Does the government have to follow any rules to select a supplier?
All Australian Government organisations have procurement rules they must follow. These are contained in the Public Governance Performance and Accountability Act 2013 (the PGPA Act), the PGPA Rule 2014 and the Commonwealth Procurement Rules. The PGPA Act and PGPA Rule provide the general legal framework that Government officials must follow when undertaking a procurement. The Commonwealth Procurement Rules provide detailed instructions to officials undertaking procurements.
What is in the Commonwealth Procurement Rules?
The Commonwealth Procurement Rules (The Rules) have two divisions. Division 1 contains the rules that apply to all procurements.
The core focus of Division 1 is achieving value for money. The Rules require Government organisations to conduct their procurements in a way that:
- Encourages competition
- Achieves efficient, effective, economical and ethical procurement
- Provides accountability and transparency
- Ensures open and effective competition
- Manages procurement risk
- Follows procurement rules
Division 2 contains rules that apply to procurements valued above $80,000 (with some exceptions).
Procurements valued at $80,000 or more will be conducted by open tender unless there are reasons called Exemptions to conduct a limited tender or a prequalified tender. The Rules contain descriptions of these Exemptions.
The Commonwealth Procurement Rules can be downloaded from the Department of Finance Website.
Are there any other rules that have to be followed?
In addition to the legislation and the government-wide policies, some Government organisation have their own procurement policies but these will not displace the Commonwealth Procurement Rules.
What is value for money
Value for money means considering all the relevant financial and non-financial costs and benefits of each response including, but not limited to:
- the quality of the goods and services;
- fitness for purpose of the proposal;
- the potential supplier’s relevant experience and performance history;
- flexibility of the proposal (including innovation and adaptability over the lifecycle of the procurement);
- environmental sustainability of the proposed goods and services (such as energy efficiency and environmental impact); and
- whole-of-life costs.
Do I have to pay anything to get selected for a Government contract?
Australian Government officials are required to buy goods and services in an ethical, accountable and transparent manner. They must not seek or accept gifts or other favours from potential suppliers, and should follow procedures and protocols designed to ensure a fair and consistent approach to procurement activities.
Likewise, potential suppliers should not approach agency officials in a way that might be interpreted as an attempt to improperly influence agency purchasing processes. This will usually mean that typical private sector marketing practices such as providing entertainment or giving gifts to potential Government clients is not allowed and is discouraged.
Officials and suppliers should aim to conduct business at all times on the basis of mutual trust and respect.
How will my response to the ATM be assessed?
The information below will help you understand how your response to an ATM is assessed by the Government organisation. Generally speaking, your response is evaluated against the advertised evaluation criteria. The response that offers the best combination of meeting the evaluation criteria and price considerations will be identified as the best value for money, and selected as the preferred supplier.
Will I know the criteria to be used to evaluate my tender?
Yes. You must be advised of the criteria that will be used to evaluate your response. This information will be in the approach to market (ATM) documentation.
What are mandatory (or essential) evaluation criteria and why are these important?
Mandatory (or essential) criteria describe the minimum requirements that must be met for your response to be considered. If there are any mandatory (or essential) evaluation criteria, these will be clearly identified as such in the ATM documents.
If your goods or services do not meet these criteria the Government organisation cannot choose your goods or services as this would not represent value for money.
Pay careful attention to mandatory (or essential) criteria. If your tender response does not clearly show how your goods or services meet the mandatory criteria, your response will be set aside and excludedfrom further evaluation. This is not discretionary - the Government procurement officer must set aside any responses that do not comply with mandatory criteria. It is always disappointing for both parties if it becomes necessary to set a tender response aside.
What are desirable criteria and why are these important?
Desirable criteria indicate features or characteristics of the goods or services that are not essential, but which may add value for the buyer.
When responding to desirable criteria, you have the opportunity to show how your goods or services are different from those offered by your competitors, and to demonstrate any key advantages or unique features that your goods or services provide. Your response should remain consistent with the requirements otherwise you risk extending beyond the scope of the request.
In the context of value for money, if two businesses have offered goods or services at the same price and both have met the mandatory criteria, then the business that best meets the desirable criteria would usually be assessed as offering better value for money.
Who will assess my response?
For simple, low value requirements, the decision will usually be made by a single officer who understands both the client’s needs and the procurement rules that apply to that purchase.
For more complex or higher value requirements, the selection will usually be made by a tender evaluation panel made up of two or more officers from the buying organisation. There will usually be a representative of the area that wants the goods or services, and a procurement professional.
Does the government have to choose the cheapest response?
It is very important to understand that Government organisations are required to select their suppliers on the basis of value for money rather than just the cheapest. There is no obligation to choose the cheapest response.
Value for money includes the price, as well as other factors such as total costs of ownership (eg repairs and maintenance, end of life disposal costs), quality and suitability of the goods and services for the purpose, track record and experience of the supplier, innovation and flexibility of the proposal and environmental sustainability of the goods and services, for example.
