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Purchasing Update - Volume 68 June 2007
Developing the procurement profession in Government
"A profession is a disciplined group of individuals who adhere to ethical standards and who hold themselves out as, and are accepted by the public as possessing special knowledge and skills in a widely recognised body of learning derived from research, education and training at a high level, and who are prepared to apply this knowledge and exercise these skills in the interest of others." (Professions Australia 1997 http://www.professions.com.au).
Professional status is available in many fields, some meet the Professions Australia definition and some serve merely to indicate an occupation. The difference lies in the effort required to earn “professional” status and the investment required to retain it.
The APCC has as one of its deliverables the development of a standard for a public procurement professional. Through its Procurement Skills Action Team, the APCC is defining a standard which jurisdictions can adopt to establish pathways to professional status.
In early 2007, the APCC published the Developing the Government Procurement Professional (Guide) which defines a procurement professional through competencies and capabilities. The Guide discusses what the term "professional" means as a sub-group within the public procurement profession. The document also recognises that progression through levels of procurement professionalism is associated with increasing levels of procurement complexity, risk, managerial responsibility and leadership. Inspiring individuals to a professional career path in government procurement will be planned through three major pathways:
- Graduate recruitment;
- Lateral recruitment via alternative professions in both the private & public sectors
- Development of mainstream procurement practitioners
Until now, procurement professionalism in Australia has not been clearly recognised or defined. The Guide addresses these issues by aiming to raise the profile of procurement and the capacity of those who work within the profession. Through the Procurement Skills Action Team, the APCC aims to ensure our activities in competency development, organisational development and in personnel management are nationally consistent and aligned with what is happening in the private sector but adapted to allow for the needs of the public sector.
The Guide is an aspiration for building government professional procurement workforces now and into the future. Its now up to mangers of our Departments to actively establish programs using the three pathways mentioned above.
A PDF version of the Guide can be downloaded at the APCC website.
The Australian Procurement and Construction Council (APCC) is the peak council of departments responsible for procurement, construction and asset management policy for the Australian, State and Territory governments. New Zealand is an associate member. The APCC reports to the Australian Procurement and Construction Ministerial Council (APCMC), comprising Ministers with direct responsibilities for procurement and construction matters.
Note:
The Australian Procurement and Construction Council (APCC) is the peak council of departments responsible for procurement, construction and asset management policy for the Australian, State and Territory governments. New Zealand is an associate member. The APCC reports to the Australian Procurement and Construction Ministerial Council (APCMC), comprising Ministers with direct responsibilities for procurement and construction matters.
The legalities of procurement, Australian Competition and Consumer Commission v. Baxter Healthcare Pty Ltd
[2006] FCAFC 128 (Full Federal Court of Australia)
Introduction
A recent Federal Court decision that will soon go on appeal to the High Court has important implications for procurement practitioners. The case highlights the need to take care with the structure of Invitations to Offer and the negative consequences of anti-competitive practices by suppliers.
Background
Baxter Healthcare Pty Ltd ("Baxter") is the Australian subsidiary of a global medical product and service company, Baxter International Inc.
Baxter sold various sterile fluids and peritoneal dialysis (PD) products to the State health authorities in NSW, Queensland, South Australia, Western Australia and the ACT.
Each State had invited tenders for the supply of certain sterile fluids to public hospitals. Baxter responded to these tenders, offering to supply sterile fluids on an item-by-item basis, as well as an alternate offer to supply these same items, at substantially lower prices, if the health authority also purchased PD products, on an exclusive, sole supply basis.
Between 1998 and 2001, each of the State health authorities entered into various long term contracts for the supply of these sterile fluids.
Trade Practices Act Allegations
The ACCC brought an action (before a single judge in the Federal Court) against Baxter alleging that Baxter had contravened s.46 and s.47 of the Trade Practice Act 1974 ("TPA").
Section 46 prohibits a corporation from engaging in a misuse of market power. The conduct complained of was that in bundling sterile products (in which Baxter was alleged to have a substantial degree of market power) with PD products (in which Baxter as alleged not to have a substantial degree of market power), Baxter used that power to harm competitors or substantially damage competition in the PD market.
Section 47 prohibits a corporation from engaging in exclusive dealing. The exclusive dealing complained of was that Baxter offered to supply the sterile fluids at a discount, on the condition that the PD products were also purchased exclusively (or almost exclusively) from Baxter, and that this conduct had the purpose or effect (or the likely effect) of substantially preventing, hindering or lessening competition.
Trade Practices Act Findings
On the issue of the alleged TPA breaches, the trial judge found:
There was no misuse of market power, under s.46, by Baxter because:
- Baxter did have a substantial degree of market power in the Australian sterile fluids market;
- However, Baxter did not take advantage of that market power
- Each of the States had negotiated contracts with Baxter in circumstances where the State had the capacity to choose, to a degree, the terms upon which they would deal with Baxter, including the range of products supplied and the cost savings produced. On this view, a State is therefore entitled to enter into whatever arrangements it chooses, even bundled or exclusive arrangements, where it perceives such arrangements to be in its economic or political interests.
