Skip to main content
 

Procurement Policy

Version 5.0

Purpose and Intent

City of Casey (Council) procures goods, services and works each year to deliver services to the community and develop and maintain infrastructure. This Policy sets out the key principles and processes that apply to all procurements of goods, services and works made by Council, and is issued under Part 5, Division 2 of the Local Government Act 1989 (the Act). The Procurement Policy Compliance Manual sets out the processes Council Staff must follow in order to comply with this Policy.

This Policy aims to achieve value for money, promote fair and open competition and advance socioeconomic outcomes across all Council procurement activities.

Scope

This Policy applies to all Council Staff. Council Staff must comply with this Policy before entering into a contract for the purchase of goods and services or the carrying out of works.

Definitions

Key term

Definition

Council

means Casey City Council, being a body corporate constituted as a municipal Council under the Local Government Act 1989.

Councillors

means the individuals holding the office of a member of Casey City Council.

Act, the

Local Government Act 1989.

Best and Final Offer (BAFO)

A term that indicates to the respondent that no further negotiation on price or terms of contract is possible, so they should submit final pricing and deliverables. Where the Council accepts the offer, it becomes legally binding on both parties. 

Commercial in Confidence

Information that, if released, may prejudice the business dealings of a party (e.g. prices, discounts, methodologies).

Council Staff

Any employee of Council, whether permanent, temporary, full-time, part-time or casual, and any volunteer, student, contractor, consultant or anyone who works in any other capacity for Council.

Emergency

A sudden or unexpected occurrence requiring immediate action, such as:

  • the occurrence of a natural disaster such as flooding, bushfire or epidemic which may require the immediate procurement of goods/services/works to provide relief;
  • the occurrence of an event such as flooding or fire at a council property which may require the immediate procurement of goods, services or works to ensure business continuity;
  • the unforeseen cessation of trading of a core service provider due to bankruptcy and a need to appoint a replacement service provider on the grounds of public safety; or
  • any other situation which is liable to constitute a risk to life or property.

Evaluation Criteria

The criteria that are used to evaluate the compliance and/or relative ranking of proposals. Evaluation criteria must be clearly stated in the request for tender documentation.

Goods

Every type of right, interest or thing which is legally capable of being owned. This includes, but is not restricted to, physical goods and real property as well as intangibles such as intellectual property, contract options and goodwill.

Indigenous Supplier

A business with at least 50% Indigenous ownership certified by Supply Nation.

Probity

Evidence of ethical behaviour in a particular process. For Council, this involves proactively demonstrating that any procurement process is robust and the outcome beyond reproach. Probity requires behaving in such a way that there can be no perception of bias, influence or lack of integrity.

Probity Adviser

A Probity Adviser provides the procurement team, the project manager and Delegates, as required, with independent advice and guidance on probity issues throughout a procurement activity and may also assist in anticipating issues, proactively managing problems and advising on potential courses of action.

Probity Auditor

A Probity Auditor provides independent scrutiny of a procurement process and expresses an objective opinion as to whether the tender requirements, set criteria, standards or principles and Probity Plan or principles have been adhered to. A Probity Auditor should not provide advice or offer any solution to any probity issues that arise during the procurement process.

Procurement

Procurement is the whole process of acquisition of external goods, services and works. It can include planning, design, standards determination, specification writing, preparation of quotation and tender documentation, selection of suppliers, financing, contract administration, disposals, and other related functions. It also includes the organisational and governance frameworks that underpin the procurement function.

Purchase Order

A type of contract used to authorise the purchase of goods/services by Council.

Small to Medium Enterprise

A business employing less than 200 people.

Social Enterprise

A business certified by Social Traders that trades to intentionally tackle social problems, improve communities, provide people access to employment and training, or help the environment.

Value for Money

The best mix of cost, quality (i.e. ability to meet user requirements) and sustainability (environmental, social and economic). The lowest price will not necessarily represent the value for money.

