UOW Policy Documents

Policy Documents at a Glance

Writing & Reviewing Policy

PURCHASING AND PROCUREMENT POLICY


Date approved	22 October 1999	Date Policy will take effect	On approval	Date of Next Review	May 2010
Approved by	University Council
Custodian title & e-mail address	Associate Director Financial Services finance_managers@uow.edu.au
Author	Procurement Manager
Responsible Faculty/ Division & Unit	Financial Services Division
Supporting documents, procedures & forms of this policy	Declaration of Interest Form New Supplier Form Petty Cash Procedure Sample Contract Registry Sample Tender Accept and Reject Letter Template Sample Tender Assessment Form Sample Tender Evaluation Criteria Sample Tenderer Reference Check Form Tender Evaluation Checklist Travel Absence Form
References & Legislation	Delegations of Authority Policy Conflict of Interest Policy Asset Disposal Policy Corporate Credit Card Policy Risk Management Policy Environmental Policy University Code of Conduct – Staff Travel and Entertainment Policy Records Management Policy OHS Purchasing Guidelines Contractor Safety Guidelines
Audience	Public – accessible to anyone
Expiry date of Policy	Not applicable

Contents

1 Purpose of Policy 3
2 Definitions 3
3 Application & Scope 4
4 Policy Principles 4
5 Methods of Procurement 6
6 Use of Personal Funds to Buy Goods and Services 8
7 Use of Corporate Credit Cards 9
8 Preferred Suppliers 9
9 Addition of New Suppliers 9
10 Engaging Consultants & Contractors 10
11 Electronic Transactions 10
12 Trading Assets 10
13 Prohibited Practices 10
14 Controlled Practices 11
15 Prepayment of purchase orders 11
16 Records Management 11
17 Goods and Services Tax (GST) 11
18 Fringe Benefits Tax (FBT) 11
19 Roles & Responsibilities 12
20 Version Control and Change History 14
Appendix 1: Competitive Tendering and Contracting (CTC) /Requests for Tender (RFT), Requests for Proposals (RFP) and Invitations for Expressions of Interest (EOI). 15
Appendix 2: Sample Tender Assessment Form 22
Appendix 3: Sample Tenderer Reference Check Form 23
Appendix 4: Sample Tender Accept & Reject Letter Templates 24
Appendix 5: Sample Tender Evaluation Criteria 26
Appendix 6: Tender Evaluation Checklist 27
Appendix 7: How to Select the Best Procurement Method 28
Appendix 8: Determining and Managing Risk 29
Appendix 9: Tender Review Committee Composition 32
Appendix 10: Sample Contract Registry 33
Appendix 11: What is a Probity Auditor? – A Guide 34

1 Purpose of Policy

1. The purpose of this policy is to ensure that financial probity is assured by prescribing a range of appropriate methods for purchasing and procurement, including, where appropriate, a competitive tendering and contracting (CTC) process.
2. Purchasing, tendering and contract letting are substantially devolved activities. This carries the risk of different practices operating at different standards creating exposure to liabilities caused by poor control over procurement and purchasing standards. This policy provides a framework that is practical for such a devolved environment.
3. As a consequence of adhering to this policy, the University shall:

a. obtain the best value for its purchases, in both cost and quality terms
b. have a fast and efficient purchasing process; demonstrate financial probity and accountability to its clients, stakeholders and the public interest
c. successfully manage and prevent the potential for conflicts of interest
d. utilise a transparent CTC process where chosen
e. monitor and evaluate performance in purchasing and procurement
f. be protected from complaints and legal actions mounted by potential suppliers who believe they have not received fair treatment Version Control and Change History

2 Definitions

Word/Term	Definition (with examples if required)
Best and Final Offer	In the context of this policy, and particularly Competitive Contracting and Tendering processes (CTC, see below), the term “best and final offer” refers to final negotiations with the selected supplier(s) to extract the best terms.
Close Personal Friend	Is intended to refer to intimate and/or close personal and social relationships that are, or have been established between University employees and individuals external to the University. It does not refer to professional working relationships that may be established with personnel internal, or external, to the University.
Competitive Contracting and Tendering (CTC) processes	Refers to the continuum of market-testing processes including Expressions of Interest (EOI), Request for Proposals (RFP) and Request for Tender (RFT). Competitive Tendering and Contracting in this policy is understood to be the process of selecting a preferred supplier from a range of potential suppliers after inviting proposals and evaluating the proposals against specific selection criteria.
Consultancy	Refers to the procurement of external consultants or consultancy services to the University. Consultancy does not refer to the provision of services from the University to external organisations or to the exchange of services within the University.
Life cycle costing	The terms “total cost of ownership” and “life cycle costing” refer to the ongoing, as well as initial, cost(s) of the purchase, eg. The cost of maintenance, warranty, support, refills and complementary products, compatibility with other equipment and the cost of disposal.
Preferred supplier	A preferred supplier is one that has been selected by the University, following a market-testing process, and offers significant benefits to the University.
Product stewardship	Refers to the service that a supplier may provide in disposing of the goods after they have served their useful life.
Purchasing Officer	For the purpose of this policy the term Purchasing Officer refers to any staff member sourcing the goods or services and raising a requisition, an order or a payment to purchase goods and services.
Risk	Fundamentally, risk shall be understood to mean the extent to which the University is unable to meet the policy purposes, outcomes and principles intended, as outlined in sections 1 and 4, as a consequence of an inappropriate choice of procurement process.
Standing contract	In the context of this policy the term standing contract refers to a contractual agreement with a supplier. Usually these contracts are for a specific duration and/or a specific value.
Total cost of ownership	See life cycle costing.

3 Application & Scope

1. This policy shall apply to all University of Wollongong entities.
2. This policy does not apply to the sale or disposal of University property, assets or services. The disposal of goods, property and assets is covered by a separate policy on the disposal of assets: the Asset Disposal Policy.

4 Policy Principles

1. Three sets of principles shall govern procurement policy and practice, these are:

a. economic principles
b. ethical principles; and
c. environmentally conscientious principles

Economic Principles

2. Any individual engaged in purchasing and procurement on behalf of the University shall seek best value for money. The term “value” is not limited to the monetary cost of the supply but shall also take into account a range of factors such as quality and service.
3. Any staff member engaged in purchasing shall be mindful of the following aims:

a. to conserve funds through cost reductions without sacrificing quality
b. to minimise total cost of ownership (see Definitions)
c. to reduce overheads; and
d. to reduce transaction volumes and streamline processes

4. The following factors shall be taken into account when considering “value”:

a. the suitability and compliance of the goods/services being procured
b. the service history of the supplier
c. associated delivery and operating costs; and
d. the cost of disposal.

5. Staff members shall consider life cycle costing, i.e. the cost of the item over the life cycle of its use.
6. Leasing: where appropriate staff members shall perform a cost-benefit analysis to determine whether outright purchase or lease is the best option.

