upon and there might
be a risk of physical collapse.
2.7.5 Changed
insurance
requirements
after award risk
and insurance
sub-VAC
approval
If for any reason the project manager/asset manager believes that insurance requirements
should be amended during the currency of any contract (e.g. if the value of the contract
increases significantly) then such proposed amendments must be first submitted to the risk and
insurance sub-VAC for approval.
2.7.6 Bonds A contractor's performance bond may be required under NZS 3910:2003 section 3.1. This
provides the NZTA security to ensure performance of the contractor's obligations under the
contract agreement. This may include completing the work to the specified standard and breach
of contract, e.g. through wrongful termination. The bond is usually released within five days of
practical completion.
The contractor in addition may offer a bond in lieu of retentions as under NZS 3910:2003 clause
12.3.3.
Alternatively, a contractor may be eligible to apply to join the global bond scheme. If a
global bond can be obtained, it can be used for contracts with a tendered sum of up to
$20 million refer to global bond policy.
This will negate the requirement for a performance bond or a bond in lieu of retentions.
2.7.7 Bonding policy The following are the bonding policies for PW contracts with bond values rounded to the
nearest $1000:
1. Except as set out in 5 below, for contracts with an estimated cost of less than $100,000
and/or duration of less than three months, no bond is required.
2. Except as set out in 4 and 5 below, contracts with an estimated cost in excess of
$100,000 and less than $1 million, a 10 percent bond is required.
3. Except as set out in 4 and 5 below, contracts with an estimated cost in excess of
$1 million, a 10 percent bond on first $1 million and a five percent bond thereafter are
required.
4. For contracts that have very special characteristics such as complexity or for very large
maintenance contracts the requirements for additional bonds are to be submitted to the
risk and insurance sub-VAC for approval. Any proposal for additional bonds must not be
greater than the reasonably expected loss to the NZTA in the event of the contractor
defaulting.
5. For contracts in excess of $20 million the appropriateness of the proposed bond is to be
considered by the risk and insurance sub-VAC for approval.
6. No performance bond is required for term maintenance contracts including reseal
contracts unless they are performance-based contracts.
Contract procedures manual SM021 Part A Appendix VI
Second edition, Amendment 1
Effective from June 2013
Page 29
2.7.8 Amendments to
standard PW bond
forms
The NZTA PW contracts use performance bonds and bond in lieu of retention forms
provided in NZS 3910:2003.
Some bond providers require amendments to the NZS 3910:2003 bond forms making
them on demand and enabling multiple draw downs.
The following amendments to the NZS 3910:2003 standard bond forms are acceptable
to the NZTA:
tly and severally held and bound to the principal in
the sum of NZ$XXXXX and bind themselves, their successors and assigns jointly and
severally for the payment of that sum and the sureties undertake that they will pay to
the principal any amount demanded by the principal provided the demand by the
should at no time exceed NZ$XXXXX in the aggregate.
Notwithstanding any other provision of this bond, the sureties may pay to the principal
an amount equal to its maximum liability under this bond less any moneys previously
paid, or such lesser amount the principal may specify. Any such payment will result in
this bond being null and
2.7.9 Bond in lieu of
retentions
retention
amounts
For all contracts the bond value shall be the applicable contract retentions set out below
plus a further 10 percent of that figure.
For construction contracts the maximum amount of retention is $200,000. The amount
to be retained from monies owing to the contractor is:
10% for the first $200,000
5% for the next $800,000, and
1.75%of the amount in excess of $1 million.
For large construction contracts, over $20 million in value, the capped retention limit of
$200,000 is not considered adequate. For such contracts the consultant is to make a
recommendation in regard to the appropriate level of retention to the project manager
who will in turn seek approval of this amended maximum retention amount from the risk
and insurance sub-VAC before the tender is advertised.
For maintenance contracts the maximum amount of retention is $100,000. The amount
to be retained from monies owning to the contractor is:
5% the first $200,000
2.5% for the next $800,000, and
1% for the amount in excess of $1 million.
2.7.10 Global bond
policy
Any contractor may apply to join the global bond scheme if the contractor has
a:
1. current contract with the NZTA
2. track record of having had at least one current contract with the NZTA at all
times during the last three years, and
3. track record of no bond being called upon by the NZTA within the last six years.
Global bonds are approved at the discretion and can be applied for by
contacting [email protected].
If a global bond is obtained, this will ordinarily replace both the requirement for a
performance bond and the need to offer a bond in lieu of retentions under NZS
3910:2003. However, the global bond may only be used for contracts with a tendered
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 30
sum up to
$20 million, as after that amount, project specific bonds will be required.
Contractors who do not wish to participate in the global bond scheme or are not eligible
to do so will have to provide a project specific performance bond and/or a bond in lieu
of retentions for the amount stated in the contract documents.
responsibility to ensure they have a current global bond and this is at the correct level
for the contracts covered by the bond. Failure to provide or renew a current global bond
at the correct level will result in the engineer retaining payment to the value of the
project specific bond and retentions for each contract under the scheme until a valid
project specific bond or global bond is provided.
The terms of any global bond obtained must be contained in a deed, and must:
provide that the bond amount will be automatically reinstated to the full amount of
the global bond amount every time the bond is called upon by the NZTA
provide
successors and assigns to pay to the NZTA on written demand at any time after the
date of this deed any sum
2.7.11 Global bond
amounts
For policy regarding global bond amounts and how this is determined is available in the
Highway Infromation Portal website (http://hip.nzta.govt.nz/technical-
information/insurance/physical-works/global-bond)
2.7.12 Cancellation of
global bond
If any contract within a global bond agreement is called upon by the NZTA during the
lifetime of the agreement, the tenders secretary must notify [email protected].
The NZTA will then consider either renewing or cancelling the agreement upon expiry
date.
If the NZTA or the contractor chooses to cancel the global bond agreement it is the
current global bond register at agreement expiry date are covered by individual
performance bonds and bond in lieu of retentions.
2.7.13 Global bond
procedures
Refer to global bond procedure flow chart for assistance to tenders secretaries,
consultants and contractors with regards to notification of contracts to add or release
from the global bond register.
Refer to appendix XXVII for global bond release letter.
2.7.14 Insurance and
bond
companies
Bonds and insurances are accepted in principle from those insurance companies and
banks on the NZTA-
requires bond and insurance companies
rating agency.
Suppliers wishing to nominate insurers or bond companies not on this list must first
obtain written approval from the NZTA Finance and Corporate Services Manager. It is the
or better from an approved rating agency.
schedule available from the ISU. The ISU is an operational unit of the Ministry of
Economic Development (www.isu.govt.nz).
Contract procedures manual SM021 Part A Appendix VI
Second edition, Amendment 1
Effective from June 2013
Page 31
2.7.15 Global bond procedure flow chart
Step 1: Execution of Global Bond Agreement and Register
The NZTA National Office to advise NZTA’s tenders secretaries with instructions.
The NZTA’s tenders secretary to inform consultants of Global Bond for the said contractor and instruct them to replace
existing performance bonds and bonds in lieu of retentions with the new ‘Agreement’ and ‘To whom it may concern bond
letter’ on contract file.
Step 2: Ongoing procedures: Adding and releasing contracts from Global Bond Register
Consultant to confirm in writing to the NZTA’s tenders secretary all new contracts to be covered under the contractor’s
Global Bond Agreement detailing: contractor, contract number, name and value, the NZTA’s regional office and contact
person, contract start date and expected date of practical completion.
The NZTA’s tenders secretary to update contract file and notify [email protected] of contract details for updating
the contractor’s Global Bond Register.
Contract completion
Consultant to inspect project with the NZTA’s project manager, and upon satisfaction issue the Certificate of practical
completion. Consultant to forward the certificate, including the expiry date of the defects liability period to the NZTA’s
tenders secretary, to place on contract file. The NZTA’s tenders secretary to notify [email protected] to update
contractor’s Global Bond Register.
Consultant to issue Defects liability
certificate for contract and request the
NZTA’s tenders secretary to issue a
release letter to the contractor with copy
of Defects liability certificate.
Contract removed
from contractor’s
Global Bond
Register.
The NZTA’s tenders secretary to issue
release letter with Defects liability
certificate and notify
[email protected] to update the
contractor’s Global Bond Register.
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 32
2.8 Checking of contract documents
2.8.1 Introduction The contract documents prepared must be thoroughly checked. This topic discusses the responsibilities of the personnel involved for each category of contract.
2.8.2 Checking PS: The appropriate manager must ensure that all contract documents prepared in-house or by a consultant are thoroughly checked to ensure that all requirements are covered and that the estimate is appropriate.
PW: The consultant responsible for the preparation of the contract documents must ensure that the contract documents are in compliance with the Procurement manual. The project manager/asset manager, in general terms only, check the scope of the work and estimate.
Note: It is the responsibility of the project manager/asset manager to ensure all steps required under the VAG process have been undertaken prior to tendering a contract.
2.8.3 Tendering
period
Adequate time, generally no less that 12 working days, must be allowed for the preparation of tender submissions.
2.8.4 Where two
envelopes are
used
For supplier selection m law which use a two-envelope system, clear instructions must be given in the RFT as to the identification of the two envelopes in which the tenderers return the tender.
2.8.5 Where tenders
close
Instructions must be given as to the location of the office(s) where tenders will close including, if required, provision for remote tender closing.
Contract procedures manual SM021 Part A Appendix VI
Second edition, Amendment 1
Effective from June 2013
Page 33
2.9 Shortlisting procedures
2.9.1 Benefits of
shortlisting
If used correctly shortlisting prospective suppliers carries out three important functions:
It reduces the cost of tendering for the industry, by reducing the number of full submissions.
It ensures only high quality suppliers are selected for the work.
It reduces the administrative burden of evaluating tenders.
Note: If used incorrectly shortlisting can increase the burden on suppliers and evaluators by introducing a second tier of submissions/evaluations.
2.9.2 When to
shortlist
Analysis of the supplier market is required to determine if shortlisting is required. Incorrect overuse of shortlisting can narrow the market as it acts as a barrier to entry. Analysis of the supplier market should include:
an assessment of the likely tenderers
an assessment of the quality of supplier required and the likely cost of the tender process to the NZTA and the supplier
an assessment of the tenderers ability to meet the required quality standard and deliver the contract outputs successfully.
At this point a preliminary decision on if shortlisting is likely to be required can be made. The final decision on if shortlisting is required is made using the factors described above once ROI have been taken and tenderers are known.
For further description on the factors influencing the decision to shortlist see the Procurement manual.
2.9.3 The shortlisting
process
All suppliers who have registered interest and are eligible to tender are requested to
submit a Statement of Interest and Ability (SIA). The SIA shall be evaluated using a
subset of the attributes in the Procurement manual. Prospective tenderers must be advised
that no other evaluation information is to be submitted with the SIA. On the completion
of the SIA evaluation, all prospective tenderers must be advised of the shortlisted
tenderers. Debriefs, if carried out, must be offered to all tenderers and should not occur
until after the tender has been awarded. For the tender process shortlisted tenderers
must then be requested to provide information on all non-price attributes, including those
submitted for the SIA, for evaluation.
If shortlisting is to be used typically three tenderers will be taken though into the full
tender process (this may be extended to four in some cases). However if the TET is not
able to clearly distinguish between tenderers at the shortlist margin (i.e. grades between
the two are ⋜ 1.0) then they may take the next placed tenderer through the full tender
evaluation process also.
On award of the contract, all unsuccessful suppliers shall be informed as prescribed in the
Award of contract section of this manual (part B).
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 34
2.10 Interactive tender process
2.10.1 Benefits and
use of the
interactive
process
The interactive tender process provides a useful means of communication between the
client and tenderer during the tender period. The individual interactive meetings are
commercial in confidence, non-contractual in nature and will not be minuted.
Interactive tender meetings will generally be used for large, complex, high risk projects.
They are always used on design construct, ECI and alliance projects.
The key purpose of the meetings is to:
clarify the intent and improve the standard of the RFT to ensure both parties are
aligned on the specified requirements
provide a forum for an open exchange of information and ideas
allow additional information transfer to more clearly identify risk, so it can be better
managed
align client and suppliers objectives, and
allow the tenderer to put forward conceptual design ideas for design construct
contracts, or alternative tender proposals and for the client to provide feedback on
Where an interactive tender process is to be used, the process proposed must be clearly
documented in the RFT.
Participants in the interactive meetings may distribute information during the meeting
but these must be returned to the tenderer. It is important that all tenderers are given
equal time and access to the TET during the interactive process.
Changes (or clarifications) identified by a tenderer as a consequence of individual
interactive meetings must be formally submitted by the tenderer through a separate
request for clarification. The tenders secretary will subsequently issue a notice to
tenderer or notice to specific tenderer as appropriate.
Generally tenderers are provided with the RFT and invited to an initial combined
interactive meeting with the TET and advisors, where the process to be followed and the
contract objectives are explained. Tenderers initial queries are also discussed.
Following the combined interactive meeting a meeting timetable for individual
interactive meetings will be agreed with tenderers.
Interactive meetings with individual tenderers should be timed logically within the
tender period phase. The timing should allow tenderers the opportunity to compile
appropriate questions and to incorporate information received into the tender
submission.
A note should be recorded in the contract file identifying the name of the tenderer, TET
members present, location and time of the interactive meetings held.
Contract procedures manual SM021 Part A Appendix VI
Second edition, Amendment 1
Effective from June 2013
Page 35
2.11 Commercial in confidence
Meetings or other communications between tenderers and the NZTA may be
deemed to be commercial in confidence.
commercially sensitive information the tenderer can request and upon agreement of
the TET the communication may be given commercial in confidence status, and the
NZTA will respond by way of notice to specific tenderer.
Tenderers shall notify the NZTA of the name and contact details of the person within
their own organisation with whom the NZTA will direct all communications during
the tender period.
Communications that are commercial in confidence between a tenderer and the
NZTA must be in writing, issued separately and clearly marked that they are
ommercial in confidence and for the attention of the NZTA representative as listed
in the tender document.
The NZTA will respect commercial in confidence communications. However, where a
significant event arises, which in the NZT
tender and/or contract process, the NZTA reserves the right to inform all tenderers
by notice to tenderer or to terminate the tender process. If the NZTA deems this to
be the case it will communicate with the tenderer who raised the commercial in
confidence matter to seek their agreement (in writing) to relax the commercial in
confidence status. If the tenderer does not agree, the NZTA will decide whether the
communication should be the subject of a general communication to all tenderers.
2.12 Base estimate to be included in the RFT
For purposes of transparency, accuracy and to allow tenderers to comment the
estimate is to be included in the RFT for all contracts unless the target price supplier
selection method is used. The base estimate is used in the calculation of the SQP for
PQM simple and it is therefore important that the most up to date estimate is
included in the RFT.
The TET shall not amend the Base Estimate after close of tenders without the
advice/approval of the Manager Project Services.
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 36
3.0 Advertising and issuing of tender documents
3.1 Issuing of tender documents
3.1.1 Introduction After the RFT has been prepared, approval to proceed to engage a supplier is to be sought and tender documents issued. Tenders shall be advertised unless the supplier is directly appointed, contract is subject to a closed tender process or where the national register of consultants is used.
3.1.2 Administrative
procedure
approval to advertise
The procedure below must be followed regardless of whether the contract is being
advertising or not. Where the tender process is being managed by a consultant the
following provisions shall apply unless amended by the consultants PS contract.
Step Action
1 Approval to proceed with the tender must be sought by the project manager/asset manager for PS
contracts or by the consultant for PW contracts. The forms to be completed are as follows:
PS: Request for approval to proceed to engage a consultant form (appendix I). PW: Request for approval to proceed to engage a contractor form (appendix II).
2 Where applicable, the project manager/asset manager must notify the risk and insurance sub-VAC
in writing before advertising, using appendix XXIII for PS and PW or ECI (refer to sections 2.6 and
2.7 for guidance).
3 For PS contracts the project manager/asset manager shall forward to the tenders secretary:
The completed Request for approval to proceed to engage a consultant for the provision of PS form including approval to advertise by the State Highway Manager.
Attachments stipulated on the form.
Document to be issued to prospective tenderers.
For PW contracts the consultant shall forward to the project manager/asset manager for the
State Highway Manager approval, three full working days prior to the required deadline for
advertising, the following:
Completed Request for approval to proceed to engage a contractor for the provision of PW form.
One final copy set of tender documents.
All accompanying documentation as required by standard PS specification design and project documentation, clause 5 or network management equivalent.
A draft of the information required for the GETS advertisement.
The tenders secretary will send a copy of the approved appendix II form to the consultant.
4 For PS contracts the tenders secretary shall ensure sufficient documents are available for issue
and send a notification via email to all consultants registered on the national register of consultants
to undertake the work being contracted. The contract may also be advertised using GETS under the
direction of the project manager.
For PW contracts the project manager shall instruct as appropriate the tenders secretary or
consultant to proceed with the advertising of the contract on GETS.
5 The tenders secretary for PS contracts/the consultant for PW contracts shall issue the contract
documents and maintain a Register of tender documents issued professional services and physical works (appendix III). In addition appendix IV Register of tenders is provided for the
tenders secretary to use to record the status of all contracts out to tender, i.e. whether it has
closed, is under evaluation, or has been awarded. When issuing RFT via post or email an
acknowledgement of receipt should be requested. If receipt is not acknowledged within a
Contract procedures manual SM021 Part A Appendix VI
Second edition, Amendment 1
Effective from June 2013
Page 37
reasonable period the tender secretary/consultant should alert the project manager/asset manager
and investigate.
3.1.3 Approval to
engage a
contractor
without
advertising
(PW only)
Where a contract is not advertised, as provided for elsewhere in this document (section
2.3 Selecting a supplier selection method), and the contractor is selected from the
register of pre-qualified contractors, the Request for approval to proceed to engage a
contractor for the provision of PW form shall be completed and forwarded to the State
Highway Manager together with accompanying documentation as appropriate. On
approval by the State Highway Manager the original or fax copy of the form signed by
the State Highway Manager is to be returned to the consultant.
3.2 Release of tender details
Details of tenderers must not be released to any external organisation other than the
NZTA consultant who is assisting with the tender. If requests for tenderers
information are received from prospective subconsultants/subcontracts the details of
these interested parties should be given to registered tenderers with a brief
description of their interest.
3.3 Communication during the tender period
3.3.1 Process for
communicating
during the
tender period
Communication during the tender period outside of a prescribed interactive tender process
will be in writing (this includes facsimile and e-mail communication, which may include
attachments). Communications will be issued by the person nominated as the contact
person in the tender documents, this should be someone outside of the TET and will
normally be the Tender Secretary for PS contracts.
PS: The officer responsible for preparation of the RFT (usually the person named as the
project manager/asset manager in the RFT) shall be responsible for all advice given
to tenderers during the tender period and for the issue of notices to tenderers, such
notices would normally be issued by the tenders secretary on behalf of the project
manager/asset manager. All communication with prospective tenderers shall be
adequately documented including formal notices to tenderer, a copy of which shall be
retained by the tenders secretary at time of issue. The tenders secretary is not to
issue a notice or to give any advice without the approval of officer responsible for the
tender.
PW: The officer responsible (usually the consultant Team Leader) for RFT preparation
shall be responsible for all advice given to tenderers during the tender period and for
the issue of notice to tenderers. All communication with prospective tenderers shall
be adequately documented including formal notice to tenderers, a copy of which shall
be sent to the tenders secretary at time of issue. The consultant acting as the tenders
secretary is not to issue a notice or to give any advice without the approval of the
officer responsible for the tender.
The format of notice to tenderers is given in appendix XXI.
Contract procedures manual SM021 Part A
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3.3.2 Control of
notices
It is the responsibility of the NZTA or consultant officer responsible for the tender to
ensure that the content of all notices is correct. It is the responsibility of the person
issuing the notice to ensure that the notice is sent to the correct tenderer.
Tenders that will have a substantial number of notices to specific tenders (NTST)
issued dealing with commercial in confidence issues should ensure appropriate
controls and safeguards are in place to prevent issue of information to the wrong
tenderer. Tenders generally requiring these additional controls are Design &
Construct and Alliance contracts.
The suggested method of additional control is to applying a unique password to each
tenderer throughout each tender process. All commercial in confidence
documents/notices will then be password protected with this unique password. If an
email/notice is inadvertently sent to the wrong tenderer it can then not be opened by
that tenderer. Alternative methods of control should be discussed with the Project
Services Team prior to the start of the tender process.
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Effective from June 2013
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4.0 Tender closing procedures
4.1 Tenders register and box
4.1.1 Register of
tenders
A register of tenders must be maintained by the tenders secretary. When the
completed Request for approval to proceed to engage a consultant for the provision of PS or
contractor for the provision of PW form is forwarded to the tenders secretary, the details
of the form must be entered into the register of tenders. The Register of tenders form as
given in appendix IV is to be used and retained on file. The tenders secretary shall take
care to ensure this register is kept confidential (especially from other tenderers).
4.1.2 Tenders box The box for the receipt of tenders is to be placed in a prominent position in the office
reception, preferably near the enquiry counter. Tender box must be displayed
prominently on the box.
4.1.3 Maintaining the
tenders box
During the receipt of tenders the tenders box must be securely locked to prevent
unauthorised access. The tenders secretary shall be responsible for the security of the
tenders and access thereto. The tenders secretary shall be responsible for ensuring
tenders are not deposited in the tenders box after the closing time and that any late
tenders are appropriately endorsed.
4.2 Remote tender closing
4.2.1 Project
manager/
Asset manager
to ensure
appropriate
arrangements
The project manager/asset manager shall be responsible for the determination of remote
sites for the receipt of tenders, the overall administration of the process and compliance
with the NZTA requirements. The tenders secretary will be responsible for ensuring the
arrangements for the closing of tenders at remote tender boxes and the tender delivery to
the NZTA office.
4.2.2 Offices where
remote tenders
may close
The RFT documentation must clearly describe the name of the business, street address
and postal address of the offices where tenders may be submitted and that they should be
addressed to the Tenders Secretary, NZ Transport Agency. The outer envelope must be
marked on the outside with the contract number and name and the name of the tenderer.
PS: Tenders may close at an NZTA office other than the NZTA office responsible for the
administration of the tender remote tender box(s).
PW: Tenders may close at an NZTA office other than the NZTA office responsible for the
administration of the tender remote tender box(s). In special circumstances it may
be appropriate for tenders to close in the offices of a consultant. In such a case it is
o ensure that the appropriate
than the NZTA office responsible for the administration of the tender remote
tender box(s).
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Effective from June 2013
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4.2.3 Closing of
tenders
Remote tender closing at RFT nominated offices shall be simultaneous. The
administration of the process at the remote office shall be by an NZTA authorised
person who shall ensure that the tenders box, closing procedure, including late tenders,
and the forwarding of tenders to the tenders secretary all conform to the NZTA
requirements.
The authorised person shall open the remote tenders box after the closing time while
ensuring any late tenders are appropriately endorsed.
A schedule of the tenders received with the names of tenderers only shall be
immediately forwarded to the tenders secretary, together with all the envelopes
received.
Should the name of the tenderer not be marked on the outer envelope the envelope
shall be sent unopened to the tenders secretary at the NZTA office responsible for the
administration of the tender.
4.2.4 Carriage of
tenders
Tenders shall be packaged and forwarded as soon as possible by courier to the tenders
secretary responsible for the administration of the contract.
Alternatively the tenders secretary of the NZTA office responsible for the
administration of the contract may instruct, with written confirmation, that the non-
other persons as the tenders secretary may nominate. This may be for example to a
specialist evaluator or the NZTA National Office personnel.
The price envelope and remaining originals of the non-price attributes (proposal,
excluding price) for each tenderer shall be immediately forwarded to the tenders
secretary as above.
Contract procedures manual SM021 Part A Appendix VI
Second edition, Amendment 1
Effective from June 2013
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4.3 Receipt of tenders
4.3.1 Introduction Tenders can be received
by mail
by courier, or
in person.
Note that tenders submitted by facsimile or email directly to the office
where tenders close will not be accepted unless expressly provided for
in the tender documents.
4.3.2 Receiving
tenders
The table below shows what to do when receiving tenders.
If tender is received . . . then . . .
by mail, courier or in person and is endorsed to
the effect that it contains a tender
place it in the tenders box.
in a plain envelope: open the envelope
write the name of person who opened it
contract name and number and tenderer on the envelope
reseal it and place it in the tenders box.
in an envelope addressed other than to the
tenders secretary:
endorse it as to where, when and who received
pin the envelope to the tender, and
hand it together with the tender to the tenders secretary or other authorised person who will reseal, appropriately endorse and place it in the tenders box.
late refer to topic on Processing of late tenders in this
section.
4.4 Processing of late tenders
4.4.1 Introduction All documentation required, as part of a tender must be received in the tenders box by
the tender closing time. However in practice there will on occasion be tenders that are
late and the rejection of which would be unreasonable. Where the late delivery of the
tender was due to extreme circumstances or beyond the control of the tenderer and that
the lateness would not have allowed the tenderer to materially change their tender then
it should be accepted. Where advice is requested from the probity auditor in regard to a
late tender the tenders secretary must ensure that this advice is provided in writing and a
copy retained on the contract file.
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4.4.2 Procedure Follow this procedure when a late tender is received.
Step Action
1 The tenders secretary must endorse late tender received ..... pm ... /... / ... on the envelope and together with
a witness initial the endorsement.
2 Enter the name of the tenderer at the bottom of the Schedule of tenders received and endorse late .
3 The tenders secretary, in consultation with the TET leader, shall determine and note the reason for the tender
being received after the closing time.
4 The TET leader must make a report/recommendation to the State Highway Manager regarding any late
tenders. The State Highway Manager must give approval to consider or reject the tender. Where it is deemed
that it was not beyond the control for the tenderer to deliver their tender by closing time, the late tender shall
be rejected and returned to the tenderer with the envelope unopened. The tenders secretary must attach the
Notice of late tender (appendix XVII) and copy placed on file.
Where the TET leader/State Highway Manager cannot decide whether or not to accept the late tender or
would like advice they will contact the Manager Project Services who will decide on the appropriate action.
5 The TET leader may decide that a late tender is deemed acceptable, on being subject to the following tests:
Note: To accept a late tender in all cases, there must be proof that the carriage of the tender was beyond the
control of the tenderer at tender closing time.
If then
the full tender would arrive and be placed in the
tenders box before the tender closing time in the
normal course of
with the agreement of the TET accept the late tender
and document the reasons for doing so.
4.5 Opening of tenders
4.5.1 Introduction Opening of tenders, is completed in conjunction with the preparation of a schedule of
tenders received. These procedures relate to the security of the tenders during the
opening process.
4.5.2 Tender
opening rules
The tenders secretary must open the tenders in the presence of a witnessing officer. No
one else should be present. It is essential that the witnessing officer remain present from
the time the tenders box is opened and tenders examined, to the completion of tender
identification (by stamping, initialling, etc). The process should be undertaken without
interruption and in a secure area preventing any other person from seeing the tenders. A
witnessing officer is any person so authorised by the State Highway Manager or
National Manager PS.
4.5.3 Time and date
stamping
Time and date stamping and initialling of tenders is required on the tender form and the
contract pricing schedule. This is the responsibility of the tenders secretary. The stamp
used must make it clear that this is a record of when the tender was opened
Contract procedures manual SM021 Part A Appendix VI
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Effective from June 2013
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4.5.4 Procedure The tenders secretary shall follow the following procedure when opening tenders.
Note: Tenders must be initialled by both the tenders secretary and witnessing officer.
Step Action
1 Examine the envelope and use the table below to decide what action to take.
endorsed as containing a tender closing on a
subsequent date
return the tender to the tenders box.
unendorsed (and is therefore opened) and contains a
tender for some other work:
write a note recording name of the person who opened the tender and when it was opened
endorse envelope with contract number, name and closing date
together with witnessing officer sign envelope, and
reseal and return to the tenders box.
2 Check if the tender comprises two, separate sealed envelopes.
then
one envelope open the envelope, time and date stamp, and initial
the tender form and the contract pricing schedule.
two separate sealed envelopes open the one endorsed as Non-price attributes or Methodology (where shortlisting is used), time and date stamp, and
time and date stamp and initial the envelope endorsed Price . Store the envelope in a secure location without opening.
Note: If the envelope endorsed Price is opened, the
tenders secretary must reseal it and initial the
envelope.
3 If a tender required to be submitted in two separate envelopes is submitted in one envelope then:
check for specific requirements in the RFT
seal the tender form and contract pricing schedule in a separate envelope, note the error of the tenderer and the action taken and initial the envelope, and
advise the State Highway Manager of the action taken.
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Effective from June 2013
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4.6 Preparation of the schedule of tenders received
4.6.1 Introduction Within 24 hours or as soon as tenders from remote tender boxes have been received,
the tenders secretary must prepare a Schedule of tenders received professional services
and physical works (appendix V) for each tender closing.
4.6.2 Policy The Schedule of tenders received professional services and physical works must be treated
as confidential and kept from perusal by staff members not involved in the tender
administration and the public.
Where in conjunction with the conforming tender, alternatives are offered by a tenderer,
the entire tender must count as one tender. This is for the purpose of noting the number
of tenders received.
4.6.3 Procedure The tenders secretary shall complete the following procedure.
Step Action
1 Complete a Schedule of tenders received (appendix V) to include amount of tender for one-envelope
tenders only.
2 Together with witnessing officer initial the Schedule of tenders received form.
3 File the Schedule of tenders received form and originals of information from tenderers in contracts file.
4 Complete a Checklist by tenders secretary prior to tender evaluation professional services and physical works (or prior to each stage of the tender evaluation where two envelopes are provided) as given in
appendix VI, for each tender. File the checklist in the contracts file.
5 Package:
copy of the completed Schedule of tenders received form
copy of the completed Checklist by tenders secretary prior to tender evaluation form
copies of any information that a tenderer has provided
copies of all tenders (non-price attributes) received.
6 Forward this package to the officer responsible for the evaluation of the tenders.
Note: The tenders secretary shall in consultation with the project manager/asset manager, ensure two sets of
each tender are available for signing sets.
7 Enter the date of this action in the register of tenders.
In completing the Checklist by tenders secretary prior to tender evaluation (appendix VI) the
tenders secretary should do the following:
Check each tender to identify any obvious non-conformity with the RFT (including any
prequalification requirements stated in the RFT), Procurement manual or this
manual.
Where, in a two-envelope tender evaluation procedure, the price has been included in
the non-price envelope the tender is prima facie non-conforming and may be rejected in
consultation with the TET leader.
Where the tenders secretary identifies such price information and believes it has been
included by mistake, he/she may, with the authority of the tenderer, remove all
references to the price contained in the non-price envelope before forwarding the non-
price information to the TET. The TET leader should be consulted prior to any action.
If the price is not detected by the tenders secretary and gets to the TET then the tender
will be non-conforming and must be rejected by the TET.
Contract procedures manual SM021 Part A Appendix VI
Second edition, Amendment 1
Effective from June 2013
Page 45
Tenderers are not entitled to rely on the to correc
errors.
Check that each tender submission received conforms to the page limit and font size
specified in the RFT. Where the tender submission has more than the specified number
of pages of information, or the font size was non-conforming the tenders secretary must
remove the last additional page(s) to the specified limit and retain these without the TET
seeing them. The TET leader should be given a list of all pages removed and a brief
description of the content.
Check additional pages removed do not contain any page(s) that are clearly identified as
tags and clarifications. If such pages are identified, ensure that they are noted to the TET
leader.
Procedure continued The additional pages will be given to the TET leader after the TET has completed the
non-price attribute evaluation. All pages (including those additional to the limit) of the
accepted tenderers submission will form part of the contract agreement with the
successful tenderer.
Note any tags that are clearly identified. (Additional and less obvious tags included
within the tender information might only be able to be identified by the TET).
Discuss with the TET leader any non-conformances or additional information identified
in the checklist (appendix VI). Agree on the action required. If the tender is rejected
advise the tenderer of the action taken by way of appendix XVI Non-conformity rejection.
Attach Schedule of tenders received form (appendix V) to each of the tender evaluation
sets, including the Potential conflict of interest/bias declaration (appendix IX).
Contract procedures manual SM021 Part A
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Effective from June 2013
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4.7 Opening the price envelope
4.7.1 For two-
envelope
tenders
On receipt of the completed form F Evaluator summary of all non-price attributes (or form G
with the non-price attribute information completed), and approval of the project manager/
asset manager via the Request for the price envelopes to be opened form (appendix XXIV), the
tenders secretary shall open the price envelopes, time and date stamp the contract pricing
schedules in the presence of a witnessing officer (being any person so authorised by the State
Highway Manager or National Manager PS) and complete the file copy of Schedule of tenders
received (appendix V) by inserting the amount of tenders.
Note: Refer to the delegated authority schedule for approval required to open the price
envelope/s.
4.7.2 Tags in the
price envelope
If the price envelope is found to contain tags, that appear to constitute an unauthorised
alteration or qualification of the RFT, the tenders secretary should consult with the TET
leader. With the consent of the TET leader the tenders secretary should request the tenderer
to remove unacceptable tags. Refusal to remove unacceptable tags will result in the tender
being rejected.
4.7.3 Arithmetic
check
An arithmetic check of the accuracy in the extensions of rates and addition for the preferred
tenderer shall be carried out by the tenders secretary or other appropriate person prior to
award.
For LPC, law and the two-envelope methods the preferred tender only is
arithmetically checked following evaluation.
4.7.4 Tender
documentation
A copy of the Schedule of tenders received form (appendix V), completed with the amount of
tenders, together with copies of the tender forms and contract pricing schedules shall be
forwarded (by courier or hand deliver) to the TET leader.
4.8 Modification and withdrawal of tenders
4.8.1 Modification of
tenders
A tenderer may modify their tender after tender submission provided the modification is
in writing and received prior to the closing time.
4.8.2 Withdrawal of
tenders
A tenderer may withdraw their tender at any time prior to issue of a tender acceptance
notice.
Contract procedures manual SM021 Part A
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Effective from June 2013
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5.0 Tender evaluation
5.1 Evaluation policy general
5.1.1 Introduction This topic describes the procedure and process to be followed in the evaluation of
tenders.
The objective of the evaluation process must be to maintain a level playing field on
which all willing tenderers can compete. The process must be conducted with utmost
integrity because of the importance of contracts to tenderers and the fact that public
money is involved. To that end, the TET and those in the NZTA dealing with them must:
act in good faith
act fairly as between bidders
provide the same information to all tenderers
not ignore or depart from manual processes
assume every action and inaction will be publicly scrutinised
always be aware that they will be judged with the benefit of hindsight.
In achieving its objective, the NZTA must ensure:
selection of appropriate people for the TET
implementation by those people in a way that demonstrably delivers integrity
any conflicts between the manuals being used are identified and resolved
lack of knowledge of the process requirements by any member of the TET are
identified and addressed.
