Government Procurement Rules firm up their bite

What the latest developments mean for evaluators

There’s change in the air in Government procurement requirements, and Council Procurement managers need to take notice.

You can no longer ignore the Government’s Principles and Rules of Sourcing.

It’s nearly two years since the government introduced its Five Principles of Procurement – which have to be built in to every public procurement activity. Sadly, evidence shows that the majority of procurement staff in all kinds of public agencies (from Councils to Ministries and everyone in-between) still have little knowledge of how these should apply to their work.

They may be in for a shock. The ‘ante’ has definitely been ‘upped’: the Five Principles of Government Procurement are now not the only thing that’s mandatory for many government procurements. From the 1st of February this year, the Government’s Rules of Sourcing have been extended to include many public organisations.

Since their introduction in October 2013, the Rules of Sourcing have been regarded with passing interest by many government organisations, who have been able to dismiss them (to a degree) because only organisations such as ministries, public service departments, Police and Defence Force were required to follow the rules.

Other government agencies were only expected or encouraged to have regard to the Rules. In practical terms, this meant they could get away with ignoring the rules and continuing to do what they had always done.

After a comprehensive consultation exercise in 2014, the Government is about to release its third edition of the Rules, and the mandate for following the Rules has been extended to a long list of additional government agencies, including District Health Boards, Crown Entities, and Crown Agencies. You can find that list, together with other useful information about the Government’s Rules and Principles, at www.procurement.govt.nz .

Those organisations are now required to meet definite standards for their tendering processes, including, for example:

  1. Allowing set minimum time periods for tender responses (mostly these are around 20 – 25 business days, with some deductions possible)
  2. Openly advertising opportunities on GETS
  3. Preparing and using Annual Procurement Plans and Extended Procurement Forecasts, aimed at giving suppliers advance notice of possible contract opportunities
  4. Avoiding applying technical specifications or conformance standards that would create obstacles for some suppliers
  5. Including the evaluation criteria and an indication of the relative importance of each, in the RFT.

There’s nothing scary in those requirements. If your procurement people understand and embrace them, you may well find that the ‘bang’ that you achieve for your limited budget bucks will be considerably more than it used to be. Procurement processes will be faster, more accurate, and less expensive.

If Local Authorities have solid procurement principles in place, the next step is to back those up with procurement tools that bolt those principles home. For example:

  1. Prequalification systems that avoid the time wasted in repeatedly evaluating generic information
  2. Identifying factors to eliminate unsuitable suppliers early in the process
  3. Developing targeted RFT questions that focus on the factors that will differentiate a great bidder from a merely good one (usually based around project-specific risks or opportunities to innovate that will create real, long-term value)
  4. Anchored marking scales that encourage consistent, fast marking processes and make the decision clearly justified
  5. Clever Response Templates that reduce the time and frustration that evaluators have in searching for the information that they need to mark.

Put together with embedding the Government’s Five Principles of Procurement and its Rules of Sourcing, these provide Councils with powerful tools to make their tendering processes sharper, better and more cost-efficient.

The Rules of Sourcing have not been put in place to make things difficult for procurement people. On the contrary, they’re aimed at providing a consistent, fair, fit-for-purpose and cost-efficient framework for procurement processes. One that encourages competition and innovation, that inspires suppliers to give their best to the contracts they bid for and win; and one that builds healthy, viable regional economies to support New Zealand Inc.