Ethical Principles

7. There shall be an audit trail for all purchases that allows for transparency of decisions and review of purchasing practice. The conduct of procurement is subject to continuous auditing by the University and by external bodies such as the Audit Office of New South Wales and the Independent Commission Against Corruption (ICAC).
8. Staff members shall ensure that they are not, or are not perceived to be, in a conflict of interest with any supplier (refer to the Conflict of Interest Policy). Those staff members who have, or may be perceived to have, a vested interest in the outcome of a purchase should disclose any conflict to their supervisor and discuss whether they should exclude themselves from any role in the purchase process.
9. Staff shall be suitably skilled and qualified to attend to the completion of their purchasing and contracting role(s).
10. Goods and services that are purchased with University funding shall be used for University purposes and not for private purposes.
11. Open and effective competition shall be encouraged and observed ensuring equitable access to all suppliers.
12. Staff members shall ensure probity, transparency, fairness and accountability in all stages of the purchasing process.
13. All pertinent data relevant to a purchase shall be recorded and accounted for in compliance with records management legislation.
14. Staff members shall show regard for preferred suppliers and existing contracts.
15. Staff members engaging in purchasing shall ensure that they are familiar with, and comply with, the Conflict of Interest Policy
16. Staff members engaging in procurement shall disclose any personal or business relationship as described in the Conflict of Interest Policy. Goods / services may only be purchased from an individual or a company where a potential for conflict of interest exists after securing the prior written approval of the Head, Dean or Director
17. Staff members shall not authorise payment to a person or organisation in which they have a material interest without prior written approval of the appropriate Head, Dean or Director
18. All conflicts of interest shall be advised to the staff member’s supervisor as soon as they arise
19. Any gifts or hospitality received in relation to the purchase of goods and services shall only be accepted in accordance with the University Code of Conduct – Staff.

Environmentally Conscientious Principles

20. Environmentally conscientious principles shall be considered alongside economic and ethical principles. Consideration shall be given to:

a. The procurement of products containing materials produced in a sustainable manner and/or reconditioned or recycled components
b. Use of suppliers that offer product stewardship, (eg. suppliers that take back products at the end of their life)
c. Preference for goods that are more energy-efficient and cause less pollution
d. Preference to those suppliers that minimise their energy consumption and adverse environmental impact. Some may have a certified environmental management system, eg. ISO14001 accreditation.

5 Methods of Procurement

1. The University uses a purchasing system called eProcurement. This system shall be used in all instances where a purchase is being made except in those situations where it is deemed that petty cash or credit card is more appropriate.

Credit cards

2. Credit cards are a low-cost and efficient means of purchasing but are not intended as a substitute for the eProcurement system.
3. Examples of appropriate credit card use include the purchase of:

a. low value materials and consumables;
b. travel related expenses, eg. Meals;
c. petrol for hire cars;
d. subscription renewals;
e. conference registration fees;
f. goods or services where immediate payment is required.

Petty cash

4. Petty cash shall only be used for small value purchases where it is not appropriate to use either eProcurement or a credit card. Staff members should refer to the Petty Cash Procedures for further guidance.
5. Goods or services shall be acquired through one of the following options. Refer to the flowchart at Appendix 6 to determine the most appropriate method of purchase:

a. Direct purchase from a company/supplier using cash, credit card or eProcurement purchase order;
b. Direct purchase from a company/supplier pursuant to a standing contract;
c. One written quotation;
d. Three written quotations;
e. Call for Expressions of Interest (notify the Procurement Manager);
f. Request for Proposal (notify the Procurement Manager);
g. Request for Tender (notify the Procurement Manager).

6. In deciding the most appropriate method of procurement, Units shall consider three factors:

a. The level of risk that the procurement poses. Fundamentally, risk shall be understood to mean the extent to which the University is unable to meet the policy purposes and outcomes as outlined in sections 1 and 4 as a consequence of an inappropriate choice of procurement process;
b. The value of the proposed procurement;
c. The possibility of achieving better value and quality by testing the market competitively.

Direct Purchase

7. Goods/services costing less than $5,000 shall be purchased to best advantage without quotations subject to the following conditions:

a. rates being considered reasonable and consistent with normal market rates for items of a like nature; and,
b. requirements not being split into components (or a succession of orders for the same goods or service) for the purpose of enabling the goods or service to be obtained under the $5,000 limit.

Direct purchase under a standing contract

8. Standing contracts shall be used to allocate all or most work of a given type to a dedicated provider for a fixed period, usually 2 to 3 years. This usually occurs where the good or service is repeatedly or regularly used and often incorporates bulk discounts for volume and streamlined payment arrangements. The renewal of any standing contract shall be re-considered at the end of the contract period.
9. For regularly used goods, a standing contract for supply may already exist. It is inefficient to let a new contract where one already exists unless there are significant savings to be gained. Units should check for the existence of such contracts when purchasing a type of item for the first time.
10. All staff members are encouraged to use University-preferred suppliers in the first instance. If a staff member decides to purchase goods and services from a supplier other than a University preferred supplier he/she is required to demonstrate to the satisfaction of the University’s Procurement Manager that either:

a. the alternate supplier can provide the goods or services at a significantly lower cost than the University preferred supplier (written quote required); or
b. the goods or services available from the University preferred supplier are not fit for the purpose required (the decision shall be supported by evidence).

Direct purchase under a government contract

11. For purchases made under a government contract, quotes are not essential as these contracts are the outcome of a competitive tendering and contracting process.

Non-order payments

12. Staff members are discouraged from making non-order payments as a purchase order is usually required to validate a request for supply. The University is not obliged to pay suppliers where a purchase order has not been raised.
13. Notwithstanding section 5.12, situations may arise where a non-order payment needs to be made, and this should be processed using the eProcurement system. Situations may include orders for catering, subscriptions, services, utility payments, florists and reimbursements. All purchase orders and payments are required to be processed in accordance with the Delegations of Authority Policy.

Written quotation

14. For purchases greater than $5,000 but less than $20,000, at least one written quotation should be obtained subject to the following conditions:

a. rates being considered reasonable and consistent with normal market rates for items of a like nature; and
b. requirements not being split into components or a succession of orders, for the same goods or services for the purpose of enabling the goods/service to be obtained under the $20,000 limit.

15. For purchases greater than $20,000 but less than $100,000, a minimum of three written quotes shall be obtained and shall be based on a written outline of specifications which has been provided to the suppliers.
16. Three written quotations do not have to be obtained where the goods or services are proprietary (held under patent, trademark or copyright), or are only obtainable from fewer than three suppliers.
17. For purchases that are considered medium to high risk and/or over $100,000, consideration shall be given to undertaking a Competitive Tendering and Contracting (CTC) process. This shall include documentation of a written brief or an outline of specifications for the purchase.