Policy

Procurement Principles

Across all its procurement activities, Council commits to:

  • Obtaining value for money;
  • Promoting open and fair competition;
  • Advancing economic, environmental and social objectives; and
  • Acting with integrity, probity and accountability.

Obtaining Value for Money

Council recognises that value for money means more than price, and therefore will consider the relevant financial and non-financial costs and benefits of a contract, including but not limited to:

  • Quality;
  • Fitness for purpose;
  • The potential supplier’s relevant experience and past performance;
  • Innovation and the adaptability over the life of the potential contract;
  • Economic, environmental and social sustainability; and
  • Whole of life costs.

Advancing Economic, Environmental and Social Objectives

Council will seek to advance economic, environmental and social objectives to benefit the community directly, by purchasing from for-social benefit entities, and indirectly, by including social clauses in its contracts with private sector providers, and screening supply chains for ethical considerations.

At its discretion, Council may apply a preference of up to 10% in the evaluation of proposals that:

  • Are from Social Enterprises or include Social Enterprises in their supply chain; and/or
  • Are from Indigenous Suppliers or include Indigenous Suppliers in their supply chain.

Council will also give regard to the following elements when making procurement decisions:

  1. Economic Sustainability - Council supports local businesses and economic diversity by encouraging purchases that:
  • Are made from local suppliers and Small to Medium Enterprises;
  • Generate local employment; and
  • Consider the cost vs life cycle/durability of purchases.
  1. Environmental Sustainability - Council seeks to make procurement decisions that reduce natural resource and biodiversity depletion by promoting:
  • Green purchasing (i.e. making purchases that use materials made of recycled content, are energy efficient and greenhouse friendly, are from a Social Enterprise or second hand/refurbished);
  • Reduced greenhouse gas emissions;
  • Reduced waste to landfill and the increase of the amount of waste recycled;
  • Reduced water consumption and the improvement of water management;
  • Improved environmental management in Council’s supply chain;
  • The selection of products/services that have minimal effect on the depletion of natural resources and biodiversity; and
  • Improved adaptability to climate change.
  1. Social Sustainability - Council seeks to address disadvantage by encouraging diversity, acceptance, fairness, compassion, inclusiveness and access for people of all abilities in its purchasing by seeking to:
  • Create new jobs and opportunities for people who may be struggling to find work;
  • Target cohorts that may be experiencing economic exclusion;
  • Reinvigorate depressed or marginalised communities; and
  • Improve equity of access to opportunities.

Adopting a Collaborative Approach

Council actively pursues opportunities to collaborate and work across municipal boundaries to improve procurement outcomes, maximise savings and benefits, share better practices and achieve enhanced value for money outcomes for the community.

Council will consider whether categories of expenditure, or significant procurements which qualify for public tender, contain opportunities for collaboration, either amongst Council departments or with other organisations. It will pursue a collaborative approach to procurement provided that a value for money outcome can be achieved.

Council may utilise a procurement agent such as the Municipal Association of Victoria (MAV), Procurement Australia (PA) or another council to conduct a tender (including itself acting as lead council in a collaborative procurements).

Council may consider a range of collaborative procurement approaches based on the value, complexity and risk profile of a project, including joint tendering or entering into a partnership with other Councils to provide shared services.

Council will also seek opportunities to collaborate internally across Departments and aggregate spending to conduct a public tender where there is likely to be significant spend across Council with the same supplier, or for the same services.

Council will include information in relation to any opportunities for collaboration with other Councils or public bodies, which were considered in any report to the Council that recommends entering into a procurement agreement.

Procurement Best Practice

Council procurement is supported by a strong governance framework and best practice procurement processes which enable procurement decisions that:

  • Use public resources efficiently, economically and ethically;
  • Facilitate accountable and transparent decision making;
  • Encourage competition and are non-discriminatory;
  • Encourage appropriate engagement with risk;
  • Are proportional to the scale and scope of a requirement; and
  • Allow for continuous improvement and innovation.
     

