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Supplier Tendering Guide

Overview

This information is current as at 18 July 2005

Rockdale City Council is committed to achieving the best possible contracting outcomes. It follows Council wide procurement policies and methodologies based on good industry practice that are designed to ensure fair and competitive tendering practices.

The Supplier Tendering Guide is designed to assist suppliers in preparing tenders and proposals to ensure compliance with the Council's requirements and covers:


Glossary of Terms

There are a number of key terms used in the tendering process. The table below provides an overview of the key terms:

Acceptance

1. Acceptance of an offer to buy or sell. In contract law, unqualified acceptance of an offer communicated to the offerer creates a binding contract.

2. The act of taking title to supplies.

Addendum

An additional document modifying the tender documents. It is issued during the tender period or during post tender negotiations.

Ad-hoc Purchase

An 'ad-hoc' purchase is an item(s) that the Council purchases as a one-off, usually not more often than once every couple of months, ie. capital equipment.

Australian and New Zealand suppliers (ANZ suppliers)

Suppliers of goods and/or services produced wholly or partially in Australia and/or New Zealand (ie. ANZ supplies), along the lines described in Article 3 (Rules of Origin) of the Australia New Zealand Closer Economic Trade Agreement.

Buyer

A generic term for any representative of the Council purchasing goods or services on its behalf.

Complex Procurement

Involves complex decisions that require a good understanding of all the principles, policies and elements of best practice. It involves higher levels of risk than simple procurement and the levels of expertise and professional judgment required are greater.

Contract

Any undertaking involving a minimum of two parties whereby each party is obligated to the others to perform some act, whether or not a formal agreement or document has been signed by the parties. The term 'contract' in a general sense and in law includes the undertaking resulting from the acceptance of any tender, offer or quotation. In a particular sense it means the group of documents resulting from the acceptance of a tender.

Contractor

A party who has entered into a contract with the Council to supply goods, construct works, provide services or for other procurement purposes.

Cost, Insurance and Freight (CIF)

An international trade term indicating that the supplier must pay the costs, insurance and freight necessary to bring the goods to an appointed destination.

Electronic Commerce

A general term applied to the use of computer and telecommunications technologies, particularly on an inter-enterprise basis, to support trading of goods and services. Electronic commerce uses a variety of technologies, such as electronic data interchange, electronic mail, facsimile transfer, continuous acquisition and life cycle support and electronic catalogue and directory systems.

Expression of Interest (EOI)

This is a tendering method used to encourage suppliers to propose solutions to meet desired outcomes. After a public advertisement inviting applications from persons interested in tendering for a proposed contract, Council may send invitations in writing to all applicants or such of them Council believe will be able to fulfil the requirements of the proposed contract.

Head Agreement

The earliest and principal agreement in a hierarchy of related agreements from which or as a consequence of which subsequent and subordinate agreements are derived.

Invitation to Register Interest (ITRI)

Refer to Expression of Interest (EOI)

ISO

International Organisation for Standardisation

Just in Time (JIT)

An approach to procurement that seeks to eliminate waste and increase productivity through character inventories and providing just the quantity of supplies needed to do a given job at the exact time they are needed.

Negotiation

Post-tender dealings with a bidder aimed at reaching a mutually acceptable contract.

Non-conforming Tender

Tenders that are outside the requirements set in the tender documents in form, content or delivery.

Partnering

In procurement, a close and collaborative arrangement between the Council and a supplier with a critical and long-term contribution to make to its core business. Recognition of interdependence and the sharing of information in a supportive environment characterise it. In a partnering relationship informal arrangements for cooperation supplement any formal procurement contract.

Preferred Supplier

A competent supplier of particular categories of goods and services selected through competitive arrangements as qualified to bid for the recurring requirements of the Council.

Preferred Supplier Agreement

A contract agreement under which a supplier will, during a specified period, provide supplies on specified terms after an order for a specified quantity of the supplies is given to the supplier.

Prime Contractor

An individual, company, firm or corporation that enters into a written agreement which commits it to perform work or furnish supplies, often by subcontracting whole or part of the work.

