Procurement for Local Suppliers

Presented by Brenda Carrall – Coordinator Procurement

What to expect 1. Welcome from Shire President – Councillor Michelle Rich2. A little bit of housekeeping3. Introduction4. Our Procurement Framework5. The Law & Council Procurement6. Request for Quotes (RFQ)7. Refreshments8. Request for Tenders (RFT)9. Issues and Tips10. Pricing11. Questions

Welcome

Shire President – Councillor Michelle Rich

HousekeepingToilet Locations

• In the main foyer• Men to the left and women to the right

Emergency• Exits

Refreshments • Tea, coffee and water

IntroductionTrying to understand how to successfully become a supplier for Local Government can bequite daunting. There are a lot of rules and regulations, and understanding why and howdecisions are made is important.This workshop is designed to encourage not only potential suppliers but also existingsuppliers to form profitable, long term partnerships with the Shire of SerpentineJarrahdale.

What is ‘procurement’? Procurement is not simply buying products, services and works. It comes down tocouncils trying to get the best value for money, in a way that is fair and transparent foreveryone.Councils have to follow certain rules set down by the State Government, operate underthe Local Government Act 1995, and also have to follow rules and internal policies thatCouncillors have decided on.

Our Procurement Framework

Local Government Procurement Framework

Local Government Act 1995

Local Government (Functions and

General) Regulations 1996

Councils Purchasing Policy

Code of ConductDelegations Authority to

Purchase

Procurement Guidelines & Forms

Procurement Systems

Competition and Consumer Act 2010

(Fed) Fair Trading Act 2010

(WA)Common Law

Corruption, Crime and Misconduct Act

2003Public Sector

Management Act 1994A

udit

Compliance

Underlying Principles

Value for Money

Procedural Fairness

Market Competitiveness

Accountability

Compliance

Openness and Transparency

The Law and Council ProcurementThe Local Government ActThe Shire of Serpentine Jarrahdale must comply with the Local Government Act 1995 (the “act”) and associated regulations. https://www.legislation.wa.gov.au/legislation/statutes.nsf/law_a465.html

Procurement of Goods and Services up to $150,000Ensuring compliance with Regulation 11A of the Local Government (Functions and General) Regulations 1996; (page 10)https://www.legislation.wa.gov.au/legislation/statutes.nsf/law_s4578.html

Procurement of Goods and Services through Public TenderingEnsuring compliance with Part 4 of the Local Government (Functions and General) Regulations 1996; (Page 10)https://www.legislation.wa.gov.au/legislation/statutes.nsf/law_s4578.html

Local Government Regulations• Sets out:

• Requirement to publicly invite

• Minimum time to be open to public

• Receiving and Opening

• Late responses

• Rejecting and accepting tenders

• Additional information

• Notification of outcome

• Contract variation

Purchasing Policy

Each Local Government must have a purchasing policy which outlines howit must procure:

• Thresholds – under $150,000

• How many quotes

• Written or verbal?

• Sole supplier

Councils Purchasing Policies

The Shire has two policies which are available on the website.

1. Council Policy - Procurement of Goods and Services up to $150,000http://www.sjshire.wa.gov.au/assets/Uploads/E19-5674-Council-Policy-Purchasing-Procurement-of-Goods-or-Services-up-to-150000-Adopted.pdf

2. Procurement of Goods and Services through Public Tendering (For goods and services over $150,000)http://www.sjshire.wa.gov.au/assets/Uploads/E19-5672-Council-Policy-Procurement-of-Goods-or-Services-Through-Public-Tendering-Adopted.pdf

The purpose of these policies is to ensure an assessment of Value for Money process for all purchasing across the Shire.

Methods of ProcurementThe Shire has the following methods for procurement

Monetary Threshold (ex GST) Supply Methodology

Up to $5,000 Direct purchase from supplier seeking at least one verbal quotation.

$5,001 - $30,000 Seek at least three verbal or written quotations (or combination of both) from themarketplace.

$30,001 - $75,000 Seek at least three written quotations from the marketplace.

$75, 001 - $150,000 Procurement to undertake a formal Request for Quote (RFQ) requesting a minimum ofthree responses containing price and specification of goods and services.

$150,000 and over Procurement to undertake a formal Request for Tender (RFT)

Request for Quote (RFQ)There are two (2) ways the Shire’s RFQ’s are advertised.

1. Through WALGA’s (Western Australian Local Government Association) eQuotes usingthere Preferred Supplier Arrangements

2. On Tenderlink and also advertised publicly through the• West Australian - Wednesday Edition• Serpentine Jarrahdale & Armadale Examiner• Pinjarra/Murray Times• Sound Telegraph – Rockingham/Kwinana

How to get on board with WALGA

Tenders for the WALGA Preferred Supplier program’s are advertised inWest Australian (Wednesday or Saturday’s)

• Register your interest at:https://walga.asn.au/Preferred-Supplier-Program.aspx - go to Suppliersheading at bottom of page and click on “here” button.

