Introduction

1. Purpose

   1. Section 108 of the Local Government Act 2020 (Act) requires councils to adopt a Procurement Policy applicable to the purchase of goods and services. It must specify:
      1. thresholds for public tenders and expression of interest processes;
      2. a description of the criteria to be used to evaluate whether a contract provides value for money;
      3. a description of how a council will seek to collaborate with other councils and public bodies in relation to Procurement Activities;
      4. the conditions under which a council may purchase goods and services without a public tender or expression of interest process; and
      5. a description of the process to be undertaken in inviting public tenders or expressions of interest.
   2. This Policy sets out the principles, processes and procedures which apply in relation to Procurement Activities at the City in response to the requirements of the Act.

2. Scope

   1. This Policy applies to all City Officers and Councillors involved in Procurement Activities.
   2. This Policy applies from when a need for a Procurement Activity is identified, and continues through to the awarding of a Contract, the management of the Contract and the performance by the Supplier of its obligations under the Contract, to the end of the Contract term.

3. Compliance requirements

   1. Compliance with this Policy is important to ensure:
      1. legislative compliance with the Act;
      2. best value for money outcomes for the community;
      3. ethical conduct, accountability, transparency and the highest standards of integrity in the conduct of Procurement Activities; and
      4. management of risk and continuity of supply in goods and services to the City.
   2. All City Officers and Councillors must comply with this Policy in relation Procurement Activities.
   3. Breaches of this Policy may be dealt with as a disciplinary matter under the City’s Employee Code of Conduct, Managing Conduct Policy or the Councillor Code of Conduct. Breaches of this Policy will be reported in a quarterly report to the Council Audit and Risk Committee.

Definitions

The following definitions apply to this Policy:

Policy

1. Procurement principles

   1. The City will apply the following best practice principles when undertaking Procurement Activities:
      1. achieving value for money;
      2. advancing the Council’s social and sustainability commitments;
      3. promoting open and fair competition;
      4. achieving the highest standards of probity, transparency, accountability and risk management in all Procurement Activities; and
      5. compliance with relevant legislative requirements.

2. The procurement lifecycle

   1. Each Procurement Activity at the City follows four stages:
   2. The Procurement Manual details each of the four stages of the procurement lifecycle and sets out the procedures to be followed by City Officers when undertaking Procurement Activities at the City.

3. Social and Environmental Procurement Policy

   1. The Social and Environmental Procurement Policy sets out the Council’s social and sustainability commitments. It is aimed at ensuring fair, inclusive, social and environmental procurement outcomes for the community by:
      1. increasing local economic benefits (including employment outcomes and local spend);
      2. identifying social procurement opportunities;
      3. maximising environmental outcomes; and
      4. supporting indigenous businesses and enterprises.
   2. The Council’s commitments set out in its Social and Environmental Procurement Policy will be embedded into all Procurement Activities conducted by City Officers.

4. Value for money statement

   1. All Procurement Activities must be carried out to achieve value for money.
   2. In assessing value for money in the City’s Procurement Activities, City Officers must give due consideration to:
      1. whole-of-life monetary costs, including the procurement price, operating and maintenance costs and the cost of environmentally responsible disposal or recycling, re-use or resale of goods;
      2. non-monetary impacts (both positive and negative) over the life of goods, works or services, including environmental impacts, social impacts (particularly on marginalised or vulnerable members of the community), fitness for purpose, quality, service and support and impacts on other Council priorities; and
      3. support for the strategic direction of the Council.
   3. Lowest price is not the sole determinant of value for money.

5. Procurement methodologies and value thresholds

   1. The procurement of goods, services and works by City Officers can be achieved through different Procurement Methodologies.
   2. The appropriate Procurement Methodology to be used for a Procurement Activity is dependent on several factors:
      1. the type of Procurement Activity (goods, works or services);
      2. the Value Threshold of the Procurement Activity;
      3. the risks associated with the Procurement Activity; and
      4. the competitiveness of the market with respect to the goods, works or services to be procured.

   3. The table below sets out the Procurement Methodologies to be used by City Officers for Procurement Activities:

      Value Threshold	Procurement Methodology to be used
      Up to $2,000.00	Minimum one quotation (either verbal or written) is sought.
      $2,000.01 - $10,000.00	Minimum one written quotation sought.
      $10,000.01 - $50,000.00	Minimum two written quotations sought.
      $50,000.01 - $150,000.00	Minimum three written quotations sought.
      $150,000.01 - $300,000.00	Minimum four written quotations sought.
      Over $300,000.01	Public tender process.

   4. All Value Thresholds set out in this Policy are exclusive of GST.
   5. When planning a Procurement Activity, City Officers must give careful consideration to calculating the Value Threshold for the Procurement Activity.
   6. City Officers must not split or divide Procurement Activities or Contracts into smaller components to reduce the Value Threshold of a Procurement Activity.
   7. When seeking quotations as part of a Procurement Activity, City Officers may use:
      1. an Active Registered Supplier; or
      2. an External Supplier; or
      3. a combination of both Active Registered Suppliers and External Suppliers.