The NZTA reserves the right to change the TET for any reason at any time during the
tender evaluation process on condition that the tender prices have not yet been opened.
If the TET members were named in the RFT then all tenderers shall be informed in
writing of the new TET members.
PW: The NZTA project manager/asset manager must ensure that an appropriate
NZTA representative is involved in the tender evaluation process as a member of
the TET where the PW contract estimate exceeds $5 million or the State
Highway Manager considers it necessary to include an NZTA representative
based on the particulars of the individual contract.
5.1.2 Evaluation
process and
policy
The evaluation must be undertaken fairly and impartially in accordance with the
requirements of
the Procurement manual
this manual, and
the RFT.
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Effective from June 2013
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5.1.3 Confidentiality
of evaluation
process
Information relating to the examination, clarification, evaluation and comparison of tenders
and recommendations concerning the award of contracts shall not be disclosed to
tenderers or other persons not officially concerned with such processes, until award of the
contract to the successful tenderer has been announced. The information disclosed shall
then be only as prescribed in the Award of contract section of this manual.
Any effort by a tenderer to influence the NZTA in the process of examination, clarification,
evaluation and comparison of tenders, and in decisions concerning award of contract, may
result in the rejection of the tender concerned by the NZTA.
All communication with tenderers from the time of closing of tenders until the award of the
contract shall be through the tenders secretary accept where during the course of tender
evaluation the TET may request additional information or clarification as described in
section 5.3 Conformity, tags, clarification and alternative tenders in this manual.
5.1.4 Prior
to the
commencement
of the tender
evaluation
process
Each member of the TET and each advisor to the TET must be properly familiar with the
following:
the evaluation procedure which is to be used, and the precise criteria for evaluating
tenders by this method
the RFT, current Conditions of contract for consultancy services (CCCS) and/or current
NZS 3910:2003 conditions of contract and all manuals which are applicable to the
tender evaluation, and, in particular, the specific provisions of these documents
his/her individual responsibilities in relation to the tender evaluation
the restrictions on the TET which, for example prevent it redefining attributes or
creating new ones
TET members should be informed on the roles and processes before the evaluation
commences
each individual who will be involved in the tender evaluation process must take
reasonable steps to ensure that there are adequate procedures in place to ensure that
his/her obligations under the relevant documents can be performed (e.g. do they have
all the relevant manuals, sufficient time and availability to meet as a TET, etc)
each individual will complete the Potential conflict of interest/Bias declaration form
(appendix IX) and submit to the TET leader (refer Conflict of interest section below).
5.1.5 Credentials
of evaluators
Requirements for the TET are that they shall:
include at least two persons who have the appropriate skills, experience and standing in
the industry (three for more complex contracts)
include a person (not necessarily the TET leader but who will have a senior role on the
team) has an appropriate level of knowledge of the work being purchased under the
contract and holds the qualification of National Certificate in Civil Engineering Asset
Management (Competitive Pricing Procedures) (or other NZTA-approved qualification)
for the evaluation of tenders with an estimated contract value over $200,000
not include any member who may have any interest in an organisation tendering for the
project being evaluated
the TET leader shall be the recommending officer
the TET leader shall not be the tender approving officer.
Contract procedures manual SM021 Part A Appendix VI
First edition, Amendment 1
Effective from June 2013
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5.1.6 Conflict of
interest
All members of the TET and advisors to the TET are required to proactively declare any
actual or potential conflicts of interest or risk of bias to the TET leader as they arise.
Prior to commencing the evaluation of the tender documents The TET leader must
ensure that all TET members and advisors, including themselves, do not have any
conflict of interest or risk of bias with any individual or organisation tendering:
The TET leader is to ensure that each TET member and advisor including themselves
complete the Potential conflict of interest/Bias declaration form (appendix IX) prior to
tender evaluation.
The TET leader will evaluate all declarations. If the TET leader determines that a
potential conflict or risk of bias has arisen they should either remove the TET
member/advisor from the tender process or give approval for them to remain with
appropriate mitigation. If the TET leader is unable to determine on the course of
action to be taken they should contact the Manager PS for approval.
If any there are any queries the TET leader can contact the Manager PS at the NZTA
National Office to discuss.
Where the conflict or risk of bias in question concerns the TET leader, continued
involvement as the TET leader must be approved by the Manager PS. If necessary
the Manager PS will discuss any issues or concerns with the probity auditor.
If there is a conflict of interest which enforces a change in the TET members, then
this must be addressed immediately to replace the TET member and a notice to
tenderers issued to all tenderers informing them of the change.
5.1.7 Types of
conflict of
interest
The types of potential conflicts that could arise are highlighted below:
Works or services carried out in the recent past for any of the potential tenderers
and any work carried out in relation to the tenders themselves.
Any personal relationship by virtue of spouse or close friend that a person has to any
personnel of any potential tenderer.
Any pecuniary (financial) interest that a person has in the potential tenderers. This
could be in terms of major shareholdings, financial arrangements.
Any managerial relationship that a person has in regard to any potential tenderer,
such as a seat on the Board.
Although a past business relationship in which a TET member/advisor may have had
contact with the potential tenderer does not of itself indicate that a conflict of
interest exists, TET members/advisors should be encouraged to declare all
situations which may be perceived as indicating that they may have a bias in respect
of that tenderer (either for or against). Failure to disclose may give the NZTA
grounds to revoke their appointment and could invalidate the tender process, with
consequent material costs involved.
If you have any interests as those described above/on appendix IX or generally similar in
nature but not strictly covered by its wording, then you should discuss it with the TET
leader. If you are the TET leader and have any interests as those described above/on
appendix IX, or generally similar in nature but not strictly covered by its wording, then
you should consider discussing it with the Manager PS.
An interest that is nothing more than an interest in a publicly available managed fund or
passive investment product that may have interests in listed PS or PW tenderers.
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5.1.8 Evaluation
process to be
complied with
The TET in undertaking the evaluation must ensure that the tender evaluation process as
described and detailed in the RFT is followed and documented as required.
5.1.9 Details to be
recorded
Details of any phone call, discussion or meeting between the TET member and any other
person (e.g. referees, other TET members, officers of the tendering authority) which relates
to the evaluation of the tender is kept on file as a file note duly dated and signed by its author.
TET members should take care to ensure that all such written material or file records do not
contain comments which are derogatory to any tenderer.
5.1.10 Referee check Where a tenderer is required by the RFT tenderer provides the names of any referees in
support of his tender, the TET is encouraged to contact all such referees. This will normally
be done by telephone. Where appropriate the TET may nominate a suitably qualified
individual, not a member of the TET, to contact a referee(s) on behalf of the TET. In such a
case this individual is required to comply with all the referee check requirements as specified
below, that would otherwise be carried out by the TET.
In making reference checks with referees, a TET should ensure the following:
Where efforts to contact a referee have been unsuccessful a detailed record should be
kept of the attempts to contact that referee.
Where an individual member of the TET contacts the referee, that team member must
report back to the rest of the team on the referees comments.
Detailed notes must be kept of any comment or opinion offered by a referee.
The TET member who contacts the referee must ask questions in a neutral and balanced
way and not lead the referee in any way.
The TET member must ensure that he/she attempts to get a balanced view from any
such referee.
5.1.11 During the
tender
evaluation
process
Each member of the TET must be familiar with the principles of fairness and acting in
good faith which include ensuring that:
all information is accurate and up to date. Where information comes from outside the
tender documents it must be assessed for reliability
only relevant information is considered and irrelevant information is excluded (to be
determined by reference to the RFT, and the relevant evaluation manuals)
views about tenderers which are relied upon in the decision-making process can be
substantiated
information before TET that is not considered relevant is clearly identified as having
been disregarded
with the difference between clarification of tenders as opposed to negotiation of
tenders which may lead to the improper improvement of bids during the evaluation
stage
the TET and other NZTA personnel are taking care to ensure that the evaluation
process is properly documented
the TET evaluation reports are accurate, and not made inaccurate by omissions or
selective quoting
others not on the TET do not become involved in the process
they do not engage in any practice that may give one tender an advantage over
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another.
5.1.12 Tenderer
presentations
Consideration should be given to the desirability of all tenderers making presentations on
their tender bids. If the TET feel that tender presentations may be required this should be
highlighted in the RFT. The TET will decide if presentations are required. Where tenderer
presentations are required these will take place after close and before completion of the
tender evaluation.
The objective of the presentation is to:
highlight key aspects of the submission
introduce key team members.
Tenderers shall not provide new information in their presentations. Participants in the
presentation may distribute resources during the meeting but these must be returned to
the tenderer.
Each tenderer shall conduct their presentation on the assumption that the TET has no
knowledge of the content of the submission.
The TET will be permitted to ask questions seeking clarification only.
A note should be recorded in the contract file identifying the name of the tenderer, TET
members present, location and time of the presentations held.
5.1.13 One conforming
tender
Should only one tender be received for a project, or there is only one conforming tender,
the evaluation process as stated in the RFT shall be followed to ensure the tender is
acceptable.
Negotiation with the tenderer is acceptable provided the scope of work is not altered and
the final negotiated price does not exceed the tendered price.
5.1.14 Pre-letting
meeting
In the event that the TET has outstanding concerns regarding any aspects of the preferred
tender, a pre-letting meeting should be held to address these. Meetings should be held
once the preferred tenderer has been identified and before any contract acceptance has
been made. Acceptance and decline notifications should not be sent out until after the
successful conclusion of the pre-letting meetings and approval to award the contract has
been obtained.
the contract and seeking assurance the tenderer has fully understood and is committed to
delivering the required outputs. Other issues which may be discussed are any areas of the
tender which the TET feel are potentially weak and may lead to issues with contract
delivery, or increased risk.
5.1.15 Negotiation with
preferred tenderer
when quality-based
supplier selection
method has been
used
If tenders have been evaluated using a quality based method the pre-letting meeting(s) are
also used for negotiation of the contract terms including price and risk allocation. It is
important to have an approved negotiation strategy in place prior to the first meeting. This
will allow the meeting to be productive and give a clear direction as well as align the
. If a proposed price
has been submitted as part of the tender, an analysis on this should be done prior to the
pre-letting meeting and the negotiation strategy updated as required. For further
information on negotiation see the Project management manual (SM011).
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5.1.16 Negotiation with
preferred tenderer
when price or price
quality supplier
selection method
has been used
Negotiation with the preferred tenderer (irrespective of the number of conforming
tenders received) is acceptable provided:
the negotiation is consistent with the RFT
negotiation is limited to contract terms (including price, i.e. loading of price schedule)
and must not extend to negotiation for the best price (where competition between
suppliers has been used to do that), and
the changes to the contract must not be so extensive that the tender process can no
longer be said to have tested the market.
In general negotiations should be focused on agreeing mitigation for any risk areas
highlighted in the tender process and aligning the contracted parties on the required
outcomes and outputs.
5.1.17 When tender
price varies
from the
estimate
In the event that the recommended tender price varies from the estimate by 10 percent or
more the recommending officer must provide justification why the tender is
recommended.
The project manager/asset manager must endorse the recommendation and confirm that
sufficient funds are available.
5.1.18 Tender
evaluation time
frame
The TET should make every effort to complete the evaluation as soon as possible after
tender closing.
If the evaluation of tenders has not been completed within two months of the tender
closing date, the project manager/asset manager must ensure that all tenderers are
advised in writing whether or not each of their tenders is still under consideration.
5.1.19 Crown entities
tendering for
the NZTA s
contracts
There is no legal restriction on Crown entities tendering for the NZTA contracts. The
Procurement manual requires that where a tender conforms to the procedural and
substantive requirements of an RFT, the NZTA must consider that tender. The NZTA is
bound to consider all conforming tenders that are submitted in response to its RFTs,
regardless of whether they are submitted by private contractor or by a Crown entity.
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5.2 Conformity, tags and clarification
5.2.1 Checklist by
tenders
secretary
To assist in evaluating tenders and maintaining conformity, the Checklist by tenders
secretary prior to tender evaluation (appendix VI) for each tenderer shall be referred to prior
to the TET undertaking the evaluation to ensure that all comments noted by the tenders
secretary are taken into account.
Where the removal of additional pages is identified, the TET leader will follow procedures
as set out in the non-price attributes assessment.
5.2.2 Review of tags Each page of the tender document should be checked by the TET for changes not
authorised by any notice to tenderers. Any such change will be considered as a tag.
Qualification of the RFT whether explicit or contained in the body of the tender shall be
regarded as a tag.
Tags shall be dealt with in accordance with the requirements of the RFT or in the absence
of any specific requirements they shall be dealt with as follows:
The tenderer shall be requested to remove tags that are unacceptable to the NZTA,
without amendment to the tender price. The tender is to be rejected if the tenderer
refuses to remove unacceptable tags.
If tags are found on the tender form or any contract pricing schedule or otherwise
included in the price envelope, the tenderer shall be requested to remove the tags.
Unacceptable tags in the price envelope cannot be considered and the tender is to be
rejected if the tenderer refuses to remove them.
5.2.3 Clarification Clarification of a tender to establish conformity with the RFT or for any other reason can be
obtained during tender evaluation. Any additional information provided which attempts to
improve the tender shall not be included for evaluation purposes.
However should a tender not include information of a minor nature requested in the RFT
and it is required to complete the evaluation, then the tenderer should be advised and
invited to supply it. In considering the additional information the TET should take page limit
requirements into account.
Any request for clarification or additional information and the response to it should be in
writing. Such response is to be received by the NZTA within 24 hours of request and may
be provided by email, facsimile, courier, hand delivery or post. Requests should be along
the lines of please provide more information on ........ rather than worded in such a way as
to allow the tenderer to judge compliance.
Requests for additional information or clarification shall be issued out of the same office
that issued the RFT or the office undertaking the evaluation. Such requests will normally be
issued by the TET leader and should include clear reference to the RFT clauses under which
clarity is being sought.
If the evaluators are unable to undertake a meaningful evaluation because a significant
amount of information requested in the RFT has not been supplied and/or there is a record
of the tenderer being continually requested to submit further details by way of clarification,
then the tender may be deemed non-conforming and rejected. The supply of an entire
attribute cannot on any sensible interpretation be called clarification. The TET must
consider the integrity of the process and the possible prejudice of other tenderers in
providing their tenders by a deadline.
In the clarification process, no change in the price or substance of the tender shall be
sought, offered or permitted.
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5.2.4 Alternative
tenders
Alternative tenders shall only be considered for evaluation where they are expressly
provided for in the RFT and a non-alternative tender has also been submitted (unless
expressly stated otherwise in the RFT).
If provision has been made in the RFT for tenderers to consult with the NZTA regarding
their alternative proposal prior to tender close, the NZTA reserves the right to reject any
alternative tender that has not been pre-consulted.
If an alternative tender offers an end result, which is outside the scope of the RFT, then it
is non-conforming and shall be rejected. In the rare situation when an alternative tender
is outside the scope of the RFT but offers a better outcome, the NZTA may consider
declining all the tenders and re-inviting tenders based on a revised RFT. The revised RFT
must not reveal the detail of any innovative idea used in the alternative tender. This
situation can be avoided by having a more outcome focused scope.
Alternative tenders are valued using a dollar premium known as the ATP.
The ATP may be positive, negative or zero. Non-alternative tenders shall have an ATP of
zero dollars, because the tender is offering the product to the standard specified in the
RFT.
The ATP evaluation must consider the net present value (NPV) of the end result offered
by the alternative tender in comparison with the minimum standard, i.e. the ATP is the
difference between the NPV of the alternative and the NPV of the non-alternative. The
assessment should consider whole-of-life cost associated with the alternative.
The ATP evaluation will also consider the social and environmental advantages and/or
disadvantages to identify whether tangible benefits for the client can be derived.
Alternative tender evaluations must be clearly documented, and only the total ATP
figure will be entered into the forms or spreadsheets. Refer to appendix XXV for an
example (shown in the example calculation using PQM simple).
5.2.5 Request for
additional
pages removed
After the TET has completed the non-price attribute evaluation, the TET leader must
request any additional pages that have been removed:
The TET leader will consider the information in the additional pages removed to
ensure that they contain no tags or issues that require clarification.
The TET leader must deal with these issues before opening the price envelope. Any
information included in these additional pages is not to be considered in the non-
price attribute evaluat -price attribute evaluation should not be
revised after these pages are seen.
All pages (including those additional to the limit) of the accepted tenderers submission
will form part of the contract agreement with the successful tenderer.
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5.3 Dealing with comments on the base estimate received from tenderers
Where the base estimate is stated in the RFT tenderers are able to comment on the
base estimate accuracy up to 4pm, five working days prior to tender close, through
the following process:
1. Comment is to be directed to the probity auditor nominated in the RFT.
Tenderers must not provide their comment directly to the NZTA or anyone
other than the probity auditor.
2. The probity auditor must immediately advise the nominated authority upon
receipt of any comment. The probity auditor will filter any sensitive
identity to the response given.
3. The nominated authority shall consider the comment and:
o if the comment strongly identifies any significant issue(s), the nominated
authority may proceed to step 4 or take immediate action as in step 5
o if the comment does not indicate any significant issue(s), the nominated
authority shall advise the probity auditor who will then advise the tenderer
that the matter will not be pursued further. No other details or justifications
shall be provided.
4. The nominated authority may ask the probity auditor to invite other tenderers
(who have not previously commented) to submit their comment as soon as
possible. The probity auditor shall not reference any detail or comment from
other tenderers in the correspondence.
5. The nominated authority will further consider the information and, if deemed
necessary, issue instructions to tenderers (notice to tenderer) before tenders
close. These may include extending the tender period, suspending the tender
or re-tendering.
The probity auditor must:
be an independent party
filter out any sensitive information before passing the comment to the nominated
authority
not
ensure that any other sensitive information is not passed to tenderers or TET.
The Probity Auditor is Peter Davies, Director, Specialist Audit and Assurance
Services, Audit New Zealand Level 2, 100 Molesworth Street Thorndon, PO Box 99,
Wellington 6140, mobile: +64 21 222 4824, fax: +64 4 496 3195, email:
The nominated authority will be the Manager PS unless otherwise indicated.
The nominated authority must:
be an independent party
not reveal any price sensitive information to the TET
not reveal the identity of any tenderer(s) who have made comment
not
not seek advice from the TET, project manager/asset manager, expert advisors or
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consultant before seeking advice from the National Manager PS or probity auditor.
5.4 Tenderers key personnel
Once tenders have been submitted, tenderer requests for substitution of named (nominated) key personnel shall only be considered after award of the contract. Approval of a substitution may be granted if replacement is by a person of equivalent or better skills and qualifications and is to the satisfaction of the NZTA.
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5.5 Subconsultants/Subcontractors and consortia
5.5.1 Subconsultants/
Subcontractors
In particular, when assessing attributes, the attributes of the subconsultants/subcontractors must be included. The detail expected in the tender should be in proportion to the amount of work to be carried out. For example, a short
s attributes. In considering additional information the TET should take page limit requirements into account.
A tenderer who proposes to subcontract any significant portion of the work should still have an appropriate organisational and management structure.
5.5.2 Consortia This is similar to the subconsultant/subcontracting situation except that the consortium would jointly sign the tender and therefore have a closer involvement in the management and organisation of the contract. Although close evaluation is necessary, a group of contractors may complement each other well and enhance the quality of the overall tender.
5.6 Non-price attribute evaluation
5.6.1 Introduction When evaluating non-price attributes, deliberations shall relate to the RFT and the contract requirements.
When allocating the grades for non-price attributes, care must be exercised not to award higher grades just because a tenderer's capabilities exceed those required for implementation of the project. For example, if only one excavator is necessary to complete drainage work within the scheduled period, the ownership of one excavator and demonstrating access to a backup excavator should obtain a high score the ownership of fifty excavators does not warrant the award of a higher grade.
Any factual information available to the TET may be used in determination of non-price attributes. However, the TET shall not be obliged to look beyond the tender submissions.
Information supplied by the tenderer must be in accordance with the RFT.
5.6.2 Non-price
attribute
evaluation
Non-price attributes shall be evaluated as specified in the RFT and in accordance with the Procurement manual.
Each of the tenderers submitted non-price attributes are evaluated, where a tender attribute grade of 35 or less is given, the tender becomes non-conforming through having graded less than the minimum quality threshold required on an attribute. (Note that some contract documents may have specified a higher threshold.) No further evaluation of non-price attributes for that tender is to take place. Any tender deemed non-conforming shall be excluded from being entered into the evaluation summary forms of appendix VII for determination of the lowest adjusted evaluation price. The price envelope should be retained unopened pending any formal challenge unless requested to be returned.
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Non-price attribute
evaluation continued
Grading of each non-price attribute should be in increments that give the appropriate
level of flexibility considering the value of the contract and the possible SQP generated
(e.g. increments of five points).
On completion of the evaluation of the non-price attributes, the evaluators shall stand
back and undertake an overall review to verify from the information available, that:
for a pass/fail evaluation, the tenderer can be expected to complete the project
adequately and safely
for a price/quality evaluation, the grade awarded is reasonable, particularly in
comparison with grades awarded to other tenderers
Financial resources are not to be included in any weighted attributes. Where there is
doubt that the tenderer has sufficient financial resources to complete the contract, the
matter shall be taken up with the State Highway Manager upon completion of the
evaluation and prior to award of contract.
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5.6.3 Use of tender
evaluation
forms for price
quality grading
The Evaluation summary forms and guidelines for professional services and physical works
(appendix VII) are to be used as appropriate during tender evaluation. The purpose of
using standard forms is to ensure uniformity in evaluation and contribute to consistent
and transparent evaluation.
The tender evaluation forms for PS contracts may be found in SM030. For PW
maintenance type contracts the forms are provided in the standard maintenance
contracts (SOMAC) documentation (SM032). For PW capital contracts forms are
provided in the standard documentation (SM031).
The following describes the use of these forms:
The project manager/asset manager selects and briefs the TET (others may be
involved in this briefing as required).
Where not identified in the RFT, tenderers at their request are entitled to the names
of the TET members during the tender, or during the evaluation process.
The project manager/asset manager ensures TET members are provided with sets of
pre-formatted forms corresponding to the number of tenders received, copies of the
tenders and a copy of the RFT. Pre-formatted forms will have included, as
appropriate, the contract name and number, attribute weights, personnel titles as
described in the personnel schedule listed on the relevant skills form, resource
factors on the resources form and factors to be graded against on the methodology
form.
Note: Attribute, subattribute, personnel and methodology factor weights are
determined by the project manager/asset manager and indicated in the RFT.
TET members independently read and evaluate the tenders then grade the non-price
attributes noting their overall rating for each attribute. Each TET member records
their reasoning behind their attribute grade allocation, the key differentiations.
Note: Sufficient time must be allowed for this step prior to the TET meeting.
The TET meets and grades are recorded on the Evaluation summary forms and
guidelines for professional services and physical works form (appendix VII), or on an
electronic white board from which copies can be made, or on an electronic
spreadsheet.
The attributes for each tenderer are then agreed by consensus and recorded in the
highlighted box.
A TET member should be nominated to be responsible for summarising and
recording the essential reasoning behind the agreed grades of each non-price
attribute (to be used in the evaluation report) and for ensuring that all evaluation
forms and comments are correctly filed.
Use of tender
evaluation forms for
price quality grading
continued
An overview is made, by the TET, of all tenderers grades verifying that grades awarded
are appropriate and reasonable, particularly with respect to grades awarded to other
tenderers and if necessary other recent contracts. The State Highway Manager may also
give a review of the relativity.
If required, grades are adjusted by agreement with the TET leader finalising grades if no
consensus can be reached.
Note: All documentation used during the evaluation process including all marking sheets
and all documents written or received by the TET during the evaluation, should be
retained on the contract file to ensure tenderers can properly receive feedback on their
tender submissions if requested. All such documentation is to be retained for a period of
seven years after completion of tender evaluation after which it may be destroyed unless
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notice of any claim or dispute relating to the TET process has been received.
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5.6.4 Non-price
attribute
definitions,
comments and
descriptions
The definition of each non-price attribute is to be found in the Procurement manual.
The following supplementary comments to those contained within the Procurement manual
are provided for guidance in attribute evaluation.
Note: The attribute descriptions included within contract proforma manuals (SM030, SM031
and SM032) for use in the RFT may be amended only in exceptional circumstances and with
the approval of the National Manager PS.
5.6.5 Relevant
experience
Tenderers adaptability as well as specific experience in technical and non-technical areas
relevant to the project should be considered. Recent experience is regarded as more valuable
than historic experience and adaptability of tenderers existing experience should be
considered.
Where relevant, it should also be determined whether the tenderer is able to make the
change from large scale to small-scale work or from one large contract to many small
contracts and vice versa.
The evaluators should carefully consider the relevant experience with regard to newly formed
firms taking into consideration that new employees/personnel may contribute to the relevant
experience of a company/newly formed firm.
Details supplied should be sufficient to demonstrate overall experience and capability (gives
a measure of a tenderer s adaptability) as well as specific experience in the technical areas
relevant to the project.
The TET is en
5.6.6 Track record Based on track record determined from completed projects, it is necessary to determine
whether the tenderer is likely to perform satisfactorily if awarded the contract. Unsatisfactory
performance on a contract constitutes unsatisfactory track record.
Personnel within newly formed firms may contribute to the track record of a company.
Great care is required in grading this attribute where the information required is not
adequately provided and the TET does not have comparable direct knowledge of and
information on all tenderers performance. Efforts should be made to validate information
provided by previous clients on tenderers past performance both good and bad. It is often
necessary to look beyond the information supplied for records of the tenderer's performance.
Care must be taken to ensure that one poor/very good performance is not taken out of
context and allowed to overshadow the assessment of this attribute.
The TET shall make use of the
performance.
performance in conjunction with verbal reference from project manager/asset manager, and
then it shall only be seen as an input into the track record evaluation, not the sole means of
measuring track record.
There will be instances where tenderers submit project(s) for track record, some with interim
PACE evaluations, others with final PACE evaluations, or non-NZTA projects with no PACE
evaluations. In these instances the TET shall make a judgement on how to use the
information from the PACE database. It is recommended that referees are asked to complete
a PACE questionnaire (either by telephone, or in writing) which is then used in the tender
evaluation. Care shall be taken to benchmark any interim or referee generated evaluations to
any final evaluations submitted
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Track record
continued
Any PACE records referred to shall be printed and kept in the contract file.
Consideration should be given to the local and national mix of projects put forward by
the tenderers. The maximum number of projects and their relevance to track record
should be as defined in the RFT.
Evaluators should determine, from the project descriptions and grade accordingly the
level of project compliance with required quality standards, reasons for exceeding or
being under budget and reasons for completion on date other than due date.
The TET is encouraged to contact the referees provided in the tender.
PW: The tenderers safety record, as may be provided in supporting information, may
be used in support of determination of compliance with quality standards.
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5.6.7 Relevant skills Nominated personnel are generally to be evaluated on an individual basis however
others nominated may be evaluated collectively as appropriate.
It is necessary to determine whether the qualifications and training and practical
experience of the proposed personnel is sufficient to achieve the output quality required.
Both technical and management experience and training should be evaluated as
appropriate to position. Care should be taken in exercising credit for national or
international expertise and the influence these personnel may have on project outputs.
For this purpose reference should be made to the individual curriculum vitae provided
ensuring these are up to date and agree with the information provided in the tender as
appropriate.
A comparative evaluation of the proposed time commitment to the project and focus for
individual nominated personnel is required. The area of particular focus should be
described.
5.6.8 Resources
(PW only)
Resources relate only to the equipment, including facilities and intellectual property
proposed to be used by the tenderer in the PW contract.
Financial resources should not be included in the evaluation of resources except to the
extent that it impacts upon the provision of plant or labour.
It is necessary to determine whether:
the tenderer is proposing sufficient reliable plant and equipment of the right type to
undertake the work (including subcontractors and independent tradespeople)
the tenderer's proposed labour resources are sufficient (including subcontractors and
independent tradespeople)
the materials proposed for use in the contract meet the RFT requirements
there is sufficient back up for emergencies.
For maintenance projects, it is necessary to determine whether the proposed labour
resource is sufficient to cover the geographical area of the works and meet response
times. It is also necessary to determine that the location of the tenderers proposed
depot(s) and that they are sufficient to provide the required service.
If
should be determined whether:
there have been appropriate increases in resources
the company can sustain further expansion.
Indication of acceptability of resources can be determined by checking monthly
expenditure on completed projects undertaken by the tenderer. If the project requires
substantially higher monthly expenditure but no indication is given of additional
resources being available, clarification should be sought.
For a tenderer with an adequate track record, care should be exercised before failing on
this attribute. Normally it is appropriate to request further information.
Tenderers may tender for more work than they can expect to undertake at any one time.
However, care needs to be exercised, where a tenderer appears to be successful in
tendering for a relatively high number of contracts.
The NZTA may, in the RFT, require tenderers to supply a list of all outstanding tenders
with the NZTA and other organisations
complete due to insufficient resources, clarification should be sought
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Resources
(PW only) continued
Plant and equipment proposed for the installation and maintenance of temporary lighting,
signing and guarding, should be adequate and compatible with the traffic management
plan submitted under methodology and the probable temporary lane closures.
5.6.9 Methodology It is necessary to determine whether the tenderer is proposing an appropriate methodology
for the type of work detailed in the RFT and whether the submission focuses on the needs
of the project.
The tenderer s understanding of the nature of the project, the client s needs and the means
and methods whereby the desired results can be achieved in a practicable and efficient
manner, should be assessed. Tenders must describe how they will complete the contract
works on time and to the standards specified in the contract documents.
The risk and the effect of an innovative approach to the project requirements may deserve
merit, but any effect on other or future projects should be determined.
Knowledge of contract area should be adequately demonstrated and factors that may
affect the project outcomes should be identified.
A work programme subdivided into elements or phases of the project as appropriate,
including the identification of any key points requiring interface with the client/and client
approval to proceed, should accurately reflect the project requirements.
How risks are proposed to be identified, assessed and managed so as to minimise
additional costs to the client and the proposed strategy to ensure 'no surprises in financial
management and reporting should be described.
Proposed reviews and quality assurance measures should be adequately detailed and
assessed in terms of their application as required in the RFT.
The following factors are often considered as part of the methodology evaluation:
The appropriateness of the tender programme of works showing start and finish dates
of major activities.
The division of work (own forces, subconsultants/subcontractors or independent
trades-people) and how the labour resources are allocated to each work activity
(scheduled item).
Proposed planning and programming.
Proposed communication: within the company, and/or between site staff and the
engineer.
Proposed recording, reporting and invoicing.
The key elements identified in the project quality plan.
A statement of knowledge of local conditions.
Demonstration of an understanding of the contract requirements, knowledge of
performance assessment, and any innovation.
And the following as noted:
PS: The proposed supervision of construction should be assessed to determine whether
it is adequate for the type of work to be implemented.
PW: The means of managing traffic during implementation of the project.
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5.7 Supplier selection methods
5.7.1 Introduction This topic discusses the procedures and processes to complete the evaluation of
tenders for different supplier selection methods with reference being made to the
Procurement manual. The LPC method, Brook s law method, PQM and client-
nominated price are discussed.
The officer responsible for the evaluation of the tenders shall ensure receipt of the
original of the completed Schedule of tenders received form, the completed Checklist by
tenders secretary prior to tender evaluation form, copies of any information that a
tenderer has provided, copies of all tenders (non-price attributes) received.
The implication of late tenders and non-conforming tenders should be considered at
the commencement of evaluation, for each method.
A report and recommendation is made to the appropriate manager/delegated
authority on each tender evaluation using the Schedule of tenders received (appendix V)
and other forms and reports as stated for the supplier selection method used.
All tenders, individual TET forms and comments, summary forms and tender
documents are retained on the contract file.
5.7.2 LPC method This one envelope method comprises two stages with the first being the ranking of
tenders in ascending order based on price. The second stage consists of evaluating the
non-price attributes commencing with the highest ranked (lowest price) tenderer from
the first stage. This process shall continue until an acceptable conforming tender is
determined. The contract shall only be awarded to the highest-ranking (lowest price)
tenderer who obtains a pass on all non-price attributes.
Tender summary lowest price conforming tender method: final evaluation form (appendix
VIII) should be used in the evaluation with all non-price attributes being assessed on a
pass or fail basis. The TET must, prior to the evaluation of the non-price attributes for
any tender, clearly define the cut off between a pass and a fail.
To ensure proper price comparison of tenders, the adjusted tender price shall be
determined for alternative tenders and acceptable tags. The adjusted tender prices
shall be compared with non-alternative tender prices to determine the tender ranking
in ascending order based on prices.
If the lowest tender price is significantly greater than the estimate, the reason should
be determined if possible and an allocation adjustment made before the contract is
awarded. Negotiation with the preferred supplier is permitted provided it is carried out
Procurement manual
appendix C and section 10.12).
of work to be performed under the contract, or other tenders, the tenderer must be
requested to confirm the tender price before award.
If the lowest tender price is unacceptable or upon request of confirmation is withdrawn
then the tender with the next lowest tender price should be evaluated.
Approval to award the contract should be gained from the delegated authority using
appendices VIII and V.
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5.7.3 law
method
The following discusses aspects of the process for undertaking tender evaluation in
accordance with the Brook s law method. The simplified Brook s law method uses a
system of ranking that must be specified in the RFT for non-price attributes but is
otherwise similar to the Brook s law method.
The evaluation of non-price attributes shall be undertaken as required in this section
of the manual using the weight assigned to each attribute in the RFT, for indices
calculation.
This two-envelope system has three stages comprising the evaluation of non-price
attributes, calculation of indices for each non-price attribute and summation of the
indices for each tender and finally price negotiation with the tenderer with the scoring
the highest overall index.
The agreed non-price attribute tenderer grades are transferred from form F to form I,
both forms are given in appendix VII. Form I should be used for the evaluation of non-
price attributes and calculation of indices to determine the preferred tenderer.
Once evaluation of non-price attributes has been completed the TET and delegated
authority sign and date the TET report 1, and printout of form I. Once approved, the
project manager/asset manager should use appendix XXIV to request opening of
the price envelope of the preferred tenderer.
The project manager/asset manager must have a strategy in place for negotiation
prior to tender close. Documented assistance for writing this negotiation strategy
resides in SM011 work procedure 5. The HNO Project Services team can be contacted
for further support.
If a single tender is received, the strategy for negotiation must be approved by the
delegated authority to award the contract prior to proceeding with negotiation.
If negotiations cannot be successfully concluded with the highest scoring tenderer,
the advice of the delegated authority to open price envelopes should be sought prior
to opening the price envelope of the second ranked tenderer and entering into
negotiations.
