Publications> Purchasing Update - Volume 66 December 2006

Purchasing Update - Volume 66 December 2006

Buying Locally in Regional Towns

What can be done to give local suppliers every opportunity to win Queensland Government business?

The State Purchasing Policy (SPP) requires agencies in their procurement planning to analyse their spend and categorise purchases based on relative expenditure and difficulty of securing supply.

Each agency must devolve to the lowest practical geographical level, purchasing decision-making and associated budgets for goods and services that the agency assesses are of low relative expenditure and for which supply is easy to secure.

Once the agency has at the corporate level undertaken this exercise and devolved this category to its regional offices it is important that these goods and services are purchased locally. This strategy delivers on the Government’s priorities of creating jobs and building Queensland ’s regions.

For easy to secure items, regional offices generally should not be purchasing from Brisbane or even outside their region or town. The category by its nature of ‘supply is easy to secure’ means that suppliers outside the town should not be invited to offer.

Another issue that appears to be undermining the ideal of purchasing this category locally is the perception that the SPP requires 3 offers to be obtained for all purchases. The SPP does not have any dollar thresholds or mandate that quotes or tenders have to be invited. It is the purchasing officer’s knowledge of the marketplace that should determine what is the most appropriate way to approach the market.

When there is a large competitive market for goods or services in a region it may be appropriate to invite offers from all. On other occasions there may be only two or even one supplier in town. In these circumstances, if the purchasing officer is satisfied that the suppliers offer competitive prices then there is no requirement under the SPP to obtain further offers. The purchasing officer should make the appropriate documentation to support this decision.

Any arbitrary requirement to seek three offers on all occasions could force the purchasing officer to go outside the town or region and be faced with the prospect of a lower priced offer from outside town.

When a lower priced offer from outside the town or region is being considered the true cost of the offer needs to be carefully calculated.

Local businesses depend on local patronage from other businesses, government agencies and the local population to be viable. When government agencies routinely chase the lowest price from Brisbane via the Internet they are potentially undermining the viability of local suppliers.

There are anecdotal reports of agencies regularly buying from Brisbane through the Internet or generally outside their town when there are competitive local suppliers in the area. These agencies then have the audacity to approach businesses in town to support their community with donations for fundraising activities.

More must be done to encourage regional business opportunities.

Queensland is presently developing the Regional Business Opportunities component of the QGM website which, when finalised, will provide information from all agencies on what is bought regionally. The following information will be included from each agency with regard to regional offices:

agency locations
core activities
goods and services required
a contact number

This will assist local suppliers seeking government business and create an expectation that the goods and services listed will be purchased locally.

For further advice or if you would like to discuss the issues raised, please contact Bob Orchard telephone 3224 2707 or email bob.orchard@qp.qld.gov.au.

Procurement: Christmas and receiving gifts

As Christmas approaches, agencies have an opportunity to remind their suppliers about the Queensland Government's Gifts and Benefits Policy. Queensland Purchasing sends an annual Gifts Policy Letter for 2006 (Word, 39kb) to all of its suppliers (use this letter as an example to write your agency gift policy letter).

It is a requirement of the Gifts and Benefits Policy that agencies communicate the principles of the Policy to their suppliers and potential suppliers. Agencies are strongly advised to write to their suppliers to ensure that they are aware of the Government's requirements on the giving and receiving of gifts.

For more information visit gifts policy or email questions to betterpurchasing@qp.qld.gov.au.

Round two consultation begins: State Purchasing Policy review

Recently the Honourable Robert Schwarten MP, Minister for Public Works, Housing and Information and Communication Technology, approved the release of a Policy Paper seeking the views of stakeholders on recommended changes to the State Purchasing Policy (SPP).

Over 200 stakeholders representing industry, Government agencies and unions, will by now have received a letter from the Director-General of the Department of Public Works (DPW) Mr Mal Grierson, enclosing a copy of the Policy Paper and inviting comment.

Evelyn Jelliffe, Director of Queensland Purchasing, is enthusiastic about the release of the Policy Paper and said that:

“In May this year DPW flagged proposed changes to the Queensland Government’s procurement policy in an Issues Paper. We were pleased that the response to the Issues Paper confirms widespread support for the direction in which we are taking the SPP. While the current SPP has been well received, we think it can be better, and we want to raise the bar in important areas such as procurement performance and update the SPP to reflect developments in procurement since 2000 to keep the Queensland policy at the leading edge of procurement governance.”