Responsible Financial Management

Council Staff must use Council funds efficiently and effectively, seeking to contain the costs of a procurement process without compromising the principles of this Policy.

Prior to establishing a procurement method, Council Staff must estimate the expected value of the total proposed purchase, including any contract options, extensions and renewals (inclusive of GST). Council Staff must also consider the expected cumulative spend on the requirement over a period of time. Council routinely monitors cumulative spend with suppliers. If this spend accumulates to $50,000 (including GST) within a 12-month period, and there is an ongoing requirement for the relevant goods, services or works, Council will evaluate the appropriateness of the procurement method.

Council Staff must establish the availability of funds within an approved budget and seek delegate approval. Delegated officers are authorised to approve expenditure relating to contracts and quotations within their financial delegation. Council Staff must treat allocated budgets as confidential.

Measures that intentionally seek to avoid the requirements of this Policy (for example splitting a procurement to remain below the relevant thresholds) are considered breaches.

Procurement Planning

Council Staff must engage with the Procurement team from pre-procurement through to contract management and disposal to:

  • Identify and assess viable solutions to achieve the desired outcomes of the procurement, including opportunities for innovation and collaboration;
  • Clearly define the procurement objectives to ensure business needs are met; and
  • Accurately estimate the value of the procurement and confirm funding arrangements.

Developing Specifications

Prior to commencing a procurement process, Council Staff must clearly specify what is to be purchased. In developing specifications, Council will seek to:

  • Ensure impartiality and objectivity;
  • Set out the specifications in terms of performance and functional requirements;
  • Encourage the use of standard products;
  • Ensure that economic, environmental and social objectives are facilitated; and
  • Minimise unnecessary and/or stringent requirements.

A Statement of Work must be prepared for any procurements valued above $15,000 (i.e. including Requests for Quotation) or which are deemed to be ‘moderate’ or ‘high’ risk, while a formal specification must be developed for all procurements valued above $150,000 (or $200,000 for works).

Establishing Evaluation Criteria

Evaluation criteria must be established and documented in a Procurement Plan in consultation with the Procurement team, prior to approaching the market and must be included in the request documentation. Mandatory evaluation criteria will reflect the minimum requirements for submissions to be considered for evaluation.

Assessing Procurement Risk

Council Staff must assess and manage the risks associated with each procurement and with the goods, services and/or works being sought. In consultation with the Procurement team, Council Staff must establish controls to mitigate the identified risks, monitor these during the procurement process and embed controls within the contract.

Depending on the risk assessment, the base procurement requirements may be enhanced to facilitate the necessary controls within Council’s risk appetite.

If identified in the initial risk assessment, suppliers will be required to register in the Rapid Global system and meet the appropriate certification level as detailed in the request documentation. Prospective suppliers will be required to provide evidence of the certification in their tender submission. Failure to do so will deem the submission to be non-conforming. During the contract term, suppliers must maintain the currency of their certification in Rapid Global.

The Procurement Process

The procurement process is dependent on the value/risk of the purchase as shown in the table below:

Table 1: Mandatory Procurement Thresholds and Requirements

Procurement Threshold (incl. GST)

Mandatory Procurement Method

Low Risk
<$1,000

Raise a Purchase Order

Low Risk

$1,000 - $15,000

Request for Quotation: obtain 1 written quotation

Moderate Risk

$15,001 - $149,999 (or $199,999 for works)

Request for Quotation: seek 3 and obtain 2 written quotations

High Risk

$150,000 (or $200,000 for works) and above

Public Tender: facilitated and approved by the Procurement team

 

Any exceptions from these requirements must be fully justified and must be authorised by the Manager, Property and Procurement or the Team Leader, Procurement.