Expressions of Interest /Request for Proposals (Competitive Tendering and Contracting) Procedures

18. Expressions of Interest (EOI) and Requests for Proposals (RFP) consist of procedures that are intermediate between obtaining written quotations and seeking tenders. EOI and RFP are generally used to cull an initial field of probable competitors who can provide innovative solutions to leading-edge or emerging issues within a given industry (e.g. a creative or technological solution).
19. In the case of RFP or EOI, a detailed overview of the product or service concept that is required is prepared and forwarded, usually with a covering letter, to a number of identified suppliers who are invited to submit written proposals. RFP and EOI can be announced in a variety of advertising mediums to achieve greatest exposure to potential contractors and tenderers. Unlike tenders, in this model the University is subsequently able to negotiate variations to the specification with a preferred supplier.
20. Requests for Proposals and Expressions of Interest shall be used for medium to high risk purchases between $50,000 and $100,000 and low risk purchases of under $1,000,000.

Requests for Tendering (RFT) (Competitive Tendering and Contracting)

21. For all high risk purchases over $100,000, Units should use an RFT process unless a case can be made to the approving officer that there is no more than one single provider available or that the risk is so low that an alternative procurement process could be adopted. Exemptions to this requirement shall be sought in writing, with a detailed explanation, to the Vice-Principal Administration.
22. The details of procedures to be followed for Competitive Tendering and Contracting are set out in Appendix 1.
23. All purchase orders, non-order payments and contracts are to be approved in accordance with the Delegations of Authority Policy.

6 Use of Personal Funds to Buy Goods and Services

1. The University discourages the use of personal funds to buy goods and services for work, study and research purposes. Staff members, and other individuals who have recourse to University funds, may only use personal funds to buy goods and services if it can be shown that there is no alternative method of purchase, eg. eProcurement or corporate credit card.
2. Staff members and other individuals using personal funds to purchase goods and services for University business shall first seek approval from the appropriate delegated officer before making the purchase. If prior approval is not given, the University is not obligated to reimburse the claimant.
3. Travel expenses such as air fares and accommodation shall be arranged through the preferred travel supplier (refer to the Travel and Entertainment Policy) and shall be booked and paid for using either the Travel Absence Form and “T” number process, or, the eProcurement system. Other incidental expenses shall be purchased in accordance with the Travel and Entertainment Policy.
4. The purchase of equipment, consumables and other work-related items shall be made using the eProcurement system unless a valid reason can be given for an alternative method of purchase.
5. In the event that use of personal funds cannot be avoided, notwithstanding section 6.1 above, reimbursements to staff members and other individuals shall be claimed within two months of the date of the expense, and claims shall not be stockpiled for bulk reimbursement.

7 Use of Corporate Credit Cards

1. Credit card holders shall adhere to the Corporate Credit Card Policy available on the Intranet.
2. Purchase order is the preferred method of procurement; however, credit cards may be used in appropriate circumstances, eg. to purchase meals when travelling on University business, to buy low value goods, and to pay for goods and services where immediate payment is required at the point of sale.
3. If a credit card is used to purchase goods and services that should have been ordered using an eProcurement purchase order and paid for via invoice, the person incurring the expense may be asked to substantiate the reason for the choice of purchase method.
4. The card shall not be used for cash advances or to purchase assets or equipment.

8 Preferred Suppliers

1. The University has a list of preferred suppliers for the provision of certain goods and services (refer to the Financial Services web site for more information). Any staff member purchasing such goods and/or services from an alternative supplier to the preferred supplier shall substantiate the reason for the decision. Documented evidence, such as a substantially cheaper quote or details of the superior service being provided, shall be attached to the order within eProcurement or within the ImageReal document management system.

9 Addition of New Suppliers

Establishment of a new preferred supplier

1. Where a preferred supplier does not exist and a unit identifies a need for the establishment of a standing agreement with a preferred supplier, the unit should refer to the Procurement Manager, Financial Services, requesting his/her consideration to establish such an agreement and to seek confirmation that a preferred supplier arrangement does not already exist for the specific goods and services required.
2. The method of selection for a new preferred supplier shall be through either Expressions of Interest (EOI) or Request for Tender (RFT). In deciding the most appropriate method of procurement, units shall have regard to the factors identified in Sections 1 and 2.
3. A standing agreement shall include the following terms and conditions:

a. The preferred supplier shall provide the University with a specified minimum discount for all goods or services purchased;
b. The preferred supplier shall match or undercut any genuine written quote from an alternative supplier;
c. Preferential terms of trade, such as net 40 days on a single consolidated invoice and the ability to receive orders and send invoices in electronic format;
d. Payment via Electronic Funds Transfer;
e. Value for money provisions such as the ability to return faulty goods or services, appropriate warranty terms and the provision of adequate service or repair backup.

4. All proposed contracts with preferred suppliers shall be reviewed and approved by the University’s Lawyer, Business Risk, prior to execution of the same.

Addition of New Suppliers for one-off purchases

5. Units may have a need to make a one off purchase of specialised goods or services from a supplier that is not listed in the University’s Supplier Address Book. In such instances the Unit shall submit to Financial Services a completed New Supplier Form for approval.
6. In granting approval for such a request, the following factors shall be considered:

a. The availability of the goods or services from a University preferred supplier or other existing supplier;
b. The specific purpose for which the goods or services are required.

7. Under no circumstances shall orders be placed with a supplier prior to the establishment of the supplier in the University’s Supplier Address Book. The University accepts no liability for orders placed in such circumstances.

10 Engaging Consultants & Contractors

1. When engaging a consultant or contractor, staff members shall:

a. Comply with this policy,
b. Clearly determine the nature of the services required and justify the requirement,
c. Have the proposal to engage a consultant or contractor approved in accordance with the Delegations of Authority Policy,
d. If applicable, invite and evaluate quotes from suitable providers,
e. Implement an appropriate contract or agreement.

2. Where it is likely that there will be a recurring need for consulting or contract services, staff members shall consider the merits of establishing a panel of suitable providers, or, a strategic partnership with a preferred provider.
3. Section 10.2 notwithstanding, to ensure fairness, transparency and probity, where a strategic relationship with a single or multiple provider/s is established, the arrangement shall be subject to review on a regular basis, eg. every one to three years.
4. All persons engaged in the sourcing of consulting or contractor services shall comply with the Conflict of Interest Policy and complete the Declaration of Interest Form.
5. Where a consultant is engaged to make recommendations on a course of action that will result in the subsequent procurement of goods or services from a supplier, the consultant shall comply with the Conflict of Interest Policy and complete the Declaration of Interest Form.

11 Electronic Transactions

1. As far as is feasible, Units are encouraged to utilise electronic commerce for the transacting of their financial business. In addition to being efficient, electronic transactions provide good audit trails and suppliers can expect reduced turn-around time in the processing of invoices when electronic transactions are the norm.
2. Units shall strive to place increasing responsibility on suppliers to consolidate invoices for several services into one invoice. The consolidated invoice shall also detail particulars of what goods/services have been supplied, when and to whom.
3. Units shall make the most use of available information technology to establish a profile of regular purchases in an effort to consolidate a list of potential suppliers of these same goods and services.

12 Trading Assets

1. The trading of assets is also an issue to be addressed in providing for "best value" processes; monetary costs may not be the only measure of 'value', staff need to consider the value of any benefit (e.g. association with the University) that the University 'confers' via its association, membership, etc.

