COOPERATIVE AGENCY PROCUREMENT

Principles1. Cooperative Procurement is where more than one entity approaches the market together (i.e. clustering) or where an entity accesses another entitys established contract or standing offer arrangement (i.e.piggybacking). It enables entities to reduce expenditure by sharing administration costs and utilising their combined economies of scale.2. Cooperative Procurement may also be referred to as collaborative procurement or multi agency access (MAA) in planned procurements, approaches to market (ATMs), multi-use lists (MULs) and standing offer notices (SONs) published on AusTender.3. Value for money is the key consideration in cooperative arrangements. Entities should assess cooperative procurement against other procurement options to determine the process that will achieve the best value for money.4. Entities should consider cooperative procurement options as part of their procurement planning. This includes: determining if another entitys existing arrangement would provide a better value for money outcome than a new approach to the market (particularly in maximising market benefits by aggregating the purchase of goods and services in common use, and delivering savings including reduced costs of tendering); considering, if an existing arrangement is found to be not suitable, whether there are opportunities to approach the market cooperatively with one or more other entities through a new procurement process; and incorporating suitable clauses in the request documentation to enable other entities to access the contract or standing offer arrangements in future.5. Specific issues that must be addressed to ensure that cooperative procurement is consistent with theCommonwealth Procurement Rules (CPRs), are: value for money is achieved; the approach to market for a cooperative arrangement must specify that it will be accessed by other entities (preferably naming the entities involved where known) ; and entities subsequently joining a cooperative arrangement must do so within the scope of the existing arrangement.6. Unless there is a legitimate reason to not allow other entities to leverage from a contract, appropriate clauses that enable multi agency access should be included in the request documentation, and notified to the market.7. Cooperative procurement complements the Australian Governments coordinated procurement arrangements (whole-of-government contracts). The key differences between cooperative and coordinated procurements are below.COOPERATIVECOORDINATED

Scoping StudyMaybeYes

Government agreedNoYes

Entity participationVoluntaryMandatory, however, opt out provisions apply where special need for alternative supply is demonstrated and approved

Lead entityGenerally initiated by entities. May be initiated by Finance at the request of several entities or government based on advice from key stakeholders.Finance or nominated lead entity

SavingsRetained by entitiesAllocated between entities and budget

SizeMay vary from a small arrangement between two entities, to a larger arrangement involving many entities.External entities may participate but must comply with CPRs.FMA Act entities

Procurement process and contract managementTailored to meet the needs of entities involved.Centrally managed by Finance or lead entity

Administrative chargeIf agreed by entitiesYes

Types of goods and servicesRelevant to the entities involved and may have a narrower scopeIn common use by all or most entities

Last updated: 10 July 2014PROCUREMENT PROCESS CONSIDERATIONS

Practice Step 1: Plan the Procurement Based on an Identified Need Step 2: Scope the Procurement Step 3: Determine the Procurement Method Step 4: Prepare to Approach the Market Step 5: Approach the Market Step 6: Evaluate Submissions and Conclude the Tender Process Step 7: Manage the Contract

Step 1: Plan the Procurement Based on an Identified Need Determine the objectives for the procurement. Detail a clear scope of requirements. Consultentity Central Procurement Area for advice were appropriate. Seek specialist advice, where appropriate. Research the market to understand capabilities and restraints. Ensureprobity arrangementsare considered where appropriate. Document relevant decisions and justifications relating to the procurement. Understand and incorporate Australian Governmenttransparency requirements.Step 2: Scope the Procurement Determine whether the goods or services to be purchased are subject to coordinated procurement arrangements that must be used. Determine if therelevant entityalready has a panel or multi-use list could be used. Consider whether there are opportunities forcooperativeprocurement. Undertake detailed research of the market if appropriate. Estimate thevalue of the procurement thismustbe done. Where procurements are unable to be valued or reliably valued, they must be treated as if they are over the relevant threshold. Unless aspecific exemption applies, entities must comply with theDivision 2 Additional rules for procurements at or above the relevant procurement threshold.Step 3: Determine the Procurement MethodOpen Tender Involves a one-stage (ie Request for Tender), open approach to the market. Is the default for all procurements valued above the relevant thresholds ($80,000 for non-corporate Commonwealth entities) Must be advertised on AusTender.Prequalified Tender Involves a procurement from: a multi-use list; a two stage process (even if the Expression of Interest was sought as an open approach to the market); or a list of all potential suppliers with a specific licence or ability to meet a legal requirement that is essential to the procurement.Limited Tender Involves procurement based on quotes being sought directly from one or more suppliers. Includes what was previously referred to as sole source and select or restricted source procurements. Can be undertaken for any procurement under the relevant thresholds where it represents value for money. Canonlybe used for procurements above the relevant thresholds where it is specifically allowed by the CPRs. The value and reasons for the direct sourcemustbe documented.Step 4: Prepare to Approach the Market Put in place appropriate governance arrangements. Prepare tender evaluation plan and request documentation, that appropriately incorporateProcurement Connected Policies. Seek delegate clearance / approval to approach the market.Step 5: Approach the Market Notify the market for open tenders this involves (as a minimum), publishing the opportunity onAusTender[]. For open and prequalified tenders, ensure the minimum time requirements of the CPRs are met. Include essential information (eg. closing time, lodgement mechanism, evaluation criteria and methodology, process rules, contact officer and the possibility of an industry briefing, site visit, and/or mid-term review) in the request documentation to enable suppliers to develop and lodge competitive and compliant submissions. Include a draft contract and statement of compliance in the request documentation. Use appropriate limitation of liability and standard contract clauses where available. Do not use unnecessary mandatory language (i.e. must, will), jargon and acronyms from the request documentation. Ensure clarifications or additional materials are made available to all potential suppliers in a timely and equitable manner. Do not materially change the evaluation plan after the opening of submissions.Step 6: Evaluate Submissions and Conclude the Tender Process Deal with unintentional errors in tenders in accordance with theCPRs. Deal with late tenders in accordance with theCPRs. Ensure the procurement process is/was fair, equitable and will stand up to scrutiny, including that the evaluation is conducted in accordance with the Tender Evaluation Plan. Ensure the process is consistent with the CPRs, including in relation tohandling complaints. Undertake afinancial viability assessment(s)of the preferred supplier(s) if necessary. Provide sufficient documentation and information to the delegate to enable them to make an informed decision. If required by your entity's Accountable Authority Instructions, obtain delegate approvalin accordance with s18of the PGPA Rulesand two signed copies of the contract (one for the entity, the other for the service provider). Advise unsuccessful tenderersand where requested. Report contracts valued at $10,000 (GST inclusive) and over onAusTender[].Step 7: Manage the Contract Develop a contract management plan to assist the entity to understand and implement obligations under the contract. Assess contract extension optionson a value for money basis in accordance with the terms of the contract. Ensure compliance with theProcurement On-Time Payment Policy for Small Business. Appropriately consider and, as appropriate, issue contract variations. Consider any obligations that survive the contract end-date or termination of the contract such as confidentiality.Last updated: 29 May 2015