Procurement in DECD Overview

Report
DECD Procurement Overview
John Scalzi, Assistant Director
DECD Procurement Unit
DECD Procurement Unit
Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
Procurement Definition
Procurement… Purchasing…
“The process by which a company (or organisation) contracts with
third parties to obtain goods and services required to fulfil its business
objectives in the most timely and cost effective manner.”
(source unknown)
Exception is works >$165,000 (Inc GST) and government office
accommodation including leasing and fit out which is covered by
similar processes undertaken by Building Management DPTI.
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
Government Procurement Requirements
State Procurement Board (SPB)
ALL DECD Staff
Agency Chief Executive
School Governing
Councils/School Councils
Accredited Purchasing Unit (APU)
Senior officers oversee and establish policies,
approve higher value/complexity purchases.
DECD Procurement Unit
Pre-School Management
Committee
Ministerial Statutory
Authorities
Supports APU and sites.
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
Government Procurement Requirements
Procurement Principles
Value for money
• Not necessarily lowest price. Assessment of quality, service, delivery, backup
and support, risks, total life-cycle costs
Ethical and Fair Treatment of All Participants
• Open and fair competition. Equal opportunity, access for new entrants,
specifications are not biased, no unnecessary burden on supply market
Probity, Accountability and Transparency
• Proper conduct. Potential or actual conflicts of interest sought, the process
can stand up to public scrutiny, tenders evaluated according to published
criteria, how will outcomes & decisions be disclosed.
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
DECD Spend Profile 2012
Expenses
$’000
Employee benefits expenses
1,975,159
Supplies and services
601,947
Grants and subsidies
109,172
Depreciation and amortisation expense
106,108
Borrowing costs
23,239
Intra government transfers
7,219
Other expenses
43,737
Source: 2012–13 Budget Paper 4, Agency Statements Volume 1 Published May 2012
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
DECD Spend Profile 2012
Supplies and services provided by entities external to the SA Government
$,000
Minor works, maintenance and equipment
88,170
Printing, postage and consumables
76,430
Cleaning
34,840
Child care, school card and other allowances
68,430
Student learning materials
27,782
Vehicle and travelling expenses
26,693
Utilities
24,159
Contractors and other outsourced services
24,865
Bus contractors
20,779
Excursions and camps
18,561
Cost of goods sold
12,324
Computer communications
12,667
Telecommunications
14,203
Training and development
9,780
Rentals and leases
4,295
Copyright
4,186
Security
857
Other
59,014
Total supplies and services – non-SA Government
532,045
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
Procurement Planning Process
Need
identified
Contract
Establishment
and
Management
Business case
developed to
establish
Funding
approvals
Planning
Undertake
procurement
process.
Procurement
plan
development
and approval
to processed
When are the
goods or
services
required?
Private treaty,
government
contracts, in
source
Market
conditions,
competition
or sole
supplier
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
Vulnerability (Risk)
Procurement Strategies
• Long Term Contracts
• Develop relationships with key
suppliers
• Specifying appropriate standards
and levels
• Exploring alternate
solutions/suppliers and services
• Intensive market research
• Supplier performance monitoring
• Negotiated and managed
relationships
• Partnering (product and service
integration)
• Contingency plans
• Managed supply and distribution
arrangements
• Standing offer arrangements
• Devolved purchasing
• Vendor managed stock
• Automated payment systems
•
•
•
•
•
Short to medium term contracts
Active sourcing
Promoting competition
Market research
Market exploitation
Expenditure (Cost)
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
DECD Procurement Framework
The Procurement Framework outlines the appropriate practices
that are to be followed in accordance with government
requirements.
The Framework:
- Identifies responsibilities and delegations
- Defines the process for specific thresholds
- Details the procurement process – eg:
-
Acquisition planning, tender development, market approach, evaluating
tenders, negotiating, purchase recommendation, contract development
and contract management
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
Financial vs Purchase Delegations
Expenditure Authorisation
Purchase Authority
From Public Finance & Audit Act (refer to
Treasurer’s Instruction 8)
From State Procurement Board
Involves managing budgets
Establishing contracts or purchase
goods/services
No negotiation with suppliers to commit
to purchase
Supplier negotiations required to obtain
value
Expenditure commitment via brief /
requisition
Allowed to sign purchase orders
DECD Finance and Investing manage
instrument of financial delegations
Procurement Unit manges procurement
delegations
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
Financial Authorisations in DECD
Delegate
Threshold
Cabinet Approval
$11,000,000 plus
Level 1 - Chief Executive, Deputy Chief Executive/Chief Operating Officer and
Deputy Chief Executive, Child Safety
Less than $11,000,000
Level 2 – Head of Schools, Head of Early Childhood Development, Head of Policy
and Communications, Executive Director, Families SA, Guardian, Office of the
Guardian for Children and Young People
Less than $1,100,000
Level 3 – Executive Director, Aboriginal, Student and Family Services, Executive
Director, Preschool and School Improvement, Executive Director, Teaching and
Learning, Executive Director, Human Resources and Workforce Development
Less than $550,000
Level 4- Central Office Directors/Regional Office Directors/Principals and
Preschool Directors
Less than $220,000
Level 5– Central Office Assistant Directors, Regional Assistant Directors
Less than $110,000
Level 6-9 Further specific delegates up to Level 9 are listed in the Specific Financial Authorisation Register. The
Register also specifies particular delegations for particular activities such as expenditure of grant funding.
