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Value for money is the central procurement principle from which all other procurement policies and decisions flow. It is reflected in Western Australian Procurement Rule A1 – Achieve Value for Money.  All purchases, regardless of value, must represent value for money.  

Value for money includes a consideration of whether there is a bona fide need to buy the good or service. Could you borrow the good from another State agency? Does your agency or the public sector more broadly have the expertise to deliver the service themselves?

Achieving value for money in procurement is much more than choosing the lowest price for a good or service.

Achieving value for money requires a consideration of:

1. government’s social, economic and environmental priorities
2. cost
3. other non-cost factors

For further information on the ºÚÁÏÕýÄÜÁ¿â€™s social, economic and environmental priorities see the Western Australian Social Procurement Framework.

The price assessment must include both the price; and other non-cost factors including:

• fitness for purpose and quality
• critical timeframes
• supplier capability, performance and financial capacity
• maintenance or operating implications, including service and support

Non-cost factors also include a consideration of risk. For a discussion about risk see the Manage Risk Guideline. The Department of Finance’s Risk Workbook might also be a useful resource to help you define your risks. Your agency is also likely to have its own risk management framework.

Ensuring all procurement is conducted with integrity and accountability is a key supply policy objective and is reflected in Western Australian Procurement Rule B - Act  Ethically – With Integrity and Accountability.

State agency employees must apply the highest levels of ethical behaviour in all areas of their work. This is particularly important in procurement, as it involves spending public money and is subject to high levels of public scrutiny.

Ethical behaviour includes being transparent and accountable.  You can be ethical by:

• declaring any conflicts of interest;
• treating all suppliers equally; and
• keeping adequate records.

Also ensure you follow your agency’s delegation register and gain the appropriate approvals prior to engaging a supplier.  The key approvals in the planning phase is the approval to spend – often called budget approval – and the approval to go to market. 

For further information on acting ethically, including managing conflicts of interest and record keeping, please see the Act Ethically Guideline. You may also find the Department of Finance’s Declaration of Interest and Confidentiality form useful.

Step 1 – Determine whether you have to involve the Department of Finance

Review Western Australian Procurement Rule C1 to determine whether you have to engage the Department of Finance to facilitate your procurement.

If you have to involve the Department of Finance, your procurement facilitator will assist you through the process outlined below.  

Step 2 – Determine whether you have to do a Gateway Review

Your agency must undertake a Gateway review for:

• infrastructure projects or programs valued at $100 million and above
• ICT projects or programs valued at $10 million and above
• other projects or programs identified by the Department of Treasury

It’s best to contact the Gateway Review team very early in your planning, as it is generally recommended that agencies complete two Gateway reviews on their project. 

Step 3 – Develop a Procurement Plan and submit for review

Western Australian Procurement Rule C3 requires you to develop a procurement plan for purchases at this value.  

For goods, services and community services, the Department of Finance Procurement Plan should be used.

For works procurement, it is sufficient to include procurement planning within relevant project documentation, such as a project definition plan, or a project management plan.

You are also required to submit your procurement planning document to either the State Tender Review Committee (for goods and services procurement); the Community Services Procurement Review Committee (for community services); or, for works procurement, to your own agency review committee where you agency has a documented review process. For works, where your agency does not have a documented review process, then contact the Department of Finance.

Western Australian Procurement Rule C3 also contains an exemption to the requirement to submit procurement plans to these review bodies.

Step 4 – Develop a Specification

The next step in procurement planning is to develop a specification.  You may like to refer to previously developed specifications by your agency; or by other agencies.  Regardless of whether you are starting your specification from scratch, or building on an old one, please ensure your specification is informed by market research.  For guidance on conducting market research please see the Develop Business Case Guideline. This Guideline also includes specific information on engaging consultants.  In doing your research you could check the Buy Ability website or the Supply Nation website to see if your good or service can be provided by an Australian Disability Enterprise or an Aboriginal business.  If it can, then see Buying Journey One.

If you are buying community services, it is particularly important to work collaboratively with industry to define and articulate community level outcomes.  This requirement is included in the Delivering Community Services in Partnership policy. 

Regardless of what you are buying, when developing your specification, there are a few things you need to consider.  

