Procuring the best for Queensland – key changes under the new Queensland Procurement Policy

A new Queensland Procurement Policy took effect on 1 September 2017 as part of the Queensland Government Procurement Strategy. A key emphasis of the new strategy and policy is encouraging the use of local Queensland businesses in procurement activities.

The policy applies to departments, statutory bodies, government-owned corporations and special purpose vehicles. It replaces the existing 2013 policy and is to be fully implemented by 1 March 2018.

Key changes

One of the most significant changes under the new policy is the application of a local benefits test for all significant procurement, which is defined as high value or high risk procurement. The local benefits test will see a weighting of up to 30% applied as part of the procurement evaluation.

Preference will be given to suppliers in the following order:

  • Local zone 1 – suppliers that maintain a workforce within 125 km of the location where the goods/services will be delivered
  • Local zone 2 – suppliers within the region
  • Local zone 3 – suppliers within the state
  • Local zone 4 – suppliers within Australia.

Other significant changes include:

  • Requiring at least one local/regional supplier and one Queensland based business to be invited to quote/tender where possible
  • Reducing complexity to make it easier for Queensland business to respond to procurement requests
  • Exempting business from the pre-qualification systems for building contracts and information technology projects under $1m
  • Permitting procurement outside whole-of-government arrangements for regional and remote locations
  • Encouraging procurement from ethical suppliers and avoiding the purchase of ‘dumped goods’.
New governance and operating models

The policy establishes a new governance structure and operating model that is based around the following categories of goods/services:

  • Information & Communication Technology
  • Building Construction & Maintenance
  • Social Services
  • Transport Infrastructure & Services
  • General Goods & Services
  • Medical.

Each category is managed by an agency-led council that oversees and directs strategic procurement activities.

Councils operate under the direction and guidance of the Queensland Government Procurement Committee and the CEO Leadership Board. A Procurement Industry Advisory Group provides industry input regarding procurement.

Procurement principles

The principles underpinning the Procurement Policy are supported by a number of key requirements for agencies. The following table sets out a brief overview:

Principle 1: Putting Queenslanders first when securing value for money

Value for money is not assessed solely by reference to price and must reflect cost and non-cost factors.

  • Address the following factors when assessing value for money:
    • local benefits test for all significant procurement (weighting of up to 30%)
    • relevant government objectives and outcome sought
    • cost-related factors (i.e. up-front price, whole of life costs, transaction costs)
    • non-cost factors (i.e. fitness for purpose, quality).
  • Identify the most appropriate procurement strategy and method based on complexity, scope, opportunities, risk and  market competition
  • Use the QTenders website and keep the Queensland Contracts Directory up to date
  • Pursue opportunities to advance relevant economic, environmental and social outcomes when identifying value for money priorities during category planning activities
  • Lead agency category teams must coordinate and   publish a forward procurement pipeline for their category
  • Measure and report on procurement benefits.

Principle 2: Advancement of economic, environmental and social objectives

Procurement activities should advance the government’s economic, environmental and social objectives and support the long-term wellbeing of the community.

  • Apply the local benefits test
  • Invite one regional and one Queensland supplier (where possible) to submit tenders/quotes
  • Do business with ethically, environmentally and socially responsible suppliers
  • Avoid purchase of ‘dumped goods’
  • Decision-making for low value and low risk   procurement must be delegated to the level closest to the geographical location where the goods/services will be supplied.

Principle 3: Integrity, probity and accountability

Agencies are accountable for delivering timely outcomes using public resources. Decisions must be transparent & defensible.

  • Observe relevant laws, policies and agreements
  • Ensure governance mechanisms are in place to   maintain integrity in the procurement decision-making process
  • Integrate probity within procurement framework
  • Publish basic details for contracts over $10,000 and additional details for those valued at over $10m

Principle 4: Leaders in procurement practice

The government must understand its needs, the market and suppliers. It requires innovation and active management of procurement activities.

  • Ensure that procurement and business areas   proactively engage with each other from pre-procurement through to contract   management and disposal
  • Adopt a cost-effective market engagement strategy
  • Pursue opportunities to develop innovative supply solutions
  • Adopt appropriate contract management processes and a contract management plan for significant procurements
  • Build procurement capability

Principal 5: Working together to achieve outcomes

Agencies are encouraged to take a collaborative approach to planning and managing procurement, thereby maximising savings and benefits.

  • Identify opportunities to generate savings and   benefits
  • Use common-use supply arrangements that are   mandated for use, except for regional or remote locations
  • Use whole-of-government standard terms, except   where departure is based on a defensible assessment of the requirements of the particular procurement.

Principal 6: Governance and planning

The Procurement Policy aims to increase stakeholder and community confidence in government procurement practices

  • Prepare procurement plans
  • Adopt appropriate planning strategies for significant procurement
  • Follow policy guidelines issued by the Office of the Chief Advisor - Procurement.

Further questions

This article provides an overview of the new procurement policy and highlight some of the key changes. It is not a complete summary of all relevant matters canvassed in the policy.

The lawyers in Crown Law’s Commercial and Property Team are specialists in advising on government contracts, probity and other legal issues relevant to procurement. If you have any questions about legal issues in procurement, contact the A/Assistant Crown Solicitor of our Commercial and Property Team, Chris Maxwell or A/Senior Principal Lawyer, Catherine Jackson on 340 43518.

The information in this publication is provided for general purposes only. It is not to be relied on as a substitute for legal advice. Crown Law and the Department of Justice and Attorney-General accept no liability for losses caused by reliance on the material in this publication. Formal legal advice should be obtained for particular matters.

Published: 20 October 2017

Author: Catherine Jackson