Procurement Framework

The Procurement Framework is a reference tool for selecting procurement methods in accordance with Council Policy.

Publicly Available Opportunity

Any tender that is not restricted and is freely available to any individual or organisation that wishes to make an offer.

Purchase Order

An official document used by the Council to order goods or services from a supplier created through the requisition system. A purchase order can create a contract through acceptance of a supplier's offer or it can be an offer that the supplier accepts.

Re-engineering

The fundamental rethinking and radical redesign of processes to achieve improvements against measures of performance such as cost, quality, service and speed.

Regular Purchase

A 'regular' purchase is an item(s) that the Council purchases on a recurring basis (even though an individual Council buyer may only be purchasing it on an ad-hoc basis), ie. stationery, building supplies etc.

Relevant Newspapers

In relation to Council this means:

  • A Sydney metropolitan daily newspaper, and
  • Either or both of the following;
  1. A newspaper circulating in Council's local area
  2. A newspaper circulating in the district where potential suppliers are likely to be carrying on business or residing.

Request for Proposal (RFP)

This is used to encourage suppliers to propose solutions to meet desired outcomes or resolve problems where the fundamental nature of the solution is not. The purpose is to leave scope for variety and innovation in situations where there may be a range of viable options. Can also be referred to an 'Expression of Interest' or 'Invitation to Register Interest'.

Request for Tender (RFT)

This is primarily used to obtain bids for clearly defined, specific and higher-value requirements. RFTs can be invited from the public at large or confine them to one or more suppliers.

Selective Tendering

A method by which invitations to tender for a particular proposed contract are made following a public advertisement asking for Expression of Interest.

Service Contract

Provision of labour and technical knowledge only, or performance of a service.

Service-Level Agreement

An agreement between a service provider and a client to ensure delivery of consistent, appropriate and timely service quality to meet the business need.

Simple Procurement

Requires straightforward decisions, conducted under supervision in an environment where established routines, methods and procedures exist and only small degrees of risk are involved. Simple procurement involves requirements that are both simple and usually low in cost.

SSROC

Southern Sydney Regional Organisation of Councils.

Supplier

An organisation that has the capacity to supply goods or services to the Council, either prospective through a tendering process or existing.

Supply Chain

The community of suppliers that contribute to providing the supplies, eg a manufacturer and the various tiers of suppliers that provide components for the supplies it manufactures.

Supply Contract

Supply of materials or equipment, without site works as a component of the contract.

Tender - Open (public)

A method by which tenders for a proposed contract are invited by public advertisement. It means a written priced proposal, for values as specified for tenders, to construct works or to supply goods or services.

Tender Document

Any document prepared in the tender processing including Request for Tenders, Request for Proposals, Expression of Interest or Invitations to Register Interest, Supplier Responses and associated communication documentation.

Tender Manager

The Council's representative nominated to manage a specific tender on its behalf (also referred to as the Point of Contact in tender documents).

Value for Money

Getting Value for Money means ensuring that benefits are commensurate with costs. To achieve and assess value for money all of the price and non-price factors that are significant in any individual procurement must be considered.

Whole of Life Costs

The total costs incurred by a buying agency over the life of the supplies including acquisition, maintenance and operating costs, and resale revenue or disposal costs.

Works Contract

Construction of works on site, including the supply of labour, equipment and materials.

World Trade Organisation (WTO)

The legal and institutional foundation of the multilateral trading system. It provides the principal contractual obligations determining how governments frame and implement domestic trade legislation and regulations. It is the platform on which trade relations among countries evolve through collective debate, negotiation and adjudication. The WTO is the embodiment of the results of the Uruguay Round trade negotiations and the successor to GATT.


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Business Ethics (Codes of Conduct)

Rockdale City Council Business Ethics (Code of Conduct)

The following principles outline the obligation of the Council and its Officers.

Personal Conduct

  • Principle 1 - Compliance. Officers must conform to all legal, statutory and regulatory obligations as well as Council Policies and procedures.