13 Prohibited Practices

1. Multiple orders, each within verbal quotation limits, which collectively amount to a substantial figure or contract, are not permissible. This is considered to be “order splitting”. Units shall forecast their needs for given services/goods and plan accordingly. Should repeat orders be required that amount to a substantial figure, a properly advertised Competitive Tendering and Contracting process shall be required.
2. The purchase of goods and services from relatives, business associates or close personal friends is prohibited without the prior approval of the Head, Dean or Director. Refer to section 4.3.9 regarding conflict of interest.

14 Controlled Practices

1. Certain kinds of purchases have prescribed controls, as follows:

a. Units seeking work or tenders related to building works and maintenance, including reticulated services and landscape structures, shall have approval clearance from the Director, Buildings and Grounds.
b. Staff recruitment, advertising and use of recruitment agencies shall be pursued via the Manager, Recruitment Services.
c. Information technology purchases shall be approved by the Associate Director, ITS.
d. In certain cases, the University establishes standing contracts on an exclusive basis (i.e. where the chosen supplier shall be used), or on a preferred basis. There are policy controls on the use of alternative suppliers and a case shall be made to the relevant authority for circumventing standing or preferred suppliers.
e. With respect to some types of activities, the University requires that the service be provided in-house, eg. payroll.
f. Acquisition of goods and services via a leasing agreement shall comply with the conditions of this policy.

15 Prepayment of purchase orders

1. Prepayment of purchase orders is discouraged and shall only occur when a supplier insists on prepayment and an alternative, suitable supplier cannot be found. In these situations staff members are encouraged to offer partial payment upfront, eg. 10% with the order and 90% on delivery, or other such compromise. Staff members shall assess the possible risk to the University before paying for goods and services in advance.
2. In certain situations a letter of credit may be arranged. This provides the supplier with a level of guarantee that the payment will be released promptly on receipt of the goods and/or service to an acceptable standard.

16 Records Management

1. All transactions that take place in the course of procuring an item or a service shall be fully documented in accordance with the principles of full and accurate recordkeeping as outlined in the University’s Recordkeeping Policy. Staff members shall use eProcurement and/or the ImageReal document management system to ensure compliance.

17 Goods and Services Tax (GST)

1. GST is applied to most non-essential goods and services, and the University is required to pay GST where-ever it is charged.
2. When using the eProcurement system or transacting business via other methods, the appropriate GST code shall be recorded to ensure that the University can claim “input tax credits”. Further advice regarding GST and its implications can be found on the Financial Services web page.

18 Fringe Benefits Tax (FBT)

1. When purchasing goods and services that are intended as benefits to staff (eg. lunch, dinner or a Christmas Party), it is worth remembering that FBT charged on the purchase is approximately equivalent to the original cost of the purchase, and this tax is debited from the account incurring the expense.
2. Measures can be taken to reduce the amount of FBT incurred and further advice can be obtained from the Administration Accountant in Financial Services.

19 Roles & Responsibilities

1. The purchase of goods and services is the responsibility of individual units and faculties.
2. Responsibilities of the Purchasing Officer (see Definitions) include:

a. Assessing whether a preferred supplier is in place
b. Obtaining additional information required for decision-making, and/or, for providing a specification to a supplier
c. Obtaining additional information with regard to the conditions of the contract, confirmation of price and availability of goods/services
d. Selection of supplier
e. Application of probity, transparency and fairness.

3. By approving the purchase order, non-order payment or contract, the approver is certifying that the transaction complies with all relevant financial policies and procedures, and that the Purchasing Officer has carried out his or her duties in compliance with policy.
4. The Purchasing Officer shall justify the decision based on evaluation criteria such as value for money, availability, urgency, quality and service.
5. Where a decision is made to purchase goods or services from a supplier other than a preferred supplier, the Purchasing Officer shall record details supporting the decision in the eProcurement system (as an attachment or a line attribute) and shall attach any relevant information such as quotes.
6. Hard copy information shall be scanned and stored in the ImageReal document management system under the order number.
7. Staff members shall bring to the attention of the Procurement Manager potential for the supply of goods and services that may be suitable for contract or panel supply arrangements, specifically high volume, high value goods/services that are purchased on a regular basis and might also be purchased by other faculties and divisions, eg. toner cartridges.
8. Units shall conform to the conditions of this policy and undertake an appropriate method of procurement for each business transaction.
9. The purchase of goods and services shall be done within the scope of the Delegations of Authority Policy.
10. Units shall incorporate market testing and contracting reviews for expensive items as part of their normal business planning and operational activities (see Appendix 6 for purchase cost benchmarks to assist in the determination of which purchase method to use).
11. Units do not necessarily need to seek competitive tenders to meet market testing requirements. This policy seeks to ensure best value for money, but cannot prescribe a process for every particular instance. The most appropriate means shall be determined after informed assessment which may involve:

a. Understanding the costs of activities and the levels of performance being achieved.
b. Benchmarking performance and processes against other comparable organisations and alternative providers, where applicable.
c. Collaborating with other agencies in common service delivery arrangements, and, inviting competitive bids for the provision of suitable activities where internal efforts have not realised substantial improvements in efficiency or quality of service.

12. Units shall comply with the principles set out in sections 1 and 4.
13. Units shall ensure that all purchases comply with relevant Occupational Health and Safety (OHS) requirements as outlined in the OHS Purchasing Guidelines and Contractor Safety Guidelines. If there is any doubt over the safety of an item proposed for purchase, technical advice shall be sought from the University’s OHS Unit. All requisitioners and approvers shall ensure that OHS requirements have been considered and noted, as required, in the eProcurement system. Units are eligible to establish more stringent procedures than are contained within this policy, but this policy shall serve as the base standard for all Units.
14. When purchasing goods and services that carry some level of risk; and in other situations where applicable, the Purchasing Officer shall specify the Australian quality standard that applies to the good or service being procured.
15. The purchasing officer shall confirm that sufficient funds exist to pay for the goods and services being purchased. If sufficient funds do not exist in the designated account, the purchase may be charged to an alternative account.
16. Units shall note that the University’s standard terms of trade are for payment to be made 30 days from the invoice date. Staff members shall not commit purchases to suppliers that are not prepared to accept these terms unless this has been approved by the University’s Finance Manager or the Associate Director, Financial Services.
17. Before placing orders of significant value (> $10,000) and especially where some pre-payment is required, staff members shall take steps to obtain a guarantee or warranty from the supplier covering the following issues/contingencies:

a. Faulty goods/services
b. Terms for late or non-delivery
c. Loss or damage in transit
d. Failure to meet contractual obligations
e. Failure to meet specifications.

Financial investigation of a supplier

18. Between the quotation or tender stage and the purchase order stage, the Procurement Manager may arrange for a financial check of the supplier, particularly if the supply is being sourced from an overseas supplier and there is reason to believe it would be difficult to recover prepaid money or contracted goods or services.