The objective of the negotiation is to reach a fair price for an agreed quality of service
which may involve a trade off between quality, methodology, resources to be applied
and price.
Care must be exercised during negotiations not to nullify the evaluation of non-price
attributes completed in the first stage. This could result from proposed changes in
key personnel or tenderers methodology. Other tenderers could be compromised if,
as a consequence of negotiation of the tender, a change in key personnel is accepted
or there are reductions in the scope of work.
Once negotiations have been successfully completed the TET and delegated authority
sign and date the TET report 2, printout of form I and appendix V to approve the
award of the contract.
5.7.4 PQM simple
method
Before starting the evaluation please refer to the sensitivity analysis (section 2.5)
which should have been undertaken to select price/non-price weightings. The
-price attributes.
The ultimate aim of the non-price attribute evaluation is for the TET to agree an SQP
for each tender which is a true reflection of the value in comparison to the other
tenders received.
Contract procedures manual SM021 Part A Appendix VI
First edition, Amendment 1
Effective from June 2013
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The tender evaluation process for PQM simple is as follows:
First, open envelope 1 and evaluate the non-price attributes. Transfer the agreed non-
price attribute tender grades from form F to form G (appendix VII). Calculate the
following for each tender:
1. Indices = non-price attribute grades [0.0 - 100.0] x weights [30 - 80] / 100
2. Weighted sum = Sum of all indices [30 - 80]
3. Weighted sum margin [30 - 80] = each weighted sum lowest weighted
sum
4. SQP ($) = base estimate* ($) x weighted sum margin [30 - 80]/price weight
[10 - 70]
* Remove any amounts fixed by the NZTA from the estimate, e.g. provisional
sums.
Note: The range indicated in [ ] denotes the maximum possible range of the figures.
The weight assigned to each non-price attribute is given in the RFT. The total non-
price attribute weight is a minimum 30, and the price weight is maximum 70.
HNO contracts for PS are to have a non-price attributes weight of between 70
percent and 90 percent, and PW contracts are to have a the non-price attributes
weight of between
30 percent and 50 percent. Approval of the non-price attributes weightings outside
the above levels is required from Manager Project Services prior to advertising the
contract.
An electronic spreadsheet (form G of appendix VII) is provided in the technical
(www.nzta.govt.nz).
the SQP calculated for each tender to confirm that the
respective SQPs represent the amount that the NZTA is prepared to pay to secure
one tender, relative to another. If the TET is not satisfied with any SQP, they are
entitled to adjust the SQP. Where an SQP is adjusted the TET must record the
calculation of the adjusted SQP and provide justification for the adjustment.
If there are any alternative tenders, proceed to calculate the ATP as discussed in
section 5.2 Conformity, tags, clarification and alternatives in this manual (part A).
The ATP evaluation must be shown.
sign and date the TET report 1 and printout of form G. The project manager/asset
manager must then use appendix XXIV to request the opening of the price envelopes
(envelope 2). All contract pricing schedules are reviewed for tags. Where any
Complete form G with the tender prices (less schedule fixed amounts). Deduct the
SQP (and ATP) from the respective evaluation prices. The tender with the lowest
adjusted evaluation price shall be the preferred tender. The TET and the delegated
authority again sign and date the TET report 2, and final printout of form G and
appendix V to authorise the beginning of the award process.
Finally, the TET leader makes a recommendation for acceptance on the Schedule of
tenders received (appendix V) to the appropriate manager and delegated authority,
depending on the value of the contract. Refer to appendix XXV for a guideline on the
use of PQM simple.
Contract procedures manual SM021 Part A
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Effective from June 2013
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5.8 Reports and recommendation
5.8.1 Tender
report and
recommendation
The Schedule of tenders received form (appendix V) shall be used in reporting the evaluation
results and the recommendation.
The report and recommendation to the appropriate delegated authority, shall include
comment on the rational and key points contributing to:
the non-price attributes grade for each tenderer (grades to be included)
why any tender failed any non-price attribute
the acceptance or rejection of tags and late tenders
the recommendation to accept a tender that is not the lowest in price, and the
acceptance of a tender where the tender price varies from the estimate of cost of work
by 10 percent or more as applicable.
On receipt of the report, the tenders secretary should note the date received in the register
of tenders. The tenders secretary must carry out an arithmetic check to confirm the
accuracy in the extensions of rates and additions for the tenderer to whom award is
recommended and confirm that this has been done by signing appendix V.
In the event that the tenders secretary discovers errors and/or omissions in a tender, the
tenders secretary may, in consultation with the TET, without advising the tenderer of the
errors and/or omissions, request the tenderer confirm the tender without correction.
Where such confirmation is not received the tender may be rejected.
All tender schedules must be properly filled in, on the original forms, to the satisfaction of
the tenders secretary, including schedules where provided in the RFT. Schedules
considered by the tenders secretary to be improperly filled in (e.g. rates not provided
where required in the schedule), may in consultation with the TET, result in the tender
being rejected.
Where the tenders secretary and/or the TET discovers a tender contains errors in
extension of unit rates or summation of items such as to vary the tendered sum, the
tenders secretary will draw the error to the attention of the tenderer and invite the
tenderer to confirm the tendered sum notwithstanding the error. Where such confirmation
is not received, the tender may be rejected.
If the tendered rates are found to contain any errors in extension of unit rates or in
summation, such as to vary the tendered sum, then the tenders secretary shall adjust the
rates, after consultation with the TET and tenderer, to agree with the tendered sum. The
adjusted rates shall then become the contract rates for payment. If agreement cannot be
reached as to the adjustments, then the tender shall be rejected.
The TET should then make the recommendation to the appropriate delegated authority.
Appendix XXIV is to be used to obtain this approval and after approval has been given
appendix XXIV should be submitted to the tenders secretary to request the opening of rice
envelopes.
The delegated authority may approve award if the contract value is within funding
allocation and within their approval limit via appendix V.
Contract procedures manual SM021 Part A Appendix VI
First edition, Amendment 1
Effective from June 2013
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5.8.2 Late tenders The evaluation report should include the reasons why the tender was accepted or
rejected.
5.8.3 Non-conforming
or rejected
tenders
Reasons for disqualification of any tender shall be reported and may include a tender
that has been failed on any non-price attribute or a tender that was the preferred tender
but was rejected because of failure to withdraw unacceptable tags.
5.8.4 Final evaluation
forms
Tender evaluation reports, are to be accompanied by a completed report form for the
particular methodology used as follows:
For the LPC tender method, the Tender summary lowest price conforming tender
method: final evaluation (appendix VIII) shall be completed.
For the PQM, the Schedule of tenders received (appendix V) shall be completed. The
tenders shall be ranked in order of the highest overall index.
5.9 Approval to open price envelopes
5.9.1 Delegation to
open price
envelopes
Refer to the delegated authority schedule (introduction to part A) for delegation to open
price envelopes.
Prior advice is required when there are any features in the recommendation, which are
unusual or controversial. These situations are to be brought to the attention of Group
Manager HNO before approval is given to accept the contract.
Advance notice is to be given when urgent approval of a tender is required.
Verbal advice of approval shall be followed up in writing.
Note that it is the responsibility of the project manager/asset manager and not the
tenders secretary to ensure that appendix V is completed and the necessary approvals
are obtained.
5.9.2 Approval to
open price
envelopes
National office approval is required as per the HNO-delegated authority table in this
manual:
Stage 1 following evaluation of non-price attributes and prior to opening price
envelopes.
Stage 2 following opening of price envelopes and prior to award of contract. When
submitting tenders for national office approval, the following information and
completed forms must accompany the request for acceptance:
the completed Schedule of tenders received (appendix V)
the weight allocated to each attribute
the key issues the TET dealt with.
Prior advice is required when there are any features in the recommendation, which are
unusual or controversial. These situations are to be brought to the National Manager PS
attention before approval is given to accept the contract.
Advance notice is to be given when urgent approval of a tender is required.
Verbal advice of approval shall be followed up in writing.
Note that it is the responsibility of the project manager/asset manager and not the
Contract procedures manual SM021 Part A
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Effective from June 2013
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Approval to open price
envelopes continued
tenders secretary to ensure that appendix V is completed and the necessary
approvals are obtained.
5.10 Consider commercial issues prior to contract award
Following opening of price envelopes and prior to contract award the TET must
review the preferred tenderers schedule of prices and satisfy themselves that it does
not contain any oddities or commercial issues. Examples of areas to consider:
Front loading of the tender price in a PS three phase contract, e.g. is the pricing
schedule balanced and not loaded in the investigations and reporting phase?
Sensible and meaningful pricing of tendered lump sum items, e.g. is the lump sum
price for as-built drawings appropriate?
If the TET is concerned that the schedule of prices is not balanced or it contains other
commercial issues then they should hold a pre letting meeting with the preferred
tender (advice on commercial issues is available from the Project Services team). The
pre letting meeting should be used to discuss these concerns and rectify them to the
satisfaction of the TET.
5.11 Approval to award contract
5.11.1 Procedure The following procedure applies when accepting a tender. The tenders secretary undertakes
this task from step 2.
Step Action
1 The project manager/asset manager should ensure that sufficient financial approval is held to cover the
accepted tender price including provisional sums and contingencies (except price contingency). If the
contract price exceeds the available allocation the contract cannot be awarded until additional funding is
sought and approval given.
2
of a tender does not require national office approval pass all required information to State Highway
Manager for approval. Once approval has been given
go to step 3.
of a tender requires national office approval send all required information to project service at national office
project services will fax/email the region responsible for the contract, and
upon receipt of the fax/email go to step 3.
3 Issue the appropriate acceptance notice and decline notices, upon receipt of the approved tender schedule.
tender acceptance notice (appendix X for PS and appendix XII or XIV for PW)
tender decline notice (appendix XI for PS and appendix XIII or XV for PW)
rejection notice on basis of non-conformity (appendix XVI).
4 If all tenderers have a fax/email, fax/email a copy of the tender acceptance notice to the successful tenderer
and tender decline notices to unsuccessful tenderers.
If an unsuccessful tenderer does not have a fax/email, post all tender decline notices.
If the successful tenderer does not have a fax/email, post tender acceptance notice and all tender decline
notices.
5 edules to [email protected] Please use the email title format Price Schedules <<Contract Name>> <<Winning Tenderers Name>> <<Contract/work type (PW Lump Sum, PW M&V, PS I&R, Competitive Alliance etc)>>.
Contract procedures manual SM021 Part A
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Effective from June 2013
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5.11.2 Disclosure
of contract
prices
The provisions of the Official Information Act 1982 govern disclosure of information
on tendering and contract matters. The Procurement manual (section 5.5) sets
out the minimum information which should be provide.
On award of the contract, all tenderers are to be advised of the following:
Name of successful tenderer.
Price and SQP of successful tender (submitted price preceding any negotiation).
law tenders) where three or
more conforming tenders are evaluated.
Range of grades for each non-price attribute, where three or more conforming
tenders are evaluated (PQM).
For each tenderer, their individual non-price attribute grade (PQM).
For each tenderer, their individual SQP and the range of SQPs (PQM).
The NZTA shall not be required to provide any further information regarding details of
tenders or details of how the evaluation was arrived at.
ding pricing schedules
shall be archived in accordance with the policy for archiving.
Following award of the contract, spare copies of the unsuccessful tenderers non-price
attribute documents shall be promptly destroyed in a secure and confidential manner.
Tender envelopes shall be securely retained on the contract file where there is reason
to believe these may be required in evidence due to unusual circumstances or tenders
were late.
Contract documents shall be retained on the contract file and on completion of the
contract shall be archived as above.
See appendices for template acceptance and decline letters.
5.12 Preferred tenderer status
5.12.1 When should
preferred
tenderer status
be given
Suppliers are often involved in a number of tender processes nationally at any one time.
If a TET has completed its tender evaluation and reached consensus on the favoured
tender but the contract cannot yet be awarded for whatever reason the favoured
tenderer should then be given preferred tenderer status. This will allow all tenderers to
make informed decisions on other tender proposals they are working on and will also
provide the preferred tenderer with an earlier indication of the pending contract award.
For example, if there is a need for Board approval to award the contract, or to first
negotiate an acceptable price or contract terms with the favoured tenderer, then the
favoured tenderer should be given preferred tenderer status.
The TET must seek approval from the officer with the delegated authority to approve
the contract award or Manager Project Services, to announce the preferred tenderer. As
soon as this approval is obtained the TET leader should verbally inform all tenderers of
their status, i.e. either preferred or not preferred. They may also advise tenderers who
are not preferred, the name of the tenderer who is preferred. Within 24 hours of such
verbal advice the tenders secretary must formalise this status in writing (email, fax or
letter) to each tenderer.
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Effective from June 2013
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When should preferred
tenderer status be
given continued
Formal advice of status will include the following:
The tenderers current status - either preferred or not preferred.
The name of the tenderer who is preferred.
An indication of the likely contract award date.
A reminder that any work undertaken by the preferred tenderer before contract
award is at their risk (preferred tenderer only).
See Notice of preferred tenderer form (appendix XXII).
Formal advice should specifically not include any advice on any non-price attribute,
SQP, ATP, price information or ranking of tenderers. This information is to be
released only when the contract is awarded.
5.13 Tender debrief meetings
After the tender process is complete and the contract awarded, it is important the all
tenderers are given the opportunity to discuss their tenders with the TET. This will
benefit all parties to the process and provide opportunity for continuous
improvement.
It is important that noncompliance in tender submissions are discussed and details of
any pages removed and not considered in the evaluation are provided to the
tenderers.
A note should be recorded in the contract file identifying the name of the tenderer,
TET members present, location and time of the debrief held.
Where significant delay is likely between announcing preferred tenderer status and
awarding the contract, tender debriefs should be offered to tenderers prior to decline
of tenders.
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
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6.0 Contract award procedure
6.1 Contract file
6.1.1 Introduction A contract file must be maintained for each contract let in a regional office.
The NZTA will maintain a full file with all papers for PS contracts. For PW contracts the
consultant must maintain a full file with all papers concerning the contract for PW
contracts.
This topic discusses the contents of the contract file.
6.1.2 Contract
procedures
In maintenance of the contract file, the file number must correspond with a sequential
number in the register of tenders.
PS: The contracts are administered by the NZTA, therefore the full contract file is
held in the NZTA office. This contract file must contain all relevant information
relating to the administering of that contract in addition to that stated below.
PW: The file must contain all relevant correspondence that will adequately monitor
the contract. This file need not include other papers concerning the contract.
These papers will be included in the full file maintained by the consultant.
6.1.3 Information
in contract file
PS: Contract files must include the following information for PS contracts:
estimate
approval to proceed to engage a consultant form
copies of all notices to tenderers
the Schedule of tenders received form (appendix V) and evaluation report
unsuccessful tenders
copy of the successful tender and supporting papers
copy of the tender acceptance and decline notices
final construction report
report
correspondence on the contract generated in the regional office and any other party
correspondence to and from the consultant pertinent to the contract
the signed contract document (where this is too big to be placed on the contract file,
it may be kept separate but in such cases, the contract file must indicate where the
signed contract document is held.
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Effective from June 2013
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Information in contract
file continued
PW: Contract files must include the following information for PW contracts:
liquidated damages pre-assessment
estimate
request for approval to proceed to engage a contractor for the provision of PW form
copies of all notices to tenderers
the Schedule of tenders received form
unsuccessful tenders
copy of the successful tender and supporting papers
copy of the tender acceptance, decline and non-conformity notices
certificate of practical completion
certificates of practical completion of a separable portion
defects liability certificates
final construction report
report performance
correspondence on the contract generated in the regional office, and between the
consultant and any other party
correspondence to and from the consultant pertinent to the contract
the signed contract document (where this is too big to be placed on the contract file,
it may be kept separate but in such cases, the contract file must indicate where the
signed contract document is held).
6.1.4 Maintenance
contracts (PW
only)
After contract award a copy of the contractors operational requirements and pricing
schedule, prepared under SOMAC, must be forwarded to the NZTA
Operations Engineer at national office by the tenders secretary.
6.2 Signing of contract documents
6.2.1 PS Contracts Two sets of the contract documents should be assembled and checked for
completeness as follows:
the RFT
the contract agreement form completed ready for signing
the tender form and tendered pricing and personnel schedules (original and copy(s))
bound into signing sets, superseding the blank pages shown in the RFT
the letter of acceptance, notices to tenderers, tender clarification queries and
responses, interview minutes and any other tendering or agreement related
correspondence bound into section E of the RFT
photocopies of the general and special conditions, the contract management
specification and the relevant standard specifications bound into section F of the
RFT.
6.2.2 Sets of
documents for
PS (PS only)
There must be two signed sets of documents for PS. Other sets may be required
for working purposes. The original NZTA set of documents must be held in
secure storage. This may be used if arbitration is necessary on the contract
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Effective from June 2013
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6.2.3 Sets of
documents for
PW (PW only)
NZS 3910:2003 section 2.7 covers the procedural requirements of the principal
and the contractor in the execution of the contract agreement. Three sets of
documents are required for distribution in accordance with the requirements.
The consultant has the responsibility for assembling and arranging the signing of
contract documents.
The set of documents to be held by the NZTA must be the original documents.
This set of documents must be returned to the tenders secretary when the
contract has been signed. The tenders secretary must hold the documents in
secure storage and these documents can be used if arbitration is necessary on the
contract.
6.2.4 Procedure PS: The tenders secretary must ensure the following tasks are completed for
the signing of contract documents (including short-form contract
agreements).
PW: The consultant responsible for the contract must ensure the signing of the
contract documents is completed in accordance with the following
procedure.
Ste
p
Action
1 Assemble the signed sets of contract documents securely together ensuring the documents are
complete and all pages are in order.
2 Number the pages in each section. Note: Each page number will be the unique identifier for that
page.
3 Index the document as given in the following table.
Note: The contract documents must contain an index under the cover sheet. The index must
reference all sections and pages that form the contract document. The title of each section must
be entered in the index showing the number of pages that form the section.
Example: General conditions for the provision of PS, pages i-iii and 1-10.
If the contract
is one document index it as in the example given above.
consists of individual
documents
enter each document individually on the index and number the
document, e.g.
Tender form page 1
Letter to tenderer page 1
4 Ensure the index page(s) of each set is signed.
Note: This must be done by all persons who will be signatories to the contract. The signing of all
pages is not required.
5 Sign the contract.
Note: This must be done by the delegated authority.
Note: The tenders secretary must ensure that all sections of each signing set of the contract documents
are securely attached to form one document.
Contract procedures manual SM021 Part A Appendix VI
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Effective from June 2013
Page 77
6.3 Who may sign the contract agreement
6.3.1 Introduction This topic discusses the procedure NZTA will follow when signing the contract
agreement where the supplier is a,
company
partnership
joint venture
individual.
In all cases of doubt or difficulty, get legal advice as failure to achieve binding
execution can leave the NZTA without remedies.
6.3.2 Company Where the supplier is a company, the contract agreement must be signed by either:
1. two or more directors of the company (whose signatures need not be
witnessed)
2. if there is only one director, by that director whose signature must be witnessed
3. if the constitution of the company so provides, a director and another person, in
which case both signatures must be witnessed, or
4. a person appointed as the attorney of the company (copy of power of attorney
and a certificate of non-revocation required).
The two most common styles are:
XYZ CONSULTANTS LIMITED
Director
Director
or:
XYZ CONSULTANTS LIMITED
Director
signature:
Name:
Occupation:
Address:
Secretary
signature:
Name:
Occupation:
Address:
While common seals are no longer a legal requirement they are still sometimes used.
Sometimes a power of attorney is used. The attorney binds the company, but only to
the kind of document involved. The extent of the power must be checked. The attorney
must give a certificate of non-revocation.
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
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Company continued A copy of the power of attorney and the original certificate of non-revocation must be
attached to the document.
A person held out by a company as having authority to sign on its behalf can bind a
company. However there can be issues as to whether it is the company or the person
If the
contract is significant (for either party) then the more formal levels of execution
described above must be used, unless documentation of the authority to bind the
company is provided.
6.3.3 Partnership Where the supplier is a partnership, the contract agreement may be signed by any of the
partners.
If there is any doubt about the authority of the person signing, the authority of the
particular person involved must be checked.
Generally any partner can bind a partnership to a contract in the usual course of the
partnership business. The execution style should be:
___________________________________
Signed by X as a member of the XYZ
Partnership who, by signing warrants that he/she has authority to bind the XYZ
Partnership.
___________________________________
signature
Name:
Occupation:
Address:
If the contract is particularly significant or outside the normal scope of the partnership,
then each partner must be required to sign.
It is always essential to ensure that the proper description of the partnership is shown.
(There may be several with slightly different names.)
6.3.4 Joint ventures There is no fixed rule for joint ventures as their ability to enter into contracts is governed
by the individual agreement creating the joint venture. A joint venture is not a legal
entity in its own right.
When contracting with a joint venture, a check must always be made with the joint
venture to find out what the correct procedure is for that particular joint venture.
6.3.5 If joint venture
is a company
A common practice is for a joint venture to form a company as an administrative vehicle
for contracts. In this case the usual rules for limited liability companies are followed.
6.3.6 If joint venture
is not a limited
liability
company
A joint venture can be a combination of companies or partnerships or even a mix of
companies and partnerships.
If the joint venture is not a limited liability company, then as a general rule an authorised
representative of each joint venture party must sign.
Contract procedures manual SM021 Part A Appendix VI
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Effective from June 2013
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6.3.7 Individuals Contracts dealing with individuals must be signed by the individual. It must be noted that
individuals sometimes use trading names.
Example: John Smith may use the trading name John Smith Roadmarking. A trading name is
not a legal entity and in such a case the individual must sign his/her name. The signature
must be witnessed, and the witness must add name, occupation and address.
6.4 Who may sign the bond (PW only)
6.4.1 Introduction A bond is a deed and some different rules apply. This topic discusses the procedures
NZTA follows when signing bonds where the contractor is a:
partnership
joint venture
individual.
In all cases of doubt or difficulty get legal advice as failure to achieve binding execution
can leave the NZTA without remedies.
6.4.2 Limited liability
company
As for execution of a contract, except that a person held out by the company should not
execute.
Execution should be by:
two directors
one director and secretary (if constitution permits)
power of attorney (banks frequently execute this way).
6.4.3 Partnerships As for execution of a contract. As giving bonds is not usually part of the normal business
of most partnerships, ordinarily every partner must sign.
6.4.4 Joint ventures There is no fixed rule as to how joint ventures enter into deeds. It will depend on the
provisions contained in the agreement creating the joint venture or the status of the
various joint ventures.
6.4.5 Individuals As for execution of a contract. The person giving the bond must be advised in writing to
take independent advice before executing the bond.
6.4.6 Contractor also Both the contractor and the bond giver must execute the bond and the executions must
be witnessed where required.
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Effective from June 2013
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6.5 Assignment or novation of contracts
6.5.1 Introduction This section sets out the procedure NZTA will follow when a company:
1. changes their name
2. seeks the rmission to assign (either wholly or in part) its rights or
obligations under the contract to another consultant, or
3. has a material change in effective control of the consultant itself (e.g. its shares
are sold to another party, or the company amalgamates with another) or where
company.
The NZTA may be at risk where there is ineffective or inappropriate assignment or
novation of a contract rights that results in:
non-transfer of contractual liabilities
breach of contract
the Procurement manual process being subverted.
The NZTA should seek legal advice, or consult the Project Services team in all cases of
doubt or difficulty, as failure to achieve the valid assignment or novation can leave the
NZTA without remedies, or weaken its commercial position. Deed templates are
available from the Project Services team.
6.5.2 Change of
name
Where the supplier changes its name, but nothing else changes there are no legal
consequences. The supplier has an obligation to:
1. provide the NZTA with notification in writing of its new name, and
2. provide the NZTA with written confirmation that the change in name will have no
effect on the substance and delivery of the contract.
The project manager/asset manager must ensure that where a change in name is
observed the matter is followed up with the consultant to determine if a change in
control has also occurred.
PW: [A change of name by itself means that there is no change in the legal entity, so
there is no need to provide for the carryover of liabilities/bonds/insurance. A
simple change of name is rare, as the change is normally an indication of a change
of control. If a change of control has also occurred, change of control provisions
below will be applicable].
6.5.3 Change in
control after
contract award
A buy-out of the supplier by another company (either shares or assets), an
amalgamation, a transfer of majority shareholding or a change in the effective
management or control of the consultant (including changes to a partnership) may
impact upon the substance and delivery of the contract, particularly in the case where
key personnel exit. The consultant has an obligation to do the following:
1. Fully inform the project manager/asset manager of the changes (as soon as
practicable, and preferably before they take effect). The NZTA may have the
right to terminate the contract if it wishes and claim consequential costs and
expenses from the supplier.
2. Seek and obtain the
contractual obligations or novation of the contract to the new party. If consent is
not given in accordance with the specified process, the NZTA has the rights
specified in (1).
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Effective from June 2013
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6.5.4 Assignment or
novation
The NZTA will only consent to assignment or novation if the process set out below is
followed and it is satisfied that its interests, the integrity of the procurement process will
not be compromised, and that any existing bonds and insurances are confirmed or
appropriate substitutions made.
In an assignment the original supplier should ordinarily remain responsible for
performance under the contract unless that is clearly inappropriate (e.g. the incoming
party is stronger and willing to take on liability for past events) and that continued
liability must be documented.
It is important that the assignment or novation is specifically addressed so that if there
are difficulties later, there is not a dispute about whether it is the original party or the
assignee that is liable. Specifically if the original party is excused, the new party must be
expressly stated to be liable for past events. At this point, the assignment is materially
the same as a novation.
In a novation the original supplier ceases to have any ongoing involvement. Issues as to
the time when a liability arises can therefore be material. Generally, novation should not
be accepted unless there is substitution of a clearly stronger party and there is no risk to
the integrity of the procurement process. The incoming (or novated) party must
acknowledge responsibility for everything done or not done by the original party.
6.5.5 Changes prior
to contract
awarded
Where the project manager/asset manager becomes aware of a material change or
change in control of a tenderer, at any time during the tender process before a contract
has been awarded, the project manager/asset manager shall do the following:
1. Send a letter to the tenderer, asking them to confirm that the personnel named in
the tender bid will remain the same and that there is no material change in
cir
bid for and demonstrate how this is so.
2. If there is a change of control, check whether the other relevant party has also
tendered for the contract. If so, seek advice from the
6.5.6 Changes after
contract
awarded
Where the project manager/asset manager becomes aware of a material change to or
change in control of an existing supplier, or receives a request for NZTA to consent to
assignment or novation of an existing contract the project manager/asset manager shall
do the following:
1. Request details of the (proposed) change in control from the consultant and
details of the proposed new key personnel.
2. Assess whether the new party is at least as able to perform the contract.
If so, the project manager/asset manager shall obtain the consent of their SHM
to request from the supplier a deed of assignment or novation of the contract for
approval by the NZTA (such approval to be given by the State Highway
Manager). This deed must clearly transfer all the rights and obligations of the
contract to the new party, and state that from the date of the deed, the NZTA is
entitled to deal only with the new party in relation to all matters. The new party
must be clearly bound in respect of past acts or omissions of the original party
and liable for them and any rectification required as it was the original party.
If it is assessed that the new party is as not able to perform the contract as, the
project manager/asset manager shall refer the matter to the appropriate State
Highway Manager. If the State Highway Manager determines that it is
appropriate, require the consultant to provide a deed of assignment or novation.
In this case, the original party would not be fully released.
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 82
Changes after contract
awarded continued
3. Check whether the new party unsuccessfully tendered for the contract. If so, seek
4. Check that replacement bonds (if any) and insurances are in place or that the
relevant deed assignment includes the assignment or novation (as appropriate) of
existing bonds and insurances
It is very important to respond to notice, even informal, of any events that might
amount to assignment or novation. This is because the
inferred from conduct or acquiescence, and in those cases its position might not be
adequately protected.
Where approval of assignment or novation is not recommended legal advice should
be sought regarding termination of the contract.
6.5.7 Where a change
in control
involves an
assignment or
novation,
subcontracting
The The NZTA's
consent to this should always expressly prohibit the subconsultant/subcontractor assigning
or novating its rights and obligations in relation to the particular tender, The consent should
require notice of changes of control, and include a provision that the NZTA may amend or
withdraw its consent if those types of arrangements occur.
Contract procedures manual SM021 Part A Appendix VI
First edition, Amendment 1
Effective from June 2013
Page 83
7.0 Contract payments
7.1 Introduction
This stage in the contract process involves making contract payments.
PS: Contract payments, for work performed by a consultant, are made at the time
and in the manner as set out in the general and special conditions for the
provision of PS and the contract documents.
PW: Contract payments, for work performed by a contractor, are made in the time
and manner as set out in NZS 3910 and the contract documents. The Contract
payment voucher and tax invoice application which is linked to PROMAN
(SAP once active) shall be used during the course of making payments to
contractors.
7.2 Liquidated damages (PW only)
Liquidated damages are daily amounts to be deducted from contract payments when
practical completion is not achieved by the contract completion date as calculated
from the NZTAs direct daily costs and provided for in the contract documents.
Under its general conditions the NZTA has the right to deduct liquidated damages
from any monies payable to the contractor in terms of the contract between them.
Commercial judgement is to be used in deciding whether to recover liquidated
damages or not while considering their actual value in relation to the cost of recovery
and the maximisation of the value to the crown. The NZTA, as the contract principal,
has the sole authority to make deductions and therefore the discretionary power to
vary the amount of liquidated damages to be deducted.
7.3 Application of liquidated damages delegations (PW only)
Liquidated damages calculated by the project manager are to be approved by the
State Highway Manager prior to approval to proceed with the engagement of a
contractor.
Under delegated authority of the general conditions of contract, the principals
contract rate when a contract proceeds beyond its completion date.
Liquidated damages proposed to be varied or waved by the project manager, must be
approved by the State Highway Manager and endorsed by the Group Manager HNO.
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 84
8.0 Contract close
8.1 Introduction
8.1.1 PS contract
closure (PS
only)
Contract closure for a PS contract occurs with the issue of a PS contract completion
notice, PSF/5b (SM030) to the consultant on satisfactory supply of all deliverables. A
copy of this certificate should be retained on the contract file.
If for any reason the project manager/asset manager wishes to terminate a contract due
to poor performance, before satisfactory supply of all deliverables, then a report must first
be prepared setting out the reasons for such recommended action for Group Manager
HNO endorsement and the NZTA Chief Executive approval. Without such approval a
contract cannot be terminated.
8.1.2 PW contract
closure (PW
only)
Contract closure for a PW contract occurs with the issue, by the engineer to the contract,
of a defects liability certificate for the contract works to the contractor and the NZTA as
set out in NZS 3910:2003 and the contract documents.
Any other reports required by the PS contract, e.g. contract performance report shall be
completed by the consultant and copies forwarded to the NZTA.
If for any reason the project manager wishes to terminate a contract due to poor
performance, before satisfactory supply of all deliverables, then a report must first be
prepared setting out the reasons for such recommended action for Group Manager HNO
endorsement and the NZTA Chief Executive approval. Without such approval a contract
cannot be terminated.
8.1.3 Release of
performance
bond
When the NZTA receives a copy of the certificate of practical completion for the whole of
the works from the consultant, the tenders secretary must obtain the agreement of the
project manager prior to the release of the performance bond. The consultant should
advise the project manager of the impending issue of a certificate of practical completion
to ensure the release of the bond within five working days of the receipt of
such certificate.
The tenders secretary must advise the contractor and the contractor s surety by written
notice of their release from the performance bond or reason for withholding release of the
bond with any conditions as to release, as provided by the consultant and agreed by the
project manager. This should be done within five
receipt of the certificate of practical completion.
Alternatively, if contractor is under a global bond scheme, the tenders secretary shall
notify [email protected] that a certificate of practical completion has been issued
for the said contract and expected end of defects liability period (refer global bond
procedure flow chart section 2.8 part A of this manual).
8.1.4 Release of bond
in lieu of
retentions
When the NZTA receives a copy of the defects liability certificate from the consultant, the
tenders secretary must obtain the agreement of the project manager prior to the release of
the bond in lieu of retentions. The consultant should advise the project manager of the
impending issue of a defects liability certificate within five
receipt of such certificate to ensure the release of the bond in lieu of retentions on issue of
the defects liability certificate.
ty by written
notice of their release from the bond in lieu of retentions on issue of the defects liability
Contract procedures manual SM021 Part A Appendix VI
First edition, Amendment 1
Effective from June 2013
Page 85
certificate.
Alternatively, if contractor is under a global bond scheme, the tenders secretary shall notify
[email protected] that a release letter has been issued for the said contract can be
removed from the global bond Register.
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 86
9.0 Appendices part A
Schedule of appendices
Appendix Page Title
I 87 Request for approval to proceed to engage a consultant
II 88 Request for approval to proceed to engage a contractor
III 89 Register of tender documents issued (PS and PW)
IV 90 Register of tenders (PS and PW)
V 91 Schedule of tenders received
VI 92 Checklist by tenders secretary prior to tender evaluation (PS and PW)
VII 92 Evaluation summary forms and guidelines for PS and PW (7 pages)
VIII 100 Tender summary lowest price conforming tender method: final evaluation
IX 101 Potential conflict of interest/Bias declaration
X 102 Tender acceptance notice PS
XI 103 Tender decline notice PS
XII 104 Tender acceptance notice for physical works contract (LPC)
XIII 106 Tender decline notice for physical works contract (LPC)
XIV 107 Tender acceptance notice for physical works contract (PQM)
XV 109 Tender decline notice for physical works contract (PQM)
XVI 110 Rejection notice on basis of non-conformity
XVII 111 Rejection notice on basis of late tender
XVIII 112 Tender acceptance notice for professional services contract target price method)
XIX 113 Tender decline notice for professional services contract and target price method)
XX 114 Contract payment voucher and tax invoice
XXI 115 Notice to tenderers
XXII 116 Notice that a preferred tenderer has been selected
XXIII 117 Request for approval of insurance amounts for:
professional services (2 pages)
physical works (2 pages)
ECI (2 pages)
XXIV 126 Request for the price envelope to be opened
XXV 127 PQM guidelines (4 pages)
XXVI 131 Regional block project procurement strategy template (3 pages)
XXVII 134 Release of contract from global bond register letter
XXVIII 135 Large project stage 1 procurement strategy template (6 pages)
XXIX 141 Large project stage 2 procurement strategy template (2 pages)
Contract procedures manual SM021 Part A Appendix I
Second edition, Amendment 1
Effective from June 2013
Page 87
Request for approval to proceed to engage a consultant
The tenders secretary NZTA File ref:
Date:
Project name
Contract number SH/SHs
Tenderers to be sought from national register of consultants Yes No If no, why?