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
DECD Purchase Delegations
Delegate
Purchase Delegation – (Includes GST)
Chief Executive (1)
$4.4 million
Chair APU (1)
$4.4 million
Assistant Director, Procurement and
Contracting (1)
$220,000
Principals and Preschool Directors (1)(2)
$220,000
Work Site Financial Delegates (where not
specified above)
Commensurate with financial delegation
up to a maximum of $22,000
Purchase Card Holders
Up to designated transaction limit
Petty Cash
Up to designated transaction limit
(1)
(2)
Where contracts exist, the purchase authority is up to value of contract and within the expenditure approval.
Principals / Preschool Directors may sub-delegate their purchase authority to their key staff if required providing the subdelegations are ratified and minuted by the school’s Governing Council.
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
Procurement Methods
Market Approach
- Request for Quote (RFQ) – formal and informal
- Expression of interest (EOI) – two stage process
- Request for Tender (RFT)
- Request for Proposal (RFP)
By way of:
- Direct negotiation
- Selective tender
- Public tender
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
DECD Purchasing Considerations
- For procurements up to and including $22,000
a minimum of one verbal or written quote is
required.
- For procurements greater than $22,000 and up
to and including $220,000 a minimum of three
written quotes (where possible).
- Procurements over $220,000 must be via a
public tender call unless approved otherwise
by the Accredited Purchasing Unit.
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
Main Documents / Steps for Major Procurements
Acquisition Plan – Details the procurement strategy to be followed re the market
approach, propose Evaluation Criteria and the findings of market research.
Specifications – A document which clearly and accurately describes the essential
requirements for goods and/or services required.
Tender Document – Comprises Instructions to Tenderers, Specification, Response
Schedule and draft contract. The tender forms the basis of the contract and accurately
reflects the scope of work and the financial, contractual and time parameters. The tender
process should be structured in such a way that it:
Gives all tenders opportunity to submit offers based on similar information, and;
Facilitates the evaluation process and selection of the best value for money option.
Tender Evaluation Plan – identifies the conduct of the evaluation including the process and
Evaluation Team responsibilities which include deciding the relative importance of each
criteria and assigning weighting to each criteria.
Commercial and Contractual Negotiations and Contract Establishment - A Negotiation
Plan is required when negotiating with tenderers to address any outstanding commercial
and/or contractual issues and to seek best and final offers prior to establishing the
contract.
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
Across Government Contracts
A number of Across Government Contracts have been established. Most of
these contracts mandated for Government Agencies. Some of the current
contracts include:
-
Auction Services
Audit and Related Services
Electricity
Fuels and Lubricants
ICT Services
Mobile Phones
Natural Gases
Document Output Devices
(Photocopiers and Printers)
- Stationery and Related Products
- Software
- Standard Personal
Computer/Notebooks/Servers
- Temporary Staff Placement Services
- Travel Management Services Contract
Additional information about all current contracts can be found at the DECD
Procurement Unit’s web pages on SSONet or In.DECD.
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
DECD Purchasing Considerations
Consultancies and Contractors
Consultant = engaged for a specified period to carry out a task that
requires specialist skills and knowledge not available in the public
authority.
Contractor = engaged for specified period to carry out a defined task in
circumstances in which the engagement of a person under normal
conditions is not a feasible alternative.
Note:
Engagement of Consultants must be approved by the CE or DCE. Need
to establish terms and conditions for service agreements. In addition,
Vacancy Management Approval is currently required for the engagement
of contractors and consultants.
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
Leasing
The Department’s position regarding leasing is that it
should not be considered unless it is determined to
be the only viable method of procurement (property
leasing and vehicle leasing through the mandated
across government fleet arrangements are exempt
from this directive).
Worksites must not enter into leasing arrangements
unless approval has been granted by Assistant
Director, Corporate Services and the Procurement
Unit.
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
Leasing Risks
- In most cases the whole of life cost of leasing is
significantly greater over the life of the asset than
if purchasing outright.