Receipt, inspection and acquittance of goods

19. The person initiating the requisition shall confirm that the goods have been received in good working order and/or that the service provided was of a satisfactory standard.
20. eProcurement purchase orders shall be receipted in the eProcurement system in order to expedite payment.
21. When signing for receipt of goods the receiver shall annotate the packing slip and carrier’s receipt with a suitable comment such as “subject to check” or “subject to inspection”.
22. The party responsible for delivery shall be responsible for loss or accidental damage in transit and shall be insured accordingly. The supplier shall ensure the goods are received in good working order at the final destination and that an appropriate method of delivery has been used.
23. Where necessary, agreed delivery terms should be specified on the purchase order and also agreed delivery charges.

Dangerous goods

24. The purchase, delivery, storage, distribution and use of dangerous goods should be controlled as prescribed in the OHS guidelines.

Poor supplier performance

25. Poor performance on the part of the supplier should be communicated to the Procurement Manager based in Financial Services.

Freight and insurance charges

26. Freight and insurance charges shall be agreed before the purchase order is issued. In most cases the supplier is responsible for insurance whilst in transit and freight charges to the port or airport of destination. The purchaser is responsible for customs clearance and local freight.

Asset purchases

27. Refer to the Asset Management Policy on the Financial Services web site.
28. Equipment purchases over $5,000 and valuable items costing between $500 and $5,000 (as defined in the Asset Management Policy) shall be registered as assets and recorded on the fixed asset register. Details shall be provided to the Fixed Assets Officer in Financial Services.

Foreign currency

29. Purchases and payments that are required to be made in a foreign currency shall be processed by the Accounts Payable Team within Financial Services.

Government contracts

30. The NSW Department of Commerce has a comprehensive list of contracts with various suppliers. Where a pre-existing UoW preferred supplier contract does not exist, staff members should refer to the catalogue of suppliers on the Dept of Commerce web site and should take advantage of the government contracts listed on the site where advantageous to UoW. Details of the State contract shall be noted on the purchase order.

20 Version Control and Change History

Version Control	Date Effective	Approved By	Amendment
1	22 October 1999	University Council	First Version
2	29 May 2007	Administrative Committee	New policy. Changes due to introduction of eProcurement
3	October 2007	Deputy Vice-Principal (Finance & IT)	Minor changes to include audit recommendations
4	6 May 2009	Vice Principal (Administration)	Migrated to UOW Policy Template as per Policy Directory Refresh

Appendix 1: Competitive Tendering and Contracting (CTC) /Requests for Tender (RFT), Requests for Proposals (RFP) and Invitations for Expressions of Interest (EOI).

1. Units have an obligation to test the market on a systematic basis to ensure the most competitive and equitable procurement of goods and services. This process is considered Competitive Tendering and Contracting (CTC). Engaging in a Competitive Tendering and Contracting process on a regular basis provides Units with the opportunity to consider new developments or options that may have arisen since the last tender.
2. Units can use a Competitive Tendering and Contracting process to approach the market in one of three ways: through Expressions of Interest (EOI), Requests for Proposals, or Requests for Tender (RFT).

Stage 1: Expressions of Interest

1. Seeking Expressions of Interest (EOI) consists of a procedure that is intermediate between obtaining written quotations and seeking tenders. It is generally used to cull an initial field of probable competitors who can provide innovative solutions to leading-edge, or emerging issues within a given industry (e.g. a creative, or technological solution).
2. In the case of expressions of interest, a detailed overview of the product or service concept that is required is prepared and forwarded, usually with a covering letter, to a number of identified suppliers who are invited to submit written proposals. Similarly, Expressions of Interest can be announced in a variety of advertising mediums to achieve greatest exposure to potential contractors and tenderers.
3. Unlike tenders, in this model, the University is subsequently able to negotiate variations to the specification with a preferred supplier.
4. The process of seeking Expressions of interest may be used for high risk purchases between $50,000 and $100,000 and low risk purchases of under $1,000,000.
5. Calling for Expressions of Interest is also a useful means to bring forward general responses to a concept or idea. This allows for innovative, creative or previously unanticipated responses to be solicited from the broader market. Expressions of Interest are also useful for safeguarding original ideas while still seeking solutions to general specifications. (e.g. It is feasible that one company’s creative approach to a given problem, or situation can be at least matched, or surpassed by other suppliers).
6. Expressions of Interest may also be used to develop a register of consultants or contractors to fulfil one-off or ongoing periodic services to the University.

Stage 2: Requests for Proposals

1. This stage involves soliciting proposals to solve the problem; usually referred to as “requests for proposals”.

Stage 3: Requests for Tender – the Competitive Tendering and Contracting process

1. This stage involves taking the ‘most promising’ of these proposals to finality in a Best and Final Offer context.

Deciding When to Use CTC for Goods and Services/Market Testing

2. The Competitive Tendering and Contracting process is designed to "test the market" for goods and services required where special rates and discounts may be available to the University. Via competitive tendering and contracting, the University can obtain the best possible value available in the market for goods and services.
3. Competitive Tendering and Contracting should be pursued where it is reasonable to assume that competitive contracting shall bring a reduction in financial costs, greater access to innovative solutions, increased flexibility, greater focus on outcomes and capacity to enable the University to focus on core activities.
4. While the direct acquisition or procurement of goods and services may be conducted within the general and financial expenditure delegations assigned, discretion shall need to be exercised in determining the appropriate time to tender.
5. Units should reference Appendix 6 (choosing a procurement method) as a financial guide to determining when to go to tender (contract) for goods and services.
6. Certain situations may arise where the need to obtain quotes or go to tender is not appropriate:

a. The required goods/service are only available from one supplier;
b. An item is a component of an existing piece of equipment and only sourcable from the original supplier;
c. The item shall be compatible with existing equipment for reasons of safety, satisfactory operation, costs associated with staff training, or some other valid reason.

7. Whenever a staff member wishes to circumvent the afore-mentioned procurement processes that apply to specific purchase thresholds, the staff member shall first seek the approval of the Procurement Manager, Financial Services.

Principles in Using a CTC Approach for the Purchase of Goods and Services

1. Best Value: In undertaking a Competitive Tendering and Contracting process, best value for University goods and services shall be sought from tenderers. This entails articulating in advance all factors that constitute “value” under the circumstances and in the opinion of the Unit. This may be understood, but is not limited to monetary value of the contract, quality of goods and services expected, and references from tenderers. Due consideration of the value of a multiple-stage bid-process to elicit best value should be given etc.
2. Factors ultimately selected that are considered to be “value” shall constitute part of the specifications for tenderers to address in their tender bid.
3. Staff shall ensure that a clear, structured, decision-making process for letting contracts is identified prior to the tendering process. This decision-making process shall be communicated as part of the Competitive Tendering and Contracting process.
4. A Tender Review Committee shall be struck for all Competitive Tendering and Contracting processes. The committee composition shall vary according to the amount of the proposed procurement as outlined in appendix 10.
5. All tenderers should be advised in advance of the possibility of any negotiation of their bid(s) and the circumstances under which it may occur.
6. Staff shall ensure that no decisions are made on the basis of criteria that were not made available to all tenderers.
7. All tenderers in the market shall be availed of any new information as it arises in the bid process and shall be allowed the opportunity to bid competitively for adjusted situations (e.g. environmental factors may result in initial specifications being redundant as in the example of a rapidly changing Information Technology environment). Where conditions of the original bid are significantly altered part-way through the Competitive Tendering and Contracting process, the Unit should consider conducting a new process.
8. Should the Tender Review Committee choose, negotiations may be undertaken with short-listed tenderers, however this prospect shall be made apparent at the start of calling for Expressions of Interest, RFP or RFT.
9. Staff shall ensure that they are not, or are not perceived to be, in a conflict of interest with the Competitive Tendering and Contracting process and outcomes.
10. Staff shall be suitably skilled and qualified to participate in the evaluation of tenders.

