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Tendering For Government Business Workshop Compressed

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  • 1. Tendering For Government Business Workshops Helping Queensland Business Win Government Contracts Bill Cristaldi Robert McRuvie
  • 2. Workshop Structure Session 1 : Money, Authority and Need: Basic Principles of Doing Business with the Government. Session 2 : The Procurement Process Session 3 : The Transaction: Buyer’s side Session 4 : The Transaction: Supplier’s side Session 5 : Closing the Deal
  • 3. Government Procurement Basic Principles Selling to the Queensland Government is much the same as doing business with any other buyer. What does the Queensland Government buy? Normally spends $11B/yr Good and Services $5B Capital Works $6B Infrastructure For 2010/11 QLD Govt spending $17.09B (this level may be maintained for the next few years)
  • 4. Government Procurement Categories Expenditure H M L Business Risk SPECIALISED CRITICAL ROUTINE VOLUME
  • 5. Government Procurement Basic Principles MONEY : Where is it? AUTHORITY : Who has it? NEED : Who wants it?
  • 6. Government Procurement Basic Principles MONEY : Where is it? Queensland Government Department and Agencies are the buyers Money from the appropriations set out in the Budget documents Subject to Procurement rules set by the QLD Government Chief Procurement Office Available online ( www.qgm.qld.gov.au )
  • 7. Government Procurement Basic Principles AUTHORITY : Who has it? Procurement Officers in each Department and Agency have the authority to manage procurement activities They are responsible for managing the PROCESS
  • 8. Government Procurement Basic Principles NEED : Who wants it? (Note: These are not the same people as the procurement officers) These are the people who manage the programs that provide services or products to the community OR They may actually provide the services and need the goods or services being procured to do this
  • 9. Government Procurement Finding the money www.heirg.com www.heirg.com/projects/index.php www.projectservices.qld.gov.au/doingBusiness/tenders.asp www.icnqld.org.au www.budget.qld.gov.au/budget-papers/bp3.shtml http://projectgateway.icn.org.au/default.php www.qgm.qld.gov.au www.qgm.qld.gov.au/03_tenders/index.htm www.qgm.qld.gov.au/02_policy/better_purch.htm
  • 10. Government Procurement Finding the money www.defence.gov.au/index.cfm www.dplusi.defence.gov.au/ www.defence.gov.au/dmo/id/aic/ www.industry.qld.gov.au/dsdweb/v4/apps/web/content.cfm?id=4949 www.lgtenderbox.com.au www.tenders.gov.au/ www.dip.qld.gov.au/infrastructure-projects/index.php
  • 11. Government Procurement Pre-Qualifying for Opportunities www.publicworks.qld.gov.au www.publicworks.qld.gov.au/resources/Pages/PQCSystem.aspx www.works.qld.gov.au/bpu/pqc/pqc_industry_guide.asp www.qbuild.qld.gov.au/index.asp www.mainroads.qld.gov.au/en/Business-and-industry.aspx www.training.qld.gov.au/training-organisations/user-choice/pqs/index.html
  • 12. www.qgm.qld.gov.au
  • 13. Going Green Queensland Government Procurement is going green This means that we need to understand the impact of policy change! *Effective from 1 January 2008
  • 14. Going Green In Practice 30% of State Government Procurement must be sustainable* For Q Fleet (who operate 14000 vehicles) this means that of the 5000 vehicles it buys each year at least 1500 must have an Ecofriendly rating of 5.5 or better. Overnight GM and Ford lost access to that % of the Government’s vehicle purchases with the Prius and other Hybrids the winners Source: www.toyota.com
  • 15. Going Green The development of sustainability as a feature of procurement policy is at an early stage BUT It has a strong commitment from Government and will take an expanding role over time. Currently embedded in the Value for Money principles
  • 16. Going Green – How you could respond! Example: Service and Maintenance of DERM QPWS Trucks Tender form Company A – installed an Ergon smart meter in the meter box, installed triple glazed windows and roof insulation to reduce air-conditioning and fan loads, utilize low energy LED lighting, tick the green box on the energy bill, use low flow restrictors on all taps, capture the water runoff from the roof and use it to irrigate lawns and flush toilets, have a high pressure cleaning bay with waste water recycle plant, have onsite waste water and oil storage capture tank and get ISO14001 waste mgt company to responsibly recycle oil and dispose of waste residuals, invoices printed on recycled paper, Price $25/hr Tender from Company B – Don’t worry about the waste, oil and water “She’ll be right”, Price $20/hr Which tender should DERM choose?
