Market Approaches and Contracts Guidelinespb.sa.gov.au/sites/default/files/Market Approaches and...

Version 1.0

Date Issued September 2016

Review Date September 2018

Principal Contact State Procurement Board

Telephone 8226 5001

www.spb.sa.gov.au

Market Approaches and Contracts Guideline

Market Approaches and Contracts Guideline of 23 Issue Date: September 2016 Version 1.0 Review Date: September 2018

Contents

Overview .............................................................................................................................. 3

General Principles ................................................................................................................. 3

Scope ................................................................................................................................... 3

Requirements ....................................................................................................................... 3

Types of Market Approaches ................................................................................................ 4

Standard Market Approach and Contract Documentation .................................................... 9

Attachment 1: Unsolicited Proposals Process ..................................................................... 13

Attachment 2: User Guide: Market Approach Documents .................................................. 14

Attachment 3: User Guide: Developing Specifications ........................................................ 16

Attachment 4: User Guide: Standard Goods and Services Contract ................................... 22


Overview This guideline provides advice on market approaches that may be undertaken by public authorities when procuring goods or services and sets out the requirements for using standard market approach and contract documents. This guideline aims to achieve a consistent approach to procurement processes undertaken by all public authorities. This guideline outlines:

the various types of market approaches that may be used when to choose a particular market approach strategy when it is appropriate to adopt the standard market approach and contract documents guidance on the structure and content of the standard market approach documentation

including invitation, specification, response documents and, contract terms and conditions. Standard market approach and contract documentation:

promotes and facilitates consistency in the contractual approach of public authorities to the procurement of goods and services

simplifies and expedites procurement and contracting processes for both government and suppliers

reduces the need for continued legal advice for similar contract documents for both government and suppliers, reducing “red-tape” and costs in dealing with government

General Principles The Object of the State Procurement Act 2004 (Act) is to advance government priorities and objectives by a system of procurement for public authorities directed towards:

a) obtaining value in the expenditure of public money b) providing for ethical and fair treatment of participants c) ensuring probity, accountability and transparency in procurement operations.

The market approach strategy and standard market approach and contract documents support these objectives by improving the efficiency of government procurement processes.

Scope

This guideline applies to all public authorities as defined in the Act and to market approaches for procurements valued at greater than $550,000. This guideline excludes market approach requirements for simple procurements (valued up to and including $550,000) which are set out in the Simple Procurement Policy.

Summary of Requirements The following standard market approach and contract documentation must be adopted for all procurements within the scope of this guideline:

Part A – Procurement Process Guidelines (Invitation to Supply) and Part A Process Guidelines (Invitation for Expressions of Interest).

Part B – Specification - The specification needs to be developed in accordance with the guidance provided.


Part C – Standard Goods and Services Contract for all low to medium risk, non-complex goods and/or services procurements, including consultancy services and panel contracts.

Part D – Sufficient relevant information needs to be requested in the response schedule to enable an appropriate evaluation to be undertaken.

except in the following circumstances, where fit-for-purpose invitation or contract terms and conditions may be appropriate:

Multi-agency arrangement – when a contract is established that allows access by more than one agency

Information Communications Technology procurements construction contracts principal contractor controlled contracts – where a supplier is contracted to manage several

procurements of goods and/or services on behalf of the Principal

contracting with universities or the CSIRO for the provision of educational services, technical and academic research

joint ventures/partnerships – where the joint venturers/partners share the costs, risks and benefits

Public Private Partnerships – usually used in the development of public sector infrastructure assets.

Types of Market Approaches Public authorities need to determine the most appropriate market approach strategy based on their business need. The choice of market approach is influenced by various factors including the nature of the procurement (for example value, quantity, time and location), the characteristics of the supply market and the objectives of the public authority. In general, a market approach strategy may be undertaken as either a single stage or multi stage approach. A single stage process allows a contract to be awarded at the conclusion and is often used when the market is stable and competitive, and when the requirements can be clearly specified. A multi stage approach has advantages in situations where there is a lack of clarity about requirements, there is limited understanding of supply market. It is also useful where shortlisting reduces the costs to suppliers and the public authority due to a large number of suppliers who can meet the requirement or the complexity and size of the procurement. Market approaches may be:

Open – invitations to supply are open to all interested suppliers. Single – only one supplier is invited to supply

Limited – a limited number of suppliers (but greater than one) are invited to supply Single and limited sourcing strategies are not to be chosen to avoid competition. The integrity of the process needs to be maintained. Single and limited sourcing strategies are only appropriate in extenuating circumstances as documented in the Acquisition Planning Policy. Types of market approaches include:

issuing an Invitation to Supply

issuing an Invitation for Expressions of Interest undertaking a Direct Negotiation


undertaking Competitive Dialogue undertaking a Reverse Auction.

This guideline also discusses the consideration of an unsolicited proposal, which is not a market approach as such, but is an alternative sourcing strategy to a market approach. Invitation to Supply An Invitation to Supply (ITS) is usually an open, publicly advertised invitation to offer goods and/or services. An ITS:

invites suppliers to offer, at their best price, goods or service to meet a particular requirement

can be applied flexibly to procure requirements where the specification can be clearly defined (i.e. technical specifications) or

where there is a need for the specification to allow variety and innovation in responses (i.e. specification is performance or function based).