• Filling this info out puts you on a “leads” page – you will be sent an emailwhen the tender is advertised.

• Contracts are usually for a minimum of 3 years but can get refreshed moreregularly.

Request for Tender (RFT)Procurement of Goods or Services through Public Tendering$150,000 and over - Procurement to undertake a formal Request for Tender (RFT) requestingresponses containing price and specification of goods and services.

The Shire uses Tenderlink when issuing RFT’s• Suppliers can register with Tenderlink through the link below

https://www.tenderlink.com/sjshire/

Note : Registration on the Shire of Serpentine Jarrahdale e-tendering portal is provided free ofcharge. This portal is hosted by TenderLink.com on our behalf. To register, you must firstagree to the TenderLink.com terms of service.

The Shire of Serpentine Jarrahdale will invite organisations to bid for the supply goodsand/or services contained within this system. As a registered supplier, you can receiveemail notification of any new tenders we publish, download and view the documentationelectronically, and participate in forums to seek clarification or to ask questions.

Tenderlink

Hope Helm

WA Business Development Manager Illion Tenderlink

Hope.Helm@Tenderlink.com

Break for refreshments

15 minute break

Please help yourself

Tender ExemptionsThe regulations make provision for certain circumstances where tendering is not required. • The purchase is obtained from a pre-qualified supplier under the WALGA Preferred

Supply Program or State Government Common Use Arrangement; • The purchase is from a Regional Local Government or another Local Government; • The purchase is acquired from a person registered on the WA Aboriginal Business

Directory, as published by the Small Business Development Corporation, where the consideration under contract is worth $250,000 or less and represents value for money;

• The purchase is acquired from an Australian Disability Enterprise and represents value for money;

• Any of the other exclusions under Regulation 11 of the Regulations apply.

Conditions for RFQ’s and RFT’s.

• RFQ’s and RFT’s are open for a period of no less than 15 days.• The Shire will set a date that it closes• Both will always close at 2pm on the nominated date.• Ensure you leave yourself enough time to upload the documents – if documents are not uploaded entirely they will

not be accepted• If you do not upload all documents requested by the Shire then your submission will may be rendered invalid and will

not be accepted• RFQ’s are advertised solely on WALGA’s eQuotes.• RFT’s are advertised on Tenderlink and also advertised publicly through the

• West Australian - Wednesday Edition• Serpentine Jarrahdale & Armadale Examiner• Pinjarra/Murray Times• Sound Telegraph – Rockingham/Kwinana

• You may need to attend a Mandatory Site Briefing• After the Quotes and Tenders close all Submissions are considered by an Evaluation Panel – These members are

selected prior to the Quote or Tender being advertised and will evaluate all submissions separately • If you have any queries please contact the Procurement Department on procurement@sjshire.wa.gov.au• Please do not contact any other employee or councillor in regards to the RFQ’s or

RFT’s

Documents for Procurement of Goods and Services through Public Tendering

1. Invitation to Tender and SpecificationThis document outlines the following:• Conditions of Tendering• Specifications• General Conditions of Contract and • Special Conditions of Contract

2. Company OfferThese documents are for the supplier complete• Compliance Criteria• Occupational Safety and Health• Qualitative Criteria and• Price Information• Quote Submission Documentation

3. Other documents that may be supplied• Pricing Schedule• Maps or Drawings• Separate Specification

Request for Tender Process

• Must satisfy the selection criteria

• Due diligence (Risk Factors)

• Reach a Value for Money consensus decision

• Approved by Council

Value for Money

• Purchasing Decisions are based on ‘Value for Money’

• Price is only one contributing factor to the overall Value for Money assessment

• No guarantee to local suppliers

• Must satisfy other Value for Money considerations (selection criteria)

• Process must demonstrate fairness and equity

Procurement of Goods and Services $150,000 and over

Once a RFT or RFQ closes

1. At 2pm when the RFT or RFQ closes – 2 staff members must be in attendance2. All submissions get downloaded from Tenderlink or eQuotes3. All submissions are Compliance checked – This is checking that all documents have been

supplied and completed as requested4. All submissions (minus the price) are then evaluated individually by the members of the

Evaluation Panel5. The Evaluation Panel then have a meeting and discuss all submissions.6. The Panel then make a recommendation and develop a consensus score for all submissions7. The RFT or RFQ then has to be presented at the next Council Meeting for a decision8. Once awarded by council, Procurement issue a Formal Instrument of Agreement and Letter of

award to the winning respondent and also issue unsuccessful letters.

**The whole process can take approximately 4 to 8 weeks**

Compliance Criteria - minimum requirements to be met by Tenderers

• Company Details• Financial position• Organisational Structure• Referees• Subcontractors• Insurance• OSH• Equipment and Machinery

The Evaluation

Qualitative Criteria1. Relevant Experience

• Demonstrated relevant experience of the Company in providing the same or similar services to local government, Federal and WA State government bodies, the private sector, or other public sector bodies/organisations over the past five years

2. Key Personnel, Skills and Resources• Capacity to deliver the services including:

• Key personnel / Professional skills

• Describe the key personnel who will be involved in the work, including past work of a similar nature

3. Demonstrated Understanding • Tenderers should detail the process they intend to use to achieve the Requirements of the

Specification.