  • Principle 2 - Fair Dealing. Officers must conduct the procurement process with honesty and fairness at all levels.

  • Principle 3 - Impartiality. Officers should perform their duties impartially, uninfluenced by fear or favour. A person's behaviour in an official capacity should not be influenced by a gift, benefit or consideration to show favour or disfavour to any person or organisation or give this impression. Officers must not engage in any practice, including improper inducements, which give one party an unfair advantage over another.

  • Principle 4 - Conflict of Interest. Individuals should not allow their conduct to warrant any suspicion of conflict between their official duty and their private interest. Officers with a conflict of interest (personally or through associations, ie.. family), must declare that interest as soon as the conflict is known to that person.

  • Principle 5 - Confidentiality. Officers must not disclose to another party any confidential or proprietary information relating to a quotation, tender or proposal provided by a supplier. This includes, but is not limited to, information concerning intellectual property and commercial-in-confidence information. Officers must not use information obtained in the course of official duties to gain directly or indirectly a pecuniary advantage for themselves or for any other person.


Procurement Practices

  • Principle 6 - Commitment to Proceed. Tenders or quotations should not be called without a firm commitment and capacity to proceed. Officers must not discriminate against a supplier who occasionally but promptly declines an invitation to quote/tender.

  • Principle 7 - Tendering Methods. It is the Officer's responsibility to select the most appropriate procurement method according to the Procurement Framework and in consideration of the interests of the Council.

  • Principle 8 - Equal Opportunity. Where tenders are called by public advertisement, equal opportunity must be provided to all suppliers qualified to respond. Conditions of tendering must be the same for each tenderer on any particular tender. Evaluation of tenders must be based on the conditions of tendering and selection criteria defined in the tender documents.

  • Principle 9 - Selection Criteria. Selection criteria should contain the critical factors on which assessment of the quotations or tenders will be based to ensure the products or services offered meet the specified requirements and achieve best value for money. Selection criteria must be clearly identifiable in the procurement documents as appropriate. Generally, the weighting of the selection criteria should not be disclosed.

  • Principle 10 - Negotiations. In any negotiations or evaluations, Officers must deal fairly with all suppliers in a manner that reflects the ethical principles in this Code. Officers must not in any way use negotiations as an opportunity to trade off different supplier's prices against others in an attempt to seek lower prices. This practice is known as ‘bid shopping' and is unacceptable.


Supplier Code of Conduct

The following principles outline the obligation of the suppliers and their Officers.

  • Principle 1 - Fair dealing. The behaviour of all parties in the tendering process should be governed by the principle of fair dealing. It requires that suppliers involved in the tender process are fair and ethical in their dealings with the Council and any associated party. Suppliers must observe the ethical principles in the Council's code and all relevant statutory and other legal requirements in the formulation of a tender response.

They must not:

  • enter into any improper commercial arrangements with any other supplier;
  • seek to improperly influence decisions during the tender process;
  • accept improper incentives to provide contracts or services to other suppliers; or
  • accept or provide inducements.
  • Principle 2 - Capability and Capacity. Suppliers should not respond to a tenders unless they genuinely believe themselves to have the capability and capacity to provide the goods, undertake the work or provide the services requested. In the case of pre-qualified or pre-registered tenders, invited suppliers have the right to decline to tender, but should give the Council prompt advice that they do not wish to tender.

  • Principle 3 - Review of Tender Documents. Suppliers should thoroughly familiarise themselves with the tender documents, any Code of Conduct obligations and all other requirements to ensure that their tenders are complete when submitted. Suppliers should advice the Council promptly of errors, omissions, ambiguities or discrepancies in the tender documents of which the supplier becomes aware. Suppliers must accept that should any one of them ask the Council to supply additional information that such information will also be supplied to other tendering suppliers.

  • Principle 4 - Tender Conformance. Suppliers must endeavor to provide a tender that conforms to all aspects of the criteria specified in the tender documents. Suppliers must lodge their tender with full identification and required documentation at the nominated location by the advertised date and time.