  • 17. Going Green – How you could respond DET Example Tender Inclusion Clause (for Organisation)
  • 18. Queensland Government Procurement Policy Government Procurement must : Support Government Ambitions Provide Value for Money Meet transparency, accountability and probity requirements These factors mean that there are differences to the customary buyer/supplier arrangements
  • 19. Queensland Government Procurement Policy State Procurement Policy aims to: Maximise opportunities for Queensland business to supply to the Queensland Government AND Achieve social, economic and environmental benefits for the Queensland community.
  • 20. Queensland Government Procurement Policy Departmental and agency Procurement Officers should: Give Queensland businesses full, fair and reasonable opportunity Understand the markets from which they buy Follow the processes that assist local suppliers to identify opportunities Devolve procurement decisions to the lowest practicable geographical level to provide opportunities to business in regional Queensland
  • 21. Government Ambitions Toward Q2 Strong : Creating a diverse economy powered by bright ideas. Green : Protecting our lifestyle and environment. Smart : Delivering world-class education and training. Healthy : Making Queenslanders Australia's healthiest people. Fair : Supporting safe and caring communities .
  • 22. Government Ambitions
  • 23. Government Ambitions How they influence Procurement Practice Supply of Paper for the Department of Environment & Resource Management Tender from Company A Pulped sourced from world heritage listed protected rainforests in Indonesia Offer Price $1.0M Tender from Company B Pulp sourced from environmentally and responsibly managed commercial forests in Queensland Offer Price $1.3M Which tender should DERM choose?
  • 24. Government Ambitions DET Tender Inclusion Clause (for Goods)
  • 25. Toward Q2 Ambitions Health Example Tender Inclusion Clause
  • 26. Government Procurement Rules Value for Money Assessment of any proposed procurement must take account of: Contribution to the advancement of Government Ambitions Non cost factors such as quality factors, fitness for purpose, quality, service and support and sustainability considerations Cost factors including Whole of life costs and transactions costs associated with acquisition, use, holding, maintenance and disposal
  • 27. Value for Money Transaction Costs can include: Negotiating and finalising a contract Contract details such as: Prepayment for future delivery Payment in instalments Warranties and guarantees for quality Provision for future maintenance and service Options for additional future purchases at a guaranteed price After contract settlement: Costs involved in monitoring the terms of the agreement
  • 28. Value for Money Benefits of dealing with Local Suppliers: Readily available spare parts, service and support Better warranty service Shorter supply lines Easier contract administration Employment Economic support for the local community
  • 29. Government Procurement Rules Accountability, Probity and Transparency Accountability: Integrity of the process . Accountability is the obligation to explain (or account for) the details of each stage of a specific procurement has been undertaken. Probity: Integrity of the buyer and the supplier . Probity requires the process to be conducted ethically, honestly and with fairness to all participants. Transparency: Integrity of the process is demonstrable . Many aspects of the decision-making process are publicly accessible. Transparency must apply to every stage of the procurement process i.e. Planning, Purchasing & Contract Administration.