An ITS has the same function as a request for proposal or a request for tender, i.e. RFX. A publicly advertised ITS is suitable where:

there are many suppliers able to offer competitive solutions and the complexity of the requirement is not at the level where a multi stage approach would be warranted

the supply market is subject to continuous change the procurement is sensitive or subject to a high level of market interest and where a

selective approach would involve a high degree of risk. A selective ITS issued to a limited number of suppliers may be appropriate where:

only a limited list of suppliers exists, verified through extensive market research there is a prequalified list of suppliers who have met required criteria (also called a multi-

use list)

a shortlist of suppliers has been determined through an EOI process suppliers are licensed or meet legislated standards required to deliver the requirements.

Invitation for Expressions of Interest Invitations for Expressions of Interest (EOI) is often the first stage in a multi stage market approach to select a supplier(s) to fulfil a procurement need. This is usually achieved through an open, publicly advertised invitation that outlines a general intention to acquire goods and services and invites suppliers to indicate their interest in being considered to meet the requirement. An EOI is sometimes referred to as a registration of interest or invitation to demonstrate capability. An EOI usually results in the development of a shortlist of suppliers to participate in a future market approach (for example an invitation to supply issued to the selected suppliers, direct negotiation etc). In some cases, the second stage of the procurement may not proceed, for example when no suitable solution to the requirement exists. Potential suppliers are not required to provide prices and a contract is not usually formed at the EOI stage.


An EOI is best utilised in the following situations:

Lack of clarity about requirements: there is a high level understanding of the business need or requirement; however detailed requirements are not yet fully understood and additional information is required to make further procurement decisions

Limited understanding of supply market: there is a lack of knowledge of the general level of interest and capability in the market to satisfy the requirement as there is uncertainty as to the market’s ability to meet the need

Shortlisting to reduce costs to suppliers and public authority: where there are a large number of suppliers or the requirements are complex, a shortlisting process reduces the costs associated with the procurement process as it decreases the number of responses to be considered, and limits the information that suppliers need to respond to (compared with responding to a detailed specification); suppliers can express their interest in a nonbinding manner and may withdraw their application before incurring the additional expense associated with the next stage of the procurement process

Security issues: it is necessary to qualify suppliers for security reasons prior to providing detailed information.

Direct Negotiation Direct Negotiation is a procurement process undertaken by directly approaching and negotiating with one or more suppliers without testing the market. It is usually undertaken when comprehensive market research indicates that there is a limited supply market. Direct negotiation is to be used in exceptional circumstances only. Direct negotiation carries a higher potential of risk in relation to ethical practices or conflict of interest (actual or perceived). Competitive Dialogue Competitive dialogue is a procurement approach that enables the purchaser to enter into detailed discussions once market and vendor capability have been determined. It differs from more traditional approaches as the specifications are developed and refined with each supplier during the procurement process. Competitive dialogue can reduce the time to complete large-scale complex procurements by enabling the buyer to enter into detailed discussions once capability has been determined. Competitive dialogue is useful in finding solutions when the public authority is dealing with an immature market and/or is unclear on the best way to meet a particular business need. Sometimes, the public authority has clear business objectives, but is not able to specify how those objectives might best be satisfied. The competitive dialogue process gives public authorities the opportunity to work interactively with the supply market and allows them to better understand the market’s capability and cost drivers. At the same time, the supplier's participation costs are minimised as suppliers do not spend resources on producing proposals that do not meet the public authority's needs. This approach differs significantly from more traditional approaches (such as an Invitation to Supply) as the specification is developed and refined with each supplier during the process.


The process involves each bidder submitting and gradually improving a solution (technical/financial/legal) to meet the public authority’s objectives. The dialogue with each supplier is aimed at focusing its response on the business need and maximising the potential value of the supplier’s solution. The suppliers then present a formal proposal for evaluation. For example, a public authority may have a particularly complex service contract with a supplier. Service level improvements are difficult to secure and every time the market is retested there is limited response. Competitive dialogue could be employed in such a situation to engage interested suppliers individually (perhaps through an EOI) on how their particular service approach can be realised to meet the business need. Through the stages of dialogue, each supplier’s proposal is developed to be the best value it can offer against the business objectives, and the proposal is then formalised to facilitate evaluation against a predetermined methodology. Competitive dialogue carries a higher potential of risk in relation to ethical practices or conflict of interest (actual or perceived) and it is important to avoid the potential for infringing a participating supplier’s intellectual property rights. Developing a probity plan or appointing a probity auditor and/or probity advisor, may be necessary to ensure such risks are effectively addressed and managed. Reverse Auctions A Reverse auction is a type of auction in which several buyers compete (on a price basis only) for the right to provide a good or service, with the bid price typically decreasing over the course of the bidding process. The bid price for each supplier is then inserted into the normal procurement process and all suppliers considered on a value for money basis. In reverse auctions, the use of the internet provides an alternative means of establishing a price for the supply of goods or services and allows suppliers to bid in a real time environment. Reverse auctions are applicable to the procurement of goods with little or no value-added or service components, and where the market is competitive and where price is a key selection criterion. Reverse auctions may be used as part of a multi-stage procurement process or as a means of obtaining quotes from suppliers from an established panel or common use contract. Reverse auctions require the usual procurement planning requirements (e.g. development of specifications, evaluation plan). The reverse auction process only establishes the price elements for the procurement, with the other qualitative elements still required. In a reverse auction, there is generally a single buyer and many suppliers, with the aim being to use technology to achieve a lower price than may be the case through a standard, once-only bidding process. The reverse auction process generally involves the buyer seeking bids from suppliers by outlining its requirement (including goods description, delivery and warranty specifications, and terms and conditions of supply). The buyer also notifies suppliers of the starting price, date, time and duration of the reverse auction. During the reverse auction, suppliers usually can see the current best bid and make lower bids if they wish. At the close of the reverse auction, each supplier’s offering is then considered against its qualitative bid (which addresses the non-price requirements of the procurement) to arrive at a value for money comparison of all suppliers. Where qualitative factors are used to differentiate between suppliers, the lowest price is not always the winning bid.