Think long term

Is your requirement a one off purchase, or will your agency have an ongoing need for the item.  If you will have an ongoing need for the good or service, then a longer contract term is likely to save you both money and time.  The Western Australian Procurement Rule C2.3 states that a contract term must not exceed five years – unless you get approval otherwise.  

Combine all of your agency requirements

Might other business units within your agency need the same thing?  If so, you might achieve economies of scale by combining all your needs into one quote. Consider too whether what you’re buying might be needed by other agencies. The Western Australian Procurement Rules contain new provisions that allow agencies to join together to procure a common product or service. See the Cooperative Procurement Guideline for more information.

Engage Stakeholders

Stakeholders are individuals, groups or organisations that have knowledge of or are affected by the proposed purchase. Stakeholder identification and analysis is encouraged so anyone with an interest in the proposed purchase receives appropriate communication from the relevant government agency.  Refer to the Procurement Planning for Individual Purchases Guideline for more information.

Promote competition

Western Australian Procurement Rule D2.1 requires your Request, including your specification, to promote open and fair competition. This includes ensuring your specification is set out in terms of performance and functional requirements (e.g. outcomes) rather than specific design or descriptive characteristics. Specifically, products must be specified generically – brand names should not be used unless you have approval from your accountable authority. Western Australian Procurement Rule D2.6 requires that specifications must not create unnecessary obstacles to free trade agreement partner countries and must not impose a condition requiring suppliers to have been previously awarded a contract in Australia. 

Consider industry standards

Western Australian Procurement Rule D2.5 (covered procurement replacement rule) requires you to specify international standards, except where the use of the international standards would fail to meet the State agency’s requirements. If no appropriate international standard exists, Request specifications should be based on Australian technical regulations, standard or building codes, as is appropriate in the circumstances.

Define Key Performance Indicators

It is important that your specification is properly defined to ensure you receive a good or service that meets your needs. Key Performance Indicators are useful tools you can include in your specification to ensure your supplier delivers key goods and services in a manner that reflects your need. See the Completing tender documents - specifications, performance requirements Guideline for more information.

Step 5 – Secure the appropriate approvals

The next step in procurement planning is ensuring you have the approval to proceed. Your agency must have financial and procurement delegations that outline who has the authority to act on behalf of the agency in a procurement process; and who has the authority to expend public funds. It is good practice to ensure that the people exercising these functions for any one procurement process are different.

Step 6 – Publish an Early Tender Advice

The final step in procurement planning is to release an Early Tender Advice on . This will allow suppliers an early indication that you intend to buy, and will allow suppliers time to better plan their offering.

Step 1: Develop your Request and gain approval to release

The Department of Finance has a suite of Procurement templates for you to use if you are buying goods, services (including ICT) or community services.

If you are buying works, your agency is likely to have some templates to assist you to do so.

When developing your Request you need to decide what sort of agreement you’d like to form with a supplier or suppliers. The most common form of agreement is a contract. A contract is used where you know what you need and when you need it. A standing offer, on the other hand, is a competitively tendered agreement that is used when a State agency has an ongoing, repetitive requirement for products and/or services, but the exact volume of products or services is not known. A standing offer may be formed with a single supplier; or with a panel of suppliers.

The Western Australian Procurement Rules have a special rule for establishing standing offers with a regional impact – that is, a standing offer that is mandatory outside of the metropolitan region. Please refer to Western Australian Procurement Rule C2.5 if this applies to your purchase.

For more information on the types of agreements that may be formed see the Types of Agreement Guidelines.

When developing your Request it is important to think about how you intend to evaluate the offers.  You must only evaluate the offers received in accordance with the process, specification and selection criteria you include in the Request.

Prior to releasing your request, consult your agency’s delegation register and seek the approval of the appropriate delegate to release your request.

Step 2: Release your Request to the market

Western Australian Procurement Rule D3.1 requires you to use to release all public tenders.  

If you wish to modify your request while it is at market, Western Australian Procurement Rule D3.2 requires you to publish all amended documents on Tenders WA, with enough time to allow potential Suppliers to modify and submit relevant documents. This may require extending the closing time.

Western Australian Procurement Rule D4 (Covered Procurement Replacement Rule) includes specific provisions in relation to the advertising periods for tenders. Please refer to the rule to determine how long you must keep your tender open for responses.
 
