Determine the procurement method

Understand the steps taken to determine which procurement method best suits the need.

What is determining the procurement method?

Determining the procurement method involves the steps taken to determine which procurement method best suits the need.

How to determine the procurement method differs for construction and goods and services.

An open tender involves publishing an open invitation to market and inviting submissions. This includes multi-stage procurements, provided the first stage is an open invitation.

A selective tender involves sourcing suppliers through a register of pre-qualified suppliers or a panel arrangement.

Limited tender involves an Agency approaching one or more potential suppliers to make submissions.

Construction - Determine the procurement method

Step 1: Confirm the size of procurement

Review the results from the market analysis and confirm what is being bought:

  • can be supplied in an efficient and timely manner
  • is structured to take into account the cost of tendering for all parties and seeks to reduce unnecessary costs for all parties

Step 2: Is a state purchase contract available?

Refer to state purchase contracts to see if a contract is available for the supply of the works or construction services needed.

For Goods and services mandated Agencies, mandatory state purchase contracts must be used even when undertaking construction procurement.

Note that this applies to the Professional Advisory Services and Legal Services state purchase contracts.

Some Agencies have chosen to use some or all state purchase contracts. Consult Agency procurement team to see if this applies.

Is there a state purchase contract that can meet the need?

  • If yes, go to Step 4
  • If no, go to Step 3

Step 3: Is an Agency specific panel available?

Agencies may establish panels of suppliers. If a panel of suppliers is available, use of the panel may be mandatory or optional.

Consult Agency procurement team to see if panels of suppliers are available, and whether use of the panel is mandatory.

Is there an Agency specific panel contract that can meet the need?

  • If yes, go to Step 4
  • If no, go to Step 5

Step 4: Rules of use for state purchase contract or Agency-specific panel

For a state purchase contract or Agency-specific panel, read the rules of use for that state purchase contract or panel.

The rules of use describe the procurement method to follow and the number participants that must be invited to participate.

Go to step 12.

Step 5: Determine the estimated value of the procurement

Determine the estimated value of the procurement.

Step 6: Find out if the additional rules under International Agreements apply

The list of Agencies that must follow the additional rules under International Agreements is at Instruction 2.1 Attachment 1.

The additional rules that apply under International Agreements are listed at Instruction 2.1 Attachment 2.

Step 7: Procurement methods available

Read Competition and contestability to see which procurement methods may be used.

  • If open tender will be used, go to Step 7
  • If Selective Tender will be used, go to Step 8
  • If Limited Tender, citing one of the Special Circumstances, go to step 9
  • If Limited Tender (estimated value higher than 50K less than 200K / 500K), go to step 10
  • If Limited Tender (estimated value less than 50K), go to step 11

Step 8: Open tender - single or multi-stage

For an open tender, determine if a single-stage or multi stage tender will be used.

Construction Guidance 3.2 describes when single stage or multi-stage tenders may be used.

Go to Step 13.

Step 9: Selective tender – select the Register

For a Selective Tender, determine which register of pre-qualified suppliers will be used.

Construction pre-qualification registers lists registers available for use in construction.

Note: membership requirements may apply to Registers. Registers may be Agency specific, that is available only to staff within an Agency.

Construction Direction 3.2 sets out the minimum number of tender participants that must be invited to participate.

Construction Guidance 3.2 provides guidance on the tender field size.

Go to Step 13.

Step 10: Limited Tender citing one of the Special Circumstances

For a Limited Tender, citing one of the Special Circumstances, determine which of the circumstances set out in Instruction 3.2.2 apply.

Instruction 3.2.1 sets out how to apply for approval to use this form of Limited Tender.

Go to Step 13.

Step 11: Limited Tender (estimated value higher than 50K less than 200K / 500K)

For a Limited tender with estimated value higher than 50K but less than 200K / 500K, an Agency may:

  • Select at least participants from any source
  • Select at least three participants from a register of pre-qualified suppliers
  • Conduct an open tender

Go to Step 13.

Step 12: Limited Tender (estimated value less than 50K)

For a Limited tender with estimated value less than 50K an Agency may select one participant from any source.

Go to Step 13.

Step 13: Manage probity and conflicts of interest

Manage probity – consider issues raised at Probity issues by stage and task.

Conflicts of interest can arise during this task. Identify, declare and manage these.

Step 14: Address Agency rules

Consult Agency procurement team for advice on meeting:

  • procurement rules and policies
  • Agency specific rules and policies

Follow Agency specific rules on when to seek an approval and who can give the approval.

Follow Agency specific rules for recording decisions and storing records.

Step 15: Record in draft procurement plan

Record information about the selected procurement method in the draft procurement plan.

Goods and services - Determine the path to market

Motor vehicles are procured under a different process, see the motor vehicle policy.

Step 1: Is a state purchase contract or register available?

Refer to State purchase contracts and registers to see if the good or service can be supplied under these contracts or registers.

For goods and services mandated Agencies, the use of state purchase contracts and registers may be mandatory.

There are standards for buying paper. The following contracts meet these standards:

Otherwise, follow the standards in the paper guide.

Some Agencies have chosen to use some, or all state purchase contracts and registers. Check to see if this applies.

Is there a State purchase contract or register that can meet the need?

  • If yes, go to Step 3
  • If no, go to Step 2

Step 2: Is there an Agency specific contract available?

Buyers should determine if an existing agency contract exists to purchase from before starting a sourcing process.

Is there an Agency specific contract that can meet the need?

  • If yes, go to Step 3
  • If no, go to Step 4

Step 3: Rules of use for state purchase contracts, registers or Agency-specific contracts

For a state purchase contract, register or Agency-specific contract, read the rules of use for the arrangement.

The rules of use describe the path to market to follow and the number participants that must be invited to participate.

Go to step 8

Step 4: Determine the complexity of the procurement

Check to see if the Agency has a category strategy. The category strategy will describe the complexity assessment and path to market.

  • If yes, go to Step 8
  • If no, go to Step 5

Step 5: Complete a complexity assessment

Check to see if the Agency has a complexity assessment tool. If there is one use it.

If not, use the detailed complexity assessment tool to determine the level of complexity. The results from the market analysis will help answer the questions in the tool.

The outcome of assessment will be in one of the four complexity categories:

  • transactional
  • focussed
  • leveraged
  • strategic

Use the Complexity assessment model to determine the path to market.

Step 6: Consider procurement capability

Check to see if the Agency has rules that outline the level of procurement experience needed.

For example, some Agencies may require no previous experience to complete a low cost transactional procurement. Others may require two years’ experience for a high cost strategic procurement.

The capability guide provides more information.

Step 7: Find out if the extra rules under International Agreements apply

Covered entities lists Agencies that must follow the rules under International Agreements.

International agreements lists the extra rules that apply under International Agreements.

Step 8: Record in draft procurement plan

Record information about the selected path to market in the draft procurement plan. For more information see, Prepare a procurement plan.

Consider:

Manage probity and conflicts of interest

Manage probity – consider issues raised at Probity issues by stage and task.

Conflicts of interest can arise during this task. Identify, declare and manage these.

Address Agency rules

Consult Agency procurement team for advice on meeting:

Follow Agency specific rules on when to seek an approval and who can give the approval.

Follow Agency specific rules for recording decisions and storing records.

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