Baxter did, however, engage in exclusive dealing, under s.47:
- Baxter had engaged in exclusive dealing by the bundling of PD products with sterile products;
- Baxter’s purpose in engaging in this conduct was to interfere with the competitive process of tendering, so that realistically competitive bids for PD products would not be received.
- That purpose did amount to a substantial lessening of competition.
However, the judge then concluded that the TPA did not apply to Baxter's conduct, because Baxter was entitled to the benefit of Crown immunity.
Crown Immunity Findings
Under the principles of Crown immunity, the TPA does not apply to the State (in other words, the State is not bound by the obligations set out in the TPA) even if it engages in conduct that might otherwise infringe the TPA.
The trial judge found that because the State is entitled to Crown immunity, it follows that the conduct of a supplier with whom the State contracts must also be entitled to that immunity.
As the argument goes: " …the immunity of the State can only be effective if those with whom it negotiates with a view to acquiring supplies are also free from the restraints of the Act". To deny the States the effect of contracts for which they have bargained would be to “interfere with (their) legal rights” and deny the States the benefit of the Crown immunity.
ACCC’s appeal to the Full Federal Court
The ACCC appealed the decision, arguing that the mere fact that the TPA does not apply to the State does not authorise unlawful conduct by others. The ACCC accepted that previous High Court authority meant that its argument could not succeed if that resulted in the State losing the benefit of a contract it had entered into, even if that contract was entered into in breach of the TPA.
On appeal, the Full Federal Court agreed with the trial judge's view that the contracts entered into were valid, because they were entitled to the benefit of Crown immunity.
Importantly, because of its finding on the Crown immunity point, the Full Court did not consider whether Baxter’s conduct in entering into those contracts breached the TPA.
Following the High Court decision in Bradken, the Full Court agreed with the trial judge that the contracts entered into by the State health authorities are protected from attack because the States are parties. To find otherwise and to punish the behaviour of those suppliers doing business with the States would inevitably affect the way in which the States can do business in obtaining supplies.
Implications for Procurement?
Although this decision confirmed the validity of the bundled and exclusive supply arrangements entered into between Baxter and the State health authorities in this case, comments in the Full Court’s judgement remind us, as procurement professionals, of the importance of healthy and appropriate competition in the marketplace.
The Full Court said:
Absent legislation or special circumstances, in acquiring good and services, the executive government takes the market as it finds it and has no special status as a purchaser, although it may have considerable market power because of the volume of potential purchases. In that context, it is difficult to see why the circumstance that the executive government is not bound by a statute should lead to the conclusion that conduct in breach of the statute by others is not prohibited, so permitting unrestrained restrictive practices in connection with the acquisition of goods and services on behalf of the executive government…. by all concerned.
And elsewhere:
The amount involved in the combined purchases of goods and services by the executive governments of the States and State instrumentalities is massive and, as this case illustrates, in many fields would dominate demand. It is one thing to exempt the executive government from legislative prohibition as to conduct, particularly where the dominant position of the executive government in many markets would complicate procurement. It is another to have a substantial area of commerce in which restrictive practices can be carried on by all those dealing with a government, perhaps to the disadvantage of the public purchasing authority, but also to the detriment of other suppliers and consumers. …… The evils of a State-sponsored cartel are not limited to the risk of causing higher prices to be paid by the government purchaser …… The existence of a cartel eliminates the ability of other suppliers to compete for government business which may dominate the market.
Generally, procurement practitioners acquiring goods and services on behalf of Government should:
- develop a clear understanding of the market for those goods and services, and the extent of competition amongst suppliers in that market;
- devise procurement strategies that stimulate and encourage competition, for the benefit of Government as buyer as well as for consumers generally;
- consider the implications of permitting bundling of goods or services in particular procurements, not just on the bottom line price but on competition generally for those goods/services within the relevant market. The short term benefits of a bundled price may well be diluted in the longer term if a monopoly situation is promoted.
But this isn’t the end of the story…
The ACCC has appealed the case to High Court. If the High Court were to find in favour of the ACCC, then:
- contracts such as those entered into in this case (ie. where products are bundled together in a way that infringes the TPA) would be illegal and unenforceable;
- the actions of suppliers in negotiating contracts with State entities would be subject to much greater scrutiny, knowing that the benefits of Crown immunity do not extend to protect contracts that would otherwise breach legislation such as the TPA.
The High Court heard the appeal on 15 May, and is expected to hand down its decision before November 2007. Queensland Purchasing will monitor and report on the outcome of the appeal in September and December editions of Purchasing Update.
Note: Except in relation to its offer to South Australia – where despite request by South Australia for pricing based on exclusive supply for sterile fluids only, unbundled from PD products, Baxter 'point blank' refused to give a discount for sterile products, unless SA agreed to exclusivity of supply of PD products.
Note: The TPA does, however, apply to the State where it carries on a business but the process of acquiring sterile supplies for the public health system was conceded not to be 'carrying on a business' for the purposes of the Act.
