Government Procurement -
What suppliers need to know
New Zealand Infrastructure Summit 1st-2nd April 2014
Shayne Gray
NZ Government Procurement - Context
• Very tight fiscal environment - reduce cost and risk
• Canterbury rebuild
• Culture ...
Government Procurement
From
Reform…
…to
Functional
Leadership
Procurement Functional Leadership
Unlock cost
savings
Create
environment
for NZ
businesses to
succeed
Increase
performance...
• Capability development highest priority
• Centre-led, not centralisation
• Strong leadership and support – including
com...
• Meeting the needs of both government
+ suppliers
• Reducing costs for government +
suppliers: not a zero sum game
• Ensu...
An overview
Government Rules of Sourcing
Good process + good results
Plain English format that is
easier to understand
Move away from strict legal
interpretation
P...
What do the Rules cover?
Focus mainly on sourcing
stages of procurement
lifecycle
Include five Procurement
Principles
Cons...
Procurement Principles
Rule 1
Who do the Rules apply to?
Required
Expected
Encouraged
Rule 6
Encouraged
When do the Rules apply?
$10 million
new construction
works
$100,000
goods,
services,
refurbishment works
• Principles alw...
Estimating value
That includes:
everything required for full delivery
options to purchase more / to extend contract
all co...
Basic rule = open advertising
Rule 14
You must openly advertise on GETS if
the maximum total estimated value
of your procu...
What’s in a Notice of Procurement?
All relevant information – some new
requirements include:
Evaluation criteria & any wei...
Suppliers must be given sufficient time
to respond
Tender deadlines
Rule 26
Things to consider:
nature and complexity of p...
Minimum times
Vary by process:
Agencies cannot go below minimum time
periods unless allowable reductions apply
Procurement...
Allowable reductions
Minimum times can be reduced when:
Procurement is listed in an agencies APP
All documents are availab...
Procurement processes
New options:
E-auctions: shortlisted suppliers bid on price
or quality.
Competitive Dialogue: shortl...
Choosing supplier(s)
Award contract to supplier(s) that:
demonstrates capability to deliver
can meet contract conditions
o...
Opt-outs and exemptions
Opt-out procurements
Agencies can opt out of all Rules in certain situations, eg:
Health, education and welfare services
P...
Open advertising exemptions
Agencies can opt out of open advertising
in some situations, eg:
Additional good services or w...
Use opt-outs and exemptions judiciously not
automatically
Verify and document rationale
Get appropriate level of sign off
...
Identify the best way to meet needs & get value for
money…then consider how Rules apply
Make the process proportionate to ...
Other rules you need to know
Collaborative contracts
All-of-government contracts
o mandatory for Public Service and State Service
Syndicated contracts
...
Planning
Strategic procurement outlooks
Annual procurement plans
Extended procurement forecasts
MBIE review of significant...
Procurement related directives
Existing Cabinet directives incorporated in
Rules include:
Web standards
Geospatial informa...
Where to find help
Contacts
Email questions to
procurement@mbie.govt.nz
Find the Rules and procurement guidance,
tools and templates at:
www....
Procurement resources in the pipeline
Coming soon:
Rfx templates
Model policy
Recently published:
Rules training modules
E...
Questions?
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Shayne Gray, Manager Commercial Pool, Government Procurement Branch, Ministry of Business Innovation and Employment - Government Procurement – what suppliers need to know

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Shayne Gray delivered the presentation at the 2014 NEW ZEALAND INFRASTRUCTURE SUMMIT.

The New Zealand Infrastructure Summit brings you the most up to date infrastructure news combining case studies and key presentations, addressing developments in the some of the main infrastructure hubs, such as Auckland and Christchurch.

For more information about the event, please visit: http://www.informa.com.au/nzinfra14

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Shayne Gray, Manager Commercial Pool, Government Procurement Branch, Ministry of Business Innovation and Employment - Government Procurement – what suppliers need to know