- Leasing contracts are often onerous shifting risks
from the vendor to the lease holder and can be
difficult and/or expensive to terminate.
- Often the asset does not transfer ownership to the
recipient at the end of the contact and has to be
returned to the vendor.
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
Lease Risk Example 1
Multifunctional Device 1 – Black & White Photocopier Options:
Purchase Outright
To purchase MDF outright the costs of this option would include the purchase price of the MDF being
$6,387.70 plus the copy cost of $0.0099 per copy (there is no minimum number of copiers per month under
this agreement).
Whole of life cost calculation over 5 years: Purchase Cost + Copy Costs
Leasing
To lease the MFD the costs of this option would include a monthly fee of $155.10 for a fixed 5 year period plus
the copy cost of $0.0095 per copy (as with purchasing outright, there is no minimum number of copies per
month).
Whole of life cost calculation over 5 years: Total Lease Cost + Copy Costs
Print Management Rental Plan
To take the MFD under a print management rental plan, there is a minimum payment required of $250.80 per
month (based on a minimum of 10,000 copiers per month x $0.02508 per copy) fixed for 5 years - $15,048.00
therefore even if you do less than 10,000 copiers per month, you must still pay for the minimum of 10,000
copies.
Whole of life cost calculation over 5 years: Monthly Plan Rate x Plan Period + any additional copies over the
minimum per month.
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
Lease Risk Example 1 (Continued)
Table 1 Options for Procuring Photocopier
Purchase
Cost
Individual
Copy Cost
Monthly
Lease/Plan
Rate
Lease/Plan
Period
(months)
Purchase
$6,387.70
$0.00990
n/a
n/a
Lease
n/a
$0.00990
$155.10
Print
n/a
Management
Plan
$0.02508
2 $250.80
Options
1
2
1Total
Lease
Cost over 5
year period
Whole of life costs over 5 year period based on
number of copies made per month
n/a
5 000
$9,357.70
10 000
$12,327.70
15 000
$15,297.70
60
$9,306.00
$12,276.00
$15,246.00
$18,216.00
60
n/a
$15,048.00
$15,048.00
$22,572.00
Total Lease Cost calculated using ‘monthly lease rate’ times ‘lease period’.
Minimum cost per month based on 10 000 copies per month as per agreement
Please Note: Although the financial implications have been calculated, it is important to note there are other potential lease risks
which may apply.
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
Lease Risk Example 2
Multi-Functional Device 2 - Colour Photocopier Options:
*NB: Multi-Functional Device 2 (Colour Photocopier) consists of both a colour and black and white component; However, comparisons
outlined below are based on the MFD being used only to produce Black and White copies.
Purchase Outright
To purchase MFD outright the costs of this option would include the purchase price of the MFD ($11,907.50)
plus the copy cost of $0.0088 per copy for black & white copying (no minimum copies under this agreement).
Whole of life cost calculation over 5 years: Purchase Cost + Copy Costs
Leasing
To lease the MFD the costs of this option would include a monthly fee of $283.80 for a fixed 5 year period plus
the copy cost of $0.0088 per copy for black & white copying (as with purchasing outright, there is no minimum
copy charge per month for this option).
Whole of life cost calculation over 5 years: Total Lease Cost + Copy Costs
Print Management Rental Plan
To take the MFD under a print management rental plan, the minimum payment required would be $363.00 per
month (based on a minimum of 10,000 copies per month specified in the agreement x $0.003630 per copy)
fixed for 5 years - *$21,780 - therefore, even if you do less than 10,000 copies per month, you must still pay for
the minimum of 10,000 copies.
Whole of life cost over 5 years: Monthly Plan Rate x Plan Period + any additional copies over the minimum
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
Lease Risk Example 2 (Continued)
Table 2 Options for Procuring Colour Photocopier
Purchase
Cost
Individual
Copy Cost
Monthly
Lease/Plan
Rate
Lease/Plan
Period
(months)
$11,907.50
$0.00880
n/a
n/a
Lease
n/a
$0.00880
$283.80
Print
Management
Plan
n/a
$0.03630
Options
Purchase
1
2
2
$363.00
1Total
Lease
Cost over 5
year period
Whole of life costs over 5 year period based on
number of copies made per month
5 000
10 000
15 000
n/a
$14,547.50
$17,187.50
$19,827.50
60
$17,028.00
$19,668.00
$22,308.00
$24,948.00
60
n/a
$21,780.00
$21,780.00
$32,670.00
Total Lease Cost calculated using ‘monthly lease rate’ times ‘lease period’.
Minimum cost per month based on 10 000 copies per month as per agreement
Please Note: Although the financial implications have been calculated, it is important to note there are other potential lease risks
which may apply.