General Overview of the CTC Process

1. The Competitive Tendering and Contracting process consists of four (4) parts and is discussed in greater detail below. Units involved in the tendering and letting process shall comply with these specifications.
2. Establish the need for a Competitive Tendering and Contracting process: in consideration of this policy and to capitalise on the benefits of competitive tendering and contracting.
3. Establish the specifications: overall documentation (for a tender) shall normally comprise of:

a. Invitation to tender;
b. General conditions of the contract;
c. Specifications; and
d. Drawings [as required].

4. Evaluate (Tenders): criteria and processes to distinguish between competitive bids shall be determined prior to seeking requests for tender. A reference process is included as a standard step in the evaluation process.
5. Conclusion: the conclusion of the CTC process involves communicating the Competitive Tendering and Contracting outcomes to the competitors and establishing a contract and project management plan with the successful contractor.

Preparing Specifications to Meet Requirements in an EOI, RFP or RFT process

1. Specifications shall be written and then published as a component of the published Competitive Tendering and Contracting process and shall be established prior to calling for Expressions of Interest, RFP, or RFT.
2. Outcomes should be defined for the Competitive Tendering and Contracting process keeping in mind that best value shall be solicited if the Unit emphasises desired outcomes rather than specifying the means. The defined outcomes should have regard for the economic, ethical and environmental principles outlined at 1.6 of the policy.
3. Attention should be given to ensuring that over-specification to a known product does not unnecessarily inhibit suitable alternatives being provided in tenders.
4. Criteria should be constructed on the basis of an analysis of the unit or faculty’s need for goods or services. Decisions regarding what is valuable, or what constitutes a distinguishing factor, in the bid process shall be identified before the bids are called. Be aware that these factors can be non-monetary variables such as, but not limited to: ability to complete the job (call for references), ability to meet licensing requirements, ability to service goods or service contract, reliability, etc.
5. Each unit shall establish a procurement process that ensures that purchased goods/services conform to University OHS requirements. To this end, OHS risk factors and hazards shall be clearly defined, and Unit purchasing documentation shall be periodically audited by the Manager, OHS for compliance with relevant legislation, regulations, standards and codes of practice. For example, compliance with the OHS Act and OHS Regulation 2001.
6. Organisations intending to supply goods or services to the University are to be provided with any University OHS requirements within the tender specifications.
7. Organisations intending to supply goods or provide services to the University including maintenance therein should have procedures covering hazard identification, risk assessment and control of risks both to its employees and to the University; e.g. Is there a system to identify safe work methods? Are appropriate licenses/tickets held for the Operator/Tradesman, material, substances, etc.? These issues shall be specified in the RFT.
8. The Competitive Tendering and Contracting process should be marked at the outset by ‘transparency’. Criteria of value to the Unit that are part of the specifications shall be established along with indicators of this value, (e.g. the value “reliability” may have two indicators: references demonstrating timely completion of tasks/projects; and completion of work to an agreed level of quality.)
9. Tenderers shall be asked to disclose any interest or link with another tendering firm; it is the responsibility of the contracting Unit to check for links between tenderers for each contract.
10. Tenderers should be required to declare full details of business ownership and knowledge of beneficially interested parties in the bid process. Those with an interest in the outcome of a Competitive Tendering and Contracting process should not be involved in the process in a way that allows them to affect the outcome.
11. The tender bid may also require bidders to declare any known interest in another bidder.
12. A probity auditor is required for all non-standard tenders greater than $1,000,000.00 and for all construction tenders greater than $10,000,000.00. Refer to appendix 10 for information on probity auditors.
13. Advertising of the Competitive Tendering and Contracting Process with the required specifications occurs at this stage.

Evaluation Criteria for a Competitive Tendering & Contracting process

1. The supplier’s OHS processes shall comply with those of the University, particularly with regard to the supply of dangerous goods or maintenance services.
2. Regard shall be demonstrated for economical, ethical and environmental principles outlined in section 4 of this policy.
3. Evaluation criteria shall be linked to the specifications communicated to tenderers and shall be established in full prior to calling for RFP, Expressions of Interest or RFT.
4. If evaluation criteria change substantially to the original criteria communicated, Units shall call new tenders.
5. Criteria to be considered for each project/contract may include (see also Appendix 5):

a. Previous relevant experience;
b. Financial capacity to complete the tasks;
c. Referees’ reports;
d. Proposed staffing/project personnel;
e. Proposed method of work/understanding of the task;
f. Industrial Relations and OHS considerations;
g. Quality systems control;
h. Environmentally conscientious attributes;
i. Suitability of engaging a local supplier;
j. Price.

6. Any tender documents shall state the criteria on which the tender shall be evaluated. Bids shall be evaluated based on compliance to explicit, stated criteria; these criteria shall be established before tenders are called and may not be deviated from.

Requests for Tender

1. Competitive Tendering and Contracting processes shall be advertised according to the exposure that the Dean/Director considers appropriate. The tender shall usually be advertised in The Illawarra Mercury and/or The Sydney Morning Herald and other specific newspapers and publications that may attract interest in the goods and/or services being sought.
2. A minimum of four (4) tenderers should be invited to tender. If the selected tenderers have not previously satisfactorily completed similar projects for the University, then the references of the proposed tenderer shall be checked and recorded on the Reference Form. Requests for Tender should be sent to these suitable suppliers specifying all details required, including the closing date for the tender and contact names.
3. Competitive Tendering and Contracting documents shall specify the method and time for lodgement of tenders, including any mention of a Tender Box held locally within the unit seeking a Request For Tender. Tenders shall be received by the stated time and date.
4. To ensure confidentiality, no faxes or emails can be accepted as a legitimate submission by any contractor and this shall be noted in the tender documents.
5. Packages containing tenders supplied should be date and time stamped and a written receipt provided to the tenderer acknowledging receipt of the tender document. If the unit seeking a Request For Tender cannot provide the resources to ensure a consistent and equitable practice of receipting/date stamping tender submissions, a Tender Box shall be provided.
6. The tender box shall be accessible to the general public and shall be kept locked until the specified time after the tender period has closed.
7. Quotations and tenders that close on future dates shall be returned unopened to the tender box after current tenders have been removed.
8. Tenders submitted by suppliers are to be held within a secure location until the closing date.