  • 30. Government Procurement Policy Some final considerations: Workplace Performance Workplace Health and Safety Quality Assurance Delivery Sustainability Price
  • 31. Government Procurement The transaction from the Buyer’s side
  • 32. Planning The buyer with the need should: Analyse and approve the need Arrange a probity audit (where appropriate) Specify requirements (supply market analysis) Meet requirements including expenditure approval Determine the most effective procurement method Determine sources of supply Develop evaluation criteria / terms of conditions
  • 33. Buying Government business is made available through: Pre-qualified Suppliers Standing Offer Arrangements Public Tenders Restricted (selected) Tenders Direct Purchase
  • 34. Pre-qualified Suppliers A register of pre-qualified suppliers is established (usually) only for high value and / or complex purchases Rigorous evaluation process determines suppliers that demonstrate a capability to meet requirements Can be drawn from over a specified period as projects are implemented
  • 35. Standing Offer Arrangements WHO: Can be more than one supplier WHAT: Specified WHEN: Set period (normally 3 + 1 +1) PRICE: Agreed QUANTITY: Undefined The result is the establishment of an agreement with panel of suppliers for a particular product from which a government buyer will have the option to choose based on specific requirements according to different locations or needs. Usually estimates of product volumes are provided for the guidance of suppliers
  • 36. Public Tenders WHO: Any supplier can submit a bid WHAT: Specified WHEN: Set timeframe PRICE: Competitive evaluation QUANTITY: Set Open (public) tender When suppliers and products are well known
  • 37. Restricted Tenders Staged Procurement Public registration of interest to ascertain market capability and capacity with selection criteria Short-listing of suitable suppliers and then seeking formal offers from them
  • 38. Direct Purchase Secure value for money by minimising process related costs Requirements undertaken as per departments procurement procedures
  • 39. Supply Market Analysis A technique used by buyers to identify market characteristics Aims to help understand how markets for a particular product or service operate Market directions Significant suppliers Suppliers view of government as a buyer
  • 40. Testing the Market Types of documents that may be put out: Information seeking Market research or testing Could be part of a staged procurement process Supplier seeking Will actually lead to a supplier being chosen
  • 41. Evaluating (Products and Services) The procurement officer / buyer will : Establish suppliers technical and commercial compliance Identify bids not meeting mandatory requirements Establish the total or life cycle costs Assess technical suitability of each offer Assess commercial cost / benefits of each offer Compare costs of the offers received Determine the best value for money Document reasons for non-acceptance of lower priced conforming offers Assess any risks arising from the evaluation process Confirm capability / capacity of product and supplier to perform
  • 42. Evaluating: Product 60% Meeting Evaluation Criteria, 30% Due Diligence, 10% Referee Reports
  • 43. Evaluating: Services Proposed Methodology Expertise / qualifications Relevant experience Management capability Position of their price in the market Financial condition and stability Rating Inadequate Does not meet level required Marginal Barely meets requirements Acceptable Meets the requirements Good Exceeds the requirements Excellent Significantly above requirements 60% Meeting Evaluation Criteria, 20% Presentation on Methodology, 20% Referee Reports
  • 44. Considerations in Supplier Evaluation Building Confidence And Trust
  • 45. Building Confidence and Trust Price position in the market Keep it real Management capability Introduce key people Note special abilities / capabilities Technological and quality capability Identify advantages Financial condition and stability Demonstrate adequacy of cash flow Just-in-time capability (if required) How well do you do it?
  • 46. Building Confidence and Trust Additional Services provided, e.g. design, engineering, product innovation Highlight Location Does it satisfy the needs of the contract Available capacity Ensure its available Logistics Materials handling and shipment facilities Industrial relations record
  • 47. Building Confidence and Trust Michael Carney has nearly thirty years experience in government at Commonwealth and State levels. He has spent a major part of his career directly involved in international trade negotiations in Geneva at the World Trade Organisation, the United Nations in New York and in the capitals of Australia’s major trading partners including China, Thailand, the United States and Taiwan. In developing the positions to be presented, defended or secured at negotiations he has worked closely with industry representatives to ensure that their (and Australia’s) interests are paramount. Government procurement is among the issues where Michael has contributed significantly to the international arrangements being negotiated. He has led Australian delegations comprising Commonwealth and State Procurement officials to negotiations in Geneva. He has worked with the Australian Procurement and Construction Council to establish more consistent and comprehensive approaches to international commitments by the Commonwealth and State Governments. Its all about the quality of the people
  • 48. Deciding In deciding, Government Buyers will : Obtain and evaluate bids from suppliers Negotiate where necessary Obtain or provide approval Prepare purchase order / contract
  • 49. Administering the Contract Government Buyers will also: Follow up and or expedite any issues that may arise Receive and inspect goods or services supplied Certify invoice and pay supplier Update records
  • 50. Government Procurement The transaction From the Supplier’s side
  • 51. Open Tender What you should see: Background and context of tender / offer What the need is What the relevant operational policies are What the conditions of tendering and proposed conditions of contract are What are the evaluation criteria? Part Offers Lodgement procedures
  • 52. Requests for Tender / Offer You should also expect to see: The identity of the purchasing agency The format and content required Whether – Post offer negotiations may be held Best and final offers may be sought Alternative or part offers may be considered Advice that – The lowest offer need not be accepted nor any offer accepted Non-conforming offers will not be accepted
  • 53. Tender Considerations - Products and Services Look for the WILL , SHALL , MUST in tender documents (Mandatory Requirements) Remember DESIRABLE features may be taken into account when all else is equal Ensure you contact your referees and let them know about your tender The best referees are other Government Buyers.