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
Lease Risk Example 3
Multi-functional Device 2 – Colour Photocopier
*NB: Multi-Functional Device 2 (Colour Photocopier) consists of both a colour and black and white component; However,
comparisons outlined below are based on the MFD being used only to produce Colour copies.
Purchase Outright
To purchase MFD outright the costs of this option would include the purchase price of the MFD being $11,907.50 plus
the copy cost of $0.099 per copy for colour copying (with no minimum number of copies per month).
Whole of life cost calculation over 5 years: Purchase Cost + Copy Costs
Leasing
To lease the MFD the costs of this option would include a monthly fee of $283.80 for a fixed 5 year period plus the copy
cost of $0.099 per copy for colour copying (as per purchasing outright, no minimum number of copies per month).
Whole of life cost calculation over 5 years: Total Lease Cost + Copy Costs
Print Management Rental Plan
It is important to note that under this agreement, colour copies charged will be additional to the minimum cost of
10,000 black and white copies per month ($363.00). The black and white copy charge is incurred irrespective of
whether any black and white copies were actually made.
Whole of life calculation over 5 years: Rental Period (60 months) x Cost per Month ($363) + any additional colour copies
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
Lease Example 3 (Continued)
Table 3 Options for Procuring Colour Photocopier
Purchase
Cost
Individual
Copy Cost
$11,907.50
$0.099
n/a
n/a
Lease Cost
over 5 year
period
n/a
Lease
n/a
$0.099
$283.80
60
Print
Management
Plan
n/a
$0.099
2$363.00
60
Options
Purchase
1
2
Lease/Plan
Period
(months)
1Total
Monthly
Lease/Plan
Rate
Whole of life costs over 5 year period based on
number of copies made per month
5 000
10 000
15 000
$41,607.50
$71,307.50
$101,007.50
$17,028.00
$46,728.00
$76,428.00
$106,128.00
n/a
$51,480.00
$81,180.00
$110,880.00
Total Lease Cost calculated using ‘monthly lease rate’ times ‘lease period’.
Minimum cost per month based on 10 000 copies per month as per agreement
Please Note: Although the financial implications have been calculated it is important to note there are other potential lease risks
which may apply.
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
Tender and Contract Timelines
Activity
Comment
Time (weeks)
Expenditure approval
Refer Instrument of delegation, Register of Financial Authorisations
2-4
Expenditure approval – Cabinet
Cabinet approval above $11m (+PMG, Treasury input as appropriate)
4-8 +
Develop Acquisition Plan
Consider detailed strategic approach to a range of procurement issues
1-2
APU approval – Acquisition Plan
Present Acquisition Plan at APU fortnightly meeting
1-2
SPB approval – Acquisition Plan
For procurement in excess of $4.4m – submitted through the APU
2-4
Develop Tender document
Develop parts A, B & C in Specification also Tender Evaluation Plan
2
Tender Call – advertise
Advertise in Govt Tenders website (and other publications as required) NB: min 4 weeks required if
>$551k – ref AUSFTA.
2-4
Tender Evaluation
At close of tender implement Tender Evaluation Plan
2
Tender Negotiations
Seek ‘best and final offers’ , clarify ambiguity etc
2
Purchase Recommendation – APU Submit the recommendation to the APU for approval
2-4
Purchase Recommendation – SPB
SPB approval sought if deviation from Acquisition Plan
2-4
Cabinet approval
Cabinet approval may be required depending on original Cabinet submission if
there is a variation in cost.
4-8
Supplier Notification
Notify successful and unsuccessful tenderers
1-2
Contract document finalisation
Legislation and Legal Servcies to finalise negotiated contract Terms and Conditions
6-8
Contract Formalisation
Sign and exchange contracts with successful Contractor
2
Contract Implementation
Notify work sites of new contract arrangements and handover for contract admin
1
Note timeframe
6 months to over 1 year + allowance for public holidays etc
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
Managing Procurement Summary
Contract Execution
Down
Stream
Upstream
Finalise Contract
Supplier Selection
Contract Strategy
Contract
Management
Supply Planning
Business Needs
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/
Questions?
For further information contact the DECD
Procurement Unit on 08 8226 1610.
DECD Procurement Websites:
• For Preschool and School Staff
https://ssonet.sa.edu.au/procurement/
• For Corporate, Regional Office and Families SA
Staff: http://in.decd.sa.gov.au/procurement
DECD Procurement Unit
For Preschool and School Staff :
https://ssonet.sa.edu.au/procurement/
For Corporate, Regional Office and Families SA Staff:
http://in.decd.sa.gov.au/procurement/

similar documents