Draft advertisement checked, approved and attached
Tender to be advertised using
Date to be advertised
Supplier selection method to be used (include price/non-price attribute weightings)
Closed Contest/PQM/Brook’s Law/Target Price
Price % RE % TR % RS % Meth %
TET members proposed (note qualified evaluator)
Tenders close at 4pm Date: Location:
Request for tender document checked and accepted
Risk and insurance sub-VAC approval for insurance obtained Yes No N/A
Contract base estimate checked approved and accepted Yes No
Appropriate contingencies and escalation allowance applied Yes No
Approved funding allocation (for current phase(s)) Phase(s) in contract I&R D&PD SD&PD MSQA $
Approved funding adequate Yes No
Project plan approved Yes No
Does this appendix constitute the stage 1 procurement strategy (for contracts with an expected construction estimate <$5 million). If no attach the stage 1 procurement strategy (for contracts with an expected construction estimate >$5 million).
Yes No
The above details are certified correct:
The above estimate is within funding allocation and the contract is recommended for advertising/consultant engagement.
Project manager/Asset manager
Date
Recommending manager Date
The above contract is approved for advertising/consultant engagement:
State highway manager Date
Contract procedures manual SM021 Part A Appendix II
Second edition, Amendment 1
Effective from June 2013
Page 88
Request for approval to proceed to engage a contractor
The tenders secretary NZTA File ref:
Date:
Project name Contract No. SH/SHs
Title of PROMAN work unit to be linked to the contractor
Draft advertisement checked, approved and attached
Tender to be advertised using
Date to be advertised
Supplier selection method to be used (include price/non-price attribute weightings and prequalification level)
Closed Contest/PQM/Brook’s Law/Target Price
Price % RE % TR % RS % Res % Meth %
TET members proposed (note qualified evaluator)
Tenders close at 4pm Date: Location:
Request for tender document checked and accepted
Risk and insurance sub-VAC approval for insurance obtained
Yes No N/A
Contract base estimate checked approved and accepted Yes No
Appropriate contingencies and escalation allowance applied Yes No
Approved funding allocation (for current phase(s)) $
Approved funding adequate Yes No
Contract duration
Delivery model Traditional / Design-Construct / Full delivery
Contract type (i.e. M&V, LS, ECI or Alliance)
Period of defects liability
Liquidated damages (from calculation sheet PSF6a) $ per day
Authority to enter land has been obtained Yes No
Provisions of Resource Management Act (RMA) 1991 complied with Yes No
Design fully complies with all RMA consent conditions Yes No
Cultural requirements identified and requirements incorporated into RFT Yes No
Archaeological authority granted and requirements incorporated into RFT Yes No
Does this appendix constitute the stage 2 procurement strategy (for contracts with an expected construction estimate <$5 million). If no attach the stage 2 procurement strategy (for contracts with an expected construction estimate >$5 million).
Yes No
The above details are certified correct:
Engineer to the contract Company Date
The above estimate is within the funding allocation and the contract is recommended for advertising/contractor engagement:
Project manager/Asset manager
Date
Recommending manager Date
The above contract is approved for advertising/contractor engagement:
SH Manager
Date
NZ Tran Contract procedures manual SM021 Part A Appendix III
Second edition, Amendment 1
Effective from June 2013
Page 89
Register of tender documents issued (PS and PW)
Contract number: Closing at: on
File number: Contract name:
Set number
Tenderers name Address Contact name
Fax number Issued Returned Notice to tenderers
1 2 3 4 5 6
1
2
3
4
5
6
7
8
9
10
11
12
Note: This form is not to be shown to tenderers or the public.
Contract procedures manual SM021 Part A Appendix IV
First edition, Amendment 0
Effective from June 2013
Page 90
Register of tenders (PS and PW)
PS PW
(Tick appropriate box)
Contract number
Contract name Closing
date Base estimate
Number of tenders received
TET and Advisors (add
date documents were issued)
Type of approval
received and date
Name of successful tenderer
Contract award value
Date accepted
Note: 1) this form is not to be shown to tenderers or the public. 2) A spreadsheet register which contains the fields above as a minimum may be used in place of this appendix
Contract procedures manual SM021 Part A Appendix V
Second edition, Amendment 1
Effective from June 2013
Page 91
Schedule of tenders received
Region: Closing date: Supplier selection method:
Contract name: Contract number:
PS Phase(s) in contract: I&R D&PD MSQA
A) Base estimate (for current phase):1 $
B) Tender price (for current phase):1 $
C) NZTA-managed costs, fees and contingency allocation $
D) Total allocation required (B+C) (for current phase): $
E) Approved Allocation (for current phase): $
PW
Engineers base estimate: $
Expected construction phase estimate including MSQA, NZTA- managed costs, risks contingency and escalation:2
$
Approved allocation: $
Name of tenderer Amount of
tender Comment on late tenders, tags, non-price attribute failure, etc
1
2
3
4
5
6
Tenders received by:
Date:
Tenders opened by:
Date:
Witnessed by:
Witnessed by:
An arithmetic check has been carried out for the tenderer to whom award is recommended.
Tenders secretary: Date
Required funds are available and I concur with the recommendation in the tender evaluation report to accept the tender of:
Project manager Date
Recommending manager (Details certified correct) Date
State Highway Manager Date
1 Forms G, H or I (Cost estimation manual (SM014)) – Expected contract estimate for current PS phase, based on the preferred tenderers price.
2 Form I (SM014) – Expected construction phase estimate, based on the preferred tenderers price.
Contract procedures manual SM021 Part A
Second edition, Amendment 1
Effective from June 2013
Page 92
Checklist by tenders secretary prior to tender evaluation (PS and PW)
Contract number: PS
Contract name: PW
Tenderer:
Supplied Comment
Yes No N/A
1* Completed and signed tender form
2* Completed and signed schedule of quantities
3 Non-price attributes
Relevant experience
Track record
Relevant skills (personnel)
Resources (plant, equipment, materials) PW only
Methodology
4 Prequalification certificate included
5 Subconsultants/subcontractor details
6 Tenderers programme
7 Notice(s) to tenderers acknowledged NTT Nos.
NTST Nos.
8 Obvious tags that are clearly identified/tags and clarification statement
9 Tender submission conforms with page limit in RFT (See procedure in section D for dealing with pages that exceed the specified limit.)
10 Any other file notes (eg items removed, number of pages exceeded, font size, blank pages)
11 TET Potential Conflict of Interest Declarations approved and on file
* Note: In two-envelope tender processes these can only be checked once the price envelope is opened after completion of the non-price attribute evaluation.
Non-price information Price information
Signed Date Signed Date
Tenders secretary Tenders secretary
Signed Date
TET leader
Contract procedures manual SM021 Part A Appendix VII
Page 1 of 7
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Effective from June 2013
Page 93
Evaluation summary forms and guidelines for PS and PW
Contents Page
Evaluator summary of all non-price attributes: PS and PW (Tender evaluation form F) 94
Price quality method simple: PS and PW (Tender evaluation form G) 95
Price quality method special: PS and PW (Tender evaluation form H) 96
Brook’s law method: PS (Tender evaluation form I) 97
Non-price attribute grading (Attribute and sub-attribute grades) 98
Guidance to evaluators on the usage of evaluation forms A to I
Note: Forms A to D may be found in SM030, and A to E in SM031 AND SM032.
99
Contract procedures manual SM021 Part A Appendix VII
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Evaluator summary of all non-price attributes: PS and PW Form F
Contract no: Contract name: TET names
Region: Date: Agreed grade
Tenderer Relevant experience Track record Relevant skills Resources Methodology
Evaluator attribute grades are averaged or agreed and entered in the highlighted box.
Contract procedures manual SM021 Part A Appendix VII
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Physical Works Professional Services
Contract For:
Region:
Contract No:
Date:
Weighting
100%
Each Tenderer's Weighted sum - Lowest Weighted sum
Weighted Sum Margin x Evaluation Estimate / Price Weight
Confirm SQP & record justification for any adjustments
ATP evaluation must be shown and recorded
May not be altered once the price envelope is opened
TET Signature
Date
TET Name
Adjusted Evaluation Price is the Evaluation Price less the SQP and ATP. The preferred Tenderer is the Tenderer with the lowest Adjusted Evaluation Price
TET Signature
Date
TET Name
The assessment above reflects the evaluation of the TET. All TET members have completed and signed appendix IX –
Potential Conflict of Interest/Bias Declaration:
Please fill in the green fields only
Remove Provisional Sums (or any other Schedule fixed amounts in the RFT)
from the Tender Prices and Estimate
Appendix VII
Form G
Price Quality Method Simple
TET's agreement on the calculated or adjusted SQP and ATP, and calculations verified correct:
Base Estimate (1)
Delegated Authority
Tenderer's Full Name
Date
Less all Schedule Fixed Amounts
Evaluation Estimate
Final adjusted and justified SQP (or none)
Lowest Weighted Sum
Relevant Skills
Track Record
Non-Priced Attributes Weighted Sum
Tenderers Indices (Grade x Weight)
ENVELOPE 2 Price Evaluation
Weighted Sum Margin
Supplier Quality Premium (SQP)
SQP + ATP
Non-Price Tenderers Grades from Form F
Price Weight
Methodology
Adjusted Evaluation Price
Less all Schedule Fixed Amounts
Evaluation Price
ENVELOPE 1 Non-Price Evaluation
Tender Price
Resources
Alternative Tender Premium (ATP)
Tenderer
Relevant Experience
Date
Authorisation to open price envelopes:
Delegated Authority
Signature
Note:This spreadsheet allows up to 10 tenderers to be evaluated. First unprotect the worksheet by selecting "Tools", "Protection", "Unprotect". Highlight column I and N, and select "Unhide". Repeat the same for Column
S and X, and row 35 and 40. (1) Refer to Terminology Section of CPM for definition of Base Estimate.
Authorisation to begin award process:
Signature
Contract procedures manual SM021 Part A Appendix XII
Second edition, Amendment 1
Effective from June 2013
Page 96
Physical Works Professional Services
Contract For:
Region:
Contract No:
Date:
Weighting
Weighted sum x Maximum Risk Consequence
Each Tenderer's Risk Premium - Lowest Risk Premium
Confirm SQP & record justifications for any adjustments
Value of Product Premium where provided for in RFT
ATP evaluation must be shown and recorded
May not be altered once price envelope is opened
TET Signature
Date
TET Name
Adjusted Evaluation Price is the Evaluation Price less the SQP and ATP. The preferred Tenderer is the Tenderer with the lowest Adjusted Evaluation Price
TET Signature
Date
TET Name
Relevant Skills
Track Record
Relevant Experience
ENVELOPE 1 Non-Price Evaluation
Evaluation Price
Tender Price
Estimate
Lowest Risk Premium
ENVELOPE 2 Price Evaluation
Risk Value
Supplier Quality Premium (SQP)
SQP + TCA + ATP
Tangible Cost Adjustment (TCA)(2)
Tenderer
TET's agreement on the calculated or adjusted SQP and ATP, and calculations verified correct:
Resources
Non-Priced Attributes Weighted Sum
The assessment above reflects the evaluation of the TET. All TET members have completed and signed appendix IX –
Potential Conflict of Interest/Bias Declaration:
Base Estimate (1) (Not used in calculations)
Less all Schedule Fixed Amounts
Maximum Risk Consequence
Final adjusted and justified SQP (or none)
Alternative Tender Premium (ATP)
Methodology
Adjusted Evaluation Price
Less all Schedule Fixed Amounts
Date
Delegated Authority
Tenderer's Full Name
Authorisation to begin award process:
Please fill in the green fields only
Non-Price Tenderers Grades from Form F Tenderers Indices (Grade x Weight)
Authorisation to open price envelopes:
Appendix VII
Form H
Price Quality Method Special
Remove Provisional Sums (or any other Schedule fixed amounts in the RFT)
from the Tender Prices and Estimate
Delegated Authority
Signature
Date
Note:This spreadsheet allows up to 10 tenderers to be evaluated. First unprotect the worksheet by selecting "Tools", "Protection", "Unprotect". Highlight column I and N, and select "Unhide". Repeat the same for Column
S and X, and row 35 and 40. (1) Refer to Terminology Section of CPM for definition of Base Estimate. (2) TCA only apply to Design and Construct Contracts
Signature
Contract procedures manual SM021 Part A Appendix VII
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Page 97
Contract For:
Region:
Contract No:
Date:
Weighting
10%
10%
25%
40%
TET Signature
Date
TET Name
Adjusted Evaluation Price is the Evaluation Price less the SQP and ATP. The preferred Tenderer is the Tenderer with the lowest Adjusted Evaluation Price
TET Signature
Date
TET Name
May not be altered once price envelope is opened
ENVELOPE 2 Price of Highest Overall Weighted Sum Tender
Please fill in the green fields only
Highest Overall (Adjusted) Weighted Sum
Non-Price Tenderers Grades from Form F
Methodology
Remove Provisional Sums (or any other Schedule fixed amounts in the RFT)
from the Tender Price and Estimate
Appendix VII
Delegated Authority
Tenderer Full Name
Form I
Brook's Law Method
Date
TET's agreement on the calculated or adjusted SQP and ATP, and calculations verified correct:
The assessment above reflects the evaluation of the TET. All TET members have completed and signed appendix IX –
Potential Conflict of Interest/Bias Declaration:
Base Estimate (1)
Less all Schedule Fixed Amounts
Evaluation Estimate
Tenderers Indices (Grade x Weighting)
Adjusted (Manual) Evaluation Price
Less all Schedule Fixed Amounts
Price for Negotiation
ENVELOPE 1 Non-Price Evaluation
Tender Price of Highest Overall Weighted Sum
Tender
Relevant Skills
Track Record
Non-Priced Attributes Weighted Sum
Final (Manual) Adjusted Weighted Sum
Tenderer
Relevant Experience
Authorisation to open price envelopes:
Delegated Authority
Signature
Date
Professional Services
Note: This spreadsheet allows up to 10 tenderers to be evaluated. First unprotect the worksheet by selecting "Tools", "Protection", "Unprotect". Highlight column I and N, and select "Unhide". Repeat the same for Column
S and X, and row 35 and 40. (1) Refer to Terminology Section of CPM for definition of Base Estimate.
Authorisation to begin award process:
Signature
NZ Transp Contract procedures manual SM021 Part A Appendix VII
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Non-price attribute grading
The following supplements the definitions in the NZTA’s Procurement manual – provided to assist evaluators in distinguishing
between the terms used on tender evaluation forms and the allocation of an appropriate grade.
A scale of 0 to 100 is to be used, generally in steps of 5 and the groupings defined below.
90, 95 or 100 – Excellent: Only awarded when all requirements are met in an outstanding manner.
Other definitions include: extremely related, superlative, significantly within
budget, consistently ahead of deadline, directly applicable.
75, 80 or 85 – Good: Where requirements are fully covered in all material aspects.
Other definitions include: very related, exceeds requirements, well within
budget, frequently ahead of deadline, very related.
60, 65 or 70 – Above average: Where requirements are adequately covered.
Other definitions include: particularly related, requirements fully met, within
budget, occasionally exceeds.
50 or 55 – Average: Adequate with some deficiencies which are not likely to have any adverse
effect.
Other definitions include: related, acceptable, on budget, on time, meets
requirements.
40 or 45 – Below average: Barely adequate and would need minor improvement if selected.
Other definitions include: barely related, needs improvement, exceeds
budget, misses deadline, adequate.
35 or less – Poor: Generally unacceptable and ruled out of further consideration.
Other definitions include: not related, unsatisfactory, significantly exceeds
budget, frequently misses deadline, barely adequate.
Contract procedures manual SM021 Part A Appendix VII
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Guidance to evaluators on the usage of evaluation forms A to I
Form A – Relevant experience and form B – Track record
Enter the tenderer name, evaluator name and date, and the description of the five tenderer-nominated projects. For each sub-
attribute enter a grade for each project. From the average of these grades, multiplied by the subattribute weight derive a total
subattribute grade. If other than average of grades the process should be documented. From the subattribute totals calculate the
attribute grade. If no subattribute weights have been specified, the evaluator should still consider the importance of each sub-
attribute when deriving an attribute total and document the process.
Form C – Relevant skills
Enter the tenderer name, evaluator name and date, and the names relating to each of the consultant's personnel from the
personnel schedule. For each subattribute enter a grade for each person. Each evaluator should consider the relevance of other
tenderer-nominated personnel and any other personnel requirements which, from the contract documents should be included for
scoring and, the adequacy of nominated personnel in relation to technical/managerial qualifications and experience as required
for the position nominated for. After having considered these issues a total subattribute shall be derived and the process should
be documented. Use subattribute weights and personnel weights, if specified, to calculate the attribute grade. If no personnel
weights have been specified, the evaluator should still consider the importance of each position when deriving an attribute total
and document the process.
Form D – Methodology
Enter the tenderer name, evaluator name and date. Enter a grade for each of the factors listed. Evaluators should consider the
importance to the contract of each factor when deriving the rating and any weight given. Factor grades are multiplied by the
weighting (where given) and the results summed to determine the overall grade.
Form E – Resources
Enter the tenderer name, evaluator name and date. Enter a grade for each of the factors listed. Evaluators should consider the
importance to the contract of each factor when deriving the rating and any weight given. Factor grades are multiplied by the
weighting (where given) and the results summed to determine the overall grade.
Form F - Evaluator summary of all non-price attributes
Enter TET member’s names in upper box relative to where their grades are entered on the summary form. Enter the date and
names of tenderers. Enter each evaluator grade for each attribute against the appropriate tenderer.
Where evaluator grades are of similar ranking for each subattribute for each tenderer the grades for each attribute may be
averaged and entered in the highlighted box. If there are marked differences between evaluator grades or rankings are
divergent, a review of subattribute scoring may be required to identify the differences and agree a similarly-ranked grade.
All tenderers final grades are over-viewed by the TET to ensure that they are reasonable and appropriate when compared with
each other and as appropriate other recent contract evaluations.
Forms G and H – Price quality method simple and Price quality method special
Forms G and H are designed as spreadsheets and used to calculate consultant/contractor non-price indices, SQP and preferred
tenderer.
Guidelines to use of the price quality method and example calculations are to be found in appendix XXV.
Form I Brook’s law method: PS
Forms I is designed as a spreadsheet and used to calculate the tenderer with the highest overall weighted sum of non-price
indices and preferred tenderer. The form provides for the preferred tenderers price to be entered and final negotiated price.
Note: Forms A to D may be found in SM030 and forms A to E in SM031 and SM032.
NZ Trans Contract procedures manual SM021 Part A Appendix VIII
Second edition, Amendment 1
Effective from June 2013
Page 100
Tender summary lowest price conforming tender method: final evaluation
Contract number: Contract name:
Name of tender (ranked in price order)
Non-price attributes (P= Pass F= Fail)
Amount of tender
RE* TR* RS* M* R*
1
2
3
4
5
6
7
8
* RE = relevant experience, TR = track record, RE = relevant skills, M = Methodology, R = Resources.
The assessment above reflects the evaluation of the TET. All TET members have completed and signed appendix IX Potential conflict of interest/Bias declaration
Authorisation to begin award process:
TET signature Signature
Date Date
TET name Delegated authority
Contract procedures manual SM021 Part A Appendix IX
Second edition, Amendment 1
Effective from June 2013
Page 101
Potential conflict of interest/Bias declaration
If your answer is ‘yes’ to any of the following questions, then you have a potential conflict that may require mitigation. For more information on how to complete this form or the process for handling potential conflicts of interest refer the Conflict of interest section in this manual.
Name: Contract name: Contract number:
Conflict/Bias examples Yes No Comment (must include where you answer ‘yes’)
1. Have you or your organisation carried out works or services for any tenderer (or member of its group) in the last two years?
2. Do you have a family and/or personal relationship with any tenderer (or member of its group)?
3. Are you employed by, or do you have a professional relationship with, or hold any office with any tenderer, including executive relationships such as director or Board member?
4. Are you or your organisation currently involved or about to be involved with any tenderer in submitting another tender to the NZTA or any other party?
5. Are you advising any party that is in a dispute with any tenderer?
6. Have you been a witness for or against any tenderer, or an expert witness in proceedings involving any tenderer in the past two years?
7. Do you or your organisation have a financial or other relevant interest in any tenderer (or member of its group)?
8. Are you or your organisation a creditor or do you hold any security over any tenderer (or member of its group)?
9. Does any company, trust, or other organisation in which you hold office, or over which you have any material influence, have an interest as described in this manual Conflict of interest section?
10. Without making specific enquiry, to the best of your knowledge does any member of your immediate family have an interest described in this manual Conflict of interest section?
Signature: Date:
Agreed mitigation/method to remove potential conflicts of interest:
Approval for member to remain on team – TET leader name: Signature: Date:
Contract procedures manual SM021 Part A Appendix X
Second edition, Amendment 1
Effective from June 2013
Page 102
Tender acceptance notice PS
Reference:
Date
Name
Company
Postal address 1
Postal address 2
Postal address 3
Dear Sir/Madam
Acceptance notice for professional services contract NZTA (Contract number)
On behalf of the NZ Transport Agency, I advise that your tender to undertake the contract work described above and referred to in
your tender for the sum of $XXXXX (amount in words) excluding GST, is accepted.
I also advise that (Name of Project Manager) of this office has been appointed Project Manager under this contract.
Your attention is directed to the need for early compliance with the requirements of Clause 6 of the General Conditions of Contract,
and Clause 2.7(c) of the Special Conditions of Contract regarding obligations relating to insurances. Please provide certificates of
insurance prior to commencing the contract works.
The NZ Transport Agency received <no.> conforming tenders. The range of prices of conforming tenders is from $XXXXX to
$XXXXX excluding GST. (Note: only include range information for price where three or more conforming tenders are evaluated.)
The range of non-price attribute grades, supplier quality premiums and your own grade and supplier quality premium, as applicable,
are as follows: (Note: only include range information for non-price attributes where three or more conforming tenders are evaluated.
The range of supplier quality premiums shall also be given even when only two tenders are evaluated.)
Attributes Range of grades or premiums Own grade or premium
Relevant experience
Track record
Relevant skills
Methodology
Supplier quality premium
Yours faithfully Tenders Secretary for <appropriate> Manager
Contract procedures manual SM021 Part A Appendix VII
Part A Appendix VII
Page 3 of 8
First edition, Amendment 1
Effective from June 2013
Page 103
Tender decline notice PS
Reference:
Date
Name
Company
Postal address 1
Postal address 2
Postal address 3
Dear Sir/Madam
Decline notice for professional services contract NZTA (Contract number)
On behalf of the NZ Transport Agency, I thank you for your tender to undertake the above contract work and advise that it is hereby
declined.
The successful tenderer is (Name of successful tenderer) at a tendered sum of $XXXXX (amount in words) excluding GST.
The NZ Transport Agency received <no> conforming tenders. The range of prices of conforming tenders are from $XXXXX to
$XXXXX excluding GST. (Note: only include range information for price where three or more conforming tenders are evaluated.)
The range of non-price attribute grades and supplier quality premiums, and your own grade and supplier quality premium, are as
follows: (Note: only include range information for non-price attributes where three or more conforming tenders are evaluated. The
range of supplier quality premiums shall also be given even when only two tenders are evaluated.)
Attributes Range of grades or premiums Own grade or premium
Relevant experience
Track record
Relevant skills
Methodology
Supplier quality premium
Yours faithfully Tenders Secretary for <appropriate> Manager
Reference:
Contract procedures manual SM021 Part A Appendix XII
Second edition, Amendment 1
Effective from June 2013
Page 104
Acceptance notice for physical works contract (LPC)
Reference:
Date
Name
Company
Postal address 1
Postal address 2
Postal address 3
Dear Sir/Madam
Acceptance notice for physical works contract NZTA (Contract number)
On behalf of the NZ Transport Agency, I advise that your tender to undertake the contract work described above and referred to in your tender for
the sum of $XXXX (amount in words) excluding GST is hereby accepted.
<<Guidance note: include the following clause when contract base estimate is less than $50 million; NZTA will include all these project under
Principal Arranged Insurance.>>
Your attention is directed to the need for early compliance with the requirements of Sections 2.7, 3.1 and 8 of the General Conditions of Contract
regarding execution of the Contract Agreement, provision of a Contractor’s Bond and obligations relating to insurances. Your attention is drawn to
the General Conditions of Contract Clause 8.5.4 requiring you to deposit the certificate of insurance, in the form set out in the Eleventh Schedule
as appropriate, with the Engineer prior to commencement of the contract works.
<<Guidance note: include the following clause when contract base estimate is more than $50 million OR where contract specific insurances are
required. Your attention is directed to the need for early compliance with the requirements of Sections 2.7, 3.1 and 8 of the General Conditions of
Contract regarding execution of the Contract Agreement, provision of a Contractor’s Bond and obligations relating to insurances. Your attention is
drawn to the General Conditions of Contract Clause 8.5.4 requiring you to deposit the certificates of insurance, in the form set out in the Seventh,
Eighth and Eleventh Schedules, with the Engineer prior to commencement of the contract works. The Contractor is required to submit their
insurance policy to be reviewed by NZTA, and may be required to be amended should any policy not meet the contract requirements. If satisfactory
insurance policies are not put in place then NZTA may at its option exercise its powers under Conditions of Contract Clause 8.5.7, and the Contract
will be required to be included in the NZTA PAI programme.
In accordance with clause 10.1 of the General Conditions of Contract and the Instructions for Tendering the agreed contract period for the
construction of the contract works is from <enter date> or <enter number of working days, from possession of site> to <enter date>. In accordance
with clause 5.4 of the General Conditions of Contract, subject to compliance with the requirements of paragraph two above the Contractor shall be
entitled to possession of the site on <enter date>.
The NZ Transport Agency received <no> conforming non alternative tenders and <no.> conforming alternative tenders. Listed below are the
names of other conforming tenderers in alphabetical order:
Contract procedures manual SM021 Part A Appendix VII
Part A Appendix VII
Page 3 of 8
First edition, Amendment 1
Effective from June 2013
Page 105
Following are the prices (excluding GST) of unsuccessful tenderers in ascending order: (Note: only include list of prices when 3 or more conforming
tenders are evaluated.)
Yours faithfully
Tenders Secretary
for <appropriate> Manager
cc. NZTA Consultant
Contract procedures manual SM021 Part A Appendix XIII
Second edition, Amendment 1
Effective from June 2013
Page 106
Decline notice for physical works contract (LPC)
Reference:
Date
Name
Company
Postal address 1
Postal address 2
Postal address 3
Dear Sir/Madam
Decline notice for physical works contract NZTA (Contract number)
On behalf of the NZ Transport Agency, I thank you for your tender to undertake the above contract work and advise that it is hereby
declined.
The successful tenderer is <name of successful ternderer> at a tendered sum of $XXX (amount in words) excluding GST.
The NZ Transport Agency received <no> conforming non alternative tenders and <no> alternative tenders. Listed below are the names of other conforming tenderers in alphabetical order:
Following are the prices (excluding GST) of unsuccessful bidders in ascending order:
(Note: only include list of prices when three or more conforming tenders are evaluated.)
Yours faithfully Tenders Secretary for <appropriate> Manager
Contract procedures manual SM021 Part A Appendix XIV
Second edition, Amendment 1
Effective from June 2013
Page 107
Acceptance notice for physical works contract (PQM)
Reference:
Date
Name
Company
Postal address 1
Postal address 2
Postal address 3
Dear Sir/Madam
Acceptance notice for physical works contract NZTA (Contract number)
On behalf of the NZ Transport Agency, I advise that your tender to undertake the contract work described above and referred to in your tender for
the sum of $XXXXX (amount in words) excluding GST, is accepted.
<<Guidance note: include the following clause when contract base estimate is less than $50 million; NZTA will include all these project under
Principal Arranged Insurance. >>
Your attention is directed to the need for early compliance with the requirements of Sections 2.7, 3.1 and 8 of the General Conditions of Contract
regarding execution of the Contract Agreement, provision of a Contractor’s Bond and obligations relating to insurances. Your attention is drawn to
the General Conditions of Contract Clause 8.5.4 requiring you to deposit the certificate of insurance, in the form set out in the Eleventh Schedule
as appropriate, with the Engineer prior to commencement of the contract works.
<<Guidance note: include the following clause when contract base estimate is more than $50 million OR where contract specific insurances are
required.>>
Your attention is directed to the need for early compliance with the requirements of Sections 2.7, 3.1 and 8 of the General Conditions of Contract
regarding execution of the Contract Agreement, provision of a Contractor’s Bond and obligations relating to insurances. Your attention is drawn to
the General Conditions of Contract Clause 8.5.4 requiring you to deposit the certificates of insurance, in the form set out in the Seventh, Eighth
and Eleventh Schedules,, with the Engineer prior to commencement of the contract works. The Contractor is required to submit their insurance
policy to be reviewed by NZTA, and may be required to be amended should any policy not meet the contract requirements. If satisfactory
insurance policies are not put in place then NZTA may at its option exercise its powers under Conditions of Contract Clause 8.5.7, and the
Contract will be required to be included in the NZTA PAI programme.
In accordance with clause 10.1 of the General Conditions of Contract and the Instructions for Tendering the agreed contract period for the
construction of the contract works is from <enter date> or <enter number of working days, from possession of site> to <enter date>. In
accordance with clause 5.4 of the General Conditions of Contract, subject to compliance with the requirements of paragraph two above the
Contractor shall be entitled to possession of the site on <enter date>.
The NZ Transport Agency received <no> conforming non alternative tenders and <no> conforming alternative tenders. Listed below are the
names of other conforming tenderers in alphabetical order:
The range of non-price attribute grades, supplier quality premiums, alternative tender premiums, and your own grade, supplier quality premium
and alternative tender premium, as applicable, for each non-price attribute are as follows: (Note: only include range information for non-price
attributes and alternative tender premiums where 3 or more conforming tenders are evaluated. The range of supplier quality premiums should still
be given even when only 2 tenders are evaluated).
Contract procedures manual SM021 Part A Appendix XII
Second edition, Amendment 1
Effective from June 2013
Page 108
Attributes Range of grades or premiums 9.1.1.1.1.1.1 Own grade or premium
Relevant experience
Track record
Relevant skills
Methodology
Supplier quality premium
Alternative tender premium
9.1.1.1.1.1.2 Following are the prices of unsuccessful conforming non-alternative tenders in ascending
order:
(Note: only include list of prices when 3 or more conforming tenders are evaluated.)
9.1.1.1.1.1.3 Tender price excluding GST
Yours faithfully
Tenders Secretary
for <appropriate> Manager
cc. NZTA Consultant
NZ Tran Contract procedures manual SM021 Part A Appendix XV
Second edition, Amendment 1
Effective from June 2013
Page 109
Decline notice for physical works contract (PQM)
Reference:
Date
Name
Company
Postal address 1
Postal address 2
Postal address 3
Dear Sir/Madam
Decline notice for physical works contract NZTA (Contract number)
On behalf of the NZ Transport Agency, I thank you for your tender to undertake the contract work described above and advise that it is hereby declined.
The successful tenderer is <name of successful tenderer> at a tendered sum of $XXXXX (amount in words) excluding GST and with an SQP of $XXXXXXX.
The NZ Transport Agency received <no.> conforming non alternative tenders and <no.> alternative tenders. Listed below are the names of other conforming tenderers in alphabetical order:
The range of prices of conforming tenders are from $XXXXXX to $XXXXXX excluding GST. (Note: only include range information for
price where three or more conforming tenders are evaluated.)
The range of non-price attribute grades, supplier quality premiums, alternative tender premiums, and your own grade, supplier
quality premium and alternative tender premium, as applicable, for each non-price attribute are as follows: (Note: only include range
information for non-price attributes and alternative tender premiums where three or more conforming tenders are evaluated. The
range of supplier quality premiums should still be given even when only two tenders are evaluated).
Attributes Range of grades or premiums Own grade or premium
Relevant experience
Track record
Relevant skills
Resources
Methodology
Supplier quality premium
9.1.1.1.1.1.4 Following are the prices of unsuccessful conforming non-alternative tenders in ascending order:
(Note: only include list of prices when three or more conforming tenders are evaluated.)
Tender price excluding GST
Yours faithfully Tenders Secretary for <appropriate> Manager
Contract procedures manual SM021 Part A Appendix XVI
Second edition, Amendment 1
Effective from June 2013
Page 110
Non-conformity rejection
Reference:
Date
Name
Company
Postal address 1
Postal address 2
Postal address 3
Dear Sir/Madam
Rejection notice on basis of non-conformity for contract NZTA (Contract Number)
On behalf of the NZ Transport Agency, I wish to inform you that your tender to undertake the works described above is rejected on
the basis that it was a non-conforming tender as defined in the NZTA’s Procurement manual. In the evaluation it was determined that
the tender was not consistent with the requirements of the RFT in that there was <for example, no information relating to the
Methodology Attribute provided>. This was contrary to the requirements of clause <for example? Tendering Information> of the RFT.
Your tender was graded less that 35 on <that attribute> at which point it became a non-conforming tender and no further evaluation
was undertaken. You are referred to the non-price attribute evaluation section in the NZTA’s Contract procedures manual (SM021)
and section << >> of the RFT which requires that a tender that is graded 35 or less on any non-price attribute must be excluded from
further consideration.
The successful tenderer was <name of successful tenderer> at a tendered price of $XXXXX (amount in words) excluding GST.
If you would like to receive a tender debrief please contact the Tender Secretary.
Yours faithfully Tenders Secretary for <appropriate> Manager
Contract procedures manual SM021 Part A Appendix XVII
Second edition, Amendment 1
Effective from June 2013
Page 111
Notice of late tender
Reference:
Date
Name
Company
Postal address 1
Postal address 2
Postal address 3
Dear Sir/Madam
Notice of late tender for contract NZTA (Contract Number)
On behalf of the NZ Transport Agency, I wish to inform you that your tender to undertake the works described above was declared to
be a late tender and therefore was rejected.
Consideration was given to the reason provided for the tender being received after the closing time but was, with the concurrence of
the NZTA State Highway Manager, deemed unacceptable.
You are referred to the late tenders reference in the NZTA’s Procurement manual and NZTA policy on late tenders as explained in
our Contract procedures manual (SM021).
Please find enclosed your unopened tender.
Yours faithfully Tenders Secretary for <appropriate> Manager
Contract procedures manual SM021 Part A Appendix XVIII
Second edition, Amendment 1
Effective from June 2013
Page 112
Acceptance notice for professional services contract (Brook’s law and target price method)
Reference:
Date
Name
Company
Postal address 1
Postal address 2
Postal address 3
Dear Sir/Madam
Acceptance notice for professional services contract NZTA (Contract Number)
On behalf of the NZ Transport Agency, I advise that your tender to undertake the contract work described above and referred to in your tender, is accepted for the sum of $XXXXX (amount in words) excluding GST.