  • Principle 5 - Enquiries from the Service Unit. When requested by the Council, suppliers will submit required documentation, information or samples by the date and time nominated so as not to cause unnecessary delays in the tender process. Any delay in the submission of these items should be notified in writing to the Council.

  • Principle 6 - Availability. Suppliers will make themselves available to attend meetings with the Service Unit after receipt of reasonable notice.

  • Principle 7 - Confidentiality of Information. Confidential or proprietary information provided to a supplier by the Council must not be disclosed to other parties.

  • Principle 8 - Competitive Behaviour. Suppliers must not be engaged in anti-competitive behaviour or other practices that deny legitimate business opportunities to other suppliers or other participants in the tender process, including but not limited to the following matters concerning collusive tendering:

  • Agreement between suppliers as to who should be the successful supplier;
  • Any meetings of suppliers to discuss tenders prior to the submission of the tenders if the client is not present;
  • Exchange of information between suppliers about the tenders;
  • Agreements between suppliers for the payment of money or the securing of reward or benefit for unsuccessful suppliers by the successful supplier;
  • Agreements between suppliers to fix prices or condition of contract;
  • Any assistance to any supplier to submit a cover tender (that is, a tender submitted as genuine but which has been deliberately priced in order not to win the contract or commission); and/or
  • Any agreement between suppliers prior to submission of tenders to fix the rate of payment of employer or industry association fees where the payment of such fees is conditional upon the supplier being awarded the contract or commission.

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Tendering Process

The Council operates within a Procurement Framework that meets and exceeds the requirements of the Local Council Act 1993. This is achieved through more stringent tendering requirements for high value purchases in the $59,001 to $150,000 range and ensuring Preferred Supplier Arrangements for all lower value regular purchases.  Through this goods are purchased through four key procurement processes:

  • Petty Cash
  • Preferred Supplier Arrangements (Fixed Price & Quotation basis)
  • Quotations
  • Tenders

Cost
of
Purchase

^




^





^


HIGH
>$150,000

Request for Tender/Proposal
(EOI Optional)

Request for Tender/Proposal

VALUE

MEDIUM
$10,001 -

Request for Quotation
(RFQ Form Mandatory
Advertised over $50k)

Preferred Supplier Panel

VALUE
$150,000

LOW
$1001 -

Request for Quotation
(RFQ Form Mandatory)

Preferred Supplier Panel

VALUE
$10,000

NOMINAL
$1 - $1000

Request for Quotation
(RFQ Form Mandatory)

Preferred Supplier Panel

VALUE


AD-HOC PURCHASE

REGULAR PURCHASE




       >                           >                              >                              >


Tenders and quotations (over $50,000) are advertised for public tender. The broad steps in the tendering process are outlined below.



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Tendering Procedures Used

In the context of the Procurement Manual documents 'tendering' is a generic term for all requests to the market. There are different tendering strategies available dependent on the requirement, including:

  • Simple Tendering:

This is used when the requirement is expected to be less than $150,000 and the market is well understood and will not generate an excessive number of detailed tenders. Tenders are called through:

  • Request For Tender (RFT): This is primarily used to obtain tenders for clearly defined, specific and higher-value requirements. An RFT can be invited from the public at large or confine them to one or more suppliers - Selective Tendering.
  • Request For Proposal (RFP): This is used to encourage suppliers to propose solutions to meet desired outcomes or resolve problems where the fundamental nature of the solution is not apparent. The purpose is to leave scope for variety and innovation in situations where there may be a range of viable options.
  • Public Tendering:

This is used when the requirement is expected to be more than $150,000, complex in nature or the market is not well understood.

  • Expression of Interest - may be referred to Invitation to Register Interest (ITRI): This is generally used at the requirement identification stage to identify the market, available or possible products, services or solutions before further soliciting tenders. It can also be used to gather broad information on potential suppliers which may be used to shortlist and eliminate uncompetitive suppliers before further soliciting tenders.

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Response Format

Tender responses must be in the formats designated in each tender document. The response should clearly repeat each question that identified for the response. Where templates or proformas are provided for responses, such as pricing schedules, these must be used as provided in the tender document.