Note: Bradken Consolidated Ltd v Broken Hill Pty Co Ltd (1979)
Latest news on the review of State Purchasing Policy
Queensland Purchasing is eagerly awaiting the publication of the Service Delivery and Performance Commission's report on purchasing and logistics in the Queensland public sector.
Once the report is available, amendments to the State Purchasing Policy can be finalised. The amended Policy will reflect both the results of Queensland Purchasing's review of the State Purchasing Policy, and any changes to the Policy resulting from the Commission’s report.
It is now likely that the preferred implementation date for the revised State Purchasing Policy will be 1 January 2008. Queensland Purchasing will continue to inform stakeholders of developments as they happen.
Meanwhile, Queensland Purchasing is working on a review of the better purchasing guidance underpinning the State Purchasing Policy. The new guidance will be rolled out progressively later this year.
If you would like to know more about the review of the State Purchasing Policy or better purchasing guidance, please contact Megan Collins on (07) 322 42736, or email your query to SPP.Review@publicworks.qld.gov.au.
Level 4 Purchasing Certification Graduates celebrate with Queensland Purchasing
L to R: Janelle Newlyn, Pam Crawford, Shawn Knox, Yvonne Kahler, Derek Ireland, Evelyn Jelliffe
Four procurement staff across Queensland joined Queensland Purchasing Director, Evelyn Jelliffe and Purchasing Training Program Manager, Janelle Newlyn in a new graduate certification presentation at Queensland Purchasing on May 22, 2007.
The students join a total of 91 level 4 purchasing certification graduates, who have completed purchasing training and assessment with Queensland Purchasing’s nationally endorsed Purchasing Training Program. Students now qualify for credits against undergraduate study in procurement, with Central Queensland University or Griffith University as well as professional recognition at ‘Diploma membership grading’ with the Chartered Institute of Purchasing & Supply (CIPS).
Evelyn Jelliffe congratulated students on this important achievement.
"Achieving this level of qualification will give you a solid foundation of knowledge, which in turn will help you to improve procurement outcomes in your agencies".
Graduates Pam Crawford, University of Southern Queensland, Shawn Knox, Environmental Protection Agency, Yvonne Kahler, CS Energy, and Derek Ireland, Local Government, Planning Sport and Recreation.
Graduates discuss the program, and their roles as procurement professionals.
Pam Crawford, Procurement Administrator and Office Coordinator, Buildings and Facilities, University of Southern Queensland
Q1) What type of procurement do you undertake at USQ?
I am the Procurement Administrator within the Buildings and Facilities Department at the University of Southern Queensland. My Department is responsible for the delivery of the Minor and Capital Works Programs, Printing Services, Buildings and Grounds Maintenance, Central Stores, Mailroom, Parking and Security Services.
My procurement activities include:
- purchasing card activities:
- Peoplesoft ordering and receipting;
- Calling of offers for all purchases over $3,000. Offers include building work, maintenance equipment, Printing Services equipment and major publications, bulk paper purchases, Standing Offer Arrangements for servicing of facilities plant and equipment.
Q2) Which of the purchasing certification courses did you most enjoy, and why?
I particularly enjoyed Level 4B, Strategic Procurement Negotiations. The trainer was well informed, had a good sense of humour and presented the course in an enthusiastic manner. The course content will be of great benefit to my future procurement requirements and the in-class group activities were challenging.
Shawn Knox, Environmental Protection Agency
Q1) How has the purchasing certification training helped in your role?
Purchasing Certification provides for official recognition of skills gained in undertaking purchasing on a daily basis and understanding of the framework for Government purchasing, including its rules and procedures. It provides a valuable opportunity to network with other procurement professionals and consider alternatives and solutions for situations, or improvements to procedures, which may not be faced or considered, in day to day operations within the EPA.
Q2) Which of the purchasing certification courses did you most enjoy, and why?
I enjoyed the 4B Strategic Procurement Negotiations training the best. I am rarely involved in contract negotiations in my role at the EPA and with the different people involved in the training, you never knew what the outcome would be. I learnt more from the process and the communication between officers, than from the actual results, if any, that were obtained at the conclusion of these exercises.
Yvonne Kahler, Catalogue Controller, Strategic Supply CS Energy
Q1) What type of procurement do you undertake in your agency?
I am currently not doing a lot of procurement as such, in my current role is the Catalogue Co-coordinator for CS Energy. This involves the identification of parts and management of the parts database for the Power Stations. I am currently also doing training around the power station sites, on how to use the Catalogue system in SAP. I still do some purchasing, most of this is for services within the Corporate office.
Q2) What are some of the challenges you face working in purchasing?
Until recently most of the purchasing challenges have been the non adherence to the CS Energy guidelines for setting up of Contracts and Orders. CS Energy Procurement recently under went a restructure and recruitment process to bring the division up to the staff and skill levels required for a Corporation of its size. This restructuring has addressed a number of problems, but has also identified others - for example, the lack of knowledge in the SAP system, and the lack of knowledge of existing processes. We are addressing these issues, and making improvements to our procurement.