I also advise that (Name of Project Manager) of this office has been appointed project manager under this contract.
Your attention is directed to the need for early compliance with the requirements of Clause 6 of the General Conditions of Contract, and Clause 2.7(c) of the Special Conditions of Contract regarding obligations relating to insurances. Please provide certificates of insurance prior to commencing the contract works.
The NZ Transport Agency received <no> conforming tenders.
The range of non-price attribute grades and your own grade are as follows: (Note: only include range information for non-price attributes where three or more conforming tenders are evaluated)
Attributes Range of grades Own grade
Relevant experience
Track record
Relevant skills
Methodology
Yours faithfully Tenders Secretary for <appropriate> Manager
Contract procedures manual SM021 Part A Appendix XIX
Second edition, Amendment 1
Effective from June 2013
Page 113
Decline notice for professional services contract (Brook’s law and target price method)
Reference:
Date
Name
Company
Postal address 1
Postal address 2
Postal address 3
Dear Sir/Madam
Decline notice for professional services contract NZTA (Contract Number)
On behalf of NZ Transport Agency, I thank you for your tender to undertake the above contract work and advise that it is hereby
declined.
The successful tenderer is (Name of successful tenderer) at a tendered sum of $XXXXX (amount in words) excluding GST and a
total non-price attribute grade of XX.
The NZ Transport Agency received <no.> conforming tenders.
The range of non-price attribute grades and your own grade are as follows: (Note: only include range information for non-price
attributes where three or more conforming tenders are evaluated.
Attributes Range of grades Own grade
Relevant experience
Track record
Relevant skills
Methodology
Yours faithfully Tenders Secretary for <appropriate> Manager
Contract procedures manual SM021 Part A Appendix XX
Second edition, Amendment 1
Effective from June 2013
Page 114
Contract payment voucher and tax invoice application
Note: The contract payment voucher and tax invoice application is linked to PROMAN (SAP when activated) and has
guidance/instruction as part of the application.
This manual will provide graphics from the application windows once SAP has been activated.
Contract procedures manual SM021 Part A Appendix XXI
Second edition, Amendment 1
Effective from June 2013
Page 115
Notice to tenderers
Note: If issued by consultant replace the NZTA logo with consultant’s logo.
Reference:
Date
Name
Company
Postal address 1
Postal address 2
Postal address 3
Dear Sir/Madam
Contract number NZTA (contract number)
Contract description:
Notice to tenderers number:
Please acknowledge receipt of this notice within 24 hours and with your tender.
Yours faithfully Tenders Secretary for <appropriate> Manager
Contract procedures manual SM021 Part A Appendix XXII
Second edition, Amendment 1
Effective from June 2013
Page 116
Preferred tenderer notice
Reference:
Date
Name
Company
Postal address 1
Postal address 2
Postal address 3
Dear Sir/Madam
Notice that a preferred tenderer has been selected on contract number <insert contract number> This letter is to inform you that <insert company name> has been selected as the preferred tenderer on contract number <insert contract number>. The NZ Transport Agency (NZTA) will now hold a pre-letting meeting with the preferred tenderer in accordance with the instructions for tendering. Following the award of contract, tender acceptance/decline letters will be issued and the opportunity to attend a tender debrief meeting will be provided. The NZTA wishes to thank all parties for their patience during this ongoing tender evaluation period. Yours faithfully Tenders Secretary for <appropriate> Manager
Contract procedures manual SM021 Part A Appendix XXIII
Second edition, Amendment 1
Effective from June 2013
Page 117
Request for approval of insurance amounts PS contracts
To: <<Guidance note: This memo should be sent to AON ([email protected]), their comments incorporated and endorsement gained prior to being submitted to the Risk and Insurance sub-VAC.>> [email protected] (on behalf of Risk and insurance sub-VAC)
CC:
From:
Date:
NZTA reference: NO file reference: R/1 – 0002
Regional file reference: [File Number]
Subject: Insurance levels: [Project Name]
1. Purpose
To seek the Risk and insurance sub-VAC approval for the proposed insurance levels for [Project Name], [Project Phase] in
accordance with the NZTA’s Contract procedures manual (SM021), Liability and insurance section.
2. Action/Deadline
Risk and insurance sub-VAC to endorse the proposed insurance levels below, or propose an alternative course of action by
10am [day and date].
<<Guidance note: Provide adequate time frame, 1 week if possible. If shorter time frame required please make clear your
required time frame.>>
3. Insurance amounts proposed for [Project Name]
Description Value
Limitation of liability
(CCCS 6.2)
$[amount] (note default amounts in the NZTA proforma document)
<<Guidance note: Limitation amount will generally be in accordance with SM030 General and special conditions of contract. Project Manager to advise Risk and insurance sub-VAC where different, and why.>>
Duration of liability
(CCCS 6.4)
[x years] from the date of completion of the services (note default duration is
6 years).
<<Guidance note: Duration will generally be in accordance with SM030 General and special conditions of contract. Project manager to advise Risk and insurance sub-VAC where different, and why.>>
Professional indemnity
(CCCS 6.5)
$[amount] with at with at least one automatic reinstatement of the minimum amount per 12-month period of insurance (note default will be for the amount specified for limitation of liability).
Public liability
(CCCS 6.5)
$[$ amount]] million (note default value $5 million).
Contract procedures manual SM021 Part A Appendix XII
Second edition, Amendment 1
Effective from June 2013
Page 118
Base estimate of PS fees $[amount] over a period of [‘x’ months/years]
Base estimate of PW (if applicable)
$[$ amount] million.
4. Background
Provide brief description of project phase, eg this phase is for the design of the 10km four-lane upgrade with one interchange
structure for…… Phase period will be for ‘x period’, construction start anticipated to commence {date] and expected to run
for ‘x period’).
Tenders for this contract close [contract closure date]
5. Project risk profile
This is the critical part of the submission to the Risk and insurance sub-VAC.
Attach the latest project risk register.
Ensure a rigorous assessment of risk has been undertaken, variations from the norm (to which our standard requirements are geared) identified, and recommendations on the exceptions made.
Identify significant risks at a project level including any planned treatments and existing controls.
Specific attention must be paid to geotechnical and seismic assessments and a specific statement identifying the
assessed risk or unknowns must be included.
Where the risks are yet to be assessed, then make a statement to this effect.
6. Insurance background
Prior to submitting this memo to the NZTA PS Project Support team via [email protected] , the project manager must obtain our insurers approval for the public liability cover. Contact Aon risk services (Russell Bell, 04 819-4004, 027 472 1012, [email protected]). Russell will advise what information the insurers require, this will vary between projects.
The NZTA’s insurer (QBE) is fully aware of this project, and have confirmed with Aon that the standard liability policy
deductibles shall apply for this contract. <<Amend as appropriate.>>
7. Recommendation
That Risk and insurance sub-VAC approve the insurance levels currently stated in the contract documents.
Prepared by: << Project Manager/Asset Manager>>
Name: _____________________ Signed: ____________________ Dated: __________
Endorsed by NZTA’s Insurance Broker:
Name: _____________________ Signed: _____________________ Dated: __________
Approved by the Risk and Insurance sub-VAC:
Name: _____________________ Signed: _____________________ Dated: __________
Name: _____________________ Signed: _____________________ Dated: __________
Contract procedures manual SM021 Part A Appendix VII
Part A Appendix VII
Page 3 of 8
First edition, Amendment 1
Effective from June 2013
Page 119
Name: _____________________ Signed: _____________________ Dated: __________
Name: ____________________ Signed: _____________________ Dated: __________
Contract procedures manual SM021 Part A Appendix XXIII
Second edition, Amendment 1
Effective from June 2013
Page 120
Request for approval of insurance amounts PW contracts
To: <<Guidance note: This memo should be sent to AON ( [email protected]), their comments incorporated and endorsement gained prior to being submitted to the Risk and Insurance sub-VAC.>> [email protected] (on behalf of Risk and insurance sub-VAC)
CC:
From:
Date:
NZTA reference: NO file reference: R/1 – 0002
Regional file reference: [File Number]
Subject: Insurance levels: [Project Name]
Purpose
To seek the Risk and insurance sub-VAC approval for the proposed insurance levels for [Project Name] in accordance with the
NZTA’s Contract procedures manual (SM021), Liability and insurance section.
Action/Deadline
Risk and insurance sub-VAC to endorse the proposed insurance levels below, or propose an alternative course of action by 10am
[day and date]. <<Guidance note: Provide adequate time frame, 1 week if possible. If shorter time frame required please make
clear your required time frame.>>
Insurance amounts proposed for [Project Name]
Description Value
Professional indemnity
(NZS 3910:2003 Part A 8.4.1a and Part B 8.4.2)
Clause 8.4.1a
$ (amount) (note default values in the NZTA proforma document)
Clause 8.4.2
State reinstatement(s) of PI Policy required ( note refer to default values in the NZTA proforma document
<<Guidance note: If contract period is greater than 3 years, OR contract value is greater than $50M, OR a Bridge construction cost is greater than $10M, then change highlighted “one automatic reinstatement” to “a minimum of two automatic reinstatements” >>
Project manager to advise Risk and insurance sub-VAC where different, and why.
Public liability (NZS 3910:2003 8.3)
$(million $ amount) (note default value $5 million)
Motor vehicle 3rd party ( NZS 3910:2003 8.3)
$(million $ amount) (note default value $1million)
Contract works (NZS 3910:2003 8.1)
The contract price
- plus (percentage)% demolition and disposal
- plus (percentage)% professional fees
- plus (percentage)% for items to be incorporated and not included in contract sum
- plus (percentage)% of contract price for increased construction costs.
This equates to $(amount) based on the expected estimate (note no default value in the NZTA proforma document).
Contractors plant (NZS 3910:2003 8.2)
All plant with market value > $(thousand $ amount) (note default value $50,000).
Contract procedures manual SM021 Part A Appendix XXIII
Second edition, Amendment 1
Effective from June 2013
Page 121
Contractors bond (NZS 3910:2003 3.1)
$ (million $ amount) (note no default value in the NZTA proforma document).
Guidance note: Bond amount will generally be in accordance with the NZTA’s Contract procedures manual (SM021) section 2B. Project manager to advise Risk and insurance sub-VAC where different, and why.
Retention (NZS 3910:2003 12.3.1)
Contracts >$20 million require the retention amounts approved by the Risk and insurance sub-VAC. Best practice for such projects is for contractor to acquire a bond in lieu of retention.
If any of the above insurances are not included in the project, enter ‘not applicable’ in the value column.
Background
(Provide brief description of project, eg this project is a conventional 10km four-lane upgrade with one interchange structure.)
Tenders for this contract close (contract closure date).
Project risk profile
This is the critical part of the submission to the Risk and insurance sub-VAC.
Attach the latest project risk register.
Ensure a rigorous assessment of risk has been undertaken, variations from the norm (to which our standard requirements are geared) identified, and recommendations on the exceptions made.
Identify significant risks at a project level including any planned treatments and existing controls.
Specific attention must be paid to geotechnical and seismic assessments and a specific statement identifying the assessed
risk or unknowns must be included.
Where the risks are yet to be assessed, then make a statement to this effect.
Insurance background
Prior to submitting this memo to the NZTA PS Project Support team via [email protected] , the project manager must obtain our insurers approval for the public liability cover. Contact Aon risk services (Russell Bell, 04 819-4004, 027 472 1012, [email protected]). Russell will advise what information the insurers require, this will vary between projects.
The NZTA’s insurer (QBE) is fully aware of this project, and has confirmed with AON that the standard liability policy deductibles shall apply for this contract. (amend as appropriate)
Recommendation
That Risk and insurance sub-VAC approve the insurance levels currently stated in the contract documents.
Prepared by: << Project Manager/Asset Manager>>
Name: _____________________ Signed: ____________________ Dated: __________
Endorsed by NZTA’s Insurance Broker:
Name: _____________________ Signed: _____________________ Dated: __________
Approved by the Risk and Insurance sub-VAC:
Name: _____________________ Signed: _____________________ Dated: __________
Name: _____________________ Signed: _____________________ Dated: __________
Contract procedures manual SM021 Part A Appendix XXIII
Second edition, Amendment 1
Effective from June 2013
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Name: _____________________ Signed: _____________________ Dated: __________
Name: ____________________ Signed: _____________________ Dated: __________
Contract procedures manual SM021 Part A Appendix XXIII
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Effective from June 2013
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Request for approval of insurance amounts ECI contracts
To: <<Guidance note: This memo should be sent to NZTA’s insurance advisor AON (, [email protected]), their comments incorporated and endorsement gained prior to being submitted to the Risk and Insurance sub-VAC.>> [email protected] (on behalf of Risk and insurance sub-VAC)
CC: Project Services (ECI Procurement Manager)
From:
Date:
NZTA reference: NO file reference: R/1 – 0002
Regional file reference: [File Number]
Subject: Insurance levels: [Project Name]
Purpose
To seek the Risk and insurance sub-VAC approval for the proposed insurance levels for [Project Name] in accordance with the
NZTA’s Contract procedures manual (SM021), Liability and insurance section.
Action/Deadline
Risk and insurance sub-VAC to endorse the proposed insurance levels below, or propose an alternative course of action by 10am
[day and date]. <<Guidance note: Provide adequate time frame, 1 week if possible. If shorter time frame required please make
clear your required time frame.>>
Insurance amounts proposed for [Project Name]
Description Value
Phases which insurance approval is being sought (SP1, 2 and/or 3)
Guidance note: state phases which insurance approval is being sought and give brief description of works included in those stages (e.g.- SP1 – Investigation and Reporting). Approval for subsequent stages will be required before they commence.
Base estimate of PS fees SP 1 = $[amount] over a period of [‘x’ months/years], and/ or SP 2 = $[amount] over a period of [‘x’ months/years],
and/or SP 3 = $[amount] over a period of [‘x’ months/years]
Base estimate of PW (if
applicable)
SP 3 = $[$ amount] million.
Professional indemnity
(NZS 3910:2003
Part A 8.4.1a and Part B 8.4.2 – SP 1, 2 and 3)
Clause 8.4.1a
$ (amount) (note default values in the NZTA proforma document)
Clause 8.4.2
State reinstatement(s) of PI Policy required ( note refer to default values in the NZTA proforma document)
<<Guidance note: If contract period is greater than 3 years, OR contract value is greater than $50M, OR a Bridge construction cost is greater than $10M, then change highlighted “one automatic reinstatement” to “a minimum of two automatic reinstatements” >>
Project manager to advise Risk and insurance sub-VAC where different, and why.
Guidance note: Contractor can be required to increase the level of PI insurance held as they move through the project development stages (SP 1, 2 and 3). PI insurance may also be purchased which is inclusion of previous design work. Prior to submitting please discuss PI requirements/level with the Project Services Team.>>
Public liability (NZS 3910:2003 8.3)
$(million $ amount) (note default value $5 million)
Guidance note: PL insurance levels can be increased as the contractor progresses through SPs..
Motor vehicle 3rd party ( NZS 3910:2003 8.3)
$(million $ amount) (note default value $1million)
Contract works (NZS 3910:2003 8.1 – SP 3
The contract price <<
Contract procedures manual SM021 Part A Appendix XXIII
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Only) - plus (percentage)% demolition and disposal
- plus (percentage)% professional fees
- plus (percentage)% for items to be incorporated and not included in contract sum
- plus (percentage)% of contract price for increased construction costs.
This equates to $(amount) based on the expected estimate (note no default value in the NZTA proforma document).
Contractors plant (NZS 3910:2003 8.2 – SP 3 Only)
All plant with market value > $(thousand $ amount) (note default value $50,000).
Contractors bond (NZS 3910:2003 3.1 – SP 3 Only)
$ (million $ amount) (note no default value in the NZTA proforma document).
Guidance note: Bond amount will generally be in accordance with the NZTA’s Contract procedures manual (SM021) section 2B. Project manager to advise Risk and insurance sub-VAC where different, and why.
Retention (NZS 3910:2003 12.3.1)
Contracts >$20 million require the retention amounts approved by the Risk and insurance sub-VAC. Best practice for such projects is for contractor to acquire a bond in lieu of retention.
If any of the above insurances are not included in the project, enter ‘not applicable’ in the value column.
Background
(Provide brief description of project, eg this project is a conventional 10km four-lane upgrade with one interchange structure.) Include project stage SP 1, 2 or 3 and description of the extent of works to be undertaken under the insurance levels to be approved.
Tenders for this contract close (contract closure date).
Project risk profile
This is the critical part of the submission to the Risk and insurance sub-VAC.
Attach the latest project risk register.
Ensure a rigorous assessment of risk has been undertaken, variations from the norm (to which our standard requirements are geared) identified, and recommendations on the exceptions made.
Identify significant risks at a project level including any planned treatments and existing controls.
Specific attention must be paid to geotechnical and seismic assessments and a specific statement identifying the assessed risk
or unknowns must be included.
Where the risks are yet to be assessed, then make a statement to this effect.
Insurance background
Prior to submitting this memo to the NZTA PS Project Support team via [email protected] , the project manager must obtain our insurers approval for the public liability cover. Contact Aon risk services (Russell Bell, 04 819-4004, 027 472 1012, [email protected]). Russell will advise what information the insurers require, this will vary between projects.
The NZTA’s insurer (QBE) is fully aware of this project, and has confirmed with AON that the standard liability policy deductibles shall apply for this contract. (amend as appropriate)
Recommendation
That Risk and insurance sub-VAC approve the insurance levels currently stated in the contract documents.
Prepared by: << Project Manager/Asset Manager>>
Name: _____________________ Signed: ____________________ Dated: __________
Endorsed by NZTA’s Insurance Broker:
Name: _____________________ Signed: _____________________ Dated: __________
Contract procedures manual SM021 Part A Appendix XXIII
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Effective from June 2013
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Approved by the Risk and Insurance sub-VAC:
Name: _____________________ Signed: _____________________ Dated: __________
Name: _____________________ Signed: _____________________ Dated: __________
Name: _____________________ Signed: _____________________ Dated: __________
Name: ____________________ Signed: _____________________ Dated: __________
Contract procedures manual SM021 Part A Appendix XXIV
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Effective from June 2013
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Request for the price envelope to be opened
TO: PS
PW
PQM
Brook’s law method
Delegated authority approval obtained:
Yes No
(tick appropriate box)
CC:
FROM:
DATE:
PROJECT NAME:
SUBJECT:
Opening of price envelopes
Contract Number NZTA has been evaluated. Form F: Evaluator summary of all non-price attributes has been completed and is attached.
PQM - Please open all the price envelopes.
Brook’s law method - Please open only the price envelope from the following tenderer: (Name of tenderer)
(tick appropriate box)
Recommendation
Project manager signature: Date:
NZ Tr Contract procedures manual SM021 Part A Appendix XXV
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PQM guidelines
PQM simple
Introduction
PQM simple is a formula-based evaluation. It distinguishes the difference in quality between tenderers by translating the non-price
attribute grades to an SQP. The SQP is defined as ‘the amount that the tendering authority is prepared to pay to secure a higher-
quality tender relative to the lowest quality tender’.
PQM simple is available for use for in both PW and PS contracts. The same steps and guidelines apply for both contract types. The
price weighting is limited as follows:
PW price weights of 50% – 30% are permitted
PS price weights of 20% – 30% are permitted.
Pre-tender preparations
Prior to issuing the RFT, the project manager should investigate and assign weightings to the non-price attributes and the price.
Once these and the estimate have been established, the SQP that will be obtained for a specific grade margin should be analysed
for sensitivity. For example if the non-price attribute grade margin between two tenders is 10% and this results in a SQP of $10,000,
does this represent the additional amount that the client is willing to pay to secure such a tender? Care should be taken to ensure
this sensitivity is understood and is appropriate, particularly where a very high weighting is placed on the non-price attributes.
Dependent on the size and complexity of the contract, the tendering authority may wish to associate this SQP with an analysis of the
risks. Where the SQP determined in too high/low, the non-price and the price weightings should be revised to ensure a suitable SQP
will be obtained. The non-price and price weightings may not be altered after the close of tenders.
Contract estimate
For PQM simple, the base estimate must be included in the RFT to add transparency to the evaluation process. Tenderers should be
encouraged to comment on the accuracy of the base estimate through the contracts-nominated probity auditor.
The evaluation estimate used in the calculation shall not include amounts fixed by the tendering authority (e.g. provisional sums).
SQP sanity check
Under PQM a ‘sanity check’ must be completed on the calculated SQPs and ATPs before the opening of the price envelope. The
TET must satisfy itself that the relevant differences between tenderer’s SQPs are realistic and represent the difference in price that
the tendering authority is prepared to pay. If the TET is not satisfied with the SQP as calculated, they may replace the SQP with an
adjusted figure but must clearly record all changes and provide justification for each change. Such adjustments should be used to
refine the SQP determined through the non-price attribute assessment.
The SQP and ATP may not be altered once the price envelope is opened. After deducting the SQP and ATP values from the
submitted tender prices, the supplier with the lowest adjusted evaluation price is the preferred supplier.
ATPs
Each alternative tender is to be separately evaluated and an ATP determined for each. ATP is defined as ‘the difference in price that
the tendering authority is prepared to pay for the product offered by an alternative tender compared to the minimum standard product
specified in the RFT’.
Example calculation using PQM simple
For a PW contract with the following basic data: Base estimate (minus provisional sums) = $100,000.00; price weight = 70%; non-
price attributes = relevant experience (10%), resources (5%) and methodology (15%).
Weighting Non-price attribute Tender A Alternative A Tender B Tender C
10% Relevant experience 90 90 80 70
Contract procedures manual SM021 Part A Appendix XXIII
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5% Resources 90 90 80 70
15% Methodology 90 95 80 70
NPA weighted sum 27.00 27.75 24.00 21.00
70% Price
Non-price attribute weighted sum margin * 6.00 6.75 3.00 0.00
Supplier quality premium $8571.43 ** $9642.86 $4285.71 $0.00
ATP $0.00 $5000.00 $0.00 $0.00
SQP + ATP $8571.43 $14642.86 $4285.71 $0.00
Tender price *** $90000.00 $97000.00 $92000.00 $87000.00
Adjusted evaluation price $81428.57 $82375.14 $87714.29 $87000.00
*Weighted sum margin = deduct the lowest non-price attribute weighted sum from each of the non-price attribute weighted sums. ** For example, tender A SQP = Evaluation estimate x (weighted sum margin / price weight)
= 100,000.00 x 6.00 / 70 = $8571.43
***Remove any amount fixed by the tendering authority from the submitted tender prices.
Tender A has the lowest adjusted evaluation price, and is therefore the preferred tenderer. Note that the ATP and SQP remain final once the price envelope has been opened. Adjustments are not permitted once the price envelopes are opened. The detailed ATP evaluations and calculations must be separately documented.
PQM Special
Introduction
This method of tender evaluation is suitable for complex projects or projects where many significant risks have been identified that
could impact on the successful outcome of the project. It distinguishes higher quality suppliers by calculating SQPs from a value
determined in a risk-based assessment. The basic process is summarised as follows.
High-quality
bid
Reduced
risk
Potential
benefits to
the client
Client willing
to pay more
to secure
this bid
Higher
SQP
Pre-tender preparations
Prior to issuing the RFT, the tendering authority must investigate the choice of non-price attributes and their weightings. The
minimum quality threshold for the non-price attribute grades are then set considering factors such as the complexity of the project,
the short listing process (if any) etc. Suppliers failing to reach this minimum quality threshold for any one NPA will be deemed non-
conforming and rejected. The maximum risk consequence (MRC) must also be determined, as described below.
Theoretically, a tenderer with a perfect non-price attribute grade of 100 will be able to successfully deliver a contract with the highest
possible quality and the least possible risk, producing maximum benefits and savings for the Client. These “maximum benefits and
savings” are represented by a figure termed the MRC. The MRC is the total of the worst case scenario related costs associated with
each risk. The risks included in this assessment are generally sourced from the risk register (based on NZTA’s Risk management
process manual (AC/Man/2)), and should all be risks that the supplier has an ability to influence.
Preferred tenderer
Contract procedures manual SM021 Part A Appendix XXV
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The tendering authority must investigate and assign a maximum value to each risk. The sum of each risk’s maximum costs forms the
MRC. The MRC equals the SQP for a 100% range. An example is provided as follows.
Risk SQP for a 10% NPA range*
Environmental Issues $0.2
Third Party/Stakeholder $0.1
Traffic management $0.3
Quality control $0.3
Safety $0.1
Design $0.2
Project management $0.2
Total SQP for a 10% non-price attribute range $1.4 million
* Note the corresponding MRC = SQP for a 100% NPA range = $1.4 million x 10 = $14 million.
To ascertain the worst case value of each risk, consider items such as:
additional full time staff to manage the crisis
extra legal fees, time delay costs and traffic delay costs
serious accidents involving the public or workers
poor quality of work will require extra construction or maintenance
poor public relations will require extra consultation and communication.
Once the MRC has been determined, the tendering authority must analyse the sensitivity of the SQPs obtained for specific grade
margins. For example, the difference in non-price attribute grades between two tenders is 10% and the resultant SQP is $1.4 million,
does this represent the amount that the client is willing to pay to secure such a tender? If it does not, revisit the risks and the
associated worst case values until an appropriate SQP is obtained. The MRC cannot be altered following the close of tenders.
The process also requires that tender evaluation marking forms consider the risks identified in this analysis and be aligned
with these risks, e.g. given that traffic management has been assigned a $0.3 million value for the worst-case scenario, 21% of the
MRC, specific references to traffic management should be added to the relevant experience, track record, technical skills and
methodology non-price attributes, and their combined weighting should approximate 21%.
No limitation is placed on the size of the MRC under the PQM special tender evaluation method.
The RFT for PQM special is required to disclose: the risks, SQP for a nominal 10% range in non-price attributes for each risk, and
the total for a nominal 10% range in non-price attribute (as shown in the above table). This disclosure will help convey the specific
risk issues that the Client wishes a supplier to focus on in their tender submission.
SQP calculation
PQM special translates non-price attribute grades to a SQP-based on a predetermined risk value as shown below.
0% C B A 100%
MRC
A
B
$C
NPA grade (%)
SQP deducted from
B’s tender price
SQP deducted from
A’s tender price
Risk value ($)
Contract procedures manual SM021 Part A Appendix XXV
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Using the non-price attribute grade, the corresponding risk value is calculated based on the MRC, as determined prior to the close of
tenders. The SQP is then calculated by using the lowest risk value as the zero benchmark.
SQP ‘sanity check’
A ‘sanity check’ of each tender’s SQP must be undertaken to confirm that the SQP is reasonable and representative. A detailed
check may be done by going through the list of risks given in the RFT. For each tender, examine how well each tenderer handles
each risk in their tender submission, allocate an appropriate risk value, and compare the resultant SQP with the SQP from the non-
price attribute evaluation.
If the TET is not satisfied with the SQP as calculated, they may replace the SQP with an adjusted figure but must clearly record all
changes and provide justification for each change. Such adjustments should be used to refine the SQP determined through the non-
price attribute assessment. The SQP for each tenderer must be finalised before the opening of the price envelope.
Example calculation using PQM special
For a physical works contract with the following basic data: non-price attribute = track record (30%), resources (20%), methodology
(50%); and the predetermined MRC is $15 million.
Weighting Non-price attribute Tender A Tender B Tender C
30% Track Record 80 80 50
20% Resources 80 90 70
50% Methodology 90 80 70
Non-price attribute weighted sum (%) 85.0 82.0 64.0
Risk value ($)* $12.75M $12.3M $9.6M
Lowest risk value ($) $9.6M
SQP ($) $3.15M $2.7M $0.00
Tender price ** $30.0 $29.0 $28.0
Adjusted evaluation price $26.85M $26.3M $28.0M
* Risk value ($) for tender A = non-price attribute grade x MRC /100 = 85 x $15 million /100
= $12.75 million
**Remove any amount fixed by the tendering authority from the submitted tender prices.
Note that $3.15 million is the maximum differential price that the client is willing to pay to secure the highest quality tender (A)
compared with the lowest quality tender (C).
Alternative tenders are evaluated in the same way as that shown in the example calculation for PQM simple.
Preferred tenderer
NZ Transport Agenc Contract procedures manual SM021 Part A Appendix XXVI
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Procurement strategy for block projects <<insert region/description>>
<<This template has been developed to be used for both standalone and packaged block project PS and PW. Delete as appropriate
to approach>>
1. Purpose
The purpose of this procurement strategy is to:
document the key considerations made in the selection of a delivery model and projects for term contracts within <<insert
region/area>>, or document the key considerations made in the selection of delivery models for block projects within <<insert
region/area>>
confirm the high level details in the approach to be taken to procurement
ensure the procurement of term contracts complement each other, or ensure the procurement of block projects complement
each other
ensure NZTA project management resources are optimised
ensure the strategy for the procurement of PS and PW are supported from the outset
ensure competition for professional services, within the market place is optimised and finite resources within the region are
managed.
2. Background
2.1 Description
<<List the high level objectives of the projects and the type of works to be undertaken.>>
<<For term/packaged contracts - Describe the key factors considered in the grouping of projects (i.e. topography, traffic volumes,
urban / rural etc) >>
2.2 Status
<<Include a brief description of the status of critical aspects of the packages OR projects such as: funding, statutory approvals,
property acquisition, consultation, investigations including geotechnical data, scheme assessment, etc>>
Regional funding allocation as of ???? 2010
Term contract or projects 2009/10 2010/11 2011/12 2012/13
???? term contract or ???? project
$?.? million $?.? million $?.? million $?.? million
Regional funding allocation as of ???? 2010
Term contract or block project
Contract status Contract value capped at $
Status of projects within contract
Designation status
Consents and other statutory approvals.
Property acquisition
status
???? term contract
Awarded
??.?? 2010
$?.? million 1 Study and 2 I&R
??? TBC? Complete?
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2.3 Projects portfolio
<<Describe other projects due for tender/design during the same period, including where possible consideration of both internal and
external projects, at both a regional, and national level, if they are likely to cause any capacity constraints etc>>
<<Include consideration of the expected tenderers for the respective PS and PW tenders. >>
<< Include reference to and attach the latest regional block project programme as appropriate.>>
<<For term - list projects within term contracts stating year to be commenced and estimated fee. List the same details for other
applicable projects programmed for the area>>, i.e. –
Breakdown of <<insert region>> term contracts for PS.
The base projects are those projects upon which the original term contract will be tendered and is therefore the initial component of
that term contract.
Additional projects are identified from the NZTA’s annual plan and three year forecast, and have been attributed to each contract.
<<As a guide the value of the additional/negotiated projects added to the contract should be limited to the value of the base
projects>>
<<insert name>> term contract
2009/10 Base projects
<<insert project name>> Fee $???
<<insert project name>> Fee $???
<<insert project name>> Fee $???
Sub total $??????
2010/11 Negotiated
<<insert project name>> Fee estimate $?????
<<insert project name>> Fee estimate $?????
Sub total $???????
2011/2012
<<insert project name>> Fee estimate $?????
<<insert project name>> Fee estimate $?????
Sub total $??????
2012/2013
<<insert project name>> Fee estimate $??????
<<insert project name>> Fee estimate $??????
Sub total $????????
Total 2009/2013 $???????????
<<describe the volume of other PS projects which are programmed for the duration of the term contracts and any implications this
has on the supplier market.>>
3. Procurement method assessment
<<Describe the reasoning for the selection of the proposed procurement method for the various packages or projects and the
advantages of packaging or not packaging the works>>
Contract procedures manual SM021 Part A Appendix XXVI
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Effective from June 2013
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Include a consideration, where relevant against each of the following criteria:
scale
complexity / scope for innovation
programme constraint
market conditions <<describe how packaging the contracts will affect the supplier market.>>
risk (quantum and type)
stakeholders
client involvement, control and capability
focus on non-cost success (e.g. social and environmental)
tangible demonstration of value for money
flexibility to deal with change.
4. Procurement method details
Accordingly, the <<term agreement>> method is the preferred approach for the procurement the professional services on block
projects.
<< Additional information on the method selected (i.e. contract duration, timing, other key factors)>>
<<If applicable - explain if additional projects are planned to be added to the term contracts and how this will be done>>
Prepared by:<<Regional Project Manager>> Signed: ____________________ Dated: __________
Endorsed: <<State Highway Manager>> Signed: _________________ Dated: __________
Agreed: <<National Manager PS / Manager Project Services>>
Signed: _____________________ Dated: _________
Contract procedures manual SM021 Part A Appendix XXVII
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Effective from June 2013
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NZTA file reference:
Date
The Manager
Contractor name
Contractor address
Attention:
Dear Sir/Madam
Notice in respect to <contractor name> global bond
We hereby advise the following contract has been released from the <contractor name> global bond:
Contract number: XXXXX
Contract name: XXXXX
NZTA region: XXXXX
NZTA contact person: XXXXX
Please find attached a copy of defects liability certificate for this contract.
We will ensure your global bond register is updated accordingly, and that this contract will no longer be included on the global bond.
Yours faithfully Tenders Secretary for <appropriate> Manager Enc. Copy of defects liability certificate cc. (consultant) [email protected]
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Large project stage 1 procurement strategy
<<insert project name>>
1. Purpose
The purpose of this stage 1 procurement strategy is to:
document the key considerations made in the selection of a delivery model for the <<insert project name>> project, and
confirm the high level details in the approach to be taken to procurement.
2. Background
2.1 Description:
<<List the high level objectives of the project, its key features, and the major scope items>>
<<Note the latest project out-turn cost estimate and the allocation for the design phase>>
<<Summarise the key programme dates, or attach the most recent risk adjusted programme, based on the selected delivery
model>>
<< Summarise how the project fits into the national/regional state highway plan and the key drivers and objectives behind the
project (i.e. priority)>>
2.2 Status
<<Include a brief description of the status of critical aspects of the project such as: funding, statutory approvals, property
acquisition, consultation, investigations including geotechnical data, scheme assessment, etc>>
2.3 Large projects portfolio
<<Describe the tie-in with other projects due for tender/construction during the same period, including where possible
consideration of both internal and external projects, at both a regional, and national level, if there are likely to be any capacity
constraints etc>>
<<Include consideration of the expected tenderers for the respective PS and PW tenders>>
3. Key project characteristics and risks
The following project characteristics or risks have been identified as key to the decision on the most appropriate procurement
model:
<<insert a list of the top 5 –10 project issues considered most relevant to the selection of the most appropriate delivery
model, and provide a description of each:
o for example, a healthy designation is available to us which may open the door to significant geometric
innovation…..
o a substantial construction start required by June 2011 requiring that we progress the project development phase
expeditiously…..>>
4. Procurement model assessment
<<Make an assessment of the relative merits of the various PW delivery models available, in comparison to the project key
characteristics, risks, programme constraints, and the market assessment.
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Include a consideration, where relevant against each of the following criteria:
Scale.