  • 54. Guidelines when dealing with Government Respect obligations of buyers Avoid perceptions of undue influence Avoid collusive and unfair practices Disclose conflicts of interest Provide accurate and reliable information
  • 55. Operational Policies Sustainable Procurement Policy Going Green Local Industry Policy >$2,5M for rural and regional QLD, >$5m all others SME ICT Participation Scheme Median value purchases >$250K 10% Training Policy 10% requirement for construction projects Indigenous Employment Policy 20% requirement for remote and rural construction projects Quality Assurance Policy
  • 56. Other Policies and Agreements COP Employment and Outwork Obligations TCFL GITC V5 How to buy computers, hardware and software IT goods and services of reasonably higher value Australia New Zealand Government Procurement Agreement (ANZGPA) Australia United States (AUSFTA) 21 days notification; Goods and Services $679K, Construction Services $9.57M, does not apply to health and education Other Free Trade Agreements (FTA’s) Thailand, Singapore, Chile
  • 57. Tender / Offer Document - Recap Tender/Offer Document = Invitation to make a Bid Request for a Price/Quote Conditions of Offer Buyers' side The Specifications Conditions of Contract Supplier’s side/Bid
  • 58. The Heart of the Transaction SPECIFICATION Tells buyer what is needed Sets standards for quality Defines customer needs Tells supplier the requirements
  • 59. Responding to a Tender ANSWER ALL THE QUESTIONS Especially on the Specifications
  • 60. Responding to a Tender Be succinct Follow the format Repeat what you have said before if it answers the question Learning experience: Local Government tender for marketing and communications “ Oh my aching fingers how many times do I have to repeat myself”
  • 61. Responding to a Tender Be sure to address the terms the tender has specified for the required product or service Think about the evaluation criteria Emphasise YOUR STRENGTHS (NOT YOUR COMPETITION NEGATIVES) Bid must be received NO LATER than the specified time, that is on time
  • 62. Submitting a Bid A conforming bid must be communicated to the designated procurement officer All terms and conditions must be notified When a bid is received, the bid may be: Accepted Rejected Allowed to lapse Withdrawn
  • 63. Acceptance of a Bid When the price and conditions are agreed Must be formally communicated to the supplier Must be unconditional All the terms of the bid are accepted by the buyer and the supplier
  • 64. Closing the Deal Just the same as any other contract A contract is An agreement made between two or more parties Legal rights and obligations are created Enforceable in law
  • 65. Closing the Deal If you are successful: Check that the contract: Complies with the tender / offer Takes account of any agreed specifics of your bid Ensure you can fulfil the terms of the contract Request post contract award briefing
  • 66. Otherwise If you are unsuccessful: Seek a debriefing and obtain the reasons Contractor / value (>$100K) Be diplomatic in your approach If you choose to lodge a complaint: Address the issues carefully Contact the procurement manager first Follow procedures Start with the Procurement Officer you dealt with – TAKE the debrief QLD Government Chief Procurement Office Crime and Misconduct Commission
  • 67. Performance When the product / service is delivered and completed, a contract is considered to have been discharged / fulfilled Delivery In Full On Time (DIFOT) NOTE Contracts might also be discharged / ended By mutual agreement By impossibility of performance (frustration) By breach or default on conditions No cost penalty Costs & Reputation
  • 68. Still Think You Need Help Office of Advanced Manufacturing Department of Employment, Economic Development and Innovation www.business.qld.gov.au Bill Cristaldi 07 3224 8618 [email_address] Robert McRuvie 07 3224 7548 [email_address]
  • 69. Still Think You Need Help Defence Team Department of Employment, Economic Development and Innovation www.industry.qld.gov.au/dsdweb/v4/apps/web/content.cfm?id=10420 David Belham 07 3224 7437 [email_address] Mary Willis 07 3222 2937 [email_address]
  • 70. Tender Document Sample Refer to Workbook Tender Example
  • 71. Thank you for your attendance To contact your nearest Regional Centre Phone 13 26 50