http://www.businessdictionary.com/definition/auction.html


Reverse auctions allow suppliers multiple opportunities to offer a price and reduce the procurement efforts and transaction costs for both buyer and supplier. Reverse auctions are also transparent and fair as all suppliers have knowledge of the leading bid at any point in time during the process. Unsolicited Proposals An unsolicited proposal is a unique or innovative method, concept, approach or idea submitted to a public authority from a private entity, not in response to a formal request and not readily available in the marketplace. An unsolicited proposal is submitted without formally being requested by the Government. The nature of the proposal can address a wide range of areas and includes, for the purpose of the State Procurement Act 2004, the delivery of goods and services to, or on behalf of, Government. The Government’s Guidelines for Assessment of Unsolicited Proposals (government guideline) provides a framework for the assessment of unsolicited proposals and is supported by the Department of Premier and Cabinet Circular ‘Unsolicited Proposals’ (PC038). The process for the review of unsolicited proposals is outlined in more detail in the government guideline which encourages the private sector to bring innovative ideas to Government while maintaining value for money and probity. The minimum financial threshold for a non-infrastructure (goods and services) unsolicited proposal under the government guideline is $1.1 million (GST inclusive). This will ensure low cost, low risk proposals are handled directly by public authorities under standard procurement policies and procedures and removes the requirement for the State Coordinator General to be involved in proposals of a more minor nature. However, this threshold does not preclude a proponent making an application directly to the State Coordinator-General and the State Coordinator-General can elect to review any proposal that is below this threshold. If a public authority has initial contact with a proponent on an unsolicited proposal above the threshold, they are to encourage proponents to contact the Office of the State Coordinator-General for a pre-lodgement meeting prior to lodging the submission. Where the Government assesses that a proposal does not meet the criteria under the government guideline at any stage of the process, it reserves the right to go to market, end the proposal consideration process or withdraw from exclusive negotiations. If the Government does go to market, the proponent will be given the opportunity to participate in any subsequent procurement process. The Government will respect any intellectual property owned by the proponent. Proposals that are not accepted by the Unsolicited Proposals Steering Committee, the Assessment Panel or by Cabinet, may form the basis of a competitive bidding process or be referred to a relevant public authority for further consideration in accordance with relevant Board policies and guidelines. The public authority may choose to consider proposals valued at less than the government guideline threshold by using the unsolicited proposals process as outlined in Attachment 1.


This process is consistent with the government guideline and can be used to address relevant issues through the development of an acquisition plan.

Standard Market Approach and Contract Documentation There are several different ways for a public authority to approach the market for the procurement of goods and services. The following standard market approach documentation has been developed:

Invitation to Supply Invitation for Expressions of Interest

For other types of market approaches, the standard documents can be used to the extent that they are capable of being applied. The framework for the standard market approach and contract documentation is set out below.

A User Guide on the Market Approach Documents is provided in Attachment 2. Part A Procurement Process Guidelines (ITS) and EOI Process Guidelines (EOI) Part A – Procurement Process Guidelines (ITS) and Part A EOI Process Guidelines (EOI) detail the instructions to potential suppliers and the rules that govern the way that invitations will be conducted. Part A – Procurement Process Guidelines (ITS) and Part A EOI Process Guidelines (EOI) must be used for all procurements within the defined scope of the Act, except under circumstances where fit-for-purpose invitation or contract terms and conditions may be appropriate. The ITS and EOI Process Guidelines have the following parts:

Part Description

Reference Schedule All of the variable data for the procurement is to be included in the Reference Schedule

Part A - Procurement Process Guidelines

Part B - Specification

Part C - Draft Contract

Part D - Response

Invitation to Supply (ITS)

Part A - EOI Process Guidelines

Part B - Specification

Part C - Response

Invitation for Expressions of Interest

(EOI)


Part Description

Invitation The terms in the Invitation section of each template are fixed and are not to be modified. This enables both public authorities and suppliers to have confidence that the terms are standard and unchanged for each procurement.

Glossary At the back of the Invitation is a Glossary of all defined terms used in the market approach template.

Appendices There are Appendices which potential suppliers are required to complete and include with their responses.

Part B Specification (ITS) and (EOI)

A specification is the statement of a need or requirement that is to be procured from third party suppliers which clearly and accurately describes the essential requirements for goods and services.

A specification is the basis of the offers that are received from the supply market and once a contract has been awarded, the specification becomes a key document for the management of the supplier to ensure they deliver what has been specified.