Use of Existing Contracts or Panels

Council may utilise collaborative purchasing arrangements with other councils, the Municipal Association of Victoria (MAV), Procurement Australia (PA), approved Whole of Government contracts, Victorian Government, or other bodies. Council may also elect to invite selected suppliers to tender through the Victorian Department of Treasury and Finance’s Construction Supplier Register (CSR). Other arrangements may be authorised by the Council, CEO or the Minister for Local Government as required by extraordinary circumstances or emergencies.

Where there is an existing Panel Contract, Council Staff must approach the relevant Panel instead of procuring the same goods or services outside the Panel, unless authorised by the Manager, Property and Procurement or Team Leader, Procurement. For procurements where there is an existing Panel Contract, Council Staff must seek and obtain the number of quotes as required by this Policy and subsequently comply with the mechanism established in the Panel Contract for engagement of suppliers.

Public Tender

Council gives public notice via its website at www.casey.vic.gov.au to invite tenders for all procurements equal to or greater than $150,000 (or equal to or greater than $200,000 for works) via a Request for Tender (RFT) or a Request for Expressions of Interest (REOI), whereby shortlisted tenderers may be invited to participate in a subsequent RFT process.

Tender briefings may be conducted for some projects to assist prospective tenderers to prepare their tender. Attendance at some tender briefings may be mandatory for some projects, and this will be specified in the relevant RFT document.

Council provides all potential suppliers the same information and the same conditions for participation. Any additional information is communicated to all potential suppliers via an Addendum through the online portal.

All tenders must be received in the specified format by the date and time specified in the request documentation, which is Australian Eastern Standard Time. Council will not accept late tenders under any circumstances.

Exemptions from Public Tender

Council may purchase goods or services without first conducting a public tender or expression of interest where:

  • The contract has to be entered into because of an emergency, its scope is for immediate rectification of or response to the emergency, and any subsequent related requirements will be sourced in accordance with this Policy;
  • The contract is entered into with a council (or other third party) acting as the agent for a group of councils (e.g. in collaborative procurement arrangements);
  • In exceptional circumstances, the Minister for Local Government has approved an arrangement to allow Council to enter into a contract without first conducting a public tender;
  • The contract is for legal services, which is the only type of contract exempted from public tender by the Act;
  • Council enters into a novated contract for the purchase of goods or services, and the initial contract was established in accordance with the Act.

Where there is only a single supplier capable of providing the goods or services required, Council must still conduct a Public Tender or seek a Ministerial Approval to enter into a contract without first conducting a competitive process.

Evaluation of Proposals

Council will undertake an initial compliance check of proposals received against mandatory criteria before these can progress through to evaluation. Evaluations are conducted in a manner that is robust, systematic and unbiased to achieve best value outcomes in procurement.

RFQ proposals will be evaluated in accordance with the Procurement Policy Compliance Manual.

Tender evaluations will be conducted in accordance with the methodology set out in the Procurement Policy Compliance Manual noting:

  • Late tenders will not be accepted under any circumstances; and
  • A tender evaluation panel will be established to evaluate each tender submission against the tender’s evaluation criteria and all parties are required to declare any actual or potential conflicts of interest.

Council will consider tenderers’ technical, financial and commercial abilities and evaluate proposals based on the evaluation criteria specified in the request documentation.

Council Staff must not approach or discuss offers with tenderers during the evaluation period, unless it is to seek clarification of any ambiguous or unclear parts of a proposal.

A Probity Advisor may be appointed to any Tender Evaluation Panel (TEP) and a Probity Auditor may be appointed to audit the evaluation process (mandatory for procurements above $10 million).

Councillors are precluded from participating in evaluation processes.

Negotiations

Negotiations may be conducted to settle terms and conditions and reach an optimal commercial arrangement. Council may conduct a shortlisting process and shortlisted respondents may be invited to negotiate further, which may include submitting a best and final offer (BAFO) in relation to all or certain aspects of their proposal.

Council will maintain the probity of the procurement process and ensures that negotiations do not disadvantage other respondents or impact negatively on the competitive process.

