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					Policy Manual

The District Council of Elliston Policy Document CONTRACTS, TENDERING & PURCHASING POLICY

Date Adopted: Review Date: Original Number: Reviewed: Minute Number:

18th June 2004 Ongoing, when necessary 143.2004 19th March 2007 85.2007

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Policy Manual

Contracts, Tendering & Purchasing Policy Introduction
The Local Government Act 1999 (Section 49) provides that a Council must prepare and adopt policies on contracts and tenders, including policies on the following: • • • • • the contracting out of services; competitive tendering and the use of other measures to ensure that services are delivered costeffectively; and the use of local goods and services; and the manner in which purchases are ordered, processed and paid for the disposal of land or other assets (now a separate policy).

The policies must: • • • identify circumstances where the Council will call for tenders for the supply of goods, the provision of services or the carrying out of works, or for the sale or disposal of land or other assets; and provide a fair and transparent process for calling tenders and entering into contracts in those circumstances; and provide for the recording of reasons for entering into contracts other than those resulting from a tender process.

Purchasing, or contracting, consists of both the act of and functional responsibility for securing necessary inputs from outside sources or from an appropriate internal source where financial and policy consideration dictate. These inputs can be quite diverse and can cover most of the needs of a Council. In the main, purchasing buys a variety of services from external service providers, either as needed or on a contractual basis. When well managed and structured, the contracting and purchasing activities within Council have the potential to make a major contribution to the effectiveness of the organisation and to reduce costs of operations. In determining whether contracting out of services is appropriate for the Council, the organisation will need to:• • • • • • • • • understand and appreciate its corporate objectives and whether the strategic direction is to reduce costs, improve control, enhance strategic focus, gain added capabilities or resolve some problems; evaluate the Council’s readiness for contracting out identified services and whether it has in-house skills, knowledge and resources to effectively manage the Contractors; explore some of the options for contracting out services to determine which would suit the Council’s particular circumstances; assess the core competencies of the organisation and the gap between the Council’s perceived performance or best practice models, if available. the desire to stimulate local economic and employment opportunities; determination of service delivery approaches that are considered in the best interests of the district community; the ability to respond to emergency situations; comply with statutory obligations and the National Competition Policies; and any other relevant factors which Council consider appropriate.

Before steps can be taken to purchase goods or services, funds must be available in the approved Council budget. Once Council has adopted the budget, it becomes a legal document, which must be adhered to. In circumstances where funds are not available for the purpose within the appropriate budget line, an alternative source of funds must be approved by Council.

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Policy Manual This policy concerns a range of matters associated with the purchase of goods and services, together with associated processes and procedures relevant to those purchases. The policy includes a general statement in relation to contracts as well as other matters considered relevant to the general policy position.

Scope

Policy for Supply of Goods and Services
The Chief Executive Officer shall authorise appropriate officers to initiate orders and limits for responsibility of programmed budget purchases / commitments. The delegation limits are listed below. Discretionary Limits of Authority This authorisation is for the commitment of goods and services within the budget program.
Final Authoriser Status: CEO Deputy CEO Unlimited within budget constraints and compliance with Tender & Purchasing Policy Unlimited within budget constraints and compliance with Tender & Purchasing Policy

Authority limits within budget constraints and compliance with Tender & Purchasing Policy (for any single transaction): Works Co-ordinator Administration Officer Receptionist Grader Driver Dump Manager Town Handyperson(s) Work Gang members Chairman Deputy Chairman Up to $5,000 Up to $2,000 Up to $500 Up to $100 Up to $100 Up to $100 Up to $100 Up to $500 Up to $100

Method of Procurement of Goods and Services
A competitive method of obtaining goods or services for Council will generally be adopted in relation to the estimated gross value of the expenditure.

Method
The method of procurement will be: $1 000 or less: • Seek verbal quote from the supplier ** • Formalise purchase with a purchase order #See Purchase Orders below • Arrange for an invoice to be forwarded to the Council office • Approval of the invoice with the guidance of the Discretionary Limits Authority Unless authorised by the CEO or DCEO, daily repeated orders by the individual are disallowed. When filling orders it is the individual’s responsibility to ensure that items purchased are a requirement of the task or position and adequate checking should be completed to ensure the product has not already been purchased by Council.