The specification needs to detail the exact need the public authority is seeking to have met by the suppliers. At a minimum, information needs to be provided on:

quantities required technical details that will meet the specific needs performance standards that the resulting supply of goods and/or services will need to

address.

A specification needs to clearly describe:

what the supplier is required to do when the supplier is required to do it why the supplier is required to do it.

A logically constructed and well written specification assists suppliers to understand what is expected of them, to respond effectively and develop a suitable solution and cost/fee, and eventually if awarded the contract to carry out their contractual obligations.

There are three types of specifications:

Specification types Description

Functional Outline the proposed function or role of the goods and services in helping the end-user achieve a desired outcome. It defines a desired result and may describe the general form of the goods/services required. It focuses on what is to be achieved rather than the method of achieving it.

Performance Detail required performance characteristics of the goods and services with a focus on what is to be achieved not the method of achieving the outcome/result.

Technical Detail the technical and physical aspects of the goods and services such as dimensions, colour, exterior finish, design specifics, physical properties, processes and operational requirements.

Functional and performance specifications are encouraged and have the advantage over technical specifications of allowing suppliers to offer innovative and technologically advanced solutions that can offer improved value for money.


In preparing the specification, public authorities need to consider the type of specification to utilise. Consideration needs to be given to defining a specification in terms of the functions to be fulfilled, rather than proposing the solution - via a specification heavy with technical requirements – which inadvertently can restrict innovative approaches that may be offered by suppliers. In some cases it is critical to define a requirement technically, such as an interface / compatibility requirement or the requirement for the supplier to hold an industry license or accreditation. A specification is not to include process rules, conditions of contract, questions or response schedules for the supplier to complete. This is the function of the response schedules. Whilst there is no mandated format for the Part B specification, an optional template has been developed (see Templates section) to assist public authorities, with additional guidance for developing specifications provided in Attachment 3. Part C Contract Terms and Conditions (ITS) A contract will be entered into with the successful supplier. Public authorities must use the Standard Goods and Services Contract for all low to medium risk, non-complex (i.e. standard) goods and/or services government procurements, including procurements of consultancy services and for panel contracts. The Standard Goods and Services Contract consists of:

Standard Goods and Services Contract Template Special Conditions Clause Bank Execution Block Bank

Where necessary the Standard Goods and Services Contract Template contract terms and conditions can be supplemented by special conditions from the Special Conditions Clause Bank. For example the Standard Goods and Services Contract Template can be used for a standing offer/panel contract by the addition of clauses identified for that purpose in the Special Conditions Clause Bank. Similarly the Standard Goods and Services Contract Template can be used to procure consultancy services by the addition of clauses from the Special Conditions Clause Bank. When using the Standard Goods and Services Contract Template, the clauses in the Special Conditions Clause Bank need to be reviewed to determine whether the particular procurement requires the addition of any Special Conditions. Users are guided in the proper use of Special Conditions by a series of yes or no questions. In some instances, users will be directed to contact the Crown Solicitor’s Office for legal assistance which may include drafting bespoke special conditions. Not all contract terms that may be required for procurement are included in the Special Conditions Clause Bank. Public authorities need to contact their procurement staff or the Crown Solicitor’s Office if contract terms are required that are not specified in the Special Conditions Clause Bank. Contract terms and conditions are not included in an Invitation for Expressions of Interest. A User Guide supporting the Standard Goods and Services Contract is provided in Attachment 4.


Contract Documents Post-Negotiation On some occasions, negotiations with the selected supplier may result in parties agreeing to changes to the standard contract terms and conditions. Where mutual agreement has been reached, these amendments can be made to the head part of the contract. However, it is strongly recommended that advice of the Crown Solicitor’s Office is sought when diverging from the standard terms and conditions. Public authority specific amendments can also be incorporated into the main contract document at this stage. Public authorities will need to ensure that subsequent market approaches utilise the mandated standard contract documents, not the revised negotiated contract. Where a public authority proposes to enter into a new contract with an existing service provider without a market approach, the existing contract can be used with negotiated changes added. Part D Response Schedule (ITS)/Part C Response Schedule (EOI) The response schedule is the key document to enable suppliers to respond to the requirements set out in the Invitation. Sufficient information needs to be requested to enable an appropriate evaluation of the response. Key areas for consideration in developing response schedules include:

supplier information prior experience and references capacity and capabilities (key staff, quality systems, organisational details)

supply approach (methodology, customer service, work plan) subcontractor information industry participation policy information innovation and value for money compliance with contract, specification financial viability pricing information conflicts of interest related to the supplier

Templates Invitation to Supply – Part A – Procurement Process Guidelines Invitation to Supply – Part B – Specification (optional) Invitation to Supply – Part C – Standard Goods and Services Contract Invitation to Supply – Part D – Response Schedule (optional) Expression of Interest – Part A – Process Guidelines Expression of Interest – Part B – Specification (optional) Expression of Interest – Part C – Response Schedule (optional)

Further Information State Procurement Board Secretariat Phone: (08) 8226 5001 Email: [email protected] www.spb.sa.gov.au

mailto:[email protected]

http://www.spb.sa.gov.au/


Attachment 1: Unsolicited Proposals Process The following process is to be used by public authorities when considering unsolicited proposals valued at below the threshold ($1.1 million GST inclusive) for goods and services.