Derek Ireland, Principal Technical Officer, Indigenous Environmental Health Infrastructure Unit, Local Government, Planning Sport and Recreation
Q1) What are some of the challenges you face working in purchasing?
Some of the day-today purchasing challenges I face as part of my work include:
- Running the procurement activities efficiently, including reassessing procured goods (contracts) that are not working well, overhauling those that can work better and promoting ones that work well
- Achieving cohesion amongst staff and suppliers so that they work smoothly together as one team to meet the challenges head on
- Building and maintaining successful solid working partnerships with suppliers and client Indigenous remote communities which is key to achieving successful outcomes
- Promoting successful procurement outcomes, which is very important because successful outcomes do not always guarantee they will be judged so unless they are promoted
- Ensuring proper and consistent service is an obvious challenge, it is therefore paramount to ensure that a suitable contract is firmly in place
- Finding suitable suppliers in today’s heated and expensive engineering market.
Q2) What do you think are the benefits of the purchasing certification program to you, and your workplace?
By using competent procurement management strategies my organisation can unlock the purchasing and creative power in order to deliver innovative goods and supplies efficiently. With high levels of appropriate delivery performance required of both procurement managers and suppliers the work that my organisation undertakes towards delivering basic services for the improvement of the health of Indigenous people in remote communities can be optimised.
Additional benefits in achieving my Level 4 Certification include:
- Increased career path options and opportunity to advance at post graduate level
- Recognition in the workplace, obtaining a higher financial delegation level, and increased personal incentive and morale
- Networking with fellow students, trainers and Queensland Purchasing
- Ready access to procurement advice, techniques and information
- Leveraging my learning achievements into my core skills and competencies enabling me to contribute further to the objectives of my team within the business of my organisation
Well done Purchasing Certification Level 4 Graduates.
New Commonwealth guide OH&S in procurement
The Commonwealth Department of Australian Safety and Compensation Council has released a new guideline, Guide to Occupational Health and Safety in Procurement.
The Guide was developed as Governments are major purchasers of goods and services, and as such can influence safety outcomes through their procurement arrangements, and have the potential to decrease the number of workplace injuries and fatalities.
Visit the ASCC for more information.
Buyers Forums 2007: Toowoomba, Rockhampton, Townsville, Brisbane
Buyer’s forums are a unique opportunity to update your purchasing awareness and discuss purchasing issues with a panel of experts and network with regional buyers.
2007 schedule:
Toowoomba: Friday, June 8 – places still available register now
Townsville: August (date TBA)
Rockhampton: October (date TBA)
Brisbane : November (date TBA)
For more information, or to register visit: Buyers forum page or contact Angela Baldwin, (07) 3224 2632 or email: betterpurchasing @qp.qld.gov.au.
Purchasing Training and Certification Schedule
Purchasing Training enables staff across the sector to learn the latest procurement knowledge while enhancing their workplace procurement skills. We deliver training in Brisbane, and regions. The purchasing certification courses can also be conducted on an in-house arrangement. Demand for the training is high, so early registration is encouraged to avoid disappointment.
To view the 2007 Training Calendar.
If you have any purchasing training questions please contact Shannon O'Donoghue, Purchasing Training Event Coordinator at Queensland Purchasing on telephone (07) 3224 2790 or email courserego@qp.qld.gov.au.
Australia's Aging Workforce; The Inherit Problems, and a Solution
A Procurement Perspective by Tarong Energy Corporation Ltd
Australia's aging population and looming skills shortage is an issue amongst managers and industry experts alike. The issue affects many sectors of the Australian economy and workforce, including procurement.
Undeniably, increasing retirement of Australia's skilled procurement professionals is effectively creating a vacuum of valuable industry skills and knowledge. A loss in skills and knowledge can severely impact relationships, operational capacity and the profits of an organisation. Macquarie Bank analyst Jim Lennon directed towards this issue within the Platt's International Coal Report (2005) stating an aging workforce increases capital and operational costs. If ignored, lost knowledge and skills could affect the ability of Procurement departments to effectively operate within both private and public sectors. The ramifications of any drop in procurement’s performance can have dramatic effects on both the competitiveness of organisations to serve the market, and their ability to provide positive returns for stakeholders. For instance, procurement activities in 2006 accounted for $12 Billion of Queensland Government expenditure alone. A 2% decrease in procurement efficiency would result in a $240 million increase in expenditure.
Australia's ageing workforce dilemma will only continue to compound as Australia experiences the tightest domestic labour market in 30 years. Unemployment trends have reached 30 year lows creating a sizeable gap between demand and supply of skilled labour.
So what does this all mean for the procurement profession? This new operational environment may force managers to proactively engage in long term succession planning and its related challenges. Departments now need to plan to actively recruit and develop staff if they are to maintain current levels of performance. Some organisations are strategically positioning themselves to hedge against these risks by investing in prospective procurement professionals.
Next generation investment is being used by Queensland’s own Tarong Energy Corporation Ltd. Tarong Energy is Queensland's largest wholesale energy producer generating 26% of Queensland’s electricity supply. Recently Tarong Energy secured a graduate through Queensland Purchasing's "Procurement Professional Graduate Development Program". The program is aimed at recruiting high achieving university graduates, and utilising them in government departments and corporations for a twelve month period. The graduates undergo extensive training and learn directly from mentors working and experienced in procurement.