All tender responses must clearly identify the Tender Number, Title and the Supplier submitting the tender response.


Fair and Open Competition

Open and effective competition is the central operating principle of Council procurement, permitting a range of procurement methods. It requires transparency in the procurement process, including access to opportunities for potential suppliers and ease of entry for new and small suppliers.

Key considerations in achieving open and effective competition include:

  • Exercising discretion in deciding the procurement method in accordance with the Council's Procurement Framework;
  • Ensuring conditions for effective competition so that buyers and suppliers are genuinely independent in their actions, that there is ease of market entry for suitably competent new and small suppliers and a genuine availability of alternative choices for buyers;
  • Sound knowledge of the market, including technologies, product cycles, and commercial relationships and alliances;
  • Responding to conditions that limit competition including:
  • structural factors in the market, such as the existence of monopolies for certain technologically advanced products that may be protected by patents,
  • the numbers of suppliers able to meet qualification requirements,
  • genuine urgency in requirements,
  • the need for compatibility with existing services or equipment,
  • the nature of supplies, for example unique art works, and
  • difficulty in obtaining offers that comply with specifications;
  • Providing information to the market to give prospective suppliers all the information they need to prepare their quotations or tenders. The level of detail will vary according to the value and/or the complexity of the requirement. All those wishing to respond should have access to the same information;
  • Allowing enough time for prospective suppliers to respond effectively. The time frame will vary with the complexity of the requirement. Advance notice to industry in forms such as public briefings will assist suppliers to prepare in advance for significant requirements, and reduce the time involved in the response preparation phase;
  • Avoiding bias or favouritism in the process in:
  • the specification of requirements,
  • the invitation of quotations / tenders,
  • the evaluation and selection of suppliers, or
  • the implementation, administration and evaluation of contracts.

Compliance Requirements

There are a number of minimum compliance requirements that the Council must adhere to in procurement activities. This includes:

  • State and Federal legislation in relation to procurement in general and, in particular, the Local Government Act 1993, Tendering Regulations, S55;
  • State and Federal Policies and guidelines, for example relating to OH&S, Environmental Management, etc.; and
  • State Government Contracts (NSW Supply Service) and Southern Sydney Regional Organisation of Council’s (SSROC) Contracts.

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Value for Money Requirements

Procurement practices are directed to achieving the best available value for money in the acquisition of goods and services. Price alone is not a reliable indicator of value. Best value means the best available outcome when all relevant costs and benefits over the full procurement cycle are considered.

Decisions on very simple procurement can be made substantially on the prices offered, provided essential requirements are met. However, for more complex/high value procurement, the determination of relative value for money includes:

  • a careful assessment of the requirement (what is needed);
  • a thorough evaluation of what is offered and of suppliers’ capabilities to provide it;
  • an understanding of all relevant costs on a whole of life basis;
  • an assessment of any risk factors that may impact on cost and value;
  • negotiation, where appropriate, to clarify the best offers or to seek improvements so that the best possible outcome is obtained; and
  • ensuring that any legal agreements entered into are appropriate and protect the Commonwealth’s interests.

The specific value for money factors to be considered will vary according to the project and the duration of the contract.  Outputs from the value for money evaluation should include:

  • an assessment of variations, both positive and negative;
  • the reasons for them;
  • specific recommendations for action; and
  • general recommendations for improvements in processes and systems.

An indicative list of factors relevant to determining whole of life value for money in the procurement of goods and services is set out in the table below for consideration in evaluation.