What are the recommendations?

The Policy Paper contains 14 recommendations for improvement:

Measuring and reporting on procurement. The current SPP does not require agencies to have systems in place to measure and report on their procurement. Stakeholders expressed a high level of support for the enhancement of procurement measurement and reporting as proposed in the Issues Paper.

Accordingly, the Policy Paper makes recommendations which require agencies to have procurement measurement and reporting frameworks in place.

To assist DPW in providing a more comprehensive and informative picture of the sector’s procurement performance to Executive Government each year, budget sector agencies will be required to report on measures as specified by DPW from time to time, and DPW may seek Government Owned Corporation (GOC) procurement measurement information through Shareholding Ministers.

Procurement planning. The current SPP mandates the preparation of both Corporate Procurement Plans and Significant Purchase Plans. There was a very positive response from stakeholders to propositions to incorporate greater policy direction with regard to procurement plans.

The recommendations aim to build a greater strategic focus into agency procurement, including demonstrating a stronger alignment with the strategic goals of the agency. DPW has also responded to a need for improved policy direction in procurement planning, and recommends that minimum requirements be addressed in both Corporate Procurement Planning and Significant Purchase Planning.

Maintaining transparency in supplier selection. The Queensland Government’s participation in trade agreements such as the Australia-United States Free Trade Agreement (AUSFTA) means that there are additional requirements now applying to covered procurements. Amendments to the Policy and the development of supporting guidance are necessary to recognise these requirements, and to assist agencies covered by the agreement in clearly understanding their obligations.

Recommendations have been made to enhance transparency of the tender and contract process in Queensland, which will bring the State into line with other jurisdictions. This includes central listing of tenders on the Queensland Government Marketplace website, as well as a new requirement to publish details of awarded contracts and standing offer arrangements $100,000 and over.

In keeping with the 'buy local' intent of the policy, it is proposed that agencies be provided with the flexibility to set-aside procurements specifically for small and medium enterprises (SMEs) where the Government’s interests will be best served by limiting offers to SMEs.

Procurement capability and performance assessments. Stakeholders showed strong support for the introduction of periodic independent procurement capability and performance assessments within the SPP. Recommendations in this area are aimed at achieving better procurement across Government through objective assessments of agency performance and capability, and will be mandatory for budget sector agencies and recommended better practice for Government Owned Corporations and Statutory Bodies.

Sustainable procurement. This is an area of growing emphasis both in Australia and overseas. DPW’s annual reviews of the SPP have found that the extent of sustainable procurement in agencies is extremely low.

Stakeholders agreed that there needs to be more attention in the SPP placed on this important area. In fostering an increased focus on sustainable procurement, DPW recommends amendments to the Policy which will require agencies to increase their efforts in this area, and measure and report the results in their Corporate Procurement Plans.

Employee conditions in government contracts. Many of the suppliers to the Queensland Government are now subject to the provisions of the Commonwealth Government’s Workplace Relations Act 1996 (Cth) as amended by the ‘Work Choices’ legislation in 2006.

A diverse range of opinions were received from stakeholders in relation to this matter, and jurisdictions around Australia have taken differing approaches in dealing with the issue. The recommendations in the Policy Paper incorporate a statement into the SPP requiring agencies to use their best endeavours to deal with suppliers who treat their employees fairly. Further, the Paper recommends that stakeholders note that the Department of Employment and Industrial Relations (DEIR) will develop a ‘no disadvantage test’ clause to be included in State contracts and a DEIR policy statement directing the inclusion of a ‘no disadvantage test’ clause in all contracts.

Roles and responsibilities. Since the release of the current version of the Policy in 2000, it has become evident that there is scope for the Policy to more clearly reflect the roles and responsibilities of the key stakeholders including Accountable Officers.

In response, Policy paper recommends a clear expression of roles and responsibilities including clarifying application of the policy to Government Owned Corporations and Statutory Bodies, and the implications of shared service arrangements on procurement.

Consultation closes on 18 December 2006

SPP stakeholders have been invited to consider the recommendations and provide comment to the SPP Review Team by Monday 18 December 2006. Copies of the Policy Paper and related documents can be found on the at SPP review.