The graduate program enables mentors to share their knowledge, experiences and skills about procurement with graduates. This effectively reduces the time and capital expenditure organisations must outlay while employees develop relevant experience curves in the procurement profession. Additionally, the program promotes stronger professional relations between the graduates and their host organisations. Long term, by encouraging graduates into the procurement profession organisations seek to reduce the affects of supply and demand pressure for skilled labour in the future.
Vince Aisthorpe, Tarong Energy's Supply Manager and chairperson of the Queensland Supply Chain and Logistics Conference commented that:
"Australia's ageing work force is going to have a large effect on efficient supply chain management in the medium to long term. The recent failures of organisations to recognise the importance of Procurement activities and to train employees accordingly will result in increased operational costs and lead times within the supply chain. There has been a mentality amongst business professionals in the past that Procurement is a some what obscure department that just makes mindless transactions. This is couldn't be further from the truth. Procurement can be a vital tool for cost reduction and value creation if given the appropriate authority and support within an organisation."
When asked why Tarong Energy had taken on a graduate he responded with some conviction:
"Employing a graduate puts Tarong Energy in a unique position. We can raise the profile of the Procurement profession, while addressing our long term succession planning challenges. All of the graduates in the program are highly educated and committed individuals. The professionalism and knowledge of our graduate will help to drive efficiency within Tarong Energy into the future. While helping to expose others to the importance of Procurement."
For perceptive professionals like Tarong Energy 2007 graduate Desmond Roche, procurement provides a valuable platform to grow a long and successful career. As a Procurement Graduate at Tarong Energy, Desmond has been given a vast number of challenging tasks covering areas such as: contract management; analysis of procurement expenditure and risk; inventory, and; purchasing. Ultimately in the long term this profession is looking for motivated professionals ready to step up and take on responsibility. He is very excited about the opportunities Procurement provides for advancement in the future.
Generally, Australia's aging work force and low unemployment figures are driving demand shortages for skilled procurement professionals increasing operational inefficiencies and costs. As a consequence by engaging in long term succession planning, Queensland Purchasing’s Procurement Professional Graduate Development Program provides organisations with the opportunity to counter the outwards vacuum of knowledge as skilled professionals retire.
For more information about the 2008 Procurement Professional Graduate Program.
Development Opportunities
QP continues to support the development of procurement skills across the sector. One method available to Procurement Professionals is to join and participate in industry association activities or professional bodies. Depending on your area of interest, there are often relevant conferences, site visits and other educational activities that will enhance the knowledge and skills of procurement specialists.
On 2 and 3 August, there is a 'Supply Chain & Logistics Conference' hosted by the major procurement and affiliated associations covering a wide range of procurement related topics.
The event program and registration details can be found at the event website.
Graduate Profiles
James Wilson – Queensland Purchasing
Procurement Professional Queensland Purchasing Graduate James Wilson, discusses his new understanding of procurement, current projects, and career direction. Manager, Maurie McKenzie also discusses the graduate program, and James's journey so far.
PU: Where did you study at university, what did you study, did you enjoy your degree?
JW: In 2006 I graduated with a Bachelor of Commerce from Griffith University; my major areas of study were business orientated, including human resource management, management and marketing. While there were parts of the degree that were theoretically based, overall it was a great learning experience. Already I have been able to take parts of this knowledge and apply it directly into my work with Queensland Purchasing.
PU: How did you find out about the Procurement Professional graduate program?
JW: At the University's Careers Fair held on-campus. I also was able to find out more detailed information at a lunch-time presentation and also through QP email graduate circulars that provided updates on when the program was accepting applications and so forth.
PU: Why did you choose procurement as a career?
JW: At uni I was never exactly sure which direction my career would lead. I really desired not just to focus purely in marketing or human resources but to be able to apply broadly my skills set and major areas of study. While initially I did not know a huge amount about procurement, after speaking with Queensland Purchasing graduate program staff I was able to conceptualise such an opportunity in procurement. So far they have been proven to be right.
PU: Describe the procurement area in the Agency you work for, what type of projects do they work on?
JW: Currently I am working with the Procurement Performance Group. Broadly this unit looks at ways in which procurement performance can be improved in Government. This includes working with agencies to help improve their performance; services include procurement profiling, supply positioning, capability assessment, and coordinating purchasing training certification programs and also running the graduate program itself.
PU: Where do you see the procurement profession heading in the future?
JW: I believe the profession will continue to grow and expand, particularly in influence, as more senior level managers realise its importance. Additionally, as time goes by, I believe there will also be a continual increase in the treatment of procurement as a strategic rather than a purely operational function. With both private and public organisations seeking to gain increased efficiencies wherever and whenever possible, this strategic perspective will become increasingly important as executives realise that good, strategic procurement can deliver significant benefits.
PU: What do you like to do outside of the office environment, any interest sports or hobbies?