Stage 1 Initial Proposal

The initial proposal stage enables the public authority to form a preliminary view as to whether to further consider the unsolicited proposal in accordance with the following criteria:

there are no competing proposals under consideration by the Government or other public authorities

the proposal promotes economic, social and/or environmental outcomes for South Australia and is consistent with the Government’s/public authority’s strategic priorities

the proposal is unique and could not be delivered by any other party within acceptable timeframes

the proposal represents value for money when the proponent is seeking any form of financial contribution or risk sharing from the government

the proponent has the skills and experience required to deliver the project as specified in the proposal.

Only proposals that meet the initial proposal criteria and are approved by the principal officer can move to the next stage. The proponent will be advised in writing of the outcome.

Stage 2 Detailed Proposal

The detailed proposal stage involves further consideration of the feasibility of the proposal, with the details outlined in an acquisition plan in cooperation with the proponent (who may be required to provide additional information) and relevant stakeholders (for example, business managers, procurement experts, technical experts).

The acquisition plan will address and outline:

the nature and terms of the arrangement, including timeframes and the nature of any exclusivity arrangements

how it will be delivered and whether it represents value for money the costs and risks to government/public authority and the benefits to South Australians whether the proposal is technically and financially feasible.

No commitment is to be made at any stage of the process and the proponent is to be kept informed on the progress of their proposal at each step. Only acquisition plans that are approved by the principal officer can move to the final stage. The proponent will be advised in writing of the outcome.

Stage 3 Contract Negotiations

The contract negotiation stage allows the public authority and the proponent to negotiate final legal and commercial terms and then prepare and execute the formal project documentation. The final purchase recommendation will be approved by the principal officer and a contract finalised before implementation. The proponent will be advised in writing of the outcome.


Attachment 2: User Guide: Market Approach Documents 1. Overview There are a number of different ways for a public authority to approach the market for the procurement of goods and/or services valued at greater than $550,000. The following market approach templates can be used:

Invitation to Supply Invitation for Expression of Interest

These templates can be provided to potential suppliers to assist them in providing a response to the specific requirements of the procurement.

2. Selecting A Procurement Strategy Invitation to Supply (ITS)

The ITS can be used for procurements:

where the supplier is invited to propose alternative solutions to the achievement of the procurement objectives (also known as Request for Proposal)

where the purchaser specifies exactly the goods and/or services it requires (known as Request for Tender).

Where alternative offers will be accepted, this can be highlighted in the Reference Schedule in the ITS. Expression of Interest (EOI)

An EOI can be used where there is: a high level understanding of the business need or requirement; however detailed

requirements are not yet fully understood and additional information is required to make further procurement decisions

lack of knowledge of the general level of interest and capability in the market to satisfy the requirement as there is uncertainty as to the market’s ability or desire to meet the need

a large number of suppliers and a shortlisting process reduces the costs associated with the procurement process as it decreases the number of responses to be considered, and limits the information that suppliers need to respond to (compared with responding to a detailed specification

Potential suppliers are not required to provide prices and a contract is not usually formed at the EOI stage. 3. How To Use - Invitation To Supply

Part A - Market Approach Process Guidelines

The ITS has the following parts:

Reference Schedule - all of the variable data for the procurement is to be included in the Reference Schedule.

Invitation - The terms in the Invitation section of each template are fixed and are not to be modified. This is an important feature of the template as it is intended that both public authorities and suppliers have confidence that the terms are standard and unchanged for each procurement.


Glossary - at the back of the Invitation is a Glossary of all defined terms used in the market approach template.

Appendices depending on the market approach template there are Appendices which potential suppliers are required to complete and include with their responses.

Part B - Specification or Statement of Requirements

There is a basic specification template available (its use is not mandated). The detailed technical and operational requirements for an ITS are to be included in this part of the market approach template. A User Guide on Developing Specifications is also available. Part C - Draft Contract

A draft contract is required to be attached to Part C for the ITS. Part D - Response

There is a Response template for the ITS (its use is not mandated). The Response template comprises: Offer Under Seal - this is a form of process contract which if executed by the potential

supplier makes its offer binding for the specified number of days.

Schedule - the variable content of the potential supplier’s response is to be inserted where indicated in the template.

4. How To Use - Expression Of Interest

Part A - Market Approach Process Guidelines

The EOI has the following parts:

Reference Schedule - all of the variable data for the procurement is to be included in the Reference Schedule.

Invitation - The terms in the Invitation section are fixed and are not to be modified. This is an important feature of the template as it is intended that both public authorities and the supply market have confidence that the terms are standard and unchanged for each procurement.

Glossary - at the back of the Invitation is a Glossary of all defined terms used in the market approach template.

Appendices - these include templates that potential suppliers are required to complete and include with their responses.

Part B - Specification or Statement of Requirements

The technical and operational requirements for an EOI are to be included in this part of the market approach template. Part C - Response

There is a Response template for the EOI (its use is not mandated) which comprises:

Schedule - the variable content of the potential supplier’s response is to be inserted where indicated in the template.


Attachment 3: User Guide: Developing Specifications The standard market approach documents have a section for the Specification as ‘Part B.’ An optional format for a specification, and appropriate content, is provided below.

