Government Rules of Sourcing

An overview for suppliers June 2013

Objectives

To provide information on the new Rules – what they do and don’t do

To increase understanding of Government’s expectations on procurement

Why is procurement important?

Increasingly public services delivered by businesses

$30b annual spend across government on goods and services

Choosing right supplier is critical

Rules are part of procurement reform

Encourage procurement professionals to upskillSimplify, streamline processes - tools, templates and

model contractsUnlock savings for agenciesCreate an environment for business to succeed

A cultural change is underway

Why do we have Rules

Set the standard for procurementPromote open, competitive, transparent government procurementMore consistent processEncourage commercial practiceStrengthen accountabilityHelp us to honour our agreements with trade

partners

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

What are the Rules?

Focus mainly on the sourcing stages of the procurement lifecycle

Come into effect on 1 October 2013

rules

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 practiceApply to contracts estimated to be over $100,000Don’t apply to grants, employment contracts,

investments, etcSometimes closed competition or direct sourcing is

okay

Rule #1 apply the Principles

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

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!

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

‘Sufficient time’Agencies must allow suppliers sufficient

time to respond Take into account:Nature and complexity of

procurementLevel of detail you needOpportunities for subcontractingLevel of risk

Minimum time period

“10 day” rule goneNew minimum time periods by processProcurement process Minimum time period• Request for Quote 13 business days• Registration of Interest• Expression of Interest 20 business days

• Request for Tender• Request for Proposal 25 business days

Allowable reductions

Deductions for:Prior listing in APPAll documents available

electronicallySuppliers’ responses

accepted electronically

Note: Different processes allow different numbers of days for reductions.

Evaluation CriteriaMust include evaluation criteriaMust include relative importance of the

criteriaRelative importance can be indicated in a

number of ways, including weightings, ranking, or the amount of information requested

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.

.

InnovationIP rights – transparency + potential to negotiatePermit and encourage engagement with the market Encourage use of design contests in appropriate

circumstancesUnsolicited 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

StandardsStandards are not prescribed by the RulesGives agencies flexibility to prescribe standard fit

for purposeWhere 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!

Use of standardised documentsRequired use of government model contracts for

low value/low risk contractsStandardised RFP/RFT – under pilot now - coming

soonAnd other standardised documents as these are

developed

Prior government experience

Not allowed as a condition of contractBut request for relevant experience is allowed

What about local content?Cannot be a condition of contract But agencies can and should consider the

advantages of local supplyExample – 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

What’s nextSuccess depends on good implementation

MBIE to support agencies with:TrainingInformationGuides

More information

www.procurement.govt.nz

Or

Call me, Karen English, 04 462 4287

Questions?

?