The next step

The Policy Paper will give stakeholders an opportunity to comment on the recommended changes to the SPP, prior to the final amendments being recommended to Executive Government for approval in 2007.

Throughout the review the Department of Public Works has liaised with the Service Delivery and Performance Commission, which is concurrently conducting a separate review of Queensland Government procurement and logistics. The Department of Public Works’ submission to Executive Government for approval of changes to the SPP will occur following the finalisation of the Commission’s review, ensuring that any changes to the SPP recommended by the Commission can be incorporated. The Department continues to work towards an implementation date for the revised Policy of 1 July 2007.

If you would like to know more about the review, please contact either John Dears (07) 322 42910 or Megan Collins (07) 322 42736, or email your query to SPP.Review@publicworks.qld.gov.au.

Graduate profile

Vanessa Read, Queensland Purchasing

Queensland Purchasing Procurement Professional Graduate, Vanessa Read discusses her educational background, current procurement role, outlook of the profession and career aspirations. Andrew McGregor, Vanessa’s manger, Manager of QP’s Travel Management Unit speaks about procurement in the travel unit and the organisational benefits of the graduate program.

PU: Where did you study at university, what did you study, did you enjoy your degree?

VR: I began my degree whilst in year twelve as a part-time business student at Griffith University . Upon graduating from high-school I transferred to the University of Queensland and enrolled in a dual degree. I studied Business and Arts, majoring in International Business and International Relations. As part of the international business side of my degree, I spent a year at the University of Nottingham in the UK as an exchange student. I enjoyed my degree as the two fields of study gave me an educated insight into global business and politics, both areas greatly interest me. I have found that my interest has continued beyond the culmination of my undergraduate degree, hence my current study in a Masters of International Business part-time at UQ.

PU: How did you find out about the Procurement Professional graduate program?

VR: I found out about the program by chance as I was looking on the university careers website. I thought the program sounded like an excellent way to gain a broad knowledge of both operational and strategic procurement, a field that I had been introduced to at university.

PU: Why did you choose procurement as a career?

VR: Procurement is a discipline that is quickly gaining increased recognition for its role in business operations. I became aware of the procurement function at university and was intrigued by the varying facets and the scope of the field. I felt that a career in procurement would enable me to enjoy a wide variety of work and projects, as well as offering me future international employment opportunities.

PU: Describe the procurement area in the Agency you work for, what type of projects do they work on?

VR: I am currently involved with Queensland Purchasing’s Travel Management Unit. The travel team is responsible for managing all whole of government standing offer arrangements pertaining to travel commodities, as well as designing and implementing the new government booking tool, the Travel Management System (TMS).

PU: Where do you see the procurement profession heading in the future?

VR: Procurement is gaining increased recognition for the positive impact, well-managed procurement and informed purchasing can have on organisations. As more firms become exposed to the benefits of procurement, the profession will evolve and gain respect, in turn procurement professionals will be in greater demand. In the future, I feel that companies may integrate the procurement, logistics, and supply management functions, as ultimately the areas interact and affect each other.

PU: What do you like to do outside of the office environment, any interest sports or hobbies?

VR: I am an avid traveller as a result of being brought up overseas, both in Asia and in Europe. My friends and I are currently planning a trip in 2007 to South America to attend Carnivale in Brazil.

PU: Where do you see your career path leading?

VR: I hope to gain an excellent understanding of procurement and become someone that has indispensable skills to an organisation. I would like to eventually be able to travel for my career.

Andrew McGregor – Manager, Travel Management Unit, Queensland Purchasing

PU: Describe the procurement area in your agency.

AMc: The Travel Management Unit is part of Queensland Purchasing, the team deals with commodities relating directly to travel. The Travel Management Unit is responsible for establishing and managing seven whole-of-government standing offer arrangements for travel products and services. The unit also provides travel management advisory services to the Queensland Government. Procurement within the unit focuses on not only reducing the cost of travel but also improving the policy compliance of travel and the efficiency of the travel booking process.

PU: What type of work is your Procurement Graduate working on?

AMc: Vanessa assisted in conducting the tender and evaluation process for a whole of government standing offer arrangement for car rentals (SOA 681). This was a particularly interesting project because it is the first cross-jurisdictional arrangement in Australia . This standing offer arrangement encompasses Queensland, New South Wales, Victoria, and South Australia – totalling in all, an aggregated spend of approximately $20M each year. As well as this, Vanessa assists in managing the standing offer arrangements for Air Travel, where she is responsible for collating and distributing the reporting on spend to agencies.