1. Introduction

Briefly explain the requirement and the context of the requirement. Explain the public authority’s role and the policy and operational objectives to be met by

the proposed procurement.

2. Scope and Context

Scope

Provide a summary description of the desired range and type of goods and/or services that are required, for example: - a statement as to whether the supplier is to only supply the requirement, or is also to

install, commission, support, and provide training or documentation (e.g. review, recommend and report; review, recommend, report and train; design only; design, deliver and assess; review, recommend, report and implement; design, develop and present.)

Advise on anything the supplier is not required to do or provide which might otherwise normally be considered to be part of the requirement and the period of the contract.

Develop a sufficiently detailed scope to support accurate pricing by the respondents, and easier contract management; it will also help ensure that all respondents quote or tender on the same work and will assist in comparing respondents equally during evaluation.

Context

Describe the context of the procurement, such as any unique or pertinent factors about the conditions/environment which can affect the design or performance of the offered solution/methodology. For example factors may include: - physical environment (eg. ambient temperatures, altitude, geographic conditions such

as inclines, descents, dusty environment, rainfall, remote access) - operating and/or storage conditions to be observed (eg. existing site dimensions,

ceiling clearances, available space, storage, access, security features, air conditioning) - availability of energy and other services at site - compatibility with existing equipment, systems, etc. (eg. ICT security platforms or

operating systems, interfaces) - site access constraints (eg, shared use rights, easements, lease restrictions,

requirement for ongoing public use/access during service delivery) - existence of unique, important or potentially dangerous site conditions (eg. heritage

items, significant trees, asbestos) - personnel safety aspects (eg. confined spaces, hot work) - servicing or maintenance requirements or limitations.

If there are limitations imposed by users, explain what they are (for example, limited access to and within a building, the requirement for work to be undertaken in parallel with public access to site, or a new service to cutover from an existing service seamlessly).

Provide contextual information (which can be sourced from the approved Acquisition Plan) such as: - research undertaken into the requirement - the public authority’s historical spend data and usage (eg. value of previous purchases,

location of purchases, site information)


- description of current delivery methods to compare and contrast with the new requirement

- options (if any) considered in the development of the requirement and any options dismissed and why

- the relationship of the requirement to other requirements and acquisitions, whether already purchased and implemented, or planned for the future.

Refer to relevant documents to avoid duplicating content and provide clear list of these documents (and their location) which may include: - policies and procedures - white papers/discussion papers/background reports - site lists/technical drawings/maps/diagrams/data - concept designs or preliminary designs - previous research/reference publications - Codes of Practice - Acts of Parliament/Government directives.

Please note: By referring to a document, it is incorporated into the specification. If only part of a document is relevant, then only that part should be referred to. The following should also be considered: - Does the public authority own them and can they issue them? - Are any details confidential or sensitive and should only extracts be issued? - Do the documents include financial information that relate to future projects or other

form of confidential information and therefore, may not be suitable to be released without editing?

If the document is sensitive, consideration should be given to its inclusion for respondents to respond properly. If it is essential, an additional confidentiality process may need to be put in place.

3. Requirements (Goods and/or Services)

Consider whether use of functional characteristics, performance characteristics and/or technical characteristics are appropriate to describe the requirements.

Provide adequate details to describe the requirements and allow respondents to develop an accurate cost to deliver the requirements.

Document detailed requirements that vary depending on the scale and complexity, and whether the purchase is for goods or services.

Functional characteristics:

Outline the proposed function or role of the goods/services in helping the end-user achieve a desired outcome. It defines a desired result and may describe the general form of the goods/services required. It focuses on what is to be achieved rather than the method of achieving it, for example goods such as: - protective headgear that is highly visible and manufactured from high quality, durable

materials that are fit for purpose - clothing: lightweight, waterproof, reflective, breathable, high visibility - office equipment functionality: scan, print, copy, fax or services - develop an organisation structure that is fluid, flexible and responsive to the needs of

the community - the supplier is required to overhaul the equipment - to design a wetlands of sufficient area and diversity of vegetation to improve water

quality standards.


Performance characteristics: Detail required performance characteristics of the goods, for example: - ability to lift a certain loads – eg. 10 tonnes - system availability – eg. 99.99% availability - ability to achieve a minimum speed – eg. printing 100 pages per minute - service availability – eg. helpdesk services available 8 am-5.30 pm - service response – eg. response to a query within 5 minutes - satisfaction levels – eg. minimum satisfaction of 4 / 5 (80%)

Technical characteristics:

Detail the physical aspects of the goods/services: - dimensions/colour - fonts / logos - material properties (eg. metal, wood, plastic, steel, aluminium, cotton, wool, synthetic

materials) - protective headgear that is fluorescent orange and made from reinforced plastic - license requirements – eg. Builder’s license, practising certificate; training qualifications - work to be undertaken in accordance with a particular Australian standard

Services

Provide adequate details to fully describe the services and allow respondents to develop an accurate cost to deliver the requirements Note detailed requirements can vary depending on scale and complexity, from a short term and one-off consultancy, to a complex set of requirements intended to cover major project provision with ongoing whole of life support).

Describe various services and deliverables that the supplier is required to deliver.

Services these are all of the tasks, activities and overall work (including deliverables) that are described in or reasonably inferred by the contract.