6. Use of expressions of interest

   1. An expression of interest may be sought where:
      1. there is likely to be a significant number of responses received for Procurement Activity;
      2. the Procurement Activity is complex;
      3. there is uncertainty as to the willingness or interest of Suppliers to offer the required goods, works or services; or
      4. advice is required from the market regarding how to address the needs of the Procurement Activity.
   2. An expression of interest can be used at any time to achieve the best outcome for a Procurement Activities, considering the procurement principles set out in clause 1.
   3. All expressions of interest must be publicly advertised.
   4. Once the evaluation of expression of interest submissions is complete (and carried out in accordance with any evaluation requirements set out in the Procurement Manual), City Officers may conduct a selective quotation or public tender process. Whether a selective or public tender process is required at the conclusion of the expression of interest process will be determined by the Value Threshold of the Procurement Activity.

7. Exemptions

   1. General exemption provisions
      1. The following goods, works and services are exempt from the Procurement Methodologies set out in clause 5 of this Policy and may be sourced directly from a Supplier:
         1. software licenses and related maintenance renewals at the end of a Contract term with a Supplier:
            1. where the ongoing use of the software is required to support the City’s operations; and
            2. which are integrated or in use in the City’s systems and processes.
         2. external legal services providers (including barristers);
         3. engagement of independent or expert witnesses in the City’s legal matters;
         4. Suppliers which are mandated for use under legislation or by government;
         5. Novated Contracts, where:
            1. the initial Contract was entered into in compliance with this Policy; and
            2. due diligence in accordance with the Procurement Manual has been undertaken in respect of the new party to the Contract;
         6. compulsory statutory insurance schemes or the procurement of insurance products for the City’s insurable risk portfolio; and
         7. where the City is providing a Community Service, the recipient of that Community Service has Choice Rights.
   2. Instances when an exemption can be sought

      1. City Officers can seek an exemption from the requirement to carry out an applicable Procurement Methodology set out in clause 5 for the following:

         Exemption Category	How the exemption category applies	Conditions for granting of the exemption
         Sole supplier arrangements	Where a Supplier has a monopoly or sole ownership or rights over goods, works or services and their use is mandatory. Examples of sole supplier arrangements include: utility providers such as Powercor which are mandated to work on their own assets; maintenance that is proprietary to an asset and can only be performed by the proposed Supplier in the sole supplier arrangement.	Any conditions considered appropriate by the Exempting Delegate.
         Select sourcing arrangement	Where there is one Supplier or a restricted group of Suppliers for the goods, works or services and it is demonstrated to be in the public interest.	Any conditions considered appropriate by the Exempting Delegate.
         Emergency Situations	Where the Chief Executive Officer has determined in writing that a Contract must be entered into because of an Emergency;	Any conditions considered appropriate by the Exempting Delegate.
         Internal Panel Contract or Standing Offer	Where a City Officer can clearly demonstrate it is in the public interest for a Supplier other than a Supplier on an Internal Panel Contract or Standing Offer to be used.	Any conditions considered appropriate by the Exempting Delegate.
         External Purchasing Contracts	For Procurement Activities where the Value Threshold requires a public tender process, City Officers may seek an exemption from the requirement for a public tender process and in its place seek four written quotations through the pre-qualified suppliers on the External Purchasing Contract.	Any conditions considered appropriate by the Exempting Delegate.
         Sensitive Matters	For Procurement Activities where the subject matter is sensitive, confidential or the use of a quotation or public tender process could expose the City to prejudice.	Any conditions considered appropriate by the Exempting Delegate.

   3. The following delegates have authority to approve exemptions under clause 7.2:

      Procurement Activity Value Threshold or Exemption Category	Exempting Delegate
      Up to $500,000.00	Executive Director, Corporate Services, on recommendation from the Chief Compliance & Integrity Officer.
      $500,000.00 - $2 million or for Emergency situations	Chief Executive Officer, on recommendation from the Executive Director, Corporate Services.
      Over $2 million	Council resolution, on recommendation from the Chief Executive Officer.

   4. In seeking an exemption under clause 7.2 City Officers must follow the procedures set out in the Procurement Manual.
   5. An Exemption Delegate can impose any conditions it considers appropriate in granting an exemption under clause 7.2. City Officers must comply with such conditions.
   6. The City must table a list of exemptions granted under clause 7.2 to the Audit and Risk Committee annually during each calendar year of this Policy. The list of exemptions must include the details of the categories of Procurement Activities for which an exemption under clause 7.2 has been granted, and their corresponding values.

8. Internal panel contract or standing offer arrangements

   1. If a Panel Contract or Standing Offer is in place for specified goods, works or services, City Officers must use the Panel Contract or Standing Offer for the procurement of the goods, works or services for which the Panel Contract or Standing Offer has been established, unless an exemption is granted under clause 7.2.
   2. City Officers must follow the procedures in the Procurement Manual in relation to seeking quotations from members of a Panel Contract or Standing Offer.