• Use dot points to explain the process.

• The process should include a timetable for delivering the services.

The Evaluation Panel

Price Pricing can be:

• Fixed for term of contract• Hourly rate or• Schedule of rates

• Include everything required: goods, services, delivery,unloading and all applicable levies, taxes etc.

• Complete the spreadsheet “pricing schedule”“Please note that the Evaluation Panel do not see or evaluate price. Theprice is shown and taken into consideration at the Evaluation PanelMeeting after the Qualitative Criteria’s have been independentlyscored”

Scoring SystemEach Panel member will individually assess each submission on a 0-5 score basis, as shown in thefollowing table.

Risk AnalysisEvaluation Factor Tender Submission Demonstrates: Descriptor Definition

0 No evidence of addressing criteria Severe risk Fail - fails to meet minimum requirements in all respects ordid not respond. Therefore, the tender submission will berejected as a risk to the Shire

1 Minimal evidence on how the criteria will be achieved. Evidence does not address all the requirements of the criteria.

Major risk

Poor - fails to meet minimum requirements in severalrespects: contains insufficient or unclear information.Therefore, the tender submission will be rejected as a risk tothe Shire.

2

Moderate evidence on how the criteria will be achieved. Evidence does not address all the requirements of the criteria in current form.

Moderate risk Marginal - some areas of concern in relation to ability to meet minimum requirements or some deficiencies. Therefore, the tender submission will be rejected as a risk to the Shire.

3 Evidence on how the criteria will be achieved. Evidence may have some minor deficiencies. Minor risk Negligible impact on the objectives of the tender.

4 Clear evidence meeting all the requirements of the criteria. Negligible risk Negligible impact on the objectives of the criteria.

5 Evidence exceeded the requirements of the criteria. Minimal risk Minimal impact on the objectives of the criteria.

If a tender submission scores below a 3 for any of the qualitative criteria it may be rejected as a risk to theShire, and will play no further part in the assessment.

Issues and Tips

Key Issues• Make unsubstantiated claims

• Reliance on reputation

Question: Provide a list of the personnel from yourorganisation that will be involved in this project,specifying their particular roles and relevant experience.

David’s reputation is built on honest hard work. The Greeks are remembered for their Colosseums, David is remembered for 123 Venice Road, or the 4 storey unit development at The Horses Mews, 226 River Road, 29 Sailing Mast Quay, only to mention a few of the “Quality” projects completed by Dave.

Nice try but I’m pretty sure Romans built Colosseums.

Key Issues• Provide an inappropriate level of detail

Comments from evaluation process relating to qualitative criteria:

72 words, including the questions, is insufficient information for the evaluation panel to consider the submission favourably. More detail is required to assess the response.

Response to a Request for Tender:

152 pages – too much!Far too much information

Key Issues• Getting the information right

• Check your facts and details

• Don’t rely on templates

• Don’t display lack of care and effort

Excerpt from Shire of Wiluna minutes

Painting company Master Strokesinitially requested a variation ontheir Tender price on the basisthat they thought the Shire waslocated in Waroona.

Tips on Preparing Responses• Focus on the Local Government’s needs• Read and abide by the Conditions of Tendering• Match your offer to the opportunity

• Address every component of the Selection Criteria

• Be succinct!

• Understand and focus on Value for Money• Decision won’t just be based on lowest price

• Don’t’ give us the line:• “References and insurances available on request”

• We are requesting!

• Ensure all documents requested by Council are included in your submission.

……And More Tips

• Be honest and realistic

• Assume the Shire knows nothing about you and your business – it’s all got to be on paper

• If in doubt – ask a question through Tenderlink or eQuotes! (This is to allow all respondents the ability to view all questions and answers)

• Any uncertainties?

• Missing Information?

Pricing

Frazer Sullivan

Director Corporate Services

We, The Shire, are a Low Risk Client.

Suppliers may need to adjust their profit margins

Pricing

Usual Sale 20 items

Variable Costs 20 x 0.50 = $10.00plusFixed Costs 20 x 0.50 = $10.00Total Cost 20 x 1.00 = $20.00plusProfit Margin 20 x 0.50 = $10.00Price Supplier Charges 20 x 1.50 = $30.00

Would you take an order for 100 items@ 90 cents each?

Pricing

Sale 100 items

Variable Costs 100 x 0.50 = $50.00plusFixed Costs ($10.00 / 100 = 0.10) 100 x 0.10 = $10.00Total Cost 100 x 0.60 = $60.00plusProfit Margin 100 x 0.30 = $30.00Price Supplier Charges 100 x 0.90 = $90.00

Thank youBrenda Carrall – Coordinator Procurementbcarrall@sjshire.wa.gov.auprocurement@sjshire.wa.gov.au