Deliverables these are the reports, documents and other items that the supplier will develop and deliver/hand over to the public authority as a requirement of the contract.

Communicate other specific requirements to respondents about the delivery of the services, for example: - capability: circumstances where special skills, experience, knowledge or qualifications

are required, eg: current certificates, professional qualifications - due diligence: circumstances where additional checks into specific personnel are

required, eg security clearances, background checks or police checks; vetting processes such as psychometric testing, participation in simulated service provision (eg, mock training sessions, problem solving scenarios)

- aspects regarding the premises where the services are to be provided (eg. security levels, classified information areas) or equipment or information to be utilised

- privacy or confidentiality of information - the supplier to not have any actual or perceived Conflict of Interest relating to the

subject matter of the contract and the recommendations to be developed (eg. especially for consultancies)

- provision of ancillary goods (eg. replacement parts, specialised equipment required to provide the service with).

Review if some aspects of the requirement can be defined in broad terms to allow the

respondents to determine its preferred solution as part of its methodology.


Services - Consultants Common tasks for a consultant may include:

inception and progress meetings stakeholder consultation literature reviews, various studies, research and analysis specific to the scope presentations of the outcomes at defined intervals and the conclusion of the project training sessions implementation/change management.

Common deliverables for a consultant may include:

progress reports (eg. weekly/monthly written progress reports) first draft (eg. to be provided for review by public authority within 3 weeks of

commencement)

final draft (eg. to be provided for review by Steering Committee within 3 weeks of the first draft)

final report (eg. to be provided for review by Steering Committee within 2 weeks of the final draft)

submission requirements (eg. format, sections to be included). Other requirements for a consultant may include:

qualifications (eg. qualified engineer, qualified trainer) requirement for security clearances for access to premises where the services will be

required requirement to sign a confidentiality deed and a conflict of interest declaration.

Goods

Fully describe the goods to enable respondents to develop an accurate cost to deliver the requirements.

Specify goods that are required as well as any ancillary services required to enjoy the benefit of the goods.

Define some aspects of the requirement in broad terms to allow the respondents to determine its preferred solution as part of its methodology.

Common considerations for describing the required goods may include: the use of functional characteristics, performance characteristics and technical

characteristics to describe the requirement as appropriate

quality standards required for the goods (eg. Australian Standards) or associated with the supplier (eg Certified Quality Management System eg. ISO9001)

delivery requirements including details of delivery locations (gate numbers, access restrictions, height clearances, hours of operation, unloading arrangements/ facilities, security clearances)

interface/compatibility requirements for the goods to interface with or operate seamlessly with pre-existing equipment

acceptance requirements such as tests that the goods must pass before being accepted (acceptance tests can range from simple inspections of deliveries to ensure the correct quantities/part numbers have been delivered to independent tests to ensure important aspects of the goods are working as intended eg. test drive, operational trial, factory acceptance tests, provision of samples, etc).

Ancillary services:

Describe ancillary services to support the delivery and use of goods including: - installation and commissioning of the goods


- ongoing support services for the goods (eg. helpdesk services) - reporting by the supplier or attendance at milestone or regularly planned meetings - training in the use of the goods - provision of documentation to allow the use of the goods (eg. user manuals, warranty

information, safety data sheets). Timeframes Explain the proposed schedule, including commencement date, milestones, completion of

deliverables, and a completion date

Define some dates as indicative and others as set dates, depending on the requirements of the project

Identify any critical time frames, key dates or periods of time that the supplier will be required to service or meet.

For example: The supplier is required to meet the indicative / key dates for the following tasks:

Task Date / Time Frame

Inception Meeting Within 7 days of contract commencement.

Performance

Select KPIs / performance measures that are relevant and which can be measured - usually 3 or 4 KPIs / performance measures are sufficient. Potential examples include:

- delivery or response times within agreed timeframe (eg. 1 hour response time) - timeframes or completion dates, eg. - % or proportion of milestones met on time - completion of performance by due date - complaint resolution – prompt advice of any problems and resolution - acceptance of deliverables by the Steering Committee (eg Recommendation Report) - customer satisfaction with the services delivered (eg. satisfaction surveys) - cost tracking (eg. % or proportion of costs that have been invoiced benchmarked against

the agreed contract costs) - delivery accuracy (eg. % of deliveries that match orders) - service resolution (eg. % or proportion of issues resolved first time without follow up

/escalation).

Contract Sites/Delivery Locations

Explain the proposed location/s where the contract goods and/or services are required. For example this section can explain:

- whether the contract is for the entire state, geographic regions, CBD offices, regional offices, business units or specific sites; and

- if the supplier is required to travel (allowing respondents to adequately cost the travel and associated disbursement).

Contract Management Explain contract management arrangements to be established by the public authority to

manage its responsibilities under the contract and also the requirements for management of the contract by the supplier.

Explain contract management arrangements to be established by the supplier to manage its responsibilities under the contract.


State the level of contract management that will take place, and what the supplier needs to do to facilitate the internal management of the contract which could include: - the contract management resources to be provided by the public authority - the level of authority the contract manager will have to manage the contract

Confidentiality

Explain any specific confidentiality requirements or sensitive documents, information or aspects such as site access.

