Today we welcome Deirdre Diamante, Principal of MIA Consulting Services, to outline how tendering practices can change in different states of Australia.
If you are experienced in tendering for one government jurisdiction then you will have the skills needed to tender effectively for other governments. While there are some key differences in how different governments tender, there are many more similarities.
Governments are all accountable to the public, which means every single procurement, from low value straightforward procurements to very high value complex procurements, must maximise competition, openness, fairness and value for money. With this in mind, many of the core processes underlying a tender or quotation must be the same across governments.
The nature of the questions asked in a tender, the need for full and complete responses, and assessment against set evaluation criteria with weightings will be consistent across governments. So will the process of communications with government during a tender, the process of seeking clarifications on a tender or quotation response, and the treatment of tender and quotation documents that are incomplete or late.
All governments also operate the following practices:
- Assessment of value for money outcomes, based on whole of life cost and best quality and fit of the outcome rather than lowest cost
- Disclosure of contracts, either full or summary disclosure based on a dollar value limit
- Local content relating to local content delivered within the particular state or the federal government jurisdiction
- Ethical purchasing
- Sustainable purchasing
- As well as adherence to federal government legislation such as the Australian and New Zealand Procurement Agreement and Australia US Free Trade Agreement.
However, there are some key differences in how government jurisdictions conduct their procurements.
The first relates to thresholds for seeking quotations or restricted approaches to market (typically a quotation is sent to up to 3 suppliers for lower value work) and tenders (a tender is an open approach to the market). The table below gives an example of tendering thresholds for the Commonwealth and a few sample state governments.
|Government||Quotation Thresholds||Tendering Thresholds|
|Commonwealth||Less than $80,000||Greater than $80,000|
|Victoria*||Less than $150,000||Greater than $150,000|
|NSW||Less than $250,000||Greater than $250,000|
|QLD||Based on a risk and complexity assessment||Based on a risk and complexity assessment|
|South Australia||Based on a market, risk and complexity assessment||Based on a market, risk and complexity assessment|
* The Victorian government is currently implementing its procurement reform agenda, of which one key outcome is the removal of dollar value thresholds for releasing tenders and quotations and moving to the model used by the Queensland and South Australian governments. In this case, a market, risk and complexity assessment is undertaken to determine the best market approach, ie sole supplier, restricted release or open release.
The following Victorian departments no longer use dollar thresholds to determine whether a procurement is released via quotation or tender:
- Premier and Cabinet
- Treasury and Finance
- Health and Human Services
- Education and Training
- Justice and Regulation
- Victoria Police, and
- Courts Victoria
The Departments of Economic Development, Jobs, Transport and Resources (DEDJTR) and Environment, Land, Water and Planning (DELWP) are yet to complete the procurement reform process.
When responding to a government procurement you must first understand the guidelines that government had to consider in the release of that procurement, ie dollar threshold or other factors. This will give you a better appreciation of how to pitch your quotation or tender response.
Pre-qualification arrangements, contract lists or multiuse lists
Another difference between jurisdictions is the use of pre-qualification arrangements, contract lists or multi-use lists. For example, one state may use a contracted arrangement to procure marketing services, while the federal government operates a multi-use list, and then another state may have no contract mechanism in place which may mean they utilise open approaches to market.
This changes the way different governments will approach the market for different products and services. So when you identify a particular government jurisdiction to do business with, you must first understand what contract and pre-qualification arrangements exist and whether you need to become pre-qualified or tender to become part of a contracted arrangement.
Tender and quotation documentation
Tender and quotation documents differ across government jurisdictions as well as contract documents. While the direction of questions within tender documents will be the same across jurisdictions, there will be changes in the emphasis and weightings of these.
For example, one government may have a higher weighting on environmental management practices over another jurisdiction based on its procurement policies. A further example is quality management. The NSW government has a greater focus on quality management requirements for all procurements over other jurisdictions.
Specific contract requirements
Requirements within contracts can differ across jurisdictions as well. A great example of differences here relates to the treatment of intellectual property rights, insurance and liabilities. As an example, the Victorian Government has policies around the treatment of insurance and liabilities for information communication technology projects, where these values are nominated based on a risk assessment.
For all other procurements, liability and insurance amounts are based on a minimum requirement. Intellectual property rights differ across the States and Commonwealth on ownership of IP in ‘developed materials’, versus no ownership with ongoing licensing opportunities.
Again, it’s very important that if you are interested in responding to a procurement from a new government jurisdiction that you identify these key differences in tender and contract documentation so you can maximise the success of your tender response and manage your levels of risk in complying with the contract.
About Deirdre Diamante
Deirdre Diamante is the founder and principal of MIA Consulting Services. Based on 15 years of experience in procurement and governance roles, Deirdre’s intimate knowledge of public sector procurement environments makes her a sought-after advisor by commercial and public sector organisations alike. Her various educational programs are recognised by Business Victoria and Swinburne University; while her consulting expertise helps companies of all sizes engage effectively with government and win business. Deirdre also works closely with government to implement industry and procurement programs, and serves as Deputy Chair for the Victorian Council of the Australian Information Industry Association (AIIA).