Characteristics and Capabilities of Suppliers

  • Financial viability, legal identity and capacity
  • Research and design or development capability
  • Technical production capability and capacity
  • Dependability, reliability and professional standing and reputation
  • Experience and previous performance in similar work
  • Organisation structure, experience, qualifications and skills of key personnel
  • Compliance with requirements of relevant government policies
  • Management policies with regard to social responsibilities, care for the environment, safety, quality
  • Quality assurance status and commitment to continuous improvement and quality management principles in human resource development

Characteristics of The Offer

  • Extent to which supplies meet specifications including conformity with standards and degree of compliance with contractual terms and conditions
  • Scope for improvement by later modifications or 'add-ons'
  • Design and/or artistic qualities and rights to intellectual property
  • Fitness for purpose and ease of operation, eg. of equipment or software
  • Compliance with occupational health and safety requirements
  • Product liability arrangements, defect reporting and rectification processes
  • Life of the equipment including warranties, guarantees and maintenance
  • Methodology to be used, eg. in undertaking a consultancy
  • Quality and availability of key personnel for service delivery and after-sales personnel, facilities and services
  • Disposal issues including environmental considerations

Strategic and Marketplace Considerations

  • Risks and dependencies for Council
  • Market structure and its implications, ie.. potential for industry development
  • Safeguarding of vital sources of supply
  • Length of the supply chain and its vulnerability to disruption
  • Effect of procurement on price, availability and competition for future needs

Delivery of Supplies

  • Conformity with delivery, installation and commissioning requirements
  • Operation and financial effects of earlier or later availability
  • Acceptance testing, inspection and/or rejection

Whole of Life Costs

  • Initial purchase price and firmness of price, ie.. provision for cost containment (including any formulas to contain or reduce)
  • Discounts including settlement discounts
  • Pricing for associated or follow-on orders
  • Foreign-exchange risks and costs
  • Payment terms including timing of progress payments
  • Insurance where applicable and applicable duties and taxes
  • Freight, transport and delivery costs
  • Financial guarantees required from suppliers
  • Intellectual property costs
  • Liquidated damages
  • Installation and commissioning costs
  • Inventory-holding, management and administrative costs to purchaser
  • Conversion or changeover costs from existing equipment or systems
  • Costs of accelerating or delaying procurement
  • Costs of risk treatment strategies
  • Running costs including energy usage
  • Servicing and maintenance costs including cost of spares, present/future
  • Storage and other support costs
  • Depreciation, decommissioning/disposal costs and receipts from disposal

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Frequently Asked Questions

The answers to a number of frequently asked questions are provided in following table below. Further information can be obtained by contacting the Supply Unit of Rockdale City Council on 9562 1540.

QUESTION

ANSWER

How do I know when a tender is released?

Tenders (and quotations over $50K) are advertised in the Local Government Section of the Sydney Morning Herald on Tuesdays, the local Leader on Thursdays, in Council's column and on Council's website.

Minor quotations will be sought from appropriate companies Council believes could action the request.

How do I receive tender documents?

When tenders have been advertised, a request for the document can be made to the responsible officer indicated in the advertisement or downloaded from Council's website.

What if I need additional information to that provided in the tender documents?

Further information can be provided on request to the responsible officer. This information will then be made available to other respondents by way of an addendum.

How can I submit a tender?

Information on how and where to submit a response to a tender will be available within the tender document.

How do I know when a tender is due?

Again, a closing date and time will be stipulated within the tender document.

What format should I submit a tender in?

Council will accept responses by electronic means or written responses. This will be indicated in the tender document.

Do I need to answer all the questions in a tender?

Yes, especially relating to the selection criteria. By not responding to some criteria may disadvantage your proposal.

Can I submit for only part of the services or products in a tender?

Only if this is indicated within the tender document.

How is a supplier chosen?

A full evaluation will be conducted on all proposals and the one Council believes to be the best value offered will be selected.

How will I be advised if I am successful?

Initially you will be advised verbally, followed up by a formal correspondence.

If I am unsuccessful, can I find out further information or resubmit a new tender?

Unsuccessful respondents will be advised in writing. In most cases a debriefing can be arranged to discuss your submission. Unfortunately, once a tender is closed and a successful respondent is selected, Council cannot accept further proposals. However, Council reserves the right to reject all tenders and negotiate with selected respondents.

Can I submit an unsolicited proposal?

Yes, Council will accept any proposal from organisations that could provide goods or services. If Council is already under contract, proposals will be kept on file for future requirements.






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