You might like to conduct a supplier briefing while your Request is in the market. A briefing is a useful method of providing information about a Request with potential respondents. Briefings may be mandatory or non-mandatory.  Briefings are normally held while your Request is in the market but may also be held prior to releasing your Request. The Approaching the Market Guideline provides more information.

Sometimes you may need to amend your tender while it is still open. Please make sure you issue an addendum through TendersWA – and consider extending the closing time too, particularly if your changes are significant, or if the changes are made just before the original closing time.

Step 3: Evaluate the offers received

In order to evaluate the offers you receive you will need to establish an evaluation panel of three or more appropriately skilled and knowledgeable people. 

The Finance evaluation handbook templates appropriate to your purchase provide a format and methodology for rating the responses according to the selection criteria. The evaluation handbook should have been prepared and the evaluation methodology and scoring agreed to by the evaluation panel before the tenders release to market. The Evaluation of Offers Guideline provides more information on the responsibilities of evaluation panels. It is also important to remember that when evaluating a supplier’s financial capacity and commercial and technical abilities, that evaluation must be based on that supplier’s business activities both inside and outside of Australia, where such information is provided in the supplier’s offer.

In some instances you may be nominated as a reference for a supplier – whether you are on the evaluation panel or for an unrelated procurement process. The Evaluation of Offers Guideline provides you with information on what to do in this instance.

Western Australian Procurement Rule D7 also requires you to complete an evaluation report.  Finance has templates for this purpose if you are buying goods, services or community services. If purchasing works, then your agency may will likely have its own templates.  

You are also required to submit your evaluation report to either the State Tender Review Committee (for goods and services procurement); the Community Services Procurement Review Committee (for community services); or, for works procurement, to your own agency review committee where you agency has a documented review process.  For works, where your agency does not have a documented review process then contact the Department of Finance.

Western Australian Procurement Rule D7 also contains an exemption to the requirement to submit evaluation reports to these review bodies.

If you need to conduct negotiations, then you must be aware of the requirements of the Western Australian Procurement Rule D6, and, above all, negotiations must be conducted fairly.  You may like to refer to the Evaluation of Offers Guideline that gives more information on negotiation.

Step 4: Award the Contract

The Evaluation Panel makes a recommendation to the accountable authority; who then awards a contract to the successful supplier by sending an order or a letter of acceptance.  A letter of acceptance (or award letter) can be found in the Finance template suite for goods, services and community services procurements.  If you undertook negotiation prior to awarding your contract, be sure to include all of the negotiated terms and conditions in your award letter.

Advise the unsuccessful bidders of the outcome, if you received more than one quote.  The Western Australian Procurement Rule D9 requires you to debrief suppliers who request such a debrief.  More information on how to provide a debrief may be found in the Awarding Contracts Guideline.

You must also publish the contract award details on , unless authorised otherwise.  Such authorisation must be recorded on your agency’s exemption register.  The Western Australian Procurement Rule D8 contains information on the details required to be published. 

Effective contract management helps ensure that the successful supplier provides the products or services in accordance with the contract at the accepted price.  It is important that adequate resources are devoted to contract management.

A contract management plan must be developed for all contracts at this value. Western Australian Procurement Rule E1 contains an exemption to this requirement.

Department of Finance offers a number of resources to assist you in your contract management. These include Procurement templates and training. In addition you may find the How to Manage your Contract Guidelines helpful.   

Under the Western Australian Procurement Rules, a contract may be valid for up to five years (or more if approval is given). It is unreasonable to expect that a contract will not be varied in that time.  

The Western Australian Procurement Rule E2 requires you to apply rigour to contract variations. This means that where variations individually or cumulatively exceed 25% of the contract value and are greater than $100,000, you must seek written advice from Finance (if you were required to involve them in your procurement facilitation). You must also seek approval from your authorised officer within your agency (after Finance’s advice is received, if required).  

Regardless of value, where a variation increases the contract price, the updated value must be recorded on in accordance with Western Australian Procurement Rule E2.3 (though Western Australian Procurement Rule E3.2 allows an exemption from this process). 

Again, regardless of value (even where a variation does not affect the price; or reduces the price), variations must be recorded in writing and recorded in a project or contract management plan or other means for recording variations.

Further guidance may be found in the Varying your Contract Guideline.

Finally, contracts should be reviewed in readiness for a new tendering process or transition to a new supplier. The Contract Review and Transition Guideline provides more information on this process.