JW: I follow a large variety of sports, supporting just about any team with the words 'Brisbane' or 'Queensland' in their name. I also follow the exploits of Arsenal in the various competitions it participates in and also take an interest in the Baltimore Ravens in the American National Football League. Additionally over the years I have participated in quite a number of sports, playing Basketball in my younger years for both clubs and school.
PU: Where do you see your career path leading?
JW: While I am open to opportunities in both the public and private sector, for the foreseeable future at least I envisage remaining with the Queensland public service. It is satisfying to know that within the public service the various projects that I can work-on are of direct benefit to the community as a whole. I would like to, over time, move towards working on the more strategic aspects of procurement and deliver cost and other benefits that I now know such strategic procurement can deliver.
Maurie McKenzie, Procurement Performance Project Manager, Queensland Purchasing
PU: Describe the procurement area in your agency.
MMc: Queensland Purchasing’s Procurement Performance group focuses on working closely with government agencies to developing and improving their procurement capability and performance. The unit also manages the Procurement Professional graduate program, and purchasing training and certification program.
PU: What type of work is your Procurement Graduate working on?
MMc: James is working on a wide range of projects at QP. Recently he completed a supply market analysis of the office furniture market. Through this activity he was able to see that the procurement process is not just about going straight to the market and acquiring a product/service. It involves a sound understanding of internal needs and a detailed thoughtful supply market analysis of all the issues leading to the development of a significant purchase plan.
This process leads to the identification of real, tangible economic, social and environmental benefits. James has also helped research a range of issues, and been involved in many procurement development initiatives underway at QP.
PU: What are the organisational benefits of participating in the program?
MMc: The whole of Government Procurement Graduate Program is about building capability in public sector procurement. QP is hoping to, over time to address the skills shortage in our industry and increase the mix of experience and knowledge of procurement practitioners across the public sector.
Kelly Kean - QR
QR Procurement Professional Graduate, Kelly Kean chats about her study with Griffith University, her QR role, career aspirations and recent procurement in Algester. Cameron Hutcheon, Kelly's QR manager, speaks about QR procurement, Kelly’s graduate experience and the overall benefits of the graduate program.
PU: Where did you study at university, what did you study, did you enjoy your degree?
KK: I studied at Griffith University, completing a Bachelor of Commerce majoring in Marketing & Economics. I really enjoyed my time as a student in such a great environment. I enjoyed my subjects, the different personalities of my lecturers, my interactions with other students, the social activities…. The list goes on!
PU: How did you find out about the Procurement Professional graduate program?
KK: Since University I was attracted to a role within the Government and Public Service. I felt however as my majors were in two different categories it was difficult to fit into particular roles. I felt marketing led to sales positions, which was not the direction I wanted to take. I then entered into private industry for 2 years but always kept an eye out for Government grad programs, mainly through the http://www.jobs.qld.gov.au website.
I chose procurement as I felt it's a growth industry and can be applied to both private industry and all sectors of government and utilised both my knowledge of Economics and Marketing. I actually applied for the QP Graduate program twice, once in 2005 where I reached the interview round but unfortunately was unsuccessful. However in researching the industry for the application I became very interested in Procurement and when the Graduate program continued in 2006 I applied again, this time successfully.
PU: Why did you choose procurement as a career?
KK: At university I really enjoyed learning about marketing and consumer behaviour but I found after graduating university, most entry level positions did not suit my skills, I was either well over qualified for or well under qualified for. I wanted apposition that allowed me to utilise my personal creativity and communication skills in a professional environment that allowed for clear career progression. I soon found the public service offered such opportunities, and when I discovered Queensland Purchasing and the procurement industry, I felt this was an excellent opportunity to utilise my current skills and allow me to develop valuable new skills and progress my career.
PU: Describe the procurement area in the Agency you work for, what type of projects do they work on?
KK: I am currently working in the Queensland Rail Supply Helpdesk of the Supply Division of the Shared Services Group. I’m currently on a year long rotational program with 4 rotations. I was originally in a commodity team for three months where I assisted with several services contracts. Mainly this involved spreadsheet analysis from data from the SAP system –as well as communication with our contracted vendors for the maintenance and smooth running of the contracts. I have since rotated to the Supply Helpdesk where I am answering queries from internal and external customers about a range of supply/procurement related issues such as invoices and system queries.
PU: Where do you see the procurement profession heading in the future?
KK: I think as larger, medium and smaller companies become greater educated as to the benefits of strategic sourcing and the true value of effective procurement, the industry will see an increase of investment in training and a standardisation of systems and practises which will allow Procurement professionals greater flexibility in applying their knowledge to a variety of both public and private arenas.
PU: What do you like to do outside of the office environment, any interest sports or hobbies?
KK: I collect Comic Books (X-Men), enjoy travelling and dining out with my husband. Also I've just 'procured' a new house in Algester in South Brisbane, so much of my time and money and interest is now spent there.
PU: Where do you see your career path leading?