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Policy Manual
$1 001 to $5 000: • 1 written quote to be sought from the supplier ** • Formalise purchase with a purchase order #See Purchase Orders below • Arrange for an invoice to be forwarded to the Council office • Approval of the invoice with the guidance of the Discretionary Limits Authority $5 001 to $10 000: • Preferably 3 written quotes to be sought ** • Formalise purchase with a purchase order #See Purchase Orders below • Arrange for an invoice to be forwarded to the Council office • Approval of the invoice with the guidance of the Discretionary Limits Authority More than $10 000: • Formal tender process to be undertaken unless it is not practical or Council approve that the acquisition not be subject to the tender process

** Due to location and limited resources, consideration will need to be given to the following issues: • the number of known suppliers of the goods or services; • the existence of local suppliers of the goods or services and the impact on the local economy of the goods and services where purchased from outside the area; • the total estimated value of the purchase; • previous experience with suppliers; • the organisational capacity of the Council to undertake the purchasing options; and • compliance with statutory obligations.
It is the responsibility of each individual to ensure they are aware of and remain within Council’s delegated limits. Once this policy is adopted by Council, every staff member will receive a copy via our payroll system. All staff are to ensure that any transactions above their authority limit is authorised by the appropriate officer.

Purchase Orders

Purchase Orders shall be numbered consecutively, with a register of all Purchase Orders to be maintained under the control of the Chief Executive Officer. Purchase orders must by signed by the purchaser and countersigned by an additional officer with the guidance of the Discretionary Limits Authority. All goods and services shall be obtained only by the use of a Purchase Order with the exception of the items listed below. In urgent cases goods or services may be ordered subject to confirmation by an official Purchase Order. For works and services over $1000 the contractor/ service provider must sign the Purchase Order (small works contract) and return it to Council It shall not be necessary to issue a Purchase Order for: • fees and payments imposed under any Act; • insurance and freight charges under $100; • if the goods or services are below the value of $100 and the invoice is signed by the employee with the employees name printed; • service contract payments where the amount payable is fixed. Purchase Orders shall have the following details: • date of order • suppliers name • details of goods ordered • agreed prices where available, if prices are unavailable the Purchase Order should note an estimate of the value of the goods or services ordered.

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Policy Manual

Tenders

The main steps in the tendering process shall be: • Determination of Council policy, strategies, commitments; • Preparation of documents; • Advertisement of tender; • Allowance of tender preparation period (minimum 21 days); • Tender close; • Evaluation; • Decision; and • Notification of process. The tender documentation shall provide information on: • Councils contract objectives; • Work to be undertaken; • Goods or services to be supplied; • Property details; • Details of how payments are to be structured; • Councils liaison person; • Contact information; and • Tender evaluation criteria. The monetary limit for the provision of goods or services above which tenders must be called is $10 000 and above. The monetary limit will not apply if: • The Chief Executive Officer determines that it is impractical to call for tenders in the circumstances of a particular case, or • Council resolves for some other good cause that tenders need not be called for in the circumstances of a particular case. Advertising – invitations to tender/expression of interest shall be advertised in a local newspaper on at least one occasion. The advertisement shall direct tenders to identify the tender by placing the advertised tender reference on the outside of the sealed envelope or package in which the tender must be enclosed. Lodgement – tenders may be received through the mail or may be hand delivered to the Council office. Tenders are to be addressed to the Chief Executive Officer and marked “TENDER ……….” and delivered to the Chief Executive Officer or in the absence of the CEO, delivered to the Deputy Chief Executive Officer as soon as practical. Facsimile and emails will be accepted within the nominated timeframes and will be delivered to the Chief Executive Officer or in the absence of the CEO, delivered to the Deputy Chief Executive Officer as soon as practical. Custody – The tenders and the tenders register shall be kept in a box held in the strongroom with access restricted to the Chief Executive Officer, Deputy Chief Executive Officer and Chairman until the tender process has been finalised. Access to the tenders after the tender process has been finalised shall only be available through the Chief Executive Officer, Deputy Chief Executive Officer or Chairman. Accidental Opening – when an envelope containing a tender is not marked as required and is opened in the normal process of mail handling, the tender and the envelope are to be sealed into another envelope by the person dealing with the mail, signed by the Officer and immediately delivered to the Chief Executive Officer or in the absence of the CEO, delivered to the Deputy Chief Executive Officer. The contents of the tender must not be divulged to any other person by the said officer. Opening – the tenders shall be opened in the presence of at least two senior officers of Council, at the time specified in the invitation to tender as the time for the closing of the tender, or at such later time as may be necessary and the appropriate tenders removed.