Complexity/Scope for innovation.
Programme constraint.
Market conditions.
Risk (quantum and type).
Stakeholders.
Client involvement, control and capability.
Focus on non-cost success (e.g. social and environmental).
Tangible demonstration of value for money.
Flexibility to deal with change.
OPTIONAL: use the model selection matrix, attach the output, and explain the logic used in applying weightings etc.>>
<< For the two or three most appropriate models list the advantages and disadvantages of each model for the project being
considered. Then state the selected model and summarise the key reasons (see listed advantages and disadvantages for
models at the end of this template). Describe how best value for money will be obtained through the selected delivery model
and supplier selection process>>
5. Procurement details
Accordingly, the <<traditional, ECI, DC, competitive alliance, pure alliance>> delivery model is the preferred approach for this
project.
5.1 PS
<< Describe the proposed procurement process, i.e. the approach proposed to the tender of the D&PD phase is .... >>
<<Examples of details required are:
non-price attribute weightings
TET members including nominated qualified evaluator
timeframes
current estimate, etc.
5.2 PW
<< Describe the proposed procurement process, i.e. the approach proposed to the tender of the construction works is ….>>
<< State outline/high level information on the process, i.e. timeframes. This information will have detail added and be
confirmed in the stage 2 strategy>>
Prepared by:<<Regional Project Manager>> Signed: ____________________ Dated: __________
Endorsed: <<State Highway Manager>> Signed: _________________ Dated: __________
Agreed: <<National Manager PS/Manager Project Services>>
Signed: _____________________ Dated: _________
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Generic information on delivery models should be adapted on a project specific basis
Traditional
Scale – suitable for both small, medium and some large scale projects.
Complexity/scope for innovation – little scope for innovation and not suitable for complex projects.
Programme constraint – design must be fully completed prior to tendering resulting in a later construction start.
Market conditions – due to low risk transfer, well defined outputs and low tendering costs competitive tendering can be achieved.
Risk (quantum and type) – suitable for low to medium risk profiles.
Stakeholders – the client has design control so retains the majority of responsibility.
Client involvement, control and capability – the client retains design control and site supervision.
Focus on non-cost success (e.g. social and environmental) – the NZTA retains control during the design process and have the
ability to value non-cost success.
Tangible demonstration of value for money – due to the competitive tender process it is relatively straightforward to demonstrate
value for money in the construction phase.
Flexibility to deal with change – little flexibility to deal with change. Variations can be costly.
Advantages:
Allows for strong competitive bidding.
The design is completed prior to letting the PW contract so the outputs are known at the outset of the contract and the client
has a high level of control.
Low procurement costs for both supplier and purchaser.
Disadvantages:
In the event of a risk occurrence the client retains responsibility which may result with the construction phase having a higher
cost.
Coordination between design/construction suppliers and stakeholders can be more complex, and increases NZTA resources.
Few incentives to optimise the design.
Separation of contractor and designer limits innovation and build-ability.
Later site start date as detailed design must be complete before site works starts.
Design errors can be costly to the client.
D&C
Scale – suitable for medium to large scale projects.
Complexity/scope for innovation – lots of scope for innovation and suitable for complex projects.
Programme constraint – detailed design is completed after construction is started so earlier construction start/finish dates are
possible.
Market conditions – high-risk transfer and medium to high tendering costs limit the number of contractors/designers able to
tender. This can mean fewer contractors awarded contracts.
Risk (quantum and type) – suitable for medium to high risk profiles
Stakeholders – the client has little design control post tender so the contractor/consultant must take the lead in negotiations and
liaison.
Client involvement, control and capability – the contractor has design control post tender and responsibility for MSQA during
construction.
Focus on non-cost success (e.g. social and environmental) – the NZTA retains control during the design process and have the
ability to value non-cost success.
Tangible demonstration of value for money – proposed tender designs are assessed for tangible cost benefits and assigned a
premium. This should ensure the successful design achieves the best value for money possible.
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Flexibility to deal with change – the detailed design is completed as construction is ongoing so variations can be accommodated
into the design. However changes in scope can be costly.
Advantages:
High risks associated with constructability such as complicated traffic management, and working close to live lanes along the
motorway can be addressed in the detailed design phase in consultation with the contractor.
After the specimen design has been completed the detailed design and construction can be let as a lump sum contract,
transferring potential risks to the contractor who is best placed to manage them.
Works can be competitively tendered giving price tension.
Increased potential for build-ability and design innovation.
The NZTA requires less design resource.
Disadvantages:
Specimen design, designations, resource consents and property purchases must be in place prior to tendering the detailed
design and construction. This means a later site start date compared to ECI or alliance models.
Letting separate portions as design and construct contracts is not practical as it can lead to design conflicts.
Procurement cost for both the client and supplier are higher.
Minimum standard designs are encouraged.
Greater risk transfer to supplier may increase costs.
Post contract variations and scope changes can be costly.
Flexibility is reduced after award.
The number of potential suppliers is reduced due to tendering costs and risk transfer.
ECI
Scale – suitable for medium to large scale projects.
Complexity/scope for innovation – lots of scope for innovation and suitable for complex projects.
Programme constraint – detailed design, designation, consents and property purchase can be completed after construction is
started so earlier construction start/finish dates are possible compared to traditional and D&C models.
Market conditions – generally low-medium tendering cost should allow a range of interested contractors/consultants to tender.
Due to the contractors high level of commitment in the investigation and design phase some contractors may be less interested
in tendering during periods of high workload.
Risk (quantum and type) – suitable for medium to high risk profiles. The construction portion of the contract is let on a D&C basis
so the contractor has the responsibility for the detailed design.
Stakeholders – the client retains design control until the D&C phase is awarded. At this point the contractor/consultant must take
the lead in negotiations and liaison.
Client involvement, control and capability – the contractor has control of the detailed design and responsibility for MSQA during
construction.
Focus on non-cost success (e.g. social and environmental) – the NZTA retains control during the preliminary design process and
have the ability to value non-cost success.
Tangible demonstration of value for money – an independent parallel estimate is conducted on the specimen design prior to
award of the D&C phase to ensure a competitive construction price is achieved. The specimen design is developed in
conjunction with the NZTA and in consideration of project requirements.
Flexibility to deal with change – the ECI model allows for design and scope changes to be incorporated before the D&C portion
of the contract is let.
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Advantages:
High risks associated with constructability such as complicated traffic management, and working close to live lanes along the
motorway can be addressed in the design phase in consultation with the contractor.
Increased potential for build-ability and design innovation.
The ECI model will enable the staged design and construction to occur concurrently allowing an earlier start on site works
There is currently a strong buyers market with some contractor’s known to have very light order books. This should assist in
ensuring a competitive PW price.
The ECI model allows the NZTA to retain control over the project during development. This is considered of high importance
as final scope is dependent on consent and alteration designation processes.
ECI allows stakeholder consultation to continue and be fed into the design as portions of the works are commenced on site.
After the specimen design has been completed the detailed design and construction can be let as a lump sum contract,
transferring potential risks to the contractor who is best placed to manage them.
Disadvantages:
Decreased competition on price may result in higher PW costs.
Competitive alliance/Alliance
Scale – suitable for large and very large projects
Complexity / scope for innovation – suitable for complex projects. The shared risk/profit model drives innovation form all parties
Programme Constraint – site works can begin as the design is developed allowing earlier construction start and finish dates to be
achieved
Market conditions – the potential for the contractor and consultant to share in cost savings driven by good performance means
this model should be attractive to suppliers in most market conditions.
Risk (quantum and type) – this model is suitable for low, medium and high risk projects.
Stakeholders -
Client involvement, control and capability
Focus on non-cost success (e.g. social and environmental)
Tangible demonstration of value for money
Flexibility to deal with change – cost reimbursable and TOC means this model has flexibility to deal with variations and scope
changes.
Advantages:
Suitable for delivery of large complex projects.
Allows the exact scope to be developed as the project progresses.
High risks associated with constructability such as complicated traffic management and working close to live lanes along the
motorway can be addressed in the design phase in consultation with the contractor.
Increased potential for build-ability and design innovation.
The shared cost saving model and joint responsibility drives a high project team performance.
The model allows site works to start before the detailed design has been finished cutting overall project duration.
The cost of tendering for proponents is relatively low compared to project size.
Integrates specialist suppliers/designers into one delivery team giving improved co-ordination and promoting efficiency.
Risks are managed by the party most capably with shared exposure.
The client does not pay a premium for transfer of risks which may not occur.
Pricing transparency.
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Disadvantages:
Decreased competition on price may result in higher PW costs.
The procurement process and subsequent project involvement requires substantial/senior NZTA resources.
Requires significant resources from the successful consortium to manage the contract.
The NZTA’s ability to make unilateral project decisions is restricted.
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Large project stage 2 procurement strategy
<<insert project name>>
1. Purpose
The purpose of this stage 2 procurement strategy is to:
reconfirm the delivery model to be used for the project
provide a brief update on the project status, and
document details of the procurement strategy to be applied to the procurement of suppliers for the PW.
2. Objectives
<<List the high level objectives of the project, and its key features or major scope items, OR attach the stage 1 procurement
strategy and note any changes>>
3. Reconfirm the delivery model
We have reassessed the analysis made in the stage 1 procurement strategy, and reconfirmed the preferred delivery model is
<< traditional, ECI, DC, competitive alliance, pure alliance>>
<<Update any information which may affect the delivery model selection or assumptions made in the first strategy (i.e.
property purchase)>>
OR
We have reassessed the analysis made in the stage 1 procurement strategy, and changed our preferred delivery model as
follows…<<detail the change, and the rationale behind it>>
4. Project status
The following table details the status of the key aspects of the project development.
Item
Status Comment (as required)
Consents, designation and other statutory approvals
Scope and standards sub-VAC
Design peer review
Road safety audits
PW RFT development
Property acquisition
RMC sign-off of insurance values
<<insert others as required>>
<<Describe any other aspect related to the current project status, not readily described above>>
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5. Budget
The design estimate (<<insert date>>) or the is $x.xM (expected) and $x.xM (95th%ile).
Either construction funding has been confirmed to the level required by the design estimate or a construction funding request
is planned for the x Board meeting.
The cashflow forecast for the project is as follows.
Year
$(M) X.x X.x X.x X.x X.x $(M)
<<Describe any other financial issues of note>>
6. Procurement details
The following details the specific procurement strategy for the procurement of the physical works supplier for this project.
Item
Approach Comment (as required)
Enabling works packages <<for ECI state potential areas of early site works>>
Date of advertisement
Registration of interest or short-listing processes
RFT review process
Tender period
Number of interactive meetings
Tender evaluation team
Supplier selection method
Target award date
<<insert others as required>>
<<Describe the anticipated interest from the market….>>
<<Describe any other aspect related to the procurement of the PW suppliers, not included above, including any outstanding
issues or significant risks to procurement>>
Prepared by:<<Regional Project Manager>> Signed: ____________________ Dated: __________
Endorsed: <<State Highway Manager>> Signed: ____________________ Dated: __________
Agreed: <<National Manager PS/Manager Project Services>>
Signed: _____________________ Dated: _________
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Part B Internal operations procurement procedures
1.0 Overview 149
1.1 Introduction 149
1.2 Minor administrative purchases 150
1.3 Selection of procurement approach 151
1.4 Preparation of tendering documentation 154
1.5 Service delivery model 155
1.6 Selection of supplier selection method 156
1.7 Contracting process 157
1.8 Shortlisting procedures 164
1.9 Confidentiality 165
2.0 Advertising and issue of procurement documents 166
2.1 Release of documents and information 166
2.2 Contact with suppliers 166
3.0 Tender closing procedures 167
3.1 Overview 167
3.2 Tender register and box 167
3.2 Submission of proposals/tenders 167
3.4 Processing of late tenders 168
3.5 Opening of tenders 170
3.6 Pre-evaluation administration 171
3.7 Opening the price envelope 171
3.8 Modification and withdrawal of tenders 172
4.0 Tender evaluation 173
4.1 Evaluation policy general 173
4.2 Conformity, tags and clarification 176
4.3 Dealing with comments received from proposers 177
4.4 Prop 177
4.5 Subconsultants/Subcontractors and consortia 178
4.6 Non-price attribute assessment 178
4.7 Presentation of proposals 181
4.8 Report and recommendation 181
Section Page
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4.9 Post-evaluation administration 182
4.10 Release of information post-tender 182
5.0 Award of contract 183
5.1 Negotiation and development of contract documentation 183
5.2 Development of formal contracts 184
5.3 Liability and insurance for consultant contracts 186
5.4 Insurance, bonds and retention for office accommodation works
(Works) 187
5.5 Contract file 188
6.0 Signing of contract 189
6.1 Introduction 189
6.2 Signing the contract 189
7.0 Contract management 190
7.1 Contract confidentiality 190
7.2 Assessing the performance of the supplier 190
7.3 Process for managing contracts 190
7.4 Contract variations 191
7.5 Process for contract variations 192
7.6 Assignment or novation 192
7.7 Changes after contract awarded 193
7.8 Where a change in control involves an assignment or novation or
subcontracting 194
7.9 Ending a contract 194
7.10 Contract evaluation reviews 194
7.11 Record keeping 194
7.12 Health and safety requirements of contractors 195
8.0 Alternative procurement options 196
8.1 Emergency purchasing 196
8.2 Standing offers 196
8.4 Syndicated procurement 197
8.5 All-of-government contracts 197
9.0 Appendices - Part B 205
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Part B: Delegated authorities schedule
The delegation for signing supplier contracts is outlined under the various delegated authority documents on the
intranet.
The delegated authority for other procurement activities is listed below.
Activity Delegated authority
Procurement plan for direct appointment less than $100,000 Cost centre manager
Procurement plan for direct appointment over $100,000 Sponsor or group manager
Approval to shortlist Sponsor or group manager
Approval to award Sponsor or group manager
Contract variation up to 20 percent of contract value Cost centre manager
Contract variation up over 20 percent of contract value See purchasing delegations above
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Introduction This part B
provides administrative guidelines
defines actions/processes that are to be undertaken, and
describes the required documentation for each process.
Each action/process undertaken must be documented in a clear and orderly manner.
Advice can be sort from the Corporate Procurement team on any stage of the procurement
process in Part B of this manual [email protected]
This part B, should also be read in conjunction the Procurement Manual for activities funded
through the National Land Transport Programme.
Contract
process
The NZ Transport Agency (NZTA) follows a process in tendering, awarding and
administering contracts for internal operations. The procedures for each stage of this
process are discussed in the following relevant sections.
Procedures for contracting an agent to act on behalf of the NZTA to provide NZTA services
to the public, are not subject to SM021, but follow their own approved procedures for
agency relationships.
Purpose of
tender
evaluation
process
The purpose of the tender evaluation process is to select a consultant or contractor so as to
enable award of a contract.
Process chart The following diagram identifies the stages in the tendering and contract administration
process for internal operations.
RFT/RFP preparation
Advertising and issuing
tender documents
Tender closing
procedures
Award of contract
Contract close
Contract payments
Approval to proceed
with a contract
Tender evaluation
Signing of contractService delivery
Restriction on
purchasing
Employees may incur costs provided:
proper regard has been made to reasonable economy and efficiency
the cost is based on the best possible estimates
properly allocated funds are available in an approved budget to meet the costs
the costs have been allocated to the correct expenditure code (as set out in the NZTA
chart of accounts) and that expenditure code is one to which their delegation applies
the costs comply with all relevant NZTA instructions and directives.
Where an individual exercises their financial delegation, they may also exercise their
purchasing delegation provided at least two people are involved in each transaction to
mitigate any hint of collusion. In addition to getting approval to incur costs from someone
with appropriate financial delegation, employees must also get approval from someone with
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the appropriate purchasing delegation, outlined on the previous page.
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Value for money One of the four key outcomes of the NZTA is value for money. Best value for money involves
balancing:
the right quality and quantity
delivery at the right place and time
sustainability, and
price.
Recognising that the weightings of these may vary from contract to contract.
Sustainable
procurement
Sustainable procurement means that when buying goods and services, organisations
practising sustainable procurement will consider:
strategies to avoid unnecessary consumption and manage demand
the environmental credentials of the goods and services they purchase
minimising environmental impacts of the goods and services over the whole of life of the
goods and services
help foster a viable market for sustainable products and services by supporting
businesses and industry groups that demonstrate innovation in sustainability
including compliance with legislative obligations
to employees
value for money over the whole of life of the goods and services, rather than just initial
cost.
Employees must consider whole-of-life costs from the commencement to termination of a
contract when considering the value of a contract. Staff must be aware of the total contract
value, i.e. the total cost of the contract throughout the duration of the term of the contract.
Principles of
Procurement
A refreshed statement of Principles of government procurement has been approved by
Cabinet in July 2012 [Sec Min (12) 10/5]. The aim is to provide a plain English statement of
Principles that is easier for both agencies and suppliers to understand and apply. It is
essential that all government agencies take the Principles into account when buying goods
and services. The new statement of Principles is as follows.
View a more detailed explanation of the Principles [153 KB PDF]
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1.0 Overview
1.1 Introduction
1.1.1 Introduction -house professional
Transport Management Act 2003 (LTMA). It is not relevant to transport infrastructure
activities conducted under part A of this manual.
1.1.2 Contractor
vs. employee
The NZTA engages several types of contractors:
A contractor filling a role that could be undertaken by an employee.
An individual contractor or consultant to undertake a special project.
A contractor or contracting firm employed to undertake a range of activities such as
repairs and maintenance of buildings.
A contracting or consulting company employed to undertake a project(s).
There is a strict test applied by the Inland Revenue Department (IRD) to determine whether
a contractor is a genuine contractor or is actually an employee. The following table outlines
the test that the IRD applies.
Employee Contractor
Control test The employer controls the hours worked and
how the work is done.
The contractor controls how and when the
work is done.
Fundamental
test
The employer makes the profit or loss from the enterprise.
The employer deducts Accident Compensation Corporation (ACC) premiums and Pay as you earn (PAYE) tax on behalf of the employee.
The employer supplies materials and equipment for the work.
The contractor can make a profit or loss directly.
The contractor pays any tax, ACC levies and insurance directly.
The contractor supplies equipment and materials.
The contractor is free to accept work from a number of sources at the same time.
Integration test The employee is an integral part of the
business. business.
Managers should be are aware of this control test and ensure that the contractor is not an
employee.
Where it can be identified that a contractor needs to be engaged or whether it is unclear
whether the requirement is for a contractor or for employee, the request should be made
through the Corporate procurement team.
All requests to employ a contractor (or consultant) to fill a role that could be undertaken by
an employee refer to the recruitment process on the intranet. Where it is unclear whether
the requirement to employee a contractor is in a role that could be undertaken, or you are
unsure, by an employee then advice should be sought from People and Capability.
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1.1.3 Purchasing
procedures
Purchasing procedures are in place to enable the NZTA to conduct its business
effectively. Therefore, they include:
ensuring goods and services conform to the user requirement specifications
ensuring goods and services are delivered on time
maintaining minimum effective inventory levels
meeting and effectively monitoring required customer service levels
minimising the cost of supply, including distribution
proactively reducing lead-times without reducing performance levels
delegating powers for purchasing goods and services and financial authorisation to
appropriate levels
being aware of the available sources of supply
following ethical practices
reducing waste
ensuring best value for money, and
ensuring processes and procedures comply with relevant legislation and govern
procurement guidelines
1.2 Minor administrative purchases
1.2.1 NZTA
Purchasing
Card
Where the purchase is not related to an existing contract, and a NZTA purchasing card
is held, a NZTA purchasing card should be used for all minor administrative purchases
following the rules set out in the Credit Card Policy.
1.2.2 Petty cash Where a NZTA purchasing card is unavailable, and cannot be ordered in time to satisfy
the need.
Staff must seek prior approval to purchase goods or services by completing a petty cash
application form prior to seeking an advance from the petty cash account and submit
this to the local Corporate support team. Receipts are required to enable reconciliation
of petty cash accounts. Goods and services tax (GST) receipts are required for all
they wish to purchase goods or services using their agency credit card (refer to Credit
Card Policy).
Petty cash should be used for purchases up to $100 whenever practicable.
No formal, written order for purchases up to $100 is required unless a supplier requests
it.
The preference should always be to use a NZTA purchasing card for minor
administrative purchases.
1.2.3 Contract exists Where the purchase is related to an existing contract (e.g. licence plates, post, and
telecommunications) check that the contract covers the scope of your requirement, the
process to engage the supplier set out in that contract must be followed. Contact the
Contract Manager for further guidance
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1.3 Selection of procurement approach
1.3.1 Introduction The path to achieving a contractual agreement may vary according to the complexity of
the contract being sought. In some instances, project managers may have a clear idea of
what exactly they require and the potential providers of that service or supply. At the
other end of the spectrum, the service or supply required may be less clear and there may
be a need to clarify the options (including technology) available.
Purchase value definition: This refers to the total anticipated value of the purchasing with
a supplier for the full term of the relationship. E.g. A four year requirement/relationship
with an annual value of $15,000 would equal a Purchase value of $60,000 for the
purposes of part B.
The tendering process may involve one or more of the following activities:
Request for information (RFI) means a formal RFI to gain a more detailed
understanding of the supplier market and the range of solutions and technologies that
may be available (e.g. audio visual equipment supply for office fit outs).
Registration of interest (ROI) means a registration of interest, a formal process where
participants submit their interest, or their organisations interest, in a project or
projects (may sometimes be referred to as an expression of interest (EOI)).
Request for proposal (RFP) means a process, where vendors participate in a formal
competitive tendering process, either to a restricted number or open to the market.
Generally used for requirements with some flexibility to how the requirements are
delivered. (e.g. supply of office products, supply of label media or market research
surveys). Can be used regardless of value, but the cost to conduct an RFP means it is
less likely to be used for requirements where the value is under $100,000.
Request for tender (RFT) means a formal means of seeking tenders from the market
clearly defined and there is little room for flexibility or innovation (e.g. vehicle
registration plates). Can be used regardless of value, but the cost to conduct an RFT
means it is less likely to be used for requirements where the value is under $100,000.
Request for X (RFx). This is the collective name for any market engagement where a
response with information, a proposal, quotation / tender is being requested. Used
1.3.2 Purchase value
range between
$100 and
$5,000
Low value, low risk purchases should be made using a NZTA Purchasing Card following
the Credit Card Policy.
required approach. Section 1.3.3 may apply depending on the potential commercial risk to
NZTA.
1.3.3 Purchase value
range between
$5,000 and
$100,000
1. Direct appointment
Goods or services of any description between $5000 and $100,000 may be
directly appointed, provided the appropriate level of approval has been obtained
(refer to the Procurement delegation section in this part for the level of delegation
required).
Direct Appointments are not the preferred method of selection. Project
Managers/Sponsors need to satisfy their cost centre managers and Corporate
Procurement by documenting the logic for a direct appointment. Value and/or
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timing are not sufficient justification.
All project managers must have a direct appointment procurement plan completed
and approved by the relevant budget holder and endorsed by their financial
management accountant. Where the value of the contract exceeds that of a cost
centre manager but the budget is held at cost centre level, approval must be
obtained from the person with the delegated authority to commit the NZTA to the
contract. A direct appointment procurement plan template is attached as appendix
1, part B of this manual.
Reasons for Direct Appointment may include
standardisation or compatibility with existing equipment or services is
essential, and can only be achieved through one supplier
there is a legal requirement or directive to use one supplier
the market is a monopoly
an emergency procurement1
A low value, low risk contract may be used as the contractual documentation,
dependant on the complexity of the outputs required. The Corporate procurement
advisor/specialist will provide guidance on the most appropriate set of terms and
conditions to use.
1 See section 8 of this part, which covers emergency purchases. 2 The market must be checked periodically to ensure that this is still the case.
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Purchase value
between $5000
and $100,000
continued
2. Limited invitation/Closed contest
A closed contest is one in which the invitation to tender is limited to a list of
specific proposers.
Closed contests should only be used where:
the scope of work required is well defined and as a result there is a high
confidence that the price will be less than $200,000
the risk of unsatisfactory completion of the work is low
no supplier feels they have been unfairly precluded from the process
there is a limited source of supply2 (the required goods or services are available
from only one source, or only one supplier has the capacity to deliver at the
time required, and this can be adequately attested)
the cost of conducting an open tender outweighs the benefits, and a closed
tender is a more efficient alternative
there is a need for the procurement to be confidential
in an emergency3
A competitive process procurement plan must be completed prior to any
procurement activity being conducted. A competitive process procurement plan
template is attached at appendix 2, part B of this manual:
A written quote must be obtained for all closed contests up to $200,000.
The Corporate procurement team will provide the documentation required to
complete a written quote.
All procurement activity conducted under a competitive process requires a
Potential conflict of interest/Bias declaration form (appendix 7). This form must be
completed by the sponsor, everyone involved in document preparation and all
members of the TET, including any external parties, prior to involvement in the
procurement activity.
3. Open contest
An open contest is one in which an open invitation is extended to potential
suppliers, normally through the Government or NZTA preferred online tendering
site. Within the NZTA, this is the preferred method of tendering. All activity
requiring an open competitive process must be placed on the online tendering site
for the time outlined in the Government Rules of Sourcing 2013.
All procurement activity conducted under a competitive process requires a
Potential conflict of interest/Bias declaration form (appendix 7). This form must be
completed by the sponsor, everyone involved in document preparation, and all
members of the TET, including any external parties, prior to involvement in the
procurement activity.
2 The market must be checked periodically to ensure that this is still the case. 3 See section 8 of this part, which covers emergency purchases.
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1.3.4 Multistage
procurement
processes
In some cases, either the services to be purchased or the size of the market may not be
adequately understood. In these instances, a multistage process may be conducted.
The multistage process may incorporate a number of activities but only the RFP/RFT
stages are able to select a supplier.
In situations where the services need to be identified in more detail, in order to tender, an
RFI process may be conducted. This allows us to request information from the market
without being bound to any further procurement activity,
The RFI may be followed by an ROI process. This process allows us to seek organisations
that have the appropriate skills, experience and resources to register their interest in the
project. This process can be used to shortlist for a RFP/RFT stage however it is not always
the case and all registrants may be taken forward. An ROI or RFI process cannot be used
to determine a supplier.
Once the ROI stage is complete, it is followed by a RFP/RFT. However, it is not necessary
to conduct RFIs or RFP/RFTs if there is a good understanding of the product and the
services or goods required. There may also be a mix of activities, such as RFI to RFP, or
ROI to RFT.
The competitive process, which involves a number of mandatory steps. The Corporate
procurement advisor/specialist will explain the importance of each stage and guide
project managers through that process. Following the process will assist the NZTA to
ensure competition is fair and will enable the NZTA to gain the most cost-effective supply
option.
1.3.5 Purchase value
range over
$200,000
A competitive process is the preferred way to promote open and effective competition for
procurement activity over $200,000. However, the cost of the process (including
advertising, providing documents and evaluating tenders) should be commensurate with
the benefits received.
A competitive process gives all potential suppliers an opportunity to tender.
A competitive procurement plan must be completed and approved prior to the tender
documentation being released by the Corporate procurement team.
Where a short listing process is conducted (whether prior to the release of the RFP/RFT
or arising from a multistage tender process), sponsor endorsement must be gained before
a tender is moved to the next stage of the tendering process.
For all closed and open contests over $200,000 a Corporate procurement
advisor/specialist must facilitate the evaluation process to ensure fairness and
transparency.
1.4 Preparation of tendering documentation
1.4.1 Introduction Before preparing documentation, the project sponsor, people involved in tender
documentation preparation and the evaluation panel members must complete a Conflict of
interest and confidentiality declaration form (appendix 7, part B of this manual) to
a) enable management of potential conflicts to be addressed prior to involvement in the
procurement process, as a potential management approach may be to remove personnel
from the process and
b) ensure all project team members are clear on their obligation related to confidentiality.
Once completed this must be returned to the Corporate procurement advisor/specialist.
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Tendering documents should be carefully tailored to each project to ensure they are easily
understood and clear to a competent and experienced supplier.
If specific information (which it would not be normal for an experienced supplier to
supply) is required, then it must be clearly stated as a requirement in the tendering
documents.
RFP/RFT for administrative or internal operations contracts are generally prepared by the
NZTA. The project manager may use a consultant to undertake the preparation or assist in
this process, ensure they are contracted accordingly, and also complete a Potential conflict
of interest/Bias declaration form (appendix 7).
Tender documents should be reviewed by your Corporate procurement advisor/specialist,
and all relevant subject matter experts e.g. IS for any activity with an IS component
1.4.2 Where a
consultant is
used
Any consultant who prepares any documentation associated with the competitive process is
likely to be precluded from bidding for that contract.
If a consultant is likely to respond, or has indicated an intent to respond, seek advice from
your Corporate procurement advisor/specialist prior to releasing the RFP/RFT to the market.
There is a very real perception that the consultant may have an advantage in preparing their
response, resulting in non compliance with the Principles of Procurement.
1.4.3 Proforma
contract
documentation
Standard NZTA forms of contract are available from your Corporate procurement
advisor/specialist and must be issued with any tendering process. Your Corporate
procurement advisor/specialist will work with the project manager and legal should any
deviation from this be required.
1.4.4 Number of
response
copies
The preferred method of receiving responses is electronically to the
[email protected] mailbox. Should hard copy responses be required work with
your corporate procurement contact to determine how many are required and why.
The RFP/RFT specifies the number of copies of each submission that must be submitted.
The project manager/ Corporate procurement advisor/specialist should select the
appropriate number to ensure that each member of the Tender Evaluation Team (TET) has a
copy. Making additional copies of proposals received is undesirable and should be avoided as
far as possible.
1.5 Service delivery/contract model
1.5.1 Selection of
delivery model
Project risk and potential for innovation are the key criteria for selecting a procurements
delivery and contracting, model. There is no definitive point for moving from one model
to the next, rather the trend is to move to less traditional models as the potential for
innovation and transfer of risk to the supplier increases.
Delivery/Contract models available under this part are:
panel contracts - means a relationship with a group of suppliers that will be used to
deliver a bundle of outputs for a group of activities. This does not imply an exclusive
arrangement between the purchaser and the panel, but is generally considered a
preferred supplier arrangement.
staged, period contracts - means an activity is committed for delivery through one or
more separate contracts between the purchaser and supplier(s), for a fixed period of
time.
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master contracts means a relationship with a supplier for a broad scope of
activities, with agreed terms and conditions and generally rates, but with no
commitment to volumes. Such contracts are committed to through use of a
statement of work, or similar, mechanism. The original procurement plan for such
contracts should indicate an estimated spend value for the life of the contract. This
does not imply an exclusive arrangement between the purchaser and the master
contract, but is generally considered a preferred supplier arrangement.
All contracts must include an expiry date. While the requirement may need to continue
beyond that date, and expiry date enables a forced review of the arrangement through
initiating procurement activity (direct or competitive) to ensure the needs of the NZTA
are still being appropriately met.
1.6 Selection of supplier selection method
1.6.1 Introduction Procurement manual refers to supplier selection methods and explains the
parameters for their use. Evaluation for each method shall be in accordance with the
requirements of the Procurement manual. See appendix C of the Procurement manual for
further information on the process of each method.
Irrespective of the method used for the procurement activity, the project manager must
complete a procurement plan prior to commencing an activity.
Your Corporate procurement advisor/specialist will provide project managers with
appropriate guidance on the process for all procurement activity.
1.6.2 Direct
appointment
See 1.3.3(1) Direct appointment above.
1.6.3 Lowest price
conforming
(LPC) tender
method
This method may be applied to services where the scope of service required is well
defined and as a result there is a high confidence that:
the contract price will be $100,000 or less
best value for money will be obtained by having suppliers compete on price alone
the organisation is not prepared to pay a premium for additional quality.
The preferred supplier is the supplier that offers the lowest price and meets all the
minimum requirements, including quality, as set out in the RFP/RFT.
1.6.4 Purchaser
nominated
price
Purchaser nominated price is a supplier selection method where the organisation requires
outputs that are difficult to specify but it has determined a price that it is prepared to pay
for those outputs and described the desired outcome (in the RFP/RFT). Proposals must
meet the requirements of the RFP/RFT and are evaluated on the basis of quality only. Best
value for money is then obtained by selecting the supplier that provides the best proposal
for the price set out in the RFP/RFT.
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1.6.5 Price quality Price quality uses a mathematical model to translate the non-price attribute grades of
each proposer to an explicit dollar value, the supplier quality premium (SQP). The
SQP shows how much the NZTA is prepared to pay to secure a higher quality tender
relative to the lowest quality tender.
This method may be considered for use on all contracts where a balance between
price and quality needs to be achieved and where the organisation determines that:
best value for money will be obtained by having suppliers compete on both price
and quality, and
selecting the supplier that offers the best combination of the two.
Note that a simplified procedure may be used for contracts valued at $200,000 or
less (expedited procedures).
The price quality weight setting and evaluation tools can be found at price quality
evaluation tools Procurement manual.
1.7 Process and timing
1.7.1 Process
sequence
The sequence outlined on the next page related to the standard process from Business
Case development to signing a contract/s with the supplier/s. The timelines may vary
depending on the complexity of the business requirement, the number of procurement
stages used and any requirement for contract negotiations. The timeline on the next
page assumes a relatively simple activity.
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Process
sequence
continued
Serial Time frame Responsible Activity
[a] [b] [c] [d]
1 1 3 weeks Project manager Produces Business Case (where required).
Defines the user requirement/specification.4
Obtains the necessary financial approvals.
Registers project with the Corporate procurement team.
If a Business case clearly outlines the procurement approach and is reviewed by Corporate Procurement this will constitute a Procurement Plan. If not it is used to produce the procurement plan information required includes evaluation panel, delivery method, supplier selection method and resource allocation.
2 1-3 weeks Procurement staff Registers the project and applies project reference number.
Reviews the Specifications to ensure compliance with the relevant NZTA policies.
Provides relevant templates to project manager to prepare, and provides advice and review during the preparation process as required Develops the evaluation documentation with project manager.
Obtains evaluation weightings from project sponsor and conflict of interest/confidentiality statements from the TET.
3 3-4 weeks Procurement staff Releases tender documentation into the market, as applicable.
Manages the question and answer period.
Registers proposals received and distributes proposals to the TET.
Provide guidance on the minimum time periods for the activity based on the Government Rules of Sourcing 2013.
Facilitate evaluation meetings where the total value of the activity exceeds $200,000.
4 1-2 weeks Evaluation panel The project manager facilitates the evaluation meeting, unless your corporate procurement contact is providing this service (see step 3 above, however your Corporate procurement advisor/specialist may recommend this support for values under the threshold)
Evaluates proposals.
Agrees scoring and shortlist or preferred supplier to the sponsor [and Board if over $2 million].