KK: Eventually I would like to fulfil a role with greater responsibility by possibly managing a team and continuing to gain skills and experience. I particularly enjoy utilising my personal creativity to problem solve and facilitate communication, so a future role that allows me to continue to utilise these skills would be ideal.
Cameron Hutcheon Manager, Supply Chain Helpdesk, QR
PU: Describe the procurement area in your agency.
CH: QR Supply is a division centralised in Brisbane but with Purchasing officers situated through-out the state. QR Supply manages all of QR's supply contracts as well as the SAP system which stores and processes almost all of QR’s daily procurement needs. The Supply Helpdesk is the first point of call for both vendors and QR staff members with system, invoice and process related queries.
PU: What type of work is your Procurement Graduate working on?
CH: Currently Kelly is situated in the Supply Helpdesk which exposes her to a wide variety of issues and allows her to develop a vast range of skills to answer these queries.
PU: What are the organisational benefits of participating in the program?
CH: QR has been a part of the QP Graduate program since its inception. The benefits of participating in the program are that the QR Supply division gains new staff with excellent academic knowledge with fresh ideas and a fresh approach. QP Grads at QR also benefit from 2 Graduate programs – the QP program which allows them to network with other Public Sector Procurement grads as well as gain certification in 3 levels of purchasing – as well as the QR Grad program which also consists of networking, mentoring, personal and career development opportunities. Ultimately QR benefits by retaining highly skilled procurement professionals who contribute to the continual improvement of QR procurement processes.
Anthony Molino - QBuild
QBuild Procurement Professional Graduate, Anthony Molino discusses his study background, regional procurement role, projects and vision for the future. Shane Duran, QBuild Procurement Manager, (Burdekin) talks procurement at QBuild, and Anthony's graduate placement so far.
PU: Where did you study at university, what did you study, did you enjoy your degree?
AM: I attended university at James Cook University (JCU) in Townsville. I graduated with a Bachelor of Business majoring in Management and Human Resource Management. Prior to university study I was employed for several years as a Diesel Mechanic. I chose to undertake university study to enable future progression into a broader range of career options. I enjoyed my time studying and furthering my skills at JCU.
PU: How did you find out about the Procurement Professional graduate program?
AM: I became aware of the graduate program during attendance at the Townsville JCU careers fair.
PU: Why did you choose procurement as a career?
AM: I chose procurement as a career path as it has become an integral part of large and small business survival in today's market place. Procuring the correct goods and services, protects the viability of a business' function. Due to the significant funds allocated to purchasing activities, it is important for the Queensland Government to undertake thorough planning. Comprehensive research of markets and suppliers is vital in ensuring value for money is achieved. For these reasons procurement is a sustainable career for the future.
PU: Describe the procurement area in the Agency you work for, what type of projects do they work on?
AM: Establishing Standing Offer Arrangements for Responsive and On Demand Services and Housing Vacant Maintenance, Asbestos Roof Replacement Program, Vinyl Flooring Replacement.
PU: Where do you see the procurement profession heading in the future?
AM: I believe the procurement professional would be seeking to gain a wider base of diverse skills to aid in the expansion of procurement capabilities in business operations. This may include undertaking higher level analysis and subsequent evaluation of procurement functions and processes to refine current practice. Further training and education in the areas of technical/trade applications may be an avenue for development.
PU: What do you like to do outside of the office environment, any interest sports or hobbies?
AM: I am interested in health and fitness. I maintain my fitness by training at the gym three times a week. I also have a goal to become a qualified personal trainer and am currently studying a certificate III in fitness through Tafe.
PU: Where do you see your career path leading?
AM: I would like to continue on in the public sector gaining an increasing knowledge base of government procedures. My next step would be to gain employment as a manager of my own team. I would also like to branch out into project management which I will incorporate with my experience of procurement.
Shane Duran, Procurement Manager, QBuild Burdekin
PU: Describe the procurement area in your agency.
SD: The Procurement Section at QBuild Burdekin is responsible for calling and evaluating requests For quotes and tenders, raising purchasing orders, installing, administering and managing standing offer arrangements, minor and medium works contracts as well as processing of invoices. We have a large number of government clients who differ in size and demand, ranging from small scale jobs to million dollar projects.
PU: What type of work is your Procurement Graduate working on?
SD: Anthony has been learning all aspects of the Procurement Section as well as being involved in developing supplier relationships by attending and arranging meetings with suppliers and contractors. He is undertaking supplier market analysis to assist in identifying areas in which we need to establish more agreements or to engage more contractors/suppliers. Part of this involves using and updating SUPREM (Supply Positioning and Risk Evaluation Matrix) which will assist in the procurement planning process through identifying areas of high spend, risk or activity. He has developed a standardised SOA register for use as a template which has been rolled out across the northern group, comprising of five regions.
PU: What are the organisational benefits of participating in the program?
SD: Organisationally, QBuild has benefited from participating in the program through accessing and developing the knowledge and skills that the graduates have learnt through their university studies. Anthony’s contribution to developing better planning within our procurement processes has been a great benefit to the Region.