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Policy Manual
Tender Register – the tender register shall record the following details: • A brief description of the item or service to be tendered; • Date tender called; • Date and time tender closes; • Date and time tender opened; • Name and address of all tenderers; and • Gross / trade-in / net values and / or brief details for each tender, including financials. Certifying – the Chief Executive Officer, or in the absence of the CEO, the Deputy Chief Executive Officer, shall then endorse the tenders register entries as true and correct, in regard to the names of the tenderers, the brief description of the detail of each tender (if appropriate), and the values of each tender. Report to Council – the Chief Executive Officer or delegate shall submit all tender details (minimum being notes made in tender register), to the relevant Committee as may be appropriate, for recommendation to Council or alternatively directly to Council. Late Tenders – a late tender submitted through the official Australia Post services of pre-paid cost, will not be admitted unless it can be clearly established that it was posted before the date and time for the closing of tenders. Franking machine impressions are not acceptable evidence of timely posting or dispatch.

Evaluation of Tenders
There are no restrictions on the kinds of evaluation criteria that may be used, however, the reasoning must be disclosed in the evaluation process and it must relate to the purpose of the procurement. For example, the lowest tender is not necessarily the preferred tender and the following must also be considered: • • • • • Technical, management, physical and financial capacity Current commitments and ability to meet project schedules Standing within the industry Historical Record of Performance Ability to deliver on time

OHS & W Policy
In accordance with the Councils commitment to consultation as outlined in the general OHS&W Policy prior to the purchase of plant, equipment or substances which may effect the health, safety or welfare of employees at the workplace, management will consult with duly elected health and safety representatives and if appropriate, the OH&S Committee. The person responsible for the actual purchase shall ensure that consultation has occurred during the development of the specification prior to the actual purchase occurring. Manufacturers, Suppliers and Distributors must comply with Section 24 of the OHS&W Act 1986 – “Duties of Manufacturers, etc”, ensuring that plant and substances are safe, have been tested or examined, are supplied with relevant documentation, comply with prescribed standards and codes and that adequate information is available to ensure safe use, handling, processing, storage, transportation or disposal etc. All purchasing contracts will be endorsed with the requirement that all prescribed standards of the Occupational Health, Safety & Welfare Act and approved Codes of Practices are met. All plant and equipment will be inspected prior to commissioning in consultation with employee representatives to ensure that all relevant requirements have been met.

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Policy Manual

TENDER REGISTER
Tender Details: ………………………………………….……………………………………………… ……………………………………………………………………………………………………………. Date Tender Called (date of notice): …………………………………………………………………. Tender Advertised (date/s & with whom): ……………………………………………..…………... ……………………………………………………………………………………………………………. Date Closed: ……………………………………………………………………………………………. Business Name / Personal Name: …………………………………………………………………… Postal Address: ………………………………………………………………………………………… Physical Address: ………………………………………………………………………………………. Phone / Fax Details: …………………………………………………………………………………… Mobile / Email Details: …………………………………………………………………………………. Financial Information relating to Tender Submitted: ……………………………………………….. ……………………………………………………………………………………………………………… ……………………………………………………………………………………………………………… ……………………………………………………………………………………………………………… ……………………………………………………………………………………………………………… ……………………………………………………………………………………………………………… ………………………………………………………………………………………………

“Opening” Officer …………..……..………….. Date & Time

“Opening” Officer ….………………..………… Date & Time

Chief Executive Officer ……………………………. Date and Time

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