5 1 week Procurement staff Reviews and forwards evaluation recommendation to the
sponsor to either:
award the contract, subject to necessary approvals by the Chief Executive and/or the NZTA Board for contracts >$1 million and any final negotiations, or
seek further clarification, or
recommend a shortlist, or
recommend negotiations prior to award or
4 All information services procurement activity requiring a competitive process is to be approved by the Chief Information Officer (or other delegated authority) before documentation is released to the market.
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recommend a re-tender.
6 1-8 weeks Procurement
staff/Project
manager
Notifies the suppliers, both successful and unsuccessful, of the outcome.
Develops contract content in consultation with the project manager and other subject matter experts e.g. legal, IS.
Oversees negotiations with the project manager and preferred supplier.
7 1-2 weeks Project manager/
Delegation holder
Signs the contract or forwards to the relevant authority to
sign.
8 1-2 weeks Procurement
staff/Project
manager
Prepare and conduct debriefs with all respondents (on
content of response and process), and project team if
relevant (on process).
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Process
sequence
continued
Serial Time frame Responsible Activity
[a] [b] [c] [d]
1 1 3 weeks Project manager Produces Business Case (where required).
Defines the user requirement/specification.5
Obtains the necessary financial approvals.
Registers project with the Corporate procurement team.
If a Business case clearly outlines the procurement approach and is reviewed by Corporate Procurement this will constitute a Procurement Plan. If not it is used to produce the procurement plan information required includes evaluation panel, delivery method, supplier selection method and resource allocation.
2 1-3 weeks Procurement staff Registers the project and applies project reference number.
Reviews the Specifications to ensure compliance with the relevant NZTA policies.
Provides relevant templates to project manager to prepare, and provides advice and review during the preparation process as required Develops the evaluation documentation with project manager.
Obtains evaluation weightings from project sponsor and conflict of interest/confidentiality statements from the TET.
3 3-4 weeks Procurement staff Releases tender documentation into the market, as applicable.
Manages the question and answer period.
Registers proposals received and distributes proposals to the TET.
Provide guidance on the minimum time periods for the activity based on the Government Rules of Sourcing 2013.
Facilitate evaluation meetings where the total value of the activity exceeds $200,000.
4 1-2 weeks Evaluation panel The project manager facilitates the evaluation meeting, unless your corporate procurement contact is providing this service (see step 3 above, however your Corporate procurement advisor/specialist may recommend this support for values under the threshold)
Evaluates proposals.
Agrees scoring and shortlist or preferred supplier to the sponsor [and Board if over $2 million].
5 1 week Procurement staff Reviews and forwards evaluation recommendation to the
sponsor to either:
award the contract, subject to necessary approvals by the Chief Executive and/or the NZTA Board for contracts >$1 million and any final negotiations, or
seek further clarification, or
recommend a shortlist, or
recommend negotiations prior to award or
5 All information services procurement activity requiring a competitive process is to be approved by the Chief Information Officer (or other delegated authority) before documentation is released to the market.
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recommend a re-tender.
6 1-8 weeks Procurement
staff/Project
manager
Notifies the suppliers, both successful and unsuccessful, of the outcome.
Develops contract content in consultation with the project manager and other subject matter experts e.g. legal, IS.
Oversees negotiations with the project manager and preferred supplier.
7 1-2 weeks Project manager/
Delegation holder
Signs the contract or forwards to the relevant authority to
sign.
8 1-2 weeks Procurement
staff/Project
manager
Prepare and conduct debriefs with all respondents (on
content of response and process), and project team if
relevant (on process).
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1.7.2 RFP/RFT
process
During a RFP/RFT process, we ask the market to send us their proposals on how we can
best achieve our idea or concept.
The consequences of failing to follow the NZTA RFP/RFT or contract procedures may
include:
unsuccessful suppliers questioning the integrity of the NZTA procedures
suppliers withdrawing from subsequent RFP/RFT lists
inappropriate approaches from suppliers during the RFP/RFT process (e.g. an offer to
modify RFP/RFT prices or conditions)
the NZTA not achieving the most cost-effective purchase
suppliers seeking legal redress for damages or recovery of RFP costs.
If there are any doubts about whether a RFP/RFT is necessary, the matter should be referred
to the Corporate procurement team for consideration6.
The RFP/RFT documentation must clearly state:
the NZTA requirement and desired outcome
the supplier selection method and evaluation process to be used
how price will be determined
what will be valued in the anticipated relationship
the terms and conditions that will apply.
User requirements are to be as open as possible to ensure that the NZTA does not create
unnecessary obstacles to competition.
1.7.3 Weightings Prior to a RFP/RFT being released to the market (open or closed) the weightings must be
determined by the project sponsor (or group manager) and made available in the RFP/RFT
documentation for proposer. Weightings should not be changed once they have been
published.
1.7.4 Contact with
suppliers
Once a RFP/RFT has been issued, enquiries from suppliers must be answered through the
Corporate procurement team. Supplier requests for technical guidance will be forwarded to
the project manager to draft a reply for release by the Corporate procurement team.
During both open and closed contest RFP/RFTs
response will be provided to all suppliers, unless the question directly relates to the
intellectual property of the supplier. It is at the discretion of the Corporate procurement
advisor/specialist whether the question should be responded to.
There is to be no direct contact, related to the RFP/RFT, between members of the project
team and potential respondents. ALL communication must be directed in writing to the
Corporate procurement advisor/specialist in the RFP/RFT documentation until an award
has been made. Any business as usual engagement should be treated with caution, including
accepting gifts and hospitality. Extra care should be taken to record minutes and document
conversations during the procurement process. If in doubt, refer to the Code of Conduct
guide on the intranet.
1.7.5 RFP/RFT
registration
process
When an RFP/RFT closes, if hard copy responses have been requested, your Corporate
procurement advisor/specialist or person authorised by the Corporate procurement team to
act in this role is responsible for clearing the tender box at the closing time and documenting
6 If the Procurement team requires further guidance (such as legal), it will refer the issue to the relevant authority.
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receipt of the proposals.
Storage of responses should have restricted access to ensure confidentiality of information
submitted by respondents.
All RFP/RFT must be registered in a participant register document that includes:
organisation name
contact name
contact email address
contact phone number
date and time received (if soft copy only or received outside close off time), and
notes on submission conformance.
Late proposals may not be admitted, unless there are special reasons for doing so,
particularly if there is evidence to suggest that the supplier has, because of the delay,
received unfair advantage over proposals already received. The reasons a late response has
been admitted or rejected must be recorded.
The register must be signed by the Corporate procurement advisor/specialist and witnessed
by another member of the Corporate procurement team who has been in attendance at the
opening and registering.
Electronic copies will be stored in the electronic document management system.
All proposals received, including facsimile and email proposals, are to be kept secure to
ensure the privacy of commercially sensitive information. To guard against possible
breaches of confidentiality, proposals must not be opened until after the tender closing date
and time. Proposals are to be recorded in the relevant register by the Corporate
procurement team.
Once all proposals have been registered, proposals will be distributed to the TET with final evaluation documentation. Once received, the TET are responsible to ensure:
a) All responses are kept securely at all times, including when you are working away from NZTA premises.
b) Evaluation of each proposal is completed in the time allocated and based on the content of the proposal against the previously agreed criteria.
No discussion is to be held with another member of the TET, the respondent or any other
respondent, in relation to the responses
1.7.6 Health and
safety
requirements in
tender
documentation
Health and safety will be included as a requirement in tender documentation, on a case by
case basis. This will especially be the case where the tender is for services that require the
employment of contractors to undertake activities where the NZTA is the principal under
the Health and Safety in Employment Act 1992. Employees responsible for contracts must
assess whether there is a requirement for health and safety to be included in the contract,
prior to any tender being released.
Contracts will have a health and safety compliance clause included as a standard condition.
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1.7.7 Security and
privacy
requirements
Before issuing a RFP/RFT, the NZTA employees responsible for the contract must consider
whether there are any privacy or security implications. There will be privacy or security
implications if, during the RFP/RFT process or subsequent contract, the contractors or their
employees will require access to classified or sensitive NZTA information, or may view such
material while performing the requirements of the contract (e.g. contractors working on an
database with access to personal file information).
If there are privacy or security implications, the supplier/s concerned, and any
subcontractors, will be required to undergo security vetting procedures to the appropriate
level. This vetting must be undertaken before contracts are signed. Occasionally, this may be
necessary before issuing RFP/RFT s, if the process itself requires access to sensitive
material. Employees should be aware that such clearances might take up to three months,
depending on the level of clearance required.
Exposure of contractors or their employees to sensitive NZTA material, before security
clearances are issued, is a breach of security. Employees that suspect a proposed contract
may have privacy or security implications should contact the Corporate procurement team
for guidance.
1.7.8 Changes to
proposals
An offer by a supplier to reduce the price and/or the terms of their original proposal, which
would place the proposal in a more advantageous position, may be accepted where the
market has changed and these savings are merely being passed on to the NZTA. In such
cases, all suppliers should be invited (through the Corporate procurement team) to review
their responses, based on the new information.
1.7.9 Complaints All complaints received from respondent about the RFP/RFT process must be referred in
the first instance to the National Manager Corporate Support for review.
1.8 Shortlisting procedures
1.8.1 Benefits of
shortlisting
If used correctly, shortlisting prospective suppliers carries out three important functions:
It reduces the cost of responding for the industry, by reducing the number of full
submissions.
It ensures only high quality suppliers are selected for the work.
It reduces the administrative burden of evaluating responses.
Note: If used incorrectly, shortlisting can increase the burden on suppliers and the TET
by introducing a second tier of submissions/evaluations.
1.8.2 When to
shortlist
Analysis of the supplier market is required to determine if shortlisting is required.
Incorrect/overuse of shortlisting can narrow the market as it acts as a barrier to entry.
Analysis of the supplier market should include:
an assessment of the likely proposer
an assessment of the quality of supplier required and the likely cost of the RFP/RFT r
process to the NZTA and the supplier
an assessment of the proposer ability to meet the required quality standard and
deliver the contract outputs successfully.
For further description on the factors influencing the decision to shortlist see section 5.3
of the Procurement manual.
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1.9 Confidentiality
1.9.1 Commercial in
confidence
Meetings or other communications between potential and actual respondents and the
NZTA may be deemed to be commercial in confidence. Where a communication includes
commercially sensitive, upon agreement of the TET, the communication may be given
commercial in confidence status and the NZTA will respond by way of Notice.
Request must notify the NZTA of the name and contact details of the person within their
organisation to whom the NZTA will direct all communications during the RFP/RFT
period.
Communications that are commercial in confidence between a potential respondent and
the NZTA must be in writing, issued separately and clearly marked that they are
commercial in confidence, and for the attention of the NZTA representative as listed in
the RFP/RFT document.
The NZTA will respect commercial in confidence communications. However, where a
RFP/RFT and/or contract process, the NZTA reserves the right to inform all respondents
by Notice, or to terminate the RFP/RFT process. If the NZTA deems this to be the case it
will communicate with the party who raised the commercial in confidence matter to seek
their agreement (in writing) to relax the commercial in confidence status. If the party
does not agree, the NZTA will decide whether the communication should be the subject
of a general communication to all potential respondents.
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2.0 Advertising and issue of procurement documents
2.1 Release of documents and information
All RFx
protected during and after the procurement process.
Any information released to suppliers may be used only for the purposes of preparing
their response and may not be used for any purpose. The potential respondents are to
be advised that any information provided by the NZTA may only be released by them
to those preparing the response.
2.2 Contact with suppliers
All communication with potential respondents during the RFx process must be
conducted through the Corporate procurement team.
All informal contact with potential respondents during any contracting process is to
be avoided.
All information disseminated to potential respondents must be released to all
potential respondents simultaneously unless it is commercial in confidence.
The templates, provided by the Corporate procurement team, advise potential
respondents
If a RFP/RFT is conducted online, all questions and responses and information on the
successful proposer must be placed using the same online system once the contract
is signed.
The successful suppliers name will normally be provided with the rejection notices to
unsuccessful tenderers. No further information should be supplied until the contract
is signed.
Requests by respondents for additional information must be in writing and forwarded
to the Corporate procurement team. These requests will then be actioned in
accordance with the Official Information Act 1982.
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3.0 RFP/RFT closing procedures
3.1 Overview
3.1.1 Introduction This section discusses the procedures related to RFP/RFT closing.
3.2 Tender register and box
3.2.1 Register of
tenders
A register of tenders is maintained by the Corporate procurement team.
3.2.2 Tenders box The box for the receipt of RFP/RFT is to be placed in a prominent position in the office
reception, preferably near the enquiry counter. Tender box must be displayed
prominently on the box.
Responses for contracts considered to be Administration under section 26 of the LTMA
are to be submitted to the NZTA National Office, Chews Lane tenders box. In the remote
event that an alternative tender box is to be used, the Corporate procurement team will
notify all potential respondents of the change and the location of the alternative box.
3.2.3 Maintaining the
tenders box
During the receipt of RFP/RFT the tender box must be securely locked to prevent
unauthorised access. The Corporate procurement team shall be responsible for
controlling access to the tender box. Where the tender box is other than that at the NZTA
National Office, Chews Lane, the Corporate procurement team will make alternative
arrangements with the relevant office.
The Corporate procurement team shall be responsible for ensuring that any late
responses are appropriately endorsed.
3.3 Submission of proposals/tenders
3.3.1 Introduction Responses may be received only in the form allowed for in the RFx documentation
issued. These may include
by mail
by courier,
by email
by facsimile or
in person.
Note that responses submitted in a form no allowed for in the RFx will not be
accepted.
3.3.2 Receiving tenders The table overleaf shows what to do when receiving responses.
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Receiving
tenders
continued
by mail, courier or in person and is endorsed to the effect that it contains a response
place it in the tender box.
in a plain envelope (without clear indication that it contains a response to RFP/RFT)
open the envelope
write the name of person who opened it
contract name and number and proposer on the envelope
reseal it and place it in the tender box.
in an envelope addressed other than to the Corporate Procurement team or Corporate procurement advisor/specialist
endorse it as to where, when and who received
pin the envelope to the response, and
hand it together with the response to the Corporate procurement advisor/specialist or other authorised person who will reseal, appropriately endorse and place it in the tenders box.
late refer to topic on processing of late responses in this
section.
3.4 Processing of late responses
3.4.1 Introduction All contract documentation required, as part of a response must be received in the tenders
box by the tender closing time. However, there may be occasions where the late delivery of
the response was due to extreme circumstances or beyond the control of the proposer, and
the lateness would not have allowed the proposer to materially change their response, then
it should be accepted. Where advice is requested from the probity auditor in regard to a late
tender the Corporate procurement team must ensure that this advice is provided in writing
and a copy retained on the project file.
3.4.2 Procedure Follow this procedure when a late response is received.
Step Action
1 The Corporate procurement advisor/specialist or person authorised by the Corporate procurement team to act in this role must eninitial the endorsement.
2 Enter the name of the proposer at the bottom of register of proposals (see appendix 4, part B of this manual)
3 The Corporate procurement advisor/specialist or person authorised by the Corporate procurement team to act in this role, in consultation with the project sponsor, shall determine and note the reason for the tender being received after the closing time.
4 Where it is deemed by the Corporate procurement advisor/specialist that it was not beyond the control of the proposer to deliver their tender by closing time, the late tender shall be rejected and returned to the proposer with the envelope unopened. This action shall be noted on the register of proposals.
Where the Corporate procurement advisor/specialist or person authorised by the Corporate procurement team to act in this role cannot decide whether or not to accept the late response they will consult with the Principal Advisor Procurement who will decide on the appropriate action.
5 The Corporate procurement advisor may decide that a late response is deemed acceptable, subject to the following tests:
Note: To accept a late response in all cases, there must be proof that the carriage of the response was beyond the control of the proposer at closing time.
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the full response would arrive and be placed in the tenders box before the closing time in the normal course of events
with the agreement of the TET accept the late response and document the reasons for doing so.
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3.5 Opening of responses
3.5.1 Introduction Opening of responses is completed in conjunction with the preparation of a
schedule of responses received. These procedures relate to the security of the
responses during the opening process.
3.5.2 Time and date
stamping
Time and date stamping and initialling of responses is required on the tender form
and the pricing schedule. This is the responsibility of Corporate procurement
advisor/specialist or person authorised by the Corporate procurement team to act
in this role. . The stamp used must make it clear that this is a record of when the
response was opened.
3.5.3 Procedure The Corporate procurement advisor/specialist or person authorised by the
Corporate procurement team to act in this role shall follow this procedure when
opening responses.
Note: Responses must be initialled by either the Corporate procurement
advisor/specialist or person authorised by the Corporate procurement team to act
in this role, and witnessed.
Step Action
1 Examine the envelope and use the table below to decide what action to take.
endorsed as containing a response closing on a
subsequent date
return the response to the tenders box.
unendorsed (and is therefore opened) and
contains a response for some other work
write a note recording name of the person who opened the response and when it was opened,
endorse envelope with contract number, name and closing date,
together with witness sign envelope, and
reseal and return to the tenders box.
2 Check if the response comprises two, separate sealed envelopes.
If the response
one envelope open the envelope, time and date stamp, and
initial the response form.
two separate sealed envelopes -price
shortlisting is used), time and date stamp, and
time and date stamp and initial the envelope ore the envelope in a
secure location without opening.
Note:
opened, the Corporate procurement
advisor/specialist or person authorised by the
Corporate procurement team to act in this role
must reseal it and initial the envelope.
3 If a response, required to be submitted in two separate envelopes, is submitted in one envelope
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then:
check for specific requirements in the RFP/RFT, and
seal the response form and pricing schedule in a separate envelope, note the error of the proposer and the action taken, initial the envelope, and
advise the Principal Advisor Procurement of the action taken.
4 Complete a proposal registration form.
3.6 Pre-evaluation administration
In completing the Proposal close off checklist form by the Corporate procurement
advisor/specialist or person authorised by the Corporate procurement team to act in
this role prior to RFP/RFT evaluation (appendix 5, part B of this manual) the
Corporate procurement advisor/specialist or person authorised by the Corporate
procurement team to act in this role should do the following:
Check each response to identify any obvious non-conformity with the RFP/RFT,
Procurement manual or this manual.
Where, in a two-envelope evaluation procedure, the price has been included in the
non-price envelope the response is prima facie non-conforming and may be
rejected.
Where the Corporate procurement advisor/specialist or person authorised by the
Corporate procurement team to act in this role identifies such price information
and believes it has been included by mistake, he/she may, with the authority of
the proposer, remove all references to the price contained in the non-price
envelope before forwarding the non-price information to the TET.
If the price is not detected by the Corporate procurement advisor/specialist or
person authorised by the Corporate procurement team to act in this role and gets
to the TET then the response will be non-conforming and may be rejected by the
TET.
Proposers are not entitled to rely on the Corporate procurement
advisor/specialist or person authorised by the Corporate procurement team to act
in this role to correct the errors.
Note any tags that are clearly identified. (Additional and less obvious tags
included within the response information might only be able to be identified by the
TET).
Any obvious non-conformances or additional information identified in the
checklist must be noted on the checklist. The Corporate procurement
advisor/specialist or person authorised by the Corporate procurement team to act
in this role must agree on the action required with the Principal Advisor
Procurement and if any, advise the proposer of the action taken.
Attach proposal registration form to each of the response evaluation packs,
3.7 Opening the price envelope
3.7.1 For two
envelope
tenders
On receipt of both envelopes, the Corporate procurement advisor/specialist or person
authorised by the Corporate procurement team to act in this role will register that both
envelopes have been received, and initial and date stamp the price envelope. The price
envelope will be stored securely until the evaluation of non-price attributes has been
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completed and shall only be opened by the Corporate procurement advisor/specialist.
3.7.2 Tags in the
price envelope
If the price envelope is found to contain tags, that appear to constitute an unauthorised
alteration or qualification of the RFP/RFT, the Corporate procurement
advisor/specialist or person authorised by the Corporate procurement team to act in
this role should consult with the Principal Advisor Procurement. With the consent of
the Principal Advisor Procurement, the Corporate procurement advisor/specialist or
person authorised by the Corporate procurement team to act in this role should
request the proposer to remove unacceptable tags. Refusal to remove unacceptable
tags will result in the response being rejected.
3.8 Modification and withdrawal of responses
3.8.1 Introduction The NZTA procedures, regarding modification and withdrawal of responses by a
proposer, are discussed in this topic.
3.8.2 Modification of
tenders
A proposer may modify their response after submission provided the modification is in
writing and received prior to the closing time.
3.8.3 Withdrawal of
tenders
A proposer may withdraw their response at any time prior to issue of a response
acceptance notice.
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4.0 Tender evaluation
4.1 Evaluation policy general
4.1.1 Introduction This topic describes the procedure and process to be followed in the evaluation of tenders.
The objective of the evaluation process must be to maintain a level playing field on which all
willing proposers can compete. The process must be conducted with utmost integrity
because of the importance of contracts to proposer and the fact that public money is
involved. To that end, the TET and those in the NZTA dealing with them must:
act in good faith
act fairly as between bidders
provide the same information to all proposers
not ignore or depart from manual processes
assume every action and inaction will be publicly scrutinised
always be aware that they will be judged with the benefit of hindsight.
Corporate procurement
advisor/specialist must ensure:
selection of appropriate people for the TET
implementation by those people in a way that demonstrably delivers integrity
any conflicts between the manuals being used are identified and resolved
lack of knowledge of the process requirements by any member of the TET are identified
and addressed.
The NZTA reserves the right to change the TET for any reason and at any time during the
tender evaluation process on condition that the tender prices have not yet been opened. If
the TET members were named in the RFP then all proposers shall be informed in writing of
the new TET members.
4.1.2 Evaluation
process and
policy
The evaluation must be undertaken fairly and impartially in accordance with the
requirements of:
the Procurement manual
this manual, and
the RFP.
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4.1.3 Confidentiality
of evaluation
process
Information relating to the examination, clarification, evaluation and comparison of tenders
and recommendations concerning the award of contracts shall not be disclosed to proposer
or other persons not officially concerned with such processes, until award of the contract to
the successful proposer has been announced. The information disclosed shall then be only
as prescribed in the Award of contract section of this manual.
Any effort by a proposer to influence the NZTA in the process of examination, clarification,
evaluation and comparison of tenders, and in decisions concerning award of contract, may
result in the rejection of the tender concerned by the NZTA.
All communication with proposer during the RFx process until the award of the contract
shall be through the Corporate procurement advisor/specialist or person authorised by the
Corporate procurement team to act in this role except where, during the course of tender
evaluation, the TET may request additional information or clarification as described in
section Conformity, tags, clarification and alternative tenders in this manual
4.1.4 Prior to the
commencement
of the tender
evaluation
process
Each member of the TET, and each member of NZTA's staff involved in the evaluation process
must be properly familiar with the following:
The evaluation procedure which is to be used, and the precise criteria for evaluating
tenders by this method.
The RFP and all other documents that are applicable to the tender evaluation, and, in
particular, the specific provisions of these documents.
His/her individual responsibilities in relation to the tender evaluation.
The restrictions on the TET which prevent it redefining attributes or creating new ones.
TET members should be informed on the roles and processes before the evaluation
commences.
Each individual who will be involved in the tender evaluation process must take reasonable
steps to ensure that there are adequate procedures in place to ensure that his/her
obligations under the relevant documents can be performed (e.g. do they have all the
relevant manuals, sufficient time and availability to meet as a TET, etc).
Each individual will complete the Conflict of interest and confidentiality declaration form,
(appendix 7, part B of this manual) and submit to the TET leader refer Conflict of interest
below.
4.1.5 Credentials of
evaluators
Requirements for the TET are that it shall:
include at least one person who have the appropriate skills and experience for evaluations
under $200,000
include a person (not necessarily the procurement specialist but who will have a senior
role on the team) that has an appropriate level of knowledge of the work being purchased
under the contract
not include any member who may have any interest in an organisation tendering for the
project being evaluated.
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4.1.6 Conflict of
interest
Prior to undertaking any evaluation duties, all members of the TET are required to complete a
Conflict of interest and confidentiality declaration form which shall be lodged in the contract file,
to ensure that the TET members do not have any conflict of interest or risk of bias with any
individual or organisation tendering:
The procurement specialist will evaluate all declarations from TET members. If the
procurement specialist determines that a potential conflict or risk of bias has arisen they
should either remove the TET member from the TET, or contact the Manager Procurement
to seek approval to retain the TET member with appropriate mitigation.
If there are any queries the procurement specialist can contact the Manager Procurement
to discuss.
Where the conflict or risk of bias in question concerns the procurement specialist,
continued involvement as the procurement specialist must be approved by the Manager
Procurement. If necessary, the Manager Procurement will discuss any issues or concerns
4.1.7 Communication
with proposer
All communication with proposer from the time that the RFP/RFT is released until the
contract is awarded shall be conducted through the Corporate procurement team.
4.1.8 Evaluation
process to be
complied with
The TET in undertaking the evaluation must ensure that the tender evaluation process as
described and detailed in the RFP is followed and documented as required.
4.1.9 Details to be
recorded
Details of any phone call, discussion or meeting between a TET member and any other person
(e.g. referees, other TET members, officers of the tendering authority) which relates to the
evaluation of the tender is kept on file as a file note duly dated and signed by its author. TET
members should take care to ensure that all such written material or file records do not
contain comments which are derogatory to any proposer.
4.1.10 Referee checks Where a proposer is required by the RFP to provide the names of any referees in support of
their proposal, the TET is encouraged to contact all such referees. This will normally be done
by telephone or email by the Corporate procurement advisor/specialist.
In making reference checks, the TET/ Corporate procurement advisor/specialist should
ensure the following:
Where efforts to contact a referee have been unsuccessful, a detailed record should be
kept of the attempts to contact that referee.
Where an individual member of the TET contacts the referee, that team member must
Detailed notes must be kept of any comment or opinion offered by a referee.
Questions must be asked in a neutral and balanced way, without leading the referee in any
way.
4.1.11 During the
tender
evaluation
process
Each member of the TET must be familiar with the principles of fairness and acting in good
faith, ensuring that:
all information is accurate and up to date. Where information comes from outside the
tender documents, it must be assessed for reliability
only relevant information is considered and irrelevant information is excluded (to be
determined by reference to the RFP, and the relevant evaluation manuals)
views about proposers, which are relied upon in the decision-making process can be
substantiated
information before the TET that is not considered relevant is clearly identified as having
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been disregarded
th
the TET/ Corporate procurement advisor/specialist is taking care to ensure that the
evaluation process is properly documented
the TET evaluation reports are accurate, and not made inaccurate by omissions or
selective quoting
others, not on the TET, do not become involved in the process
they do not engage in any practice that may give one tender an advantage over another.
4.1.12 One conforming
tender
Should only one tender be received for a project, or there is only one conforming tender,
the evaluation process as stated in the RFP shall be followed to ensure the tender is
acceptable.
Negotiation with the proposer is acceptable provided the scope of work is not altered and
the final negotiated price does not exceed the tendered price.
4.1.13 Negotiation
with preferred
proposer
Negotiation with the preferred proposer (irrespective of the number of conforming tenders
received) is acceptable provided:
the negotiation is consistent with the RFP
the negotiation is limited to contract terms (including price) and must not extend to
negotiation for the best price (where competition between suppliers has been used to
do that), and
the changes to the contract must not be so extensive that the tender process can no
longer be said to have tested the market.
Negotiation is to be used with caution, and in a positive relationship style rather than a
negative way.
In general negotiations should be focused on agreeing mitigation for any risk areas
highlighted in the RFP/RFT process and aligning the contracted parties on the required
outcomes and outputs.
A negotiation planner is available from the Corporate procurement team.
4.1.14 Tender
evaluation time
frame
If the evaluation of responses has not been completed within the period specified in the
RFP/RFT, the project manager/ Corporate procurement advisor/specialist must ensure
that all proposers are advised in writing.
4.1.15 Crown entities
tendering for
the NZTA
contracts
There is no legal restriction on Crown entities tendering for the NZTA contracts. The
Procurement manual requires that where a response conforms to the procedural
and substantive requirements of the RFP/RFT, the NZTA must consider that response. The
NZTA is bound to consider all conforming responses that are submitted, regardless of
whether they are submitted by a private contractor or by a Crown entity.
4.2 Conformity, tags and clarification
4.2.1 Checklist To assist in evaluating responses and maintaining conformity, the checklist by Corporate
procurement advisor/specialist or person authorised by the Corporate procurement team
to act in this role prior to evaluation for each proposer shall be referred to prior to the TET
undertaking the evaluation to ensure that all comments noted by the procurement
specialist/team administrator are taken into account.
4.2.2 Review of tags Each page of the response document should be checked by the TET for changes not
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authorised by any notice to proposer. Any such change will be considered as a tag.
Qualification of the RFP/RFT whether explicit or contained in the body of the response
shall be regarded as a tag.
Tags shall be dealt with in accordance with the requirements of the RFP/RFT or in the
absence of any specific requirements, they shall be dealt with as follows:
The proposer shall be requested to remove tags that are unacceptable to the NZTA,
without amendment to the response price. The response is to be rejected if the
proposer refuses to remove unacceptable tags.
If tags are found on the response form or any pricing schedule or otherwise included in the
price envelope, the proposer shall be requested to remove the tags. Unacceptable tags in
the price envelope cannot be considered and the response is to be rejected if the proposer
refuses to remove them.
4.2.3 Clarification Clarification of a response to establish conformity with the RFP/RFT or for any other reason
can be obtained during response evaluation. Any additional information provided which
attempts to improve the response shall not be included for evaluation purposes.
However, should a response not include information of a minor nature requested in the
RFP/RFT and it is required to complete the evaluation, then the proposer should be advised
and invited to supply it.
Any request for clarification or additional information and the response to it should be in
writing. Such response is to be received by the NZTA within 24 hours of request and may be
provided by email, facsimile, courier, hand delivery or post. Requests should be along the lines
proposer to judge compliance.
Requests for additional information or clarification shall be issued by the Corporate
procurement team and should include clear reference to the RFP/RFT clauses under which
clarity is being sought.
If the evaluators are unable to undertake a meaningful evaluation because a significant
amount of information requested in the RFP/RFT has not been supplied and/or there is a
record of the proposer being continually requested to submit further details by way of
clarification, then the response may be rejected or deemed non-conforming. The supply of an
entire attribute cannot, on any sensible interpretation, be called clarification. The TET must
consider the integrity of the process and the possible prejudice of other proposers in
providing their responses by a deadline.
In the clarification process, no change in the price or substance of the response shall be
sought, offered or permitted.
4.3 Dealing with comments received from proposers
All comments by proposers are to be channelled through the Corporate procurement team to
ensure that no claim may be laid that any proposer received privileged information or was
treated differently.
4.4
Once responses have been submitted, proposer requests for substitution of named key
personnel shall only be considered after award of the contract. Approval of a substitution may
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be granted if replacement is by a person of equivalent or better skills and qualifications and is
to the satisfaction of the NZTA.
Once the contract is signed the contractor may change key personnel in accordance with the
conditions specified in the contract.
4.5 Subconsultants/Subcontractors and consortia
4.5.1 Subconsultants/
Subcontractors
In particular, when assessing attributes, the attributes of the subconsultants/subcontractors
must be included. The detail expected in the tender should be in proportion to the amount of
work to be carried out. For example, a short statement in a general section could cover a
A proposer who proposes to subcontract any significant portion of the work should still have
an appropriate organisational and management structure.
4.5.2 Consortia This is similar to the subconsultant/subcontracting situation except that the consortium
would jointly sign the tender and therefore have a closer involvement in the management and
organisation of the contract. Although close evaluation is necessary, a group of contractors
may complement each other well and enhance the quality of the overall tender.
4.6 Non-price attribute assessment
4.6.1 Introduction When assessing non-price attributes, deliberations shall relate to the RFP and type of work to
be undertaken.
When allocating the grades for non-price attributes, care must be exercised not to award
higher grades just because proposers capabilities exceed those required for implementation
of the project.
Any factual information available to the TET may be used in determination of non-price
attributes. However, the TET shall not be obliged to look beyond the tender submissions.
Information supplied by the proposer must be in accordance with the RFP.
4.6.2 Non-price
attribute
evaluation
Non-price attributes shall be evaluated as specified in the RFP and in accordance with the
Procurement manual. A non-price evaluation summary sheet is provided at appendix
6, part B of this manual.
-price attributes are evaluated and where a tender attribute grade
of between 0 and 35 is given the tender becomes non-conforming through having graded less
than 35 on an attribute. The evaluation of the tender should be completed and the price
envelope should be retained unopened pending any formal challenge unless requested to be
returned.
Grading of each non-price attribute should be in increments that give the appropriate level of
flexibility considering the value of the contract and the possible SQP generated (i.e.
increments of five points).
On completion of the evaluation of the non-price attributes, the evaluators shall stand back
and undertake an overall review to verify from the information available, that:
for a pass/fail evaluation, the proposer can be expected to complete the project
adequately and safely
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for a price /quality evaluation, the grade awarded is reasonable, particularly in comparison
with grades awarded to other proposers.
Financial resources are not to be included in any weighted attributes. Where there is
doubt that the proposer has sufficient financial resources to complete the contract, the
matter shall be taken up with the Manager Procurement upon completion of the
evaluation and prior to award of contract.
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4.6.3 Use of tender
evaluation forms
for price quality
grading
The evaluation summary forms and guidelines are to be used as appropriate during tender
evaluation. The purpose of using standard forms is to ensure uniformity in evaluation and
contribute to consistent and transparent evaluation.
The following describes the use of these forms:
The project manager/Corporate procurement advisor/specialist selects and briefs the TET
(others may be involved in this briefing as required).
Where not identified in the RFP/RFT, proposers are entitled, at their request, to the names
of the TET members during the tender, or during the evaluation process.
The project manager/Corporate procurement advisor/specialist or person authorised by
the Corporate procurement team to act in this role ensures TET members are provided with
sets of pre-formatted forms corresponding to the number of responses received, copies of
the responses and a copy of the RFP/RFT. Pre-formatted forms will have included, as
appropriate, the contract name and number, attribute weights, and factors to be graded
against on the methodology form.
Note: Attribute, subattribute, personnel and methodology factor weights are determined by
the project manager/ Corporate procurement advisor and indicated in the RFP/RFT.
TET members independently read and evaluate the tenders then grade the non-price
attributes noting their overall rating for each attribute. Each TET member records their
reasoning behind their attribute grade allocation and the key differentiations.
Note: Sufficient time must be allowed for this step prior to the TET meeting.
The TET grades are recorded on the evaluator summary of all non-price attributes, or other
medium from which copies can be made.
The attributes for each proposer are then agreed by consensus and recorded in the
highlighted box.