Closing Tenders

1. All necessary arrangements shall be made to safeguard the security and confidentiality of all tenders.
2. Tenders received after the closing time for receipt of tenders shall be rejected and returned unopened unless express approval of the Dean/Director of the Unit is obtained. The rationale for the exception shall be documented on the Tender Assessment Form (see Appendix 2).
3. In the event that no offers are received by the closing time, consideration may be given to late offers so long as other suppliers that have requested the tender specifications are advised of the extension. Re-invitation to tender may also be considered.

Evaluation of Tenders

1. Tenders shall be evaluated by a Tender Evaluation Committee approved by the Director /Dean. The Tender Review Committee composition is strictly defined for the University and is outlined in Appendix 8.
2. The evaluation of tenders is undertaken by the assessment of conformity and scoring against the predetermined criteria. Making recommendations and preparing reports is a group activity.
3. Tenders are initially evaluated based on their written responses. Based on these, a shortlist of preferred tenders should be prepared and more detailed evaluation, often involving interviews, presentations or meetings may be conducted.
4. The tender that best meets the criteria specified in the request for tenders should be accepted.
5. An investigation into the credentials of the preferred tenderer should be undertaken; e.g. what experience do they have? Do they have the technical expertise they purport to have?

Processing the Tenders

1. The University Legal and Commercial Unit, or a suitable external lawyer, shall review the supply contract unless an alternative arrangement has been agreed with the Procurement Manager.
2. In the interests of equity, if supplementary information is provided to support the tender, notifications of alterations, extensions and additional supporting information shall be provided to all prospective suppliers who have been issued with the request to tender. Furthermore, suppliers shall be denied access to any information provided by another supplier.
3. On the closing date, the tenders that have been submitted shall only be opened by the Tender Review Committee in a secure environment. Access shall be restricted to members of the committee and no person may leave the room without express permission of the supervisor.
4. Each tender shall be date stamped and details of the tenderer and prices quoted should be entered on the Tender Assessment Form.
5. Quotations and tenders shall be treated as commercial-in-confidence at all times and details shall not be divulged to persons not involved in the process, i.e. not on the committee. Details from the tender documents should not be disclosed to other suppliers with a view to bargaining as this practice is not conducive to open and equal competition. Documentation shall be kept secure and not accessible to anyone outside the tender process.
6. Where a tenderer offers an alternative, a comparable price for the alternative should not be obtained from other tenderers nor should the detailed alternative be used as the basis for the recall of tenders.
7. Tenders shall show that all parts of the specification have been met including OHS requirements.
8. Should it be decided not to accept any tender and to in fact recall tenders, the original tenderers should be advised of the reason/s for the recall. This should not prevent the University from adding to the tender list.
9. After the Close of Assessment, the rules of the bid process may not be changed mid-stream to advantage one party.
10. Confidential information may not be released to one party. If information is made known to one party, it shall be made available to all tenderers. Where there is a major change it would be prudent to consider re-submitting the Competitive Tendering and Contracting process.
11. Requests to amend quotations or tenders after the closing date are to be considered on merit but consideration shall be given to whether other tenderers are disadvantaged by the late change and whether the change has an adverse effect (from the UoW perspective) compared to the original offer.
12. The Tender Assessment form shall be completed by an assigned Officer responsible for the procurement/purchasing process and approved by the Director /Dean. Sections to be completed shall include:

a. Recommend Award Tender to:
b. Reason for Award:
c. Signature of responsible authorities (Project Officer, Members of Tender/Evaluation Committee, including Director or Dean of Unit).

Post Selection Actions

1. A formal contract incorporating the offer, acceptance of the offer and specification shall be negotiated with the successful tenderer. The contract shall at least include the request for tender and the supplier’s tender as part of the contract. Legal advice should be sought if considered appropriate and shall be sought for any non-standard contract with a value exceeding $750,000. Non-standard shall be understood as a contract for goods and services that has not been drafted by a specialist legal practitioner or contract authority such as Standards Australia.
2. The contract shall be approved by a person with the appropriate level of delegation as articulated in the Delegations of Authority Policy.
3. All unsuccessful tenderers should be notified in writing.
4. Where the University excludes a tender from evaluation, the reasons for such action should be clearly documented on the Tender Assessment Form; this rationale shall be communicated to the tenderers on request in the tender debriefing process.
5. Unsuccessful tenderers may request an exit interview where they may be debriefed on the reasons why their bid was unsuccessful. Only one interview shall be provided. It is preferable to have more than one person from the tender evaluation team present.
6. The interview should only be at the request of the tenderer and not initiated by the Unit. As a guideline:

a. Units should focus on providing:

i. An outline of the tender process;
ii. An overview of the evaluation criteria and their weightings; and
iii. A general indication of the unsuccessful tender’s relative strengths and weaknesses.

b. It is accepted practice that, where restricted by additional non-disclosure agreements that may be part of a CTC process, confidential tender information shall not be shared by the University with third parties.

7. To maintain the University’s commercial advantage as a buyer, no supplier should be told the number of tenders or quotations received, or any details regarding any other supplier or tender, except for limited details regarding the successful offer.
8. The successful tenderer shall address in writing all of the University's specified Occupational Health and Safety (OHS) requirements and warrant that these requirements shall be met throughout the contract period. Contractors shall attend a "Contractor Occupational Health and Safety induction" session at the University prior to the commencement of any work at the University.
9. Units are responsible for conducting a post-contract (i.e. completion of contract) evaluation on all contractor(s) involved with a tender. The purpose of this review is to determine progress against specifications/requirements and to determine the value of using the given contractor(s) in future.
10. Standing contracts performed shall be reviewed and opened up for reconsideration on a regular cycle, usually on a 2 to 3 year time-frame.

Appendix 2: Sample Tender Assessment Form

Appendix 3: Sample Tenderer Reference Check Form

Appendix 4: Sample Tender Accept & Reject Letter Templates

Appendix 5: Sample Tender Evaluation Criteria

Appendix 6: Tender Evaluation Checklist

Appendix 7: How to Select the Best Procurement Method

Appendix 8: Determining and Managing Risk

1. The process of risk management can be understood to have 6 iterative steps. The main elements are as follows:

Step 1 - Identify and acknowledge the context in which the process of risk while purchasing or procuring goods and services occurs

1. Strategic Context

a. This is the relationship between the University and the broader environment and includes the financial, operational, competitive, political (public perceptions/image), social, cultural and legal aspects of the University’s functions.
b. The University as a public office of the government shall pursue and shall be seen to be pursuing the best possible competitive value for its consumption of goods and services.