Contract Award

Council documents the outcome of the evaluation and negotiation process for approval by the relevant Delegate before the contract is awarded to the preferred respondent.

Where required, the successful respondent must provide to Council copies of any insurances and bank guarantees or securities before the services or works can commence. Council will only accept bank guarantees and upon exception and approval, retention of funds as security deposits.

Council requires a signed contract to be in place to enable it to issue any purchase orders under that contract. Delivery of services cannot commence until a signed contract is in place and a purchase order is issued.

After the execution of the contract, unsuccessful respondents may request a verbal debrief providing feedback on their tender. Council will not provide details of other proposals received or other respondents.           

Contract Extensions and Variations

All contract extensions and any contract variations submitted by suppliers to Council for consideration are subject to a stringent approval process, including financial approval by the relevant Delegate or Council, and consideration of factors such as risk, supplier performance, demand requirements, market analysis and collaborative procurement opportunities available.

Contract Management

Council has processes in place to manage contracts, including contractor performance and contract variations and extensions. For significant procurements, a Contract Management Plan is established to ensure that Council receives the goods, services or works provided to the required standards of quality and quantity as intended by the contract. This includes by: 

  • Establishing a system for recording conversations and monitoring and achieving the responsibilities and obligations of both parties under the contract;
  • Monitoring and ensuring the currency of relevant insurances and compliance requirements;
  • Providing a means for the early recognition of issues and performance problems and the identification of solutions; and
  • Adhering to Council’s Risk Management Framework and relevant occupational health and safety compliance procedures.

Council Staff must proactively manage contracts to ensure Council receives value for money in the delivery of the contracted goods, services or works. Ongoing consideration should be given to due diligence, and contract risks should regularly be reviewed, evaluated and managed. Council Staff should monitor relationship management and supplier performance throughout the life of the contract.

Integrity, Probity and Accountability

In all procurements Councillors and Council Staff must:

  • Comply with this Policy, Procurement Policy Compliance Manual and associated procedures;
  • Act ethically and with the highest integrity;
  • Declare any actual or perceived conflicts of interest;
  • Treat all prospective and current suppliers with equality and fairness, providing all suppliers with equal access to information;
  • Neither seek nor receive personal gain or benefit and comply with the Code of Conduct for Employees and Gifts, Benefits and Hospitality Policy for Council Officers;
  • Protect the integrity and confidentiality of the procurement process, including budget information, details of tenders received (including pricing), details of the TEP and evaluation process and all Commercial in Confidence information; and
  • Be able to account for all decisions via appropriate record-keeping and information management.

Council Staff may refer to the Protected Disclosures Policy for more information on disclosing information which enables the prevention of fraud and corruption.

Council will not procure goods, services or works from businesses owned by Council Staff or their immediate families. Council will not accept tenders or quotations from former Council Staff, or which nominate former Council Staff as specified personnel, until 12 months after the former Council Staff member has ceased their employment with Council.

Probity

Council must appoint an independent Probity Adviser for all procurements exceeding $10 million or as requested by the Chief Executive Officer or as identified in the risk assessment. An independent Probity Auditor may be engaged at the conclusion of the procurement process if required.

Maintaining the probity of the procurement process is an obligation of each Council Staff member involved in the procurement and use of the services of a Probity Adviser and/or Probity Auditor does not absolve, remove or replace the responsibility of Council Staff to ensure the conduct of the procurement is consistent with the principles of probity.

Accountability

Council recognises it is accountable for delivering timely outcomes using public resources and ensures its decisions are transparent and defensible. For all procurements valued at $10 million or more, or where the risk profile or legal/commercial complexities associated with the procurement necessitate legal review, Council Staff must liaise with the Procurement team to obtain legal review of tender documents and contracts.

Council Staff must maintain accurate, complete and concise information on each procurement, including documenting the business need for the procurement, the process that was followed, how value for money was considered and achieved, relevant approvals and relevant decisions and their basis. Council Staff must retain evidence of agreements with suppliers in the form of a written contract or purchase order and retain copies of all invoices and receipts in accordance with Council’s Information Management Policy.

