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 procurement
More consistent process
Encourage 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 practice
Apply 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 gone
New minimum time periods by process
Procurement 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 APP
All documents available
electronically
Suppliers’ responses
accepted electronically
Note: Different processes allow different numbers of days for reductions.
Evaluation Criteria
Must 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 next
Success depends on good implementation
MBIE to support agencies with:
Training
Information
Guides
More information
www.procurement.govt.nz
Or
Call me, Karen English, 04 462 4287
Questions?
?