9. External purchasing contracts

   1. City Officers may use External Purchasing Contracts to conduct Procurement Activities where:
      1. the Value Threshold for a Procurement Activity is under $300,000.00; or
      2. the Value of a Procurement Activity is over $300,000 and an exemption to the requirement for a public tender process has been granted under clause 7.2.
   2. City Officers must:
      1. use the Procurement Methodology relevant to the Value Threshold of the Procurement Activity (where the Value Threshold is under $300,000.00); or
      2. where an exemption has been granted for the use of an External Purchasing Contract under clause 7.2 of this Policy, City Officers must seek at least four written quotations from Suppliers engaged under the External Purchasing Contract.

10. Evaluation of submissions to procurement activities

    1. Evaluation of submissions to a Procurement Activity must be conducted in accordance with the Procurement Manual.
    2. Evaluation criteria for a public tender process must be determined before the release of the tender to market and must not change once a public tender has closed for submissions.
    3. An evaluation panel must be established to evaluate submissions for a public tender process. The composition of the evaluation panel for a public tender process must be as set out in the Procurement Manual.
    4. The Procurement Manual may set out requirements for evaluation for Procurement Activities are other than public tenders. City Officers must comply with any requirements for the evaluation of Procurement Activities other than public tenders.

11. Collaborative procurement

    1. Where practicable, the City will collaborate with other councils and public bodies to take advantage of economies of scale, explore service design best practice and shared service opportunities.
    2. City Officers must consider and identify opportunities for collaboration with other councils in the planning stages of Procurement Activities.

12. Conduct of councillors and city officers

    1. City Officers engaged in Procurement Activities must always conduct themselves in ways that are, and are seen to be, ethical and of the highest integrity.
    2. Councillors and City Officers will:
       1. treat potential and existing suppliers with equality and fairness;
       2. not seek or receive personal gain;
       3. maintain confidentiality of Commercial in Confidence Information;
       4. deal with Suppliers in an honest and impartial manner;
       5. provide all submitters in a Procurement Activity with the same information and equal opportunity; and
       6. be able to account for all decisions and provide feedback on them.
    3. City Officers must:
       1. disclose a general or material conflict of interest (as required under sections 127 and 128 of the Act) before providing advice on or participating in a Procurement Activity, including preparing any reports or recommendations in connection with a Procurement Activity;
       2. not exercise a power, duty or function in connection with a Procurement Activity where they have a conflict of interest; and
       3. comply with the City’s Managing Conduct Policy, Employee Code of Conduct, and any other policy or procedure relevant to the conduct of Procurement Activity, including the Procurement Manual.
    4. Councillors
       1. must disclose a general or material conflict of interest (as required under sections 127 and 128 of the Act) in the performance of their duties as a councillor; in connection with a Procurement Activity; and
       2. must not improperly direct or improperly influence a City Officer in the exercise of any power or the performance of any duty or function in connection with a Procurement Activity.
    5. Where the award of a Contract from a public tender process requires a Council resolution, Councillors will consider the information and recommendations made by City Officers and the assessment of tender submissions against the stated evaluation criteria.

13. Internal controls

    1. All City Officers engaged in a Procurement Activity must follow the established governance framework for internal controls to ensure:
       1. more than one person is involved in and responsible for transactions in a Procurement Activity;
       2. transparency in Procurement Activity processes;
       3. a clearly documented audit trail exists for all Procurement Activities;
       4. the required authorisations are obtained and documented; and
       5. systems are in place for appropriate monitoring and performance measurement.
    2. The Council to CEO and CEO to Staff Instruments of Delegation set out the limits of financial delegations for the Chief Executive Officer and City Officers in relation to Procurement Activities, including variation of Contracts entered into from a Procurement Activity.

Implementation of this Policy

Monitoring and reporting

The Responsible Officer is responsible for monitoring and reporting in relation to this Policy.

Advice and assistance

The Responsible Officer for this Policy manages the provision of advice to the organisation regarding this Policy. Advice on the application and implementation of this Policy can be sought from the Responsible Officer or the City’s Procurement & Strategic Sourcing and Procurement Planning & Contract Management Teams.

Records

The City must retain records associated with this Policy and its implementation in accordance with its Records Information Management Policy

Review

The City should review and, if necessary, amend this Policy within two years of the approval date.

References

Legislation

• Charter of Human Rights and Responsibilities Act 2006
• Competition and Consumer Act 2010
• Local Government Act 2020

Other Documents

• Contract Risk Allocation Policy
• Council to CEO and CEO to Staff Instruments of Delegation
• Council Complaints Policy
• Councillor Code of Conduct
• Councillor Gifts, Benefits and Hospitality Policy
• Employee Code of Conduct
• MOU Policy
• Managing Conduct Policy
• Registered Supplier Policy
• Social and Environmental Procurement Policy
• Staff Gifts and Hospitality Management Policy
• Purchasing Card Policy
• Procurement Manual

Definitions and abbreviations

This section defines the key terms used in this policy.