2. Organizational Context

a. The process of determining risk at this level asks to what extent the practice of purchasing for goods and services complies with (or not) the wider goals, objectives and strategies of the University.
b. What would be the outcome for failure to achieve the objectives of the University (specifically as set in this policy)?
c. This policy defines the definitive framework and to a lesser extent, the explicit criteria by which it should be decided whether a risk for assuming a particular purchasing approach should be taken. (e.g. at times staff are guided by specific dollar amounts in their decision on whether to seek a verbal, written quote or are required to consider specific points in the acquisition of goods/services [OHS for instance]; yet where judgment shall be exercised outside of these parameters staff are guided by the principles of the policy)

3. Risk Management Context

a. The goals, objectives, strategies, scope and parameters of the purchasing and procurement activity and the Unit to which the risk management process is being applied should be established. This shall involve setting scope and boundaries to the risk management process:

i. Defining the end project, goal and activity and establishing its goals and objectives. Consider what is the item, or service to be acquired? What are the specifications for the acquisition and are they all known? Is there a possibility that an alternative means of purchasing the item or service would result in a better fit with the original project goals, activities, and objectives?
ii. What is the extent of the project (end goal, activity) in time and location? Is it best served by the selected procurement method?
iii. Would the acquisition process be better served by additional research, studies, background information? What are the objectives, and the scope for additional study?

Step 2 - Risk Identification

1. Using the matrix below, this step seeks to determine what can happen, why and how in the purchasing/procurement process.
2. Additional thought should be given to compliment the example provided in this Appendix and to meet the needs, specifications, considerations and circumstances of the purchasing Unit in question. Consider what can happen by pursuing a given approach, how and why it can happen and ultimately pursue one approach for the purchase, or procurement based on later analysis.
3. Tools or techniques at this stage can include checklists, judgments based on experience, brainstorming, systems or scenario analysis, etc.

Step 3 - Risk Analysis

1. This is the systematic use of available information to determine how often specified events may occur, and the consequences of a particular risk.
2. The purpose here is to distinguish minor versus major risks, and to provide information to assist in the assessment and treatment of risks. The likelihood of events occurring and the magnitude of their consequences are combined to produce a level of risk. Here, the best available information should be brought to bear on the decision-making process. Sources of information may include such variables as:

a. Past or current records;
b. Relevant experience or advice;
c. Research or literature, etc

3. A quantitative or qualitative analysis of the risk should be undertaken and a decision made on the level or risk associated with choosing a particular path, or option.

Step 4 - Risk Assessment

1. This involves a comparison of the level of risk determined in the Risk Analysis stage and deciding whether the risks can be accepted.

Step 5 - Risk Treatment

1. Choices about how to proceed are made at this stage and may involve choices such as:

a. Avoiding the risk altogether (choosing a less risky alternative, deferring responsibility to other parties, etc.);
b. Accepting the risk within the choices made and establishing an appropriate plan to accommodate the risks;
c. Reducing the likelihood of an occurrence;
d. Reducing the consequences to an occurrence.

1. Plans to proceed with a given decision should document how the chosen options shall be implemented. Responsibilities and accountabilities for actions should be specified here.

Step 6 - Monitoring and Review

1. Ongoing review is essential to ensure that original choices, decisions, plans, etc. remain relevant as few risks remain constant – what was suitable in the past, may no longer be the appropriate course of action today, or in the future.
2. It is therefore necessary to regularly repeat the risk management cycle (steps 1 – 6) – review is an integral part of the risk management treatment plan.

Risk Identification and Analysis: Risk Sources and Their Impact

Appendix 9: Tender Review Committee Composition

Tenders < $1,000,000.00

1. The Tender Review Committee shall comprise of the following minimum staffing levels at all times:

a. (Tender) Project Officer
b. One outside (of the Unit) staff member who does not have – and is not perceived to have – a vested interest in the outcome of the tender.

1. The Dean/Director of Faculty/Department may be co-opted as required for tenders less than $1,000,000.00. S/He is already required to view the evaluation criteria at all stages.

Tenders > $1,000,000.00 but < $10,000,000.00

1. The Dean/Director of the respective Faculty of Department;
2. A probity auditor should be assigned to any high risk tender process at this level (see Appendix 10 for definitions)

Tenders > $10,000,000.00

1. The Dean/Director of the respective Faculty of Department;
2. A probity auditor

Note:

1. The committee composition shall be approved by whoever ultimately has authority to approve expenditure.
2. Committees may co-opt additional members as deemed appropriate in the interests of safeguarding probity and fair-practice issues.

Appendix 10: Sample Contract Registry

Appendix 11: What is a Probity Auditor? – A Guide

Aims

1. The immediate task of a probity auditor is to ensure that the Request for Tender process is open and fair. That is, the tender evaluation team:

a. Acts within the limitations of prescribed policies, rules and guidelines;
b. Takes into account only relevant matters;
c. Applies rules consistently but not inflexibly;
d. Complies with express conditions set out in the tender documents; and
e. Makes decisions that are free from external influences.

1. In addition, the auditor shall confirm that the process is;

a. Not tainted by interference by any interested party;
b. Conducted in compliance with UOW Procurement, Corporate Card, Financial Delegations and other related policies.

Process

1. In order to safeguard the integrity of the project and to ensure that the processes of selecting a supplier are carried out in an open and fair way, a probity auditor shall generally be required to:

a. Review the Request for Tender and proposed tendering and assessment procedures from a probity perspective;
b. Outline a probity plan, including proposed process for handling bids, maintaining confidentiality and communicating with bidders, plus details of what documentation of contacts, decisions and meetings is required for probity to be demonstrated at the conclusion of the project;
c. Provide a training session to staff on probity principles and guidelines;
d. Respond to requests for advice to resolve any probity issues arising during the course of the project, including advising how to redress any errors or omissions;
e. Report any act or omission in the tendering process that affects, or may affect, the process’ integrity;
f. Review adherence to the probity plan and prepare a report for the chairperson of the project steering committee as to the probity of the process.

Answerability

1. Where a probity auditor is appointed by a Unit, s/he shall be accountable to the Vice Chancellor as an independent probity auditor to the project.
2. Day to day management of the auditor shall be provided by the Director of the unit seeking a tender. The auditor shall report as required to the chairperson the Tender Review Committee.

Attendance

1. The auditor should attend:

a. Any group briefing sessions with potential bidders;
b. A staff probity meeting;
c. An initial meeting of each evaluation team; and
d. Debriefing sessions with bidders if requested by the Chair of the tender review committee, or Director of the Unit seeking a Request for Tender /Expressions of Interest.

2. The auditor shall not be required to attend:

a. Subsequent evaluation team meetings;
b. Working committee sessions; and
c. Negotiations with bidders;

3. Unless he or she deems it necessary in specific circumstances, in order to protect the integrity of the project.
4. The auditor shall be given full access to necessary documentation, personnel, meetings and premises to assess the adherence to the principles of probity.

Some Selection Criteria for a Probity Auditor

1. The auditor shall:

a. Be available within the time frame above;
b. Have demonstrable experience in purchasing and/or ethical issues;
c. Be able to demonstrate knowledge and understanding of the UOW procurement and purchasing polices and procedures;
d. Have knowledge of good financial probity processes for tendering and Contracting, and Bid Analysis Evaluation;
e. Have a high level of interpersonal skills and written and oral communications skills; and
f. Be independent of all organisations who are potential bidders.

Last reviewed: 6 August, 2009

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