PU: What are the organisational benefits of the graduate program?

AMc: The Graduate program will bring tertiary-qualified professionals from other, related disciplines (business, economics, finance, ICT, law) into the procurement profession. This will broaden the skill base within the profession by bringing useful business and analytical skills to the procurement process. Given the importance of procurement to the Queensland Government, it is critical that we continue to attract skilled professionals to ensure the delivery of core goods and services at the best value for money.

Department of Public Works Excellence Awards 2006 – Highly Commended

Congratulations to Queensland Purchasing’s Procurement Professional Graduate team. The program received a Highly Commended award at The Department of Public Works Recognition of Excellence Awards 2006.

The Excellence Awards provide an opportunity to recognise notable achievements in the Department throughout the year.

Well done to team members Project Manager, Melissa Watson, Graduate Coordinator, Alison Boundy, Senior Project Officer, Mark Hoffmann, and Communication Officer, Angela Baldwin

8 graduates were placed in State Government Agencies and Shared Service Providers in 2006, this placement has increased with the 2007 program including 14 graduates, across 10 departments & Government Owned Corporations, including 2 regional positions, in Townsville and Rockhampton.

For more information on 2007’s Graduate Program visit: www.qgm.qld.gov.au/graduates

Mark Hoffmann and Alison Boundy
accepting the award from
Minister for Public Works, Hon Robert Schwarten.

Guidelines for the Disposal of Computer Equipment

Are you thinking about upgrading your PC and laptop fleet? Don't know what to do with the old ones?

Queensland Purchasing has developed a guideline which provides advice to Queensland Government agencies when making decisions about disposing agency computer equipment.

The Guideline for Disposal of Computer Equipment (PDF, 128kb) provides information about:

When to dispose of the equipment
What are the disposal methods?
What are the implications of the disposal methods?
Pre-disposal activities.

Any questions? Email betterpurchasing@qp.qld.gov.au.

2007 Purchasing Training Calendar

The 2007 Purchasing Training calendar poster is printed and being distributed throughout the state this month to all current purchasing students.

Programming of purchasing courses to support purchasing certification levels 1 to 4, will recommence from February 2007. Student enrolments for 2007 have already commenced, so register early to ensure your place. Text Box:

To preview the online 2007 training schedule.

If you would like a printed copy of the calendar please email courserego@qp.qld.gov.au or for more information call Shannon O’Donoghue on purchasing training phone line: (07) 3224 2790.

The Queensland Purchasing Training and Development Team would like to thank our students and clients for their continued support throughout 2006 and extend our wishes for a safe and Merry Christmas.

Travel Management Unit update

2006 has proved to be another testing year in the general travel market and within the Queensland Government travel arrangement arena. Travel arrangements and processes change quickly and travel officers have needed to be kept abreast of the ever changing travel market. The numerous changes, milestones and travel information have been presented and/or communicated to the many Queensland Government travel officers in ‘Travel Update’ e-newsletters or in the form of presentations at Government Buyers Information Sessions. The Travel Management Unit is pleased to make these e-newsletters and other travel related information available on the TMU web page.

In 2007 the Travel Management Unit will rollout the much anticipated Travel Management System (TMS). As a lead up to the TMS rollout, the Travel Management Unit is entering the User Acceptance Testing (UAT) stage of the project, which will then be followed by the all important ‘Pilot’ of the system in April 2007.

For more detailed information on the Travel Management System, travel arrangements or any ‘Travel Update’ material, please visit the website.

Cutting Costs with Government Disposals

The Government Disposals section of Queensland Purchasing recently completed a clearance with a difference on behalf of the Department of State Development and Trade.

The clearance involved co-ordinating an on site auction of the plant & equipment from a sawmill. The Queensland Government had purchased the sawmill as part of a voluntary buyback program to support the transition of the Queensland timber industry to reliance upon a sustainable plantation resource.

The auction was conducted at the Road Tek Depot in Emerald in August. Authorised Government Auctioneer Chris Tomkins from Rockhampton advertised the auction nationally and conducted the auction.

