PROCUREMENT in DECS. March 2010. Presented By: John Scalzi A/Director Infrastructure. Procurement Definition. The terms procurement and purchasing (often used interchangeably) may be defined as:
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PROCUREMENT in DECS March 2010 Presented By: John Scalzi A/Director Infrastructure
Procurement Definition The terms procurement and purchasing (often used interchangeably) may be defined as: ‘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.’ Exception is works >$150k and government office accommodation inc leasing and fit out which is covered by similar processes undertaken by Building Management DTEI.
Govt Procurement Requirements State Procurement Board All DECS Staff School Governing Councils Pre-School Management Committees Ministerial Statutory Authorities Agency Chief Executive Accredited Purchasing Unit Senior officers oversee & establish policies, approve higher value/risk purchases Procurement Unit Supports APU and sites
Govt 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 & Fair Treatment of All Participants - open and fair competition. Equal opportunity, access for new entrants, specifications are not biased, 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
DECS Spend Profile DECS spend profile in 2003
Procurement Planning Process Funding approvals Business case developed to establish preferred solution Need identified Private treaty, govt contracts, insource Undertake procurement process. Contract establishment & management Planning Market conditions. Competition or sole supplier. Procurement plan development & approval to proceed When are the goods or services required?
Procurement Strategies • Strategy development - examples • Intensive market research • Supplier performance monitoring • Negotiated and managed • relationships • Partnering (product and service • integration) • Contingency plans • Long term contracts • Develop relationships with key • suppliers • Specifying appropriate • standards and levels • Exploring alternate solutions / • suppliers and services • 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 Vulnerability (risk) Expenditure (cost)
DECS Procurement Framework • The Procurement Framework outlines the appropriate practices that are to be followed in accordance with government requirements • The Framework: • identifies responsibilities & delegations • defines the process for specific thresholds • details the procurement process e.g.: • Acquisition planning, ender development, market approach, evaluating tenders, negotiating, purchase recommendation, contract development and contract management
Financial Vs Purchase Delegations Other Considerations - Separation of duties Different attributes & skills
Financial Delegations in DECS • Cabinet approval is required for: • Expenditure for goods and services in excess of $11 million • Capital works and land in excess of $4.4 million • Office accommodation in excess of $1.1 million • Minister can approve expenditure up to $11million • The Chief Executive can approve expenditure up to $1.1million. • Individual positions have specified expenditure delegation, viz: • Executive Directors/ Directors = $200,000* • District Directors/ Assistant Directors = $50,000* • Principals/Unit Manager = $10,000* Note 1: Refer Budget Management Circular which limits expenditure authority to Corporate positions. Note 2: All Consultancies, regardless of value, must be approved by the Chief Executive or Deputy Chief Executives.
DECS Purchase & Expenditure Delegations (1)Where contracts exist, authority up to value of contract & within expenditure approval. (1) Principals/Pre-school Directors may sub-delegate via written authority. (3) LPO’s must be approved by appropriate financial delegate Note: Refer Budget Management Circular which limits expenditure authority to Corporate positions
Procurement Methods • Market Approach • Request for Quote (RFQ) – formal & informal • Expression of Interest (EOI) – two stage process • Request for Tender (RFT) • Request for Proposal (RFP) By way of: • Direct negotiation – refer Waive of Competitive Process • Selective tender • Public tender
DECS Purchasing Considerations Purchases up to $11,000 (GST Inc) 1 verbal quote - Process locally Purchases $11,000 to $110,000 (GST Inc) 3 written quotes - Requisition to Procurement – Corporate - Schools process locally Contact Procurement Unit for help in developing Request for Quotation (RFQ), particularly services. Purchases over $110,000 (GST Inc) via a public tender call, unless approved otherwise by the APU + Full Acquisition Plan required.
Process for Major Procurements Acquisition Plan – Details the procurement strategy to be followed re the market approach, Evaluation Criteria and reflect 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 must accurately reflect 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 tenderers an 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 inc 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 + 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.
AcrossGovernment Contracts A number of Across Government Contracts have been established by the State Procurement Board. Most of these contracts are mandated for govt agencies: • Standard Personal Computers inc desktop & notebook • Photocopiers • Phones • Clerical and Administrative Temporary Staff Services • IT & Professional Financial Temporary Staff Services • Travel SA Government Auctions • Industrial Gases & Associated Services • Bulk and Compressed Medical Gases and Associated Services • Electricity • SA Government Radio Network • Facilities Management • For additional information contact the Procurement Unit or access the in.decs or SSONet websites.
DECS Purchasing Considerations Consultancies & Contractors Consultant = A person or entity that is engaged by a public authority for a specified period to carry out a task that requires specialist skills and knowledge not available in the public authority. The objectives of the task will be achieved by the consultant free from direction by the public authority as to the way it is performed and in circumstances in which the engagement of a person under normal circumstances is not a feasible alternative. Contractor = A person who is engaged by an entity for a specified period to carry out a defined task subject to direction by the entity as to the way in which that task is performed and in circumstances in which the engagement of a person under normal conditions is not a feasible alternative Nb - Engagement of Consultants must be approved by the CE or DCE’s. - Need to establish terms and conditions for services agreements.
DECS Purchasing Considerations • Sites wishing to undertake a lease in lieu of purchasing outright, must obtain prior financial approval from the Accounting & Financial Management Improvement Unit - contact Chris Williams, Assistant Director, Accounting and Financial Management Improvement Unit (tel. 8226 1381 or email: firstname.lastname@example.org). • Further information is available in the ‘DECS Leasing Guidelines’ on Procurement sub webs (SSONet and in.decs).
Managing Procurement Summary Execute Contract FINALISE CONTRACT Downstream Upstream SUPPLIER SELECTION CONTRACT STRATEGY CONTRACT MANANAGEMENT SUPPLY PLANNING BUSINESS NEEDS
Procurement Unit Level 12 – 31 Flinders Street Fax No: 8226 1902 DX 541 Courier: R11/47 Name John Scalzi Diana Maiolo Katie Hefford Justine Pope Ryan Fowden Amanda Gepp Greg Paterson Carlo Giannotti Kellie Cameron Andrew Horwood Mario De Ieso Rebecca Lamont Katherine Smits Tammy Benfell Title Assistant Director, Procurement & Contracting Administrative Support Officer Consultant Strategic Contracts Senior Contracts Officer Senior Contracts Officer Contracts Officer Contracts Officer Consultant Procurement Services Senior Project Officer, Procurement/ Fleet Fleet Admin Support Officer Procurement Analyst Procurement Officer Operations Coordinator, Distribution Centre Finance & Admin Officer, Distribution Centre Phone No 8226 3332 8226 1610 8226 0807 8226 3329 8226 1538 8226 2061 8226 3285 8226 1347 8226 1297 8226 3447 8226 1242 8226 1252 8234 0140 8234 0140