Who should I use for referees?
Reference checks are usually made when your business looks like becoming the preferred supplier. Reference checks can be quite comprehensive. You should select referees for whom you’ve worked so they can verify the claims you’ve made in your tender. You should always ask your proposed referees if they agree to provide a reference for you before you include them in your response. It is not very helpful to your chances if the referee is not expecting the contact, or worse still, does not wish to give a reference for you. It is important to note that in checking your business history the government organisation may talk to any business you have supplied, whether you have offered them as a referee or not. This is part of the due diligence process the government must follow.
Will they ask me questions about my response?
You should not assume there will be a further opportunity for you to explain anything about your response. Your response should be complete, accurate and detailed enough to evaluate what you are offering and why your business should be selected.
In some circumstances you may be contacted by the person evaluating your response to clarify something that is not clear in your response. This will almost always be done in writing (including by email) to ensure that there is a proper record of the questions and your replies.
What if I miss the deadline for submitting the response?
Government organisations cannot accept your offer if it is submitted after the deadline, unless the delay is due solely to mishandling by the Government organisation. It is therefore vital that you submit by the deadline. If it is late for any other reason, by even a few minutes, it will not be accepted. AusTender is an automated process and it will not allow late submissions.
What if I forget to include something in my response?
The usual position is that you will not be permitted to add anything to your response once the closing time has passed. This is to comply with the policy on not accepting late tenders.
If you realise you have forgotten to include something before the closing time has passed, you can simply provide the missing information and it will be included.
If it is a small piece of administrative detail, for example, you forgot to sign something, you may be permitted to rectify that mistake, if this does not amount to accepting new information after the closing time. However, you cannot rely on this possibility: always thoroughly check your response before you submit it and make sure that you have supplied everything that is required before the closing time.
How can I ask questions about an ATM process once it is underway? What can they tell me?
Before the closing time
If you have questions about the ATM before it closes, you can ask questions and have them answered. Typically , you will need to submit your questions in writing (usually email) to a nominated contact officer. You will be provided with an answer, again usually in writing. Government buyers are usually very sensitive to the time pressure associated with questions during an ATM process, and will do their best to respond promptly. Many government organisations will include a closing time for questions in their ATM information. Make a note of these deadlines and read the material early so that questions can be addressed quickly.
When asking questions, please be aware that your question and the answer will be provided to every potential supplier. You will not be identified in that process. For smaller, less complex ATM processes, this is usually achieved by the contact officer sending out a collated list of questions and answers by email to all potential suppliers that are participating in the procurement process.
For ATM processes being conducted through AusTender, the contact officer will collate the questions and answers and issue these as an Addendum to the ATM on AusTender. It is your responsibility to check periodically on AusTender to see if any addenda have been issued in connection with an ATM. If you don’t check this from time to time, you may miss out on important information that is useful in preparing your response. It is possible to register with AusTender and receive automatic notification of developments with an ATM. See the AusTender website for details.
After the closing time
Once the closing time has passed, procurement officials are very limited in what they can tell you as a potential supplier. This is mainly for probity, fairness and transparency reasons.
Please do not contact procurement officials after closing time unless it is very urgent - for example if you wish to withdraw your response. There is no point contacting a procurement official with questions about when the process will be completed, whether your response was successful or not, or whether you should accept other work in preference to this opportunity because they cannot comment on those matters.
Is my response confidential? Are my design ideas at risk?
The Government takes its responsibilities of confidentiality and probity very seriously. All Government organisations treat tender responses with the utmost confidentiality.
You can be assured that your response will not be discussed with or provided to anyone who does not have a direct and work related need to know about it. This is usually only the client and any members of a tender evaluation panel, the approval delegate who signs off on the contract, plus any administrative staff that may be involved in tasks such as downloading or printing your response.
Your design ideas are not at risk. Your ideas always remain your intellectual property, and if you are unsuccessful in winning the contract, the Government will not obtain any rights over your intellectual property.
If you are successful in winning the contract, you need to be aware of the terms of that contract, which may grant various types of licence to the Government according to the terms that were contained in the contract sent out with the approach to market documents. If intellectual property rights are of concern for your business, you may want to obtain legal advice before entering into any contracts, and ideally before investing the time and effort associated with putting in a response. The Australian Government intellectual property rules including model contract clauses, are available on the Department of Communications and the Arts web site.
Why does it take so long for the Government to make a decision on an ATM?
Government organisations are aware of the need to make prompt procurement decisions, to complete tender evaluations and award the contract as quickly as possible. However, this may be slower than the private sector experience.
This may be due to the need to ensure high standards of probity, fairness and accountability in decision making. There are checks and balances in the procurement process to ensure that this money is spent wisely, that best value is obtained and that the way Government contracts are awarded is fair, transparent and justifiable.