A TET member (or Corporate procurement advisor/specialist for activities over $200,000)
should be nominated to be responsible for summarising and recording the essential
reasoning behind the agreed grades of each non-price attribute and for ensuring that all
evaluation forms and comments are correctly filed.
Note: All documentation used during the evaluation process including all marking sheets and
all documents written or received by the TET during the evaluation, should be returned to
Corporate procurement to be retained on the contract file to ensure proposers can properly
receive feedback on their submissions if requested. All such documentation is to be retained
for a period of seven years after completion of evaluation after which it may be destroyed
unless notice of any claim or dispute relating to the TET process has been received.
4.6.4 Proposal
deficiencies
In the event that the Corporate procurement advisor/specialist or person authorised by the
Corporate procurement team to act in this role discovers errors and/or omissions in a
response, they may, in consultation with the TET, without advising the proposer of the errors
and/or omissions, request the proposer confirms the tender without correction. Where such
confirmation is not received the response may be rejected.
All requirements deemed to be mandatory for completion in the RFP/RFT must be properly
addressed to the satisfaction of the Corporate procurement advisor/specialist or person
authorised by the Corporate procurement team to act in this role
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4.7 Presentation of proposals
Consideration is to be given to the desirability of all proposers making presentations
on their responses. If the TET feel that tender presentations may be required this
should be highlighted in the RFP/RFT. The TET will decide if presentations are
required after submissions have closed and this will be notified to proposers in a
notice to respondents.
4.8 Recommendation report
4.8.1 Negotiations Refer to section 5.0.
Negotiations are best conducted prior to making any announcement to respondents.
The recommendation report may outline the intent to negotiate but ask for approval to
award based on an expected outcome of a negotiation.
It is best not to hold debriefs with any respondents until all negotiations have been
completed.
4.8.2 Recommendation
report
The recommendation report to the appropriate delegated authority, shall include comment
on the rational and key points contributing to:
number of responses, including any responses that were anticipated through a closed
competitive process and not received, and late/rejected responses
the non-price attributes grade for each proposer (grades to be included)
why any tender failed any non-price attribute (see 4.8.3 below)
the acceptance or rejection of tags and late tenders
any plans for negotiation and the expected outcome of those negotiations
any recommendation that is to accept a tender that is not the lowest in price,
the benefits, including financial and operational, to the NZTA of the recommendation
risks associated with the award e.g. market reaction, implementation challenges,
interrelated activities and
the recommendation to award (or next stage) and request for approval of the
recommendation.
The report should be sent to the Corporate procurement advisor/specialist for review.
Once finalised, the Corporate procurement advisor/specialist should note the date the
report has been finalised in the register of tenders.
The TET should then issue the recommendation report to the appropriate delegated
authority as detailed in the procurement delegation schedule contained in part B.
The Corporate procurement team will provide a template.
4.8.3 Non-conforming
or rejected
responses
Reasons for disqualification of any response shall be reported and may include a response
that has been failed on any non-price attribute.
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4.8.4 Final evaluation
forms
Recommendation reports, are to be accompanied by the completed report form for the
particular methodology used.
4.9 Post-evaluation administration
4.9.1 Debrief meetings After the RFP/RFT process is complete and the contract is awarded, it is important the
unsuccessful/successful proposers are given the opportunity to discuss their
responses with the Evaluation team. This will benefit all parties to the process and
provide oppor
process.
The Corporate procurement team will provide a template.
4.10 Release of information post-tender
Care should be taken not to disclose any information that is likely to reveal a
, or any other confidential or
commercially sensitive information.
The following information may be released to unsuccessful suppliers:
The rating of their tender or proposal in relation to the others received (e.g. 7th
out of 12].
A summary against each evaluation criteria where the proposal was strong or
deficient (e.g. specification, technical requirement or delivery terms). The purpose
of this is to encourage and assist suppliers in responding for future NZTA
contracts.
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5.0 Award of contract
5.1 Negotiation and development of contract documentation
5.1.1 Purpose of
negotiation
Negotiations are best conducted prior to making any announcement to respondents.
Post-tender negotiations are an effective risk management tool. Their primary objective
should be to:
test the understandings and underlying assumptions that have influenced a proposer in
preparing its costings, and
achieve cost reductions through operational refinements or enhancements.
5.1.2 Process for
conducting
service
delivery
negotiations
Staff involved in negotiations must ensure that:
they are conducted ethically and in good faith
other proposers are not potentially disadvantage by negotiating a contract that is
materially different in scope from what was proposed in the response documents
the negotiated contract is sustainable and does not compromise quality
where possible, you are able to make key decisions at the negotiation
the negotiations do not focus solely on reducing bottom line costs
negotiations are conducted first with the preferred proposer, and
if, in quality-based evaluations, the outcome is unsatisfactory, negotiations may then
be held with the next highest ranked proposer, and so on down the list, until a
satisfactory outcome is achieved.
The skills and expertise of the negotiation team should be commensurate to the value, risk
and complexity of the procurement. The composition of the negotiation team is
determined by the project manager in consultation with the Corporate procurement team.
A negotiation planner is available on request from the Corporate procurement team.
5.1.3 When to
undertake due
diligence
Due diligence provides both the NZTA and a proposer with the opportunity to test their
expectations and understanding of the procurement.
Formal due diligence is usually unnecessary for simple, routine procurements.
An alternative to due diligence, if the cost of the procedure will be high, must require the
successful proposer to provide a performance bond.
Special care must be taken to avoid inadvertently creating a contractual obligation during
the due diligence process. If in doubt, contact the Corporate procurement team.
5.1.4 Due diligence
process
The RFP/RFT documents must:
state whether due diligence may be undertaken, and
set out the anticipated timing of the process and the contact details of the person
responsible for managing it.
The NZTA needs to establish formal procedures to ensure:
relevant material is collected, collated and indexed for inspection by proposer
the relevant employees are available for questioning by proposer, and
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requests for information by proposers are responded to.
Due diligence process
continued
A due diligence process should include an address:
the proposers ability to deliver the goods or services for the price submitted
the reasonableness of any price renegotiation clause
the terms and conditions of any proposed financing structures, including the
certainty of funding and the proposers ability to service the debt, and the financial
viability of the proposer
the experience of either the proposer or any proposed subcontractor in providing
similar goods or services
credit and/or reputation checks to establish (inter alia) the qualifications or
credentials of key personnel, for example by obtaining curricula vitae and meeting
with individuals to discuss their relevant experience, and understanding of the
requirement
the adequacy of the proposers approach to the procurement, and whether it is
likely to meet key objectives
site visits to check the adequacy and condition of infrastructure, equipment and
resources that will be used in meeting the requirement
examination of work or product samples.
The TET must keep a record of the due diligence enquiries undertaken, forwarding the
results and ensure these are forwarded to the Corporate procurement
advisor/specialist.
5.2 Development of formal contracts
5.2.1 Formal
contracts
A formal contract is one that has been agreed to, and signed, by both the appropriate
NZTA purchasing delegation holder and the cont
Formal contracts ensure that all terms agreed through the negotiation process can be
referred to and enforced.
Where it is impossible, from a practical point of view, for the negotiated contract to be
signed by both parties prior to the commencement of supply or work, a formal letter of
intent may be used to allow work or supply to commence. You must consult the
Corporate procurement team before sending a letter of intent to ensure the
commitments you are making within the letter are appropriate, and the letter is clear as
to what is intended to be legally binding and what is not. This letter of intent should
refer to all the relevant contract documents subsequent to its issue. The formal contract
document must be signed by both parties as soon as possible, as the letter is simply a
starting point. .The award of the contract by fax, email or letter is a binding contract. An
award is to be used when it is not possible to present the contract document for signing
prior to the contractor staring to deliver the supply or service. This form of initiating a
contract may be used when time is of the essence but should not be may be used as a
surrogate for a completed formal contract.
The Corporate procurement team will provide template contracts for sponsors/ project
managers.
5.2.2 Deeds A deed is normally headed Deed and is a formal legal document required when a
specific legal right is created. They include every transaction relating to land (including
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leases but not licences), guarantees, power of attorney, and acknowledgement of debt
and gifts.
5.2.3 Process for
preparing
contracts
Contract templates are held by the Corporate procurement team. Employees must
ensure that the appropriate procurement process has been followed before requesting a
contract template.
Employees must complete the schedule of services and forward to the Corporate
procurement team for review prior to release to the contractor.
Any changes to the standard NZTA terms and conditions must be reviewed by the
NZTA legal team.
Contracts must be signed by the relevant delegated authority.
Two signed originals of contracts are required for signature. One signed original must be
provided to the contractor while the other must be returned to the Corporate
procurement team, for central filing in a fireproof safe.
5.2.4 Right of
Renewal
Relationships need to be considered on the expiry of each contract, so the business
relationship can be commercially and competitively tested.
If a contract has a right of renewal period written into it, you only need to go to the
market at the right of renewal point, if the NZTA or the contractor wishes to exercise
the option not to renew. However, the NZTA may use the right of renewal point as an
opportunity to harmonise the service or goods provision with other contracts.
5.2.5 Contract
format and
content
The proposed contract format is to be detailed in the RFP/RFT document.
The user requirement specification, quality assurance plan, and relevant
correspondence should be contained in the schedules to the contract.
Material that adds nothing to the actual contract should not be bound into the contract.
Remove all unnecessary information such as curricula vitae, personal profiles and
promotional material.
5.2.6 Transition plan A transition plan must be prepared if the
delivery. Transition expectations may be relevant to document in a high risk transition
contract.
A transitioning plan will be most likely required where the NZTA has supplier providing
complex or high-value services (e.g. advertising, printing and design services, and bulk
mail-outs), or high-volume, core business goods (e.g. licence plates, drivers licences or
publications).
5.2.7 Preparing a
transition plan
Employees responsible for a contract should ensure that a transition plan is in place or is
required in a response to RFP/RFT.
The amount of detail needed in the plan will depend on what is being supplied. For
example a relatively minor, routine contract may require only a statement outlining the
adequacy of existing procurement procedures, while an outsourcing contract may
require a detailed transition plan that identifies the schedule of tasks or activities that
the parties will perform during the transition period, and sets out the responsibilities,
resources, policies and procedures necessary to enable effective management of the
transition.
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Preparing a transition
plan continued
Depending on the complexity of the transition and the services being provided, the plan
may also need to address:
the capacity of the Corporate procurement team to cope with any increase in
workload
any organisational restructuring resulting from the contract
any new training requirements
, e.g. the impact of the contract on
land, facilities, equipment or machinery, and intellectual property
identifying and assigning responsibilities such as ownership, insurance, access, usage,
transfer, and liabilities of a financial, legal, safety, or environmental nature
any effect on customers, including
the need for a customer communication strategy
consultation to identify any customer needs during the transition period
the need to notify any interim arrangements, or changes to staff and service
delivery schedules.
5.2.8 Key
performance
indicators
Each contract must have a set of clear deliverables and measures for establishing
whether or not the supplier is providing the service or goods to the standard specified
within the contract.
The Corporate procurement advisor/specialist will guide the project manager through the
development of the key performance indicators (KPIs) which are to be used by the
project manager to establish whether or not the NZTA is receiving the goods/services
contracted. These KPIs form part of the contract and where the contract is re-tendered at
the end of the current term, those KPIs will normally form part of the tender specification
released in those subsequent tenders.
5.3 Liability and insurance for consultant contracts
5.3.1 Liability and
insurances
The NZTA requires that all contractors and consultants carry adequate insurance coverage
(particularly professional indemnity and/or public liability) to protect the interests of the
NZTA against any claim arising from the provision of services.
5.3.2 Changed
insurance
requirements
after award
If for any reason the Corporate procurement advisor/specialist /project manager believes
that insurance requirements should be amended during the currency of any contract (e.g. if
the value of the contract increases significantly) then such proposed amendments must be
reviewed by the sponsor.
5.3.3 Uninsured
consultants
engaged in
minor contracts
Refer to Insurance and risk management manual (SM013) for uninsured
consultants engaged in minor contracts (up to $100,000) who require insurance, or where
a reduction or waiver for professional indemnity, or public liability insurance is applicable.
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5.4 Insurance, bonds and retention for office accommodation works (Works)
5.4.1 Introduction Insurance of the contract works and a contractor s bond may be required for a Works
contract.
5.4.2 Insurance The provisions for insurance of works carried out under a Works contract are set out in
New Zealand Standard 3910:2003 Conditions of contract for building and civil engineering
construction (NZS 3910:2003) section 8.
5.4.3 Insurance
certificate
approval/
Generic works
insurance
certificates
approval
The NZTA requires the insurance company providing the cover to sign the insurance
certificate.
Alternatively, subject to satisfying the NZTA that it has appropriate insurance policies in
place that meet the ay
provide a generic underwriter certificate together with a project specific insurance broker-
signed certificate.
For further information on the
email [email protected] .
5.4.4 Changed
insurance
requirements
after award of
contract
If for any reason the project manager believes that insurance requirements should be
amended during the currency of any contract (e.g. if the value of the contract increases
significantly) then such proposed amendments must be first approved by the sponsor.
5.4.5 Bonds A contractor's performance bond may be required under NZS 3910:2003 section 3.1. This
provides the NZTA security to ensure performance of the contractor's obligations under
the contract agreement. This may include completing the work to the specified standard
and breach of contract, e.g. through wrongful termination. The bond is usually released
within five days of practical completion.
The contractor in addition may offer a bond in lieu of retentions as under NZS 3910:2003
clause 12.3.3.
5.4.6 Amendments to
standard works
bond forms
The NZTA Works contracts may use performance bonds and bond in lieu of retention
forms as provided in NZS 3910. Some bond providers require amendments to the NZS
3910:2003 bond forms making them on demand and enabling multiple draw downs.
The following amendments to the NZS 3910:2003 standard bond forms are acceptable to
the NZTA:
o the principal in the
sum of NZ$XXXXX and bind themselves, their successors and assigns jointly and severally
for the payment of that sum and the sureties undertake that they will pay to the principal
any amount demanded by the principal provided the demand by the principal is in writing,
NZ$XXXXX in the aggregate.
Notwithstanding any other provision of this bond, the sureties may pay to the principal an
amount equal to its maximum liability under this bond less any moneys previously paid, or
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5.4.7 Bond in lieu of
retentions
retention
amounts
For all contracts the bond value shall be the applicable contract retentions set out below plus
a further 10 percent of that figure.
For construction contracts the maximum amount of retention is $200,000. The amount to be
retained from monies owing to the contractor is:
10 percent for the first $200,000
5 percent for the next $800,000, and
1.75 percent of the amount in excess of $1 million.
5.5 Contract file
5.5.1 Introduction A contract file must be maintained electronically for each contract awarded. This topic
discusses the contents of the contract file.
5.5.2 Contract
procedure
In maintenance of the contract file, the file number must correspond with a sequential
number in the register of tenders. This contract file must contain all relevant information
relating to the administering of that contract in addition to that stated below.
5.5.3 Information in
contract file
Contract files must include the following information.
All documents with signatures must be scanned to retain an electronic copy. If the original is electronic, retaining in electronic is fine (and not printing a hardcopy duplicate is fine).
practice to retain the hardcopy original.
Supporting procurement plan.
Estimate.
Copies of all notices to proposer.
The Schedule of tenders received and evaluation report.
Summary of unsuccessful proposers.
Copy of the successful tender and supporting papers.
Copy of the tender acceptance and decline notices.
Correspondence on the contract generated the project manager and any other party.
The signed contract document. A hard copy original must also be retained.
Two original copies of the contract are to be signed. Each party to the contract is to retain a
copy of the contract with one signed original to be provided to the Corporate procurement
team for central filing in a fire proof safe.
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6.0 Signing of contract
6.1 Introduction
This section discusses the procedure for signing the contract documents.
6.2 Signing the contract
The delegation to enter into contracts is detailed in the procurement delegations
schedule of this part.
If the contract is not a deed, the c a person who is
authorised to enter into contract by the expressed or implied authority of the
contract.
Two original copies of the contract are to be signed. Each party to the contract is to
retain a copy of the contract with one signed original to be provided to the Corporate
procurement team for central filing in a fire proof safe.
If the contract is a deed, the following personnel from the supplier must sign the
contract for it to be legal:
two directors (where there are two or more directors of the company), no witness
is required
if there is only one director, signed by that director whose signature must be
witnessed
the person authorised by the company constitution (evidence of authorisation
must be provided), or
an attorney appointed by the company (certificate of non-revocation of the
appointment of the attorney must be provided).
The witness as well as the signatory must also state his/her address, profession or
title.
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7.0 Contract management
7.1 Contract confidentiality
The NZTA representative responsible for managing a contract, often the project
manager, or recipient of the deliverables (Contract managers) should retain a copy of
the contract that they are administering or managing. A copy can be requested from
the Corporate Procurement team. These employees are reminded that it is their duty
to keep the detail contained within that contract confidential.
7.2 Assessing the performance of the supplier
Contract managers must regularly assess the performance of a selected supplier
against established criteria.
Contract managers must take steps from time to time to ensure that the selective
supply is still justified. This might include advertising to seek expressions of interest
from other potential suppliers for the goods or services. Contact the Corporate
Procurement team for advice.
7.3 Process for managing contracts
Contract managers should ensure that they:
are able to identify performance issues and any problems with the conduct of the
contract, which may result in appropriate remedial action and negotiated
solutions
have regular reporting on the performance of the contract, and
implement a contingency plan, to address continuity of service/supply in the
event of contract failure.
A contingency plan should be prepared before the contract takes effect.
For low-value or low-risk services, the plan may simply recognise that some delay
could occur in restoring services, or dealing with problems, should the contract fail.
Contract managers must monitor the cont (monthly for
high value or high risk or core goods/services; quarterly for medium value or medium
risk or key goods/services; bi-annually or annually for other goods/services), to
ensure that standards set out in the contract are met, particularly that:
the contracted service is delivered
the associated risks are managed, and
effective communication is maintained between all parties.
Contract managers
that are
included in the contract. .
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The monitoring procedures should enable the Contract Manager to:
make the contractor aware of problems as they occur (if necessary, in writing)
clearly identify issues to be addressed by all parties, providing an opportunity for
the contractor to improve performance during the period of the contract, and
collect information to inform any subsequent extension or renewal of the contract.
Meetings to review contract performance will vary in scope and frequency. The types
of meeting may include the following:
Regular progress meetings involve the contractor, the contract management
team, other key staff from the NZTA, and end users. The purpose of these
meetings is to discuss performance, contract events or milestones, changes to
user demands, and proposed actions or responses to current or potential
problems.
Technical meetings as required, involve specialist technical representatives of
the Contract Management team and the contractor. The purpose of these
meetings is to review technical reports and performance data, and discuss
technical issues.
Longer-term reviews and audits the purpose of these is to consider
the achievement of objectives,
out-turn versus budget,
user satisfaction,
future opportunities and process improvement,
the extent to which value for money is being achieved and requirements met,
and
how to address any emerging need for changes.
Contract Managers must ensure that a reporting system, such as KPIs and
scorecards, is in place to allow enough relevant, succinct and timely information to:
manage the project, and
monitor performance and risk.
Relevant information may relate to:
the cost of the project
technical aspects, including standards of reliability, safety, availability of
equipment, and other performance criteria
performance against specifications, allocation of resources, costs of work
performance, and other contractor evaluation reports.
7.4 Contract variations
Because a contract is a binding commitment between the parties, there may be legal
and cost considerations in formalising any changes.
Where changes become necessary during the period of the contract a formal
variation must be put in place.
Advice from the Corporate Procurement team must be sought when planning:
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negotiation of renewals, extensions
cancellations of existing contracts
where the impact of any extension, renewal, or cancellation is unclear or the
costs are greater than originally intended.
7.5 Process for contract variations
The NZTA must manage any proposed variation to a contract in accordance with a
formal change procedure. This may include:
keeping a record of any potential need for change
considering the full implications of change before making any amendments to the
contract or price
giving those involved the authority and the requisite knowledge to negotiate
variations
recording each action taken
incorporating the changes into the contract by formal variation
involving end users in the change process as necessary, and subsequently
informing them of changes that have been made.
Before agreeing to a variation, the Contract Manager must confirm that the variation:
will not significantly alter the original scope of the contract
complies with the .
If a proposed change will significantly alter the scope of the contract, advice must be
sought from the Corporate procurement team, regarding the need to consider re-
tendering. Negotiation of variations to contracts is the responsibility of the Corporate
procurement team, assisted by the Contract Manager.
Care must be taken to ensure the sponsor and/or budget holder is kept informed of
any contract variations or amendments that could substantially change any aspect of
7.6 Assignment or novation
The NZTA will only consent to assignment or novation if the process set out below is
followed, and it is satisfied that its interests, the integrity of any procurement process
will not be compromised, and that any existing bonds and insurances are confirmed
or appropriate substitutions made.
In an assignment the original supplier should ordinarily remain responsible for
performance under the contract unless that is clearly inappropriate (e.g. the incoming
party is stronger and willing to take on liability for past events) and that continued
liability must be documented.
It is important that the assignment or novation is specifically addressed so that if
there are difficulties later, there is not a dispute about whether it is the original party
or the assignee that is liable. Specifically if the original party is excused, the new party
must be expressly stated to be liable for past events. At this point, the assignment is
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materially the same as a novation.
In a novation the original supplier ceases to have any ongoing involvement. Issues as
to the time when a liability arises can therefore be material. Generally, novations
should not be accepted unless there is substitution of a clearly stronger party and
there is no risk to the integrity of the procurement process. The incoming (or
novated) party must acknowledge responsibility for everything done or not done by
the original party.
7.7 Changes after contract awarded
Where the Corporate procurement advisor/specialist Contract Manager becomes
aware of a material change to, or change in, the control of an existing supplier, or
receives a request for the NZTA to consent to assignment or novation of an existing
contract the Corporate procurement advisor/specialist Contract Manager shall do
the following:
1. Request details of the (proposed) change in control from the consultant and
details of the proposed new key personnel.
2. Assess whether the new party is at least as able to perform the contract.
3. If so, the procurement specialist/project manager shall obtain the consent of
the project sponsor to request from the supplier a deed of assignment or
novation of the contract for approval by the NZTA (such approval to be
given by the project sponsor). This deed must clearly transfer all the rights
and obligations of the contract to the new party, and state that from the date
of the deed, the NZTA is entitled to deal only with the new party in relation
to all matters. The new party must be clearly bound in respect of past acts or
omissions of the original party and liable for them and any rectification
required as it was the original party.
4. If it is assessed that the new party is as not able to perform the contract, the
procurement specialist/project manager shall refer the matter to the project
sponsor. The project sponsor may determine that it is appropriate, to require
the consultant/ contractor to provide a deed of assignment or novation. In
this case, the original party would not be fully released.
5. Check whether the new party unsuccessfully tendered for the contract. If so,
seek advice from the Corporate procurement team.
6. Check that replacement bonds (if any) and insurances are in place, or that
the relevant deed assignment includes the assignment or novation (as
appropriate) of existing bonds and insurances
It is very important to respond to notice, even informal, of any events that might
inferred from conduct or acquiescence, and in those cases its position might not be
adequately protected.
Where approval of assignment or novation is not recommended legal advice should
be sought regarding termination of the contract.
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7.8 Where a change in control involves an assignment or novation or subcontracting
NZTA's consent to this should always expressly prohibit the
subconsultant/subcontractor assigning or novating its rights and obligations in
relation to the particular tender, require notice of changes of control and include a
provision that the NZTA may amend or withdraw its consent if those types of
arrangements occur.
7.9 Ending a contract
The unsuccessful incumbent being terminated must be advised in a timely manner of
the transition arrangements. These should include (but not be limited to):
end of contract reviews if different from routine contract management reviews
referred to
long-term record retention,
intellectual property requirements, and
final payments.
Where a service is being re-tendered and the incumbent supplier is unsuccessful or a
contract is to be terminated early, a transition plan must be developed to ensure that
there is a seamless transition from one supplier to the next.
7.10 Contract evaluation reviews
Monitoring the performance of the Corporate procurement team, the Contract
Manager, NZTA end users and the supplier are important aspects in improving the
way we operate.
Performance reviews should be conducted at any time if there is an identified
problem or at pre-determined periods during a project.
Where the term is greater than one year, annual reviews are to be conducted on the
effectiveness of the contract. These reviews are to canvass the NZTA end users and
supplier.
For one off project contracts, On the completion of the project, a wrap up evaluation
should to be conducted to determine the overall effectiveness of the project.
Standard format evaluations for annual reviews and wrap up evaluations should be
completed.
7.11 Record keeping
Personnel involved in a procurement process must ensure that all documentation
relating to a procurement process is kept on file either electronically or hard copy for
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a minimum period of seven years. The Corporate procurement team will advise on
the documentation that needs to be retained.
7.12 Health and safety requirements of contractors
The NZTA has an active health and safety policy that requires all contractors to
comply with the provisions of the Health and Safety in Employment Act 1992, and
regulations pertaining to that Act.
required to sign a document confirming they agree with, and will comply with the
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8.0 Alternative procurement options
8.1 Emergency procurement
8.1.1 Introduction Emergency procurement of goods or services may be authorised provided:
life, property or equipment are immediately at risk, or
standards of public health, welfare or safety needing to be established without delay,
such as in the case of disaster relief.
8.1.2 Arranging
emergency
procurement
Emergency procurement allows all normal procurement rules to be set aside to meet an
emergency. The prime element that constitutes an emergency procurement is that
unforeseen circumstances have risen that require urgent attention by NZTA.
When the goods or services that are needed to cope with an emergency cannot be
obtained within the required time by normal procurement procedures, they may be
purchased from the most convenient suitable supplier, provided that:
the purchase is limited to the meeting the requirement needed to cope with the
particular emergency, and
the price quoted is a fair market price at the time and place where the purchase is
made.
Any NZTA employee may exercise emergency procurement provisions to meet a genuine
emergency situation, provided that the person can later justify their actions. Where the
NZTA employee concerned does not have a formal purchasing delegation, the value of
the purchase is limited to that of a cost centre manager. All others may make emergency
procurement up to their purchasing delegation level.
Responsibility for determining that the circumstances warrant an emergency purchase
rests with the NZTA employee l placing the emergency request. An individual may be
liable for any expenditure or loss resulting from misuse of the emergency purchase
procedure.
8.1.3 Post the
emergency
procurement
All documentation relating to the must be retained.
As soon as practical after the emergency procurement has taken place notification of the
emergency procurement must be sent to the Corporate procurement team and the tier
three manager responsible for the expenditure outlining:
The reason for the emergency procurement
The value and term of the emergency procurement
The supplier appointed, the form of contract used, and why
Any other relevant information to support the emergency procurement
8.2 Master Agreements
The Corporate procurement team hold information on Master Agreements able to be
accessed by the NZTA.
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8.3 Syndicated procurement
There are two types of syndicated procurement contracts. Syndicated procurement
contracts come into effect where a group of government departments/agencies
collaborate to select a preferred vendor for goods or services under a syndicated
procurement arrangement.
A Common Use Provision (CUP) contract involves, the notification of the intention to
procure the goods or services by a lead department on behalf any departments and
agencies who may wish to participate in a collaborative agreement, some many be
named at the time of engaging suppliers.
CUP contracts contain the option to join a previously established syndicated contract
utilising the provisions of that contract for the balance of the term. A CUP contract
requires MBIE sign off before creation,
The Cluster contract involves the intention to procure goods or services be made by a
lead department on behalf of the group with specifically identified participating
departments and agencies. A Cluster contract cannot be accessed by other
departments once it is in place.
.
The Corporate procurement team holds a list of syndicated contracts and must be
involved in accessing, or creating, any syndicated procurement contracts.
8.4 All-of-government contracts
All-of-government contracts (AoG) contracts are binding on all core agencies and
those agencies where the CE has opted in (NZTA has opted in on most AoG
contracts). These contracts are being developed and established as opportunities are
identified by MBIE.
The Corporate procurement team can advise which goods and services are covered
by an AoG contract.
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9.0 Appendices Part B
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Procurement plan Direct appointment
Background
Brief description of goods or services that are required
Provide a statement that describes the value for money in making
this purchase
Project manager details
Name
Business group
Budget
Is the expenditure budgeted?
What is the budget?
For tracking purposes what will any payments be coded to, i.e.
cost centre/general ledger/output/project code?
Approvals
Who has approved this expenditure?
Who will sign the contract?
Signing delegations are as follows:
tier 3 managers up to $250,000
tier 2 managers up to $1 million
Chief Executive up to $2 million
over $2 million requires the NZTA Board approval and delegation to the Chief Executive.
Users
Name the key user groups within the NZTA of this
product/service that will be impacted
Have these groups been consulted?
Is there an information services opponent to this project? Have
they been consulted?
Contract term
When must this contract commence?
When must this contract finish?
Any other key dates?
Why this time frame?
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The market
Is there a current supplier to the NZTA that can provide these
services?
What is the justification for not using this supplier?
Is there a pool of suppliers in New Zealand that can provide these
services?
If suppliers are available, provide the reasoning why you are not
placing these services out to the market?
Are you aware of any market trends affecting these Suppliers? If
so, what?
External factors
What stakeholders are interested in this purchase, e.g. industry,
public, media, competitor suppliers?
Risk
Any risks or other factors to consider?
List health and safety considerations, e.g. hazard identification (if
applicable)
Contract performance
Against what criteria will you measure successful delivery of this
contract, i.e. what are the key outcomes of this contract that the
contractor will need to perform and how will these be measure?
Approval by Cost Centre Manager or delegated authority (if over $100,000)
Name
Date
Signed
Endorsement of budget availability by Management Accountant
Name
Date
Signed
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Procurement plan Competitive process
Background
Project Name
Brief description of goods or services that are required
Provide a value for money statement
Project manager details
Name
Business group
Budget
Is the expenditure budgeted?
What is the budget?
For tracking purposes what will any payments be coded to, i.e.
CC/general ledger/output/project code?
Approvals
Who has approved this expenditure?
Who will sign the contract?
Signing delegations are as follows:
Cost centre manager up to $80,000
National Manager Corporate Support, regional directors, transport registry centre manager up to $250,000
group managers up to $1 million
Chief Executive up to $2 million
over $2 million requires the NZTA Board approval and delegation to the Chief Executive.
Users
Name the key user groups within the NZTA of this
product/service that will be impacted
Have these groups been consulted?
Is there an information services component to this project? Have
they been consulted?
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The market
Is there a current supplier and have there been any discussions
with the supplier prior to this process?
Please include why you would or would not like them to be
awarded the contract
Who are the prospective suppliers?
Are you aware of any market trends affecting these suppliers? If
so, what?
External factors
What stakeholders are interested in this purchase, e.g. industry,
public, media, competitor suppliers?
Risk
Any risks or other factors to consider?
List health and safety considerations, e.g. hazard identification.
Tender process term
When must this process commence?
When must this process finish?
Why this time frame?
Contract term
When must this contract commence?
When must this contract finish?
Any other key dates?
Why this time frame?
Procurement method
What procurement method will you use or are you planning to
use? For example, open tender released through GETS or selective
tender.
The standard requirement is that all procurement over $100,000
is placed on GETS as an open tender unless otherwise approved. If
using a selective tender method justification must be provided.
Supplier selection models
What supplier selection method will you use:
lowest price conforming
purchaser nominated price
price quality
quality based?
Please contact the contracts team for assistance if required
The Procurement manual has more detailed information on each method (see appendix C).
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Contract performance
Against what criteria will you measure successful delivery of this
contract, i.e. what are the key outcomes of this contract that the
contractor will need to perform and how will these be measured?
Evaluation panel
Provide the nominated evaluation panel. This should be a
minimum of three people and may include external
representation.
Is there a representative from any affected groups within the
NZTA?
A member of the contracts team must sit on all panels where the contract value is over $200,000.
Endorsement of budget availability by Management Accountant
Name
Date
Signed
Approval by budget holder or project sponsor
Name
Date
Signed
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Closed tender register
Contract: Closing at: On:
File number: Contract name:
Proposer name Email address Contact name Issued Returned
Notice to tenderers
1 2 3 4
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Received tender register
Contract: Closing at: On:
File number: Contract name:
Serial Item Supplied Comment
yes no n/a
1 Conflict of interest/Confidentiality declaration form received by
evaluation panel members
2 Acknowledgement of acceptance of rules
3 Submissions correctly packaged and received on time
4 Acknowledgement or submission of terms and conditions
5 All non-price attributes/mandatory response sections completed
6 Subcontractor/Subconsultant details provided
7 Obvious tags that are clearly identified
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Proposal close off checklist
Contract: Closing at: On:
File number: Contract name:
Proposer name Email address Contact name Issued Returned
Notice to tenderers
1 2 3 4
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Evaluation summary
Contract name: Closing at: On:
File number: Evaluator name:
Participant 1 Participant 2 Participant 3 Participant 4 Participant 5
Criteria P/F GRADE P/F GRADE P/F GRADE P/F GRADE P/F GRADE
1 Methodology
2 Resources
4 Relevant skills
6 Track record 0 0 0 0 0
Total RAW score
A scale of 0 to 100 is used when grading non-price attributes. To help achieve consistency of practice, the NZTA recommends that grades be awarded in steps of five and that the following grading scale be
used.
90, 95 or 100 Demonstrates exceptional compliance or ability to convey exceptional provision of the requirement
75, 80 or 85 Requirements are fully covered in all material aspects
60, 65 or 70 Requirements are adequately covered
50 or 55 Adequate, with some deficiencies that are not likely to have any adverse effect
40 or 45 Barely adequate and would need considerable improvement in this attribute, if selected
35 or less Total non-compliance or inability to convey provision of the requirement
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Conflict of interest/
Confidentiality declaration
RFP Number/Name of RFP
Conflict of interest declaration
I declare that to the best of my knowledge, I do not have:
any financial interest in the supply of goods, and or services for this project
any relatives or friends with a financial interest in the supply of goods and/or services for the project, and
any personal bias, inclination, personal obligations, allegiance or loyalty which would in any way affect my decisions in relation to the
evaluation of the tenders/proposals.
Except as set out below:
I undertake to make a further declaration detailing any conflict, potential conflict or apparent conflict which may arise during the
duration of my involvement with this project. I agree to abstain from any discussion and decision or to take appropriate steps to
manage a conflict where such conflict arises, should I be required to.
Confidentiality declaration
During the period that the request for proposal process is open and during subsequent evaluation (up until formal announcement of the
successful supplier(s)), I will not:
pass any information to
make any comments to, and
meet with:
Any potential suppliers of goods and services for the project, excluding those that have an existing relationship with the NZTA that requires operational management (and then only for purposes related to the management of that existing relationship).
I will pass any requests for information, meetings and other correspondence that I receive from potential suppliers to the contracts
team for handling via formal channels.
TET member Sponsor acknowledgment
Signature Signature
Name Name
Title Title
Date Date