Government Rules of Sourcing An overview for suppliers June 2013

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Government Rules of Sourcing An overview for suppliers June 2013 Slide 2 Objectives To provide information on the new Rules what they do and dont do To increase understanding of Governments expectations on procurement Slide 3 Why is procurement important? Increasingly public services delivered by businesses $30b annual spend across government on goods and services Choosing right supplier is critical Slide 4 Rules are part of procurement reform Encourage procurement professionals to upskill Simplify, streamline processes - tools, templates and model contracts Unlock savings for agencies Create an environment for business to succeed A cultural change is underway Slide 5 Why do we have Rules Set the standard for procurement Promote open, competitive, transparent government procurement More consistent process Encourage commercial practice Strengthen accountability Help us to honour our agreements with trade partners Slide 6 Why do you need to know about the Rules To compete successfully you need to understand the environment in which agencies operate To assist us with ensuring accountability Slide 7 What are the Rules? Focus mainly on the sourcing stages of the procurement lifecycle Come into effect on 1 October 2013 rules Slide 8 When do the Rules apply? Various levels of application Departments/ministries must apply them Other agencies such as Crown entities, universities, SOEs are encouraged to apply them as good practice Apply to contracts estimated to be over $100,000 Dont apply to grants, employment contracts, investments, etc Sometimes closed competition or direct sourcing is okay Slide 9 Rule #1 apply the Principles Slide 10 Basic rule: advertise Wherever possible an agency should use open competitive procurement processes to give all suppliers the opportunity to compete. Government should openly advertise Slide 11 GETS Government departments must advertise on GETS But there are other places where opportunities can be advertised (eg Tenderlink, trade journals, etc) Register on GETS! Slide 12 Value for Money Take account of total cost of ownership, not just acquisition cost Consider wider benefits, including economic, environmental and social sustainability Value for money over whole of life Slide 13 Sufficient time Agencies must allow suppliers sufficient time to respond Take into account: Nature and complexity of procurement Level of detail you need Opportunities for subcontracting Level of risk Slide 14 Minimum time period 10 day rule gone New minimum time periods by process Procurement processMinimum time period Request for Quote13 business days Registration of Interest Expression of Interest 20 business days Request for Tender Request for Proposal 25 business days Slide 15 Allowable reductions Deductions for: Prior listing in APP All documents available electronically Suppliers responses accepted electronically Note: Different processes allow different numbers of days for reductions. Slide 16 Evaluation Criteria Must include evaluation criteria Must include relative importance of the criteria Relative importance can be indicated in a number of ways, including weightings, ranking, or the amount of information requested Slide 17 Panel contracts Notice of Procurement must include : the terms and conditions that will apply the method the agency will use to award contracts to suppliers on the Panel the period of time the Panel will be established for whether the Panel is open or closed any circumstances that may lead to a supplier being removed from the Panel.. Slide 18 Innovation IP rights transparency + potential to negotiate Permit and encourage engagement with the market Encourage use of design contests in appropriate circumstances Unsolicited unique proposals a structured approach to assessing truly unique ideas that deliver exceptional benefits Competitive dialogue an open and competitive procurement process where suppliers work with the agency to develop a solution/s Slide 19 Standards Standards are not prescribed by the Rules Gives agencies flexibility to prescribe standard fit for purpose Where standards are used, they are to be based on international standards where they exist, or national standards or building code ANZ standards are an international standard! Slide 20 Use of standardised documents Required use of government model contracts for low value/low risk contracts Standardised RFP/RFT under pilot now - coming soon And other standardised documents as these are developed Slide 21 Prior government experience Not allowed as a condition of contract But request for relevant experience is allowed Slide 22 What about local content? Cannot be a condition of contract But agencies can and should consider the advantages of local supply Example in order to be awarded the contract, you must be a New Zealand company NOT ALLOWED Example in order to be awarded the contract, you must demonstrate that you can respond to faults within 30 minutes - OKAY Slide 23 Whats next Success depends on good implementation MBIE to support agencies with: Training Information Guides Slide 24 More information www.procurement.govt.nz Or Call me, Karen English, 04 462 4287 Slide 25 Questions? ?

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