Quality Assurance

Council seeks to manage risk through effective oversight, accountability and appropriate internal controls such as regular reviews and audits.

As part of its risk mitigation activities, Council will conduct periodic reviews of its procurement processes, contracts and associated procedures to monitor its compliance with the Act and this Policy and alignment with procurement best practice. Council will review its procurement practices in line with its Procurement Quality Assurance Framework. This will include monitoring overall spend, cumulative expenditure against individual purchase orders, variations and amendments.

Transparency

With due regard to privacy laws and information provided on a commercial in confidence basis, Council may make available details of procurement processes on its website at www.casey.vic.gov.au, including reporting related to its quality assurance activities.

Payments to Suppliers

Council will make payments to suppliers within 30 days of receipt of a correctly rendered invoice, or in accordance with the relevant Contract’s terms and conditions.

A correctly rendered invoice must include enough information to clearly determine:

  • that the document is intended to be a tax invoice;
  • the supplier's identity;
  • the supplier's Australian business number (ABN);
  • the buyer’s identity (i.e. City of Casey) and/or ABN;
  • a City of Casey-issued Purchase Order number;
  • the date the invoice was issued;
  • a brief description the goods or services supplied (e.g. materials and labour) and the price; and
  • the GST amount payable, if any.

Suppliers must include a Council-issued purchase order number on their invoices. Invoices without a valid Council-issued Purchase Order number will be returned to the supplier for correction, unless they are considered to be from one of the following exempted expenditure categories: 

  • Payments made in line with statutory/legislative requirements;
  • Grants;
  • Engagement of employees;
  • Superannuation;
  • WorkCover;
  • Payroll deductions;
  • Investments/term deposits;
  • Sundry refunds;
  • Fire Services Levies;
  • Mayoral and Councillor allowances and expenses;
  • Property purchases;
  • Warranty renewals; and
  • Leases and licensing agreements.

Key Legislative Requirements

The key legislative requirements for this Policy include:

  • Local Government Act 1989
  • Modern Slavery Act 2018
  • Working with Children Act 2005

Council will comply fully with the Competition and Consumer Act 2010 and other fair-trading legislation applicable to its operations. Council is committed to ensuring the protection and promotion of competition and to averting:

  • Restrictive trade practices, including price fixing;
  • Market sharing, anti-competitive agreements, exclusive dealing and misuse of market power;
  • Inaccurate communication or promotion (including misleading or deceptive conduct, false claims and unsubstantiated predictions); and
  • Unconscionable and unfair business practices.

Related Policies and Procedures

Council Staff must comply with the Procurement Policy Compliance Manual and all other Council policies, including but not limited to:

  • Gifts, Benefits and Other Hospitality Policy for Council Officers
  • Code of Conduct for Employees
  • Councillor Code of Conduct
  • Risk Management Policy
  • Information Management Policy
  • Sustainability Plan
  • Protected Disclosures Policy

Responsibilities

Who

What

Council Staff

Responsible for compliance with this policy and the Procurement Policy Compliance Manual.

Procurement

To review and implement this policy.

Manager Property & Procurement, Team Leader Procurement

Will be responsible for compliance with, and enforcement of this policy and may be asked to clarify the interpretation of this policy if an aspect of the policy is unclear or in dispute.

Breaches

Where the Procurement Policy or Procurement Policy Compliance Manual has been breached, appropriate corrective action will be taken immediately in accordance with the Code of Conduct for Employees. Criminal and civil penalties may be imposed if fraud, corruption, bribery or Australian Consumer Laws are breached.

Relevant Forms

Nil

Document History

Date approved

Change Type

Version

Next Review Date

16 June 2020

Major Changes

5.0

30 June 2024

Purchasing Terms and Conditions

Have you found the information you were looking for?