4. Transition

Explain requirements to address the periods of transition - both transition in (start of contract) or transition out (end of contract), - eg a statement to the effect that the supplier will be expected to cooperate fully with

the public authority and other organisations including a new provider and will take all reasonable steps to ensure the transition of the contract from itself to another provider or to staff of the public authority and shall minimise disruption to the public authority and all relevant stakeholders.

Identify requirements to be addressed before and at the time of contract start-up which may include: - a description of how the contract is to be handed over to the supplier at contract

commencement which states the responsibilities of the supplier and public authority and specifies the tasks to be performed by the supplier and public authority

- the development and submission of detailed Implementation Plans and the trigger for this activity

- transfer or purchase of assets, equipment or materials - lease of office space - the recruitment or training of staff.

Identify requirements to be addressed at the end of the contract which may include: - provision of requested information required by the public authority to re-tender - how the contract is to be handed on or handed back - development and submission of detailed Transition Out Plans and the trigger for this

activity - handover of final reports / documents and data / intellectual property - return of loan items or unused materials - return of any electronic/hard copies of contract documentation, or documentation

relevant to the provision of the contract - return of premises, infrastructure in equivalent condition to when it was handed over - confirmation of archiving or document destruction practices.

5. Glossary

Attach glossary to ensure a common understanding of key terms. Define terms and acronyms that have been used in the document.

6. Appendices

Attach relevant appendices, if any, to accompany the specification.


Attachment 4: User Guide: Standard Goods and Services Contract 1. Overview The Standard Goods and Service Contract Template is suitable for use for all low to medium risk, non-complex (i.e. standard) goods and/or services government procurements, including procurements of consultancy services and for panel contracts. It is not suitable for use in the following circumstances:

Multi agency arrangement – when a contract is established that allows access by more than one agency

Information and Communications Technology contracts under across government contract arrangements

Software licences, hosting agreements, and contracts for software development or customisation

Minor construction works including goods and services acquired in conjunction with the works

Principal contractor controlled contracts – where a supplier is contracted to manage several procurements of goods and/or services on behalf of the Principal

Contracting with universities or the CSIRO for the provision of educational services, technical and academic research

Joint ventures/partnerships – where the joint venturers/partners share the costs, risks and benefits

Public Private Partnerships – usually used in the development of public sector infrastructure assets.

2. Contract Structure The Standard Goods and Services Agreement Template has the following parts:

Execution Page Attachment 1 - Agreement Details Attachment 2 - Standard Terms & Conditions Attachment 3 - Glossary of Defined Terms Attachment 4 - Special Conditions Attachment 5 - Specifications Attachment 6 - Pricing & Payment

Supplementing these documents are two clause banks:

Special Conditions Clause Bank Execution Block Bank

3. Completing A Contract In order to finalise a contract, the following needs to be completed:

Section Action Required

Execution Page Select appropriate execution blocks for the Government Party and the Contractor from the Execution Block Bank and insert in space provided on the Execution Page.

Agreement Details Attachment 1

Insert information relevant to the procurement - insert “not applicable” against items if they are not required for the procurement.


Section Action Required

Standard Terms & Conditions Attachment 2

These are “locked” and are not modifiable. The Standard Terms and Conditions represent a neutral risk position for the procurement of goods and/or services.

Glossary of Defined Terms Attachment 3

All defined terms used in the Standard Terms & Conditions and Special Conditions Clause Bank are included in the Glossary. If additional definitions are required, these need to be included as Special Conditions.

Special Conditions Attachment 4

If additional terms are required to those included in the Standard Terms & Conditions, then they are to be inserted into Attachment 4 (Special Conditions). Some of the more commonly required additional terms are included in the Special Conditions Clause Bank.

For example if consultancy services are being procured, then there are special conditions in the Special Conditions Clause Bank that can be inserted into Attachment 4 to make the contract suitable for a consultancy procurement.

For example if goods are purchased under a standing offer either from a sole supplier or panel, there are special conditions in the Special Conditions Clause Bank that can be inserted into Attachment 4 to make the contract suitable for those purposes.

The Special Condition Clause Bank is not exhaustive. If there are agency specific terms or require the inclusion of other terms then they must be added to Attachment 4. The Crown Solicitor’s Office can assist with drafting additional terms. If no additional terms are required insert “not used” in Attachment 4.

Specifications Attachment 5

If there is a detailed specification which applies to the procurement then this can be attached to Attachment 5. If not insert “not used” in Attachment 5.

Pricing and Payment Attachment 6

Detailed pricing information for the procurement can be included in Attachment 6. If not relevant, insert “not used” in Attachment 6.

4. Contract Completion Checklist Step 1 Complete Variable Content for Contract

Insert the relevant details in Attachment 1 Insert “not applicable” for those items that are not relevant to your procurement Delete all drafting prompts (identified by coloured highlighting) Insert any applicable Special Conditions in Attachment 4 If required, attach Specification to Attachment 5 If required, include detailed Pricing and Payment in Attachment 6

Step 2 Execution of Contract

Ensure that the Contractor is a legal entity (e.g. a natural person(s) or body corporate) Insert execution blocks from the Execution Clause Bank on Execution Page To accept the contract either:

- each party must have a fully executed copy of the contract, or - each party must ensure that the other party has a copy of the contract which contains

the first party’s execution (known as counter party execution)

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