Almost 100 lots were put “under the hammer” on the day. Large items included Prime Movers, Bull dozers, Tri-axle trailers, Fork lift and a Landcruiser Utility. There was also a range of Saws, Conveyors, Kilns and various other equipment.

Many items, due to their value, were sold with the protection of a reserve price. The success of the auction led to all but one item, a Prime Mover, selling on the day. It was subsequently sold by Chris Tomkins at a later auction in Rockhampton.

Government Disposals Manager Paul Thomasson, who attended the auction in Emerald, was pleased with the outcome of the sales.

“It took a good deal of time, resources and team work from the three organisations to co-ordinate the auction and it was a really good result for all concerned.”

The Department of State Development and Trade was also happy with the result. “We were impressed with the service of both Government Disposals and Chris Tomkins,” Executive Director, Regional Development and Services, Mark Bermingham said.

“They kept the Department up to date throughout the auction process and provided the Department with valuable information that enabled us to make informed decisions.”

Paul Thomasson adds.

“On site auctions are a great way for agencies to sell large numbers of surplus items. If an Agency has a suitable site Government Disposals can arrange an onsite sale. It can also save on costs, such as transportation, which is a great benefit.”

Sawmill equipment auctioned at Emerald

If you want to know more about Government Disposals visit their website www.disposals.qld.gov.au or call them on (07) 3224 8251.

New Revised Standard Terms and Conditions

The review of the standard terms and conditions which the Queensland Government utilises for the acquisition of Goods and/or Services (excluding ICT purchases) is continuing. Crown Law is currently reviewing the “one-off purchase” package which includes:

Conditions of Offer;
Conditions of Contract; and
Invitation to Offer template.

It is anticipated that this review will be completed in December 2006. Agencies will be notified in writing when the above documents have been released.

Other documents which are currently being developed or under review are:

Procurement Terms – Defined;
Short Form – Conditions of Contract;
Invitation to Offer - Standing Offer Arrangement;
Conditions of Offer – Standing Offer Arrangement; and
Standing Offer Arrangement Conditions.

For further information regarding these revised terms and conditions, please contact Melissa Jeffs on 3224 5825 or via email - Melissa.Jeffs@qp.qld.gov.au.

QGM website Search tool

The Queensland Government Marketplace website has a key feature that may assist you when you are having troubles locating the information you require online.

Step 1: Open QGM www.qgm.qld.gov.au homepage top right hand corner search field

Step 2: type in the information you require eg. Probity

Step 3: the site will navigate directly to the page you wish to locate eg: http://www.qgm.qld.gov.au/02_policy/better_purch.htm > Ethics, Probity and Accountability in Procurement

Any questions? Email betterpurchasing@qp.qld.gov.au you will receive a response to your request within 24 hours.

New Queensland Purchasing Online Surveys

Queensland Purchasing has established a number of procurement products and services for our Policy, Procurement Services, Training, Travel and Procurement Performance business units.

To assist Queensland Purchasing in meeting agencies needs and expectations, staff from agencies will be selected to participate in regular market research (surveys). Included will be SOA surveys, these surveys are designed to determine whether suppliers of whole of government arrangements, which are managed by our Procurement Services team, are providing the required level of support, service, and quality expected by agencies.

The feedback received from these surveys will be particularly important in maintaining and improving our procurement services across Queensland Government. Agencies are encouraged to provide this feedback as it will assist Queensland Purchasing in understanding demand requirements and implementing new and improved facets to our performance, service and delivery.

The supplier chosen to undertake these online surveys is eMarketing Provider Vision 6. These surveys will be sent through this supplier to selected target groups across the sector seeking feedback. Our first two surveys for SOA 652 Photocopiers & Multifunctional Devices and SOA 360 Tyres and associated services were released in late November 2006. Please note that any feedback received as part of this process will be maintained as confidential in accordance with the Privacy Act 1988 (Cth).

If you have any questions regarding these surveys please email: betterpurchasing@qp.qld.gov.au.

Rental of Motor Vehicles – SOA 681

Queensland Purchasing has been working with three other Jurisdictions towards a collaborative arrangement for the Rental of Motor Vehicles that will deliver better value for money. This collaborative arrangement is the first of its kind between Australian jurisdictions and it is exciting to have Queensland Government as the lead jurisdiction.