Desmond Roche – Tarong Energy Corporation Ltd
Tarong Energy Procurement Professional Graduate Desmond Roche, shares his graduate procurement journey, study background, thoughts on procurement and aspirations for the future. Andrew Cochrane, Tarong Contract Manager chats about Desmond’s passion for business, and dedication to the graduate program.
PU: Where did you study at university, what did you study, did you enjoy your degree?
DR: I completed a Bachelor of Business at the Queensland University of Technology (QUT) graduating with Distinction. I Majored in International Business and Marketing. I t horoughly enjoyed my time at QUT. Particularly study areas that involved analysing the complex nature of South East Asian supply markets and the marketing psychology behind consumer/business purchases and consumption patterns.
PU: How did you find out about the Procurement Professional graduate program?
DR: I found out about the program at the university's careers and employment day on campus.
PU: Why did you choose procurement as a career?
DR: After I graduated high school in the regional town of Warwick. I worked at the local meat works (as a knife hand) and the Big-W distribution centre (as a store person). Being exposed to the various challenges each of these organisations faced with procuring materials really interested me. My university studies allowed me to explore this area and gain a more comprehensive understanding of the importance of procurement activities and its related challenges. There is so much more to procurement than just the purchasing of cattle or products for redistribution. There are a host of complex variables across supply markets that can cause fluctuations in the supply and demand of required inputs. Strategic procurement can mitigate the risk of these variables impairing the operational efficiency of an organisation through excessive costs and lead times on those inputs (Large or small). Ultimately though, I see Procurement as a rapidly growing profession with many opportunities for motivated professionals and I want to be apart of it.
PU: Describe the procurement area in the Agency you work for, what type of projects do they work on?
DR: Tarong Energy’s procurement activates are conducted out of the supply department headed by Vince Aisthorpe. Tarong Energy procures a wide range of products, materials, and services. For example, the corporation currently has a multi-million dollar control system refit in process. It also purchases products and services such as environmental revegetation programs, electrical products and services, wind-powered generators, as well as steel cap boots and hard hats. Tarong Energy’s procurement activities also vary depending on requirements between domestic and international purchases.
PU: Where do you see the procurement profession heading in the future?
DR: The Procurement function has been an under utilised resource. However, procurement can be a vital tool for cost reduction and value creation. I see procurement becoming a vital part of all successful organisations’ strategic direction in the medium to long term future. Strategically planned procurement will become widely accepted as Australian best practice. I think the general change in attitudes towards procurement will be driven by the continued global competition pressures for cost reduction and efficient management. In short I believe Procurement will be undertaking vast changes over the next decade as it grapples with heightened responsibility within organisational structures and processes.
PU: What do you like to do outside of the office environment, any interest sports or hobbies?
DR: I love watching and playing footy (The real stuff the NRL and Rugby) and having a quiet beer with my mates. I referee some league matches in Brisbane on weekends. I also volunteer for the United Nations. I am currently working with a host of international volunteers and the Warwick Youth Ambassadors to raise money to develop a community restaurant in the African nation of Burundi. The project will help to give jobs to the disadvantaged youth in the small community of Bwiza. All profits will be reinvested back into the community for other such projects. I enjoy helping others and it’s a great practical use of my business skills.
PU: Where do you see your career path leading?
DR: I am an ambitious, hard working and committed person. I see myself having a long career in procurement and supply chain management. Short term I would like to gain as much exposure to the vast range of procurement activities so that I can develop a good understanding of the finer aspects of procurement (Including the hands on dirty stuff). Long term through hard work and commitment, I hope to progress to a management position in procurement.
Andrew Cochrane, Contracts Manager, Tarong Energy
PU: Describe the procurement area in your agency.
AC: Tarong Energy's Supply Group includes a purchasing team and a contracts team. The purchasing team is involved in the acquisition of goods and low value services providers. The contracts team focuses more on contract award and the support of contract administrators.
PU: What type of work is your Procurement Graduate working on?
AC: Desmond is working on tasks covering all functional areas of the Supply Group, including inventory, warehousing, purchasing and contracts. Specific tasks include: receipting and issuing goods; purchasing stock and non-stock items; varying contracts; issuing revised Sitework conditions, and; managing a specific tender process.
PU: What are the organisational benefits of participating in the program?
AC: Like many Supply Groups, we recognise the shortage of practical professionals across all areas including logistics and contracts. The program is one way of address this shortage – something that will benefit our profession, our organisation, and our State.
Client Satisfaction Research Program 2006-07
As part of our efforts to improve our services, Queensland Purchasing has commissioned consultants to collect feedback from Queensland Government employees about the quality of services provided by Queensland Purchasing, and their satisfaction with those services. This research will be conducted bi-annually as part of Queensland Purchasing’s customer satisfaction research program.
This information is important in helping us to continually improve our services, and to ensure we are investing appropriate resources in areas of greatest importance.
During May clients across the sector who use our services were selected randomly from our client databases, we thank all of you who are participating in the research program. We value the feedback on the services provided by Queensland Purchasing.
If you have any questions regarding the research program please email, Communications Officer, Angela Baldwin: betterpurchasing@qp.qld.gov.au.
Last updated June 2007