  1. 1. Government Procurement - What suppliers need to know New Zealand Infrastructure Summit 1st-2nd April 2014 Shayne Gray
  2. 2. NZ Government Procurement - Context • Very tight fiscal environment - reduce cost and risk • Canterbury rebuild • Culture of risk aversion in government procurement • A need to professionalise procurement • Shortfall in procurement capability (agency & individual) • Support free trade negotiations • Support economic growth • A need to be fast, agile and flexible
  3. 3. Government Procurement From Reform… …to Functional Leadership
  4. 4. Procurement Functional Leadership Unlock cost savings Create environment for NZ businesses to succeed Increase performance, add value, maximise results • Integrate procurement strategies with government’s objectives • Establish what we buy, how much we spend & with whom • Aggregate areas of common spend • Change buyer behaviour • Develop procurement profession & leadership • Build confidence in government as a trusted partner • Strengthen commercial acumen & build sustainable outcomes • Benchmark performance & improve results • Simplify policy & standardise good practice • Make it easy to do business with government • Foster relationships responsive to business • Stimulate supplier performance - drive efficiency & productivity • Seek innovation & increase competitiveness • Improve access to international markets
  5. 5. • Capability development highest priority • Centre-led, not centralisation • Strong leadership and support – including commercial pool of procurers to help agencies and support for collaborative opportunities • Recognises the value procurement can add • We now strive to deliver great outcomes rather than just good process PFL – what does it really mean?
  6. 6. • Meeting the needs of both government + suppliers • Reducing costs for government + suppliers: not a zero sum game • Ensuring government procurers can ‘walk the talk’ • Changing a culture developed over generations The tightrope – Its never easy
  7. 7. An overview Government Rules of Sourcing
  8. 8. Good process + good results Plain English format that is easier to understand Move away from strict legal interpretation Provide context for agencies to apply sound judgment Help develop capability
  9. 9. What do the Rules cover? Focus mainly on sourcing stages of procurement lifecycle Include five Procurement Principles Consistent with Auditor General’s guidance on procurement
  10. 10. Procurement Principles Rule 1
  11. 11. Who do the Rules apply to? Required Expected Encouraged Rule 6 Encouraged
  12. 12. When do the Rules apply? $10 million new construction works $100,000 goods, services, refurbishment works • Principles always apply • Rules should take them into account when using public money for goods, services or construction works and must apply them when value exceeds thresholds. Rules 1, 7, 8
  13. 13. Estimating value That includes: everything required for full delivery options to purchase more / to extend contract all contracts that may result from the procurement fees, commissions etc revenue streams for supplier (eg tolls) Estimate the maximum total value over the whole life of the contract Rule 9
  14. 14. Basic rule = open advertising Rule 14 You must openly advertise on GETS if the maximum total estimated value of your procurement is over the threshold Rule 9
  15. 15. What’s in a Notice of Procurement? All relevant information – some new requirements include: Evaluation criteria & any weightings Make all related tender docs available on GETS if possible Panel contracts require additional information (see Rule 54) Use e-tendering if possible New timeframes for supplier responses Rules 34, 35, 36
  16. 16. Suppliers must be given sufficient time to respond Tender deadlines Rule 26 Things to consider: nature and complexity of procurement level of detail you need level of risk opportunities for subcontracting minimum time requirements
  17. 17. Minimum times Vary by process: Agencies cannot go below minimum time periods unless allowable reductions apply 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 Rule 27
  18. 18. Allowable reductions Minimum times can be reduced when: Procurement is listed in an agencies APP All documents are available electronically Suppliers’ responses accepted electronically Reductions vary by process Rule 28
  19. 19. Procurement processes New options: E-auctions: shortlisted suppliers bid on price or quality. Competitive Dialogue: shortlisted suppliers work with buyer to develop solutions and specifications before competitive round RFI is not a tender process Rules 42
  20. 20. Choosing supplier(s) Award contract to supplier(s) that: demonstrates capability to deliver can meet contract conditions offers value for money (not always lowest price) Inform and debrief unsuccessful suppliers Publish contract award notice Rules 43 - 47
  21. 21. Opt-outs and exemptions
  22. 22. Opt-out procurements Agencies can opt out of all Rules in certain situations, eg: Health, education and welfare services Purchasing/renting land or buildings Conditional grants Essential security interests Principles and guidance still apply Agencies still expected to achieve best value for money Rule 13
  23. 23. Open advertising exemptions Agencies can opt out of open advertising in some situations, eg: Additional good services or works (criteria apply) Following unsuccessful open tender (eg no responses met requirements) Only one supplier (eg for technical reasons) Prototype or design contest Emergency (includes small-scale urgent needs) Unsolicited unique proposal Rule 15
  24. 24. Use opt-outs and exemptions judiciously not automatically Verify and document rationale Get appropriate level of sign off If relying on an exemption, agencies still need to publish contract award notice Opt-outs & exemptions cont’d Rule 45Rule 15
  25. 25. Identify the best way to meet needs & get value for money…then consider how Rules apply Make the process proportionate to the value and complexity of your procurement Keep good records of your process and decisions (rule 49) Get the best results Balance probity and commercial nous
  26. 26. Other rules you need to know
  27. 27. Collaborative contracts All-of-government contracts o mandatory for Public Service and State Service Syndicated contracts o agencies can use if they meet their requirements Common capability contracts (mainly ICT) o agencies can use if they meet their requirements Rules 55- 57
  28. 28. Planning Strategic procurement outlooks Annual procurement plans Extended procurement forecasts MBIE review of significant business cases: $5M+ and/or significant risk and/or potential for collaboration Rules 16 - 19
  29. 29. Procurement related directives Existing Cabinet directives incorporated in Rules include: Web standards Geospatial information Intellectual property Public private partnerships Better business cases (capital projects) Gateway assurance Rules 58, 60 - 67
  30. 30. Where to find help
  31. 31. Contacts Email questions to procurement@mbie.govt.nz Find the Rules and procurement guidance, tools and templates at: www.procurement.government.nz
  32. 32. Procurement resources in the pipeline Coming soon: Rfx templates Model policy Recently published: Rules training modules Extended procurement forecasts guide Review of significant business cases guide Previously published: Mastering procurement (general guidance)
  33. 33. Questions?

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