The current whole of Queensland Government standing offer arrangement for the Rental of Motor Vehicles (SOA681) will expire on 31 December 2006 . An invitation to offer closed on 13 October 2006 and evaluation of the offers received has been completed. The totally new arrangement commences on 1 January 2007 and it is expected to delivery significant savings on major rentals across all areas.

Avis Australia Pty Ltd has been awarded the primary supplier position in this new arrangement. Thrifty Australia Pty Limited has been awarded the position of overflow or secondary supplier where the primary supplier is unable to offer a vehicle for any reason. Avis Australia will also be connected to the Queensland Government’s new Travel Management System (TMS). When the TMS is implemented, Queensland Government users will book their hire vehicles through the system.

It is hoped this collaborative arrangement will be the first of many to come where market and demand conditions are favourable. Collaborative arrangements should prove to be of benefit to all, including the suppliers where their costs will be reduced by minimised tendering cost and standardising procedures. Full details of the new arrangement will be made available through the Queensland Government Buyers Catalogue by the end of December ready for the January commencement.

Further information on SOA 681 can be obtained by contacting:

Monica Gardner from Queensland Purchasing
Phone: (07) 3224 8133
Email: monica.gardner@qp.qld.gov.au

Standing Offer Arrangement (SOA) No. 200 - Office Administrative Employment Agency Staff (Temp Staff) and Temporary and Permanent AO1 & AO2 Level Administrative Employees

Queensland Purchasing is currently developing a Best Practice Guide to assist Purchasers when engaging temporary staff.

This Guide will provide suggestions and recommendations about how to get the best value from the Standing Offer Arrangement when engaging Temp Staff.

The Best Practice Guide will cover the following four (4) areas, detailing the steps Purchasers should take:

(a) prior to the engagement of Temp Staff;
(b) at the commencement of the engagement;
(c) during the engagement; and
(d) at the end of the engagement.

It is expected information on the Best Practice Guide will be available in late December 2006, and will be accessible through Queensland Purchasing website at www.qgm.qld.gov.au.

Further information on SOA 200 can be obtained by contacting:

Leah Walker or Delia Manson from Queensland Purchasing
Phone: (07) 3404 3731 or (07) 3224 2661
Email: leah.walker@qp.qld.gov.au or delia.manson@qp.qld.gov.au.

SOA 978 Bulk Fuel & SOA777 Card Fuel Arrangements

Queensland Purchasing will be approaching the fuel market over the next couple of months with a view to implementing new Bulk Fuel and Card arrangements on behalf of the Queensland Government.

The current arrangement for Bulk Fuel is set to expire 31 December 2006, with Card Fuel to expire shortly after on 1 February 2007. A short term extension has been sort from BP until 30 April 2007. It is envisaged that responses from fuel suppliers is likely to occur mid to late February 2007, with contract award and implementation to occur during March - April 2007.

Future updates in relation to the progress of the current tender processes will be forwarded via Fuelnet and future editions of the Procurement Services SOA Newsletter and Purchasing Update. Should you have any queries please contact Tania Palmer at Queensland Purchasing on (07) 3224 7920 or via email at tania.palmer@qp.qld.gov.au.

Supplier arrangement for Practical People Management training program

The Office of the Public Service Commissioner (OPSC) recently selected three suppliers to deliver a new management development program.

The Practical People Management program aims to provide all levels of managers and supervisors in the Queensland Public Service with practical skills to manage people effectively.

“This program is designed to give participants essential people management skills and develop their confidence in applying these skills in the workplace,” said Project Manager, Sarah Hucklesby.

Under the arrangement, suppliers can tailor the Practical People Management program for in-house delivery or offer generic training programs for individuals from multiple agencies.

The arrangement offers Queensland Government departments and agencies a pre-qualified list of suppliers and does not affect any individual department/agency purchasing policy requirements.

If you are engaging a supplier to deliver the program in-house, contact the OPSC for a copy of the head agreement. Departments will need to develop their own contract documentation (in accordance with local purchasing instructions) with the selected supplier.

For further information, refer to www.opsc.qld.gov.au, the QGBC (www.qgbc.qld.gov.au) or contact:

Sarah Hucklesby
Learning & Development Branch
Office of the Public Service Commissioner
Ph: 07 322 52479
Email: learning@opsc.qld.gov.au

Last updated December 2006

Purchasing Update - December 2006