Procurement Directions PR3
Process Series
Procurement Process for Tier Three Activity
Statement of Intent
This Procurement Direction details the Procurement Process to be used for Tier Three
Procurement activity (estimated value of $50 000 but less than $200 000).
Main Features
Section 11 of the Procurement Act requires Accountable Officers and employees of Agencies to
comply with the Procurement Directions.
Tier Three Procurement Activity
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This Direction identifies the steps to be followed in relation to Tier Three Procurement
activity. The steps are not intended to be an exhaustive list of all Procurement
processes.
Agencies will ensure that all relevant Procurement processes as outlined in the
Procurement Act, Procurement Regulations, Procurement Directions and the Northern
Territory Procurement Code are met in undertaking Tier Three Procurement activity.
Key elements of the Procurement Process
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No procurement action shall commence prior to obtaining an approved requisition in
accordance with Procurement Regulation 3.
Agency Procurement planning will be undertaken as part of the Procurement process
(refer Procurement Direction PO3).
Agencies are mandated to use the Agency Procurement Requisition Online (APRO)
system for Tier Three Procurement activity.
Public Quotation is the preferred method of Procurement for Tier Three Supplies.
Select Quotation may be sought following approval by the Accountable Officer to seek
Select Quotation, with endorsement of the Procurement Review Board..
CAPS will issue all Tier Three Procurement activity via Quotations and Tenders Online
service.
All Respondents must be advised, in writing, of the outcome of a Tier Three
Procurement activity.
CAPS will arrange for publication of all Contracts awarded in the Gazette.
Contents
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Tier Three Procurement Activity
Summary of Procurement Process
Public Quotation
Select Quotation
Alternative Tier Three Procurement Process
Authorities
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Procurement Act
Procurement Regulations
Tier Three Procurement Activity
PR3.1
The Procurement processes identified below are an outline to the steps
to be followed for Tier Three procurement activity. The Procurement
Effective 30 March 2009
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Procurement Direction PR3 Procurement Process for Tier Three Activity
PR3.2
I.
II.
III.
processes are not intended to be an exhaustive list of all Procurement
requirements.
Agencies will ensure that all relevant Procurement processes as outlined
in the Procurement Act, Procurement Regulations, Procurement
Directions and the Northern Territory Procurement Code are met in
undertaking Tier Three procurement activity.
The key Procurement processes relevant to Tier Three Procurement activity are
summarised below.
The focus still needs to be on achieving Value for Money, and equitable treatment of
Respondents submitting competitive Quotations.
These key processes are not intended to be an exhaustive list of all issues to be
considered or addressed in the Tier Three Procurement activity. Agencies will
ensure that all Procurement requirements of the Procurement Act, Procurement
Regulations, Procurement Directions and the Northern Territory Procurement Code
are met.
Summary of Procurement Process
PR3.3
I.
II.
PR3.4
I.
PR3.5
I.
II.
III.
IV.
Tier Three Procurement activity will be undertaken through the Public
Quotation process unless it can be demonstrated that the Public
Quotation process in inappropriate due to the risks involved in the
Procurement activity.
The Public Quotation process assists Agencies and Suppliers to reduce the time and
costs associated with the Public Tenders for lower value Supplies by utilising less
onerous Quotation documentation, Response Schedules and Conditions of
Quotation and Contract.
The Public Quotation process may not be appropriate for procuring Supplies where
the risks to the Government are such that the process will inadequately protect the
Government’s interests. In such instances the Agency may undertake the
Procurement utilising either the Select Quotation/Tendering process or Public
Tender process, as appropriate and justified.
Agencies are mandated to utilise the Agency Procurement Requisition
Online (APRO) system for Tier Three Procurement activity. Agencies are
responsible to ensure that APRO is updated on a regular basis to ensure
that it contains current and accurate information.
The Agency shall use the Agency Procurement Requisition Online (APRO) system
for all Tier Three Procurement activity in order to achieve Government reporting
obligations.
Agency Procurement planning will be undertaken prior to
commencement of the Public Quotation process (refer Procurement
Direction PO3).
Agency Procurement planning involves identification of Supplies in sufficient time to
develop the appropriate Procurement strategy.
The identification of Supplies is the first step to the Procurement process. When
identifying the Supplies the requesting officer must have a supporting case to
present for Delegated Officer approval.
A Requisition shall be completed and approved prior to the commencement of any
Procurement activity including endorsement as to the availability of sufficient funds to
procure the Supplies specified.
A Requisition shall detail as a minimum:
a. the description and quantity or estimated quantity of Supplies required;
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Procurement Direction PR3 Procurement Process for Tier Three Activity
V.
PR3.6
PR3.7
PR3.8
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II.
III.
IV.
V.
VI.
VII.
VIII.
b. where there is an appropriate existing Contract under which the Supplies may be
obtained:
i.
the Contract price or rate, and
ii.
any relevant terms and conditions, e.g. discount, delivery variable or
firm price;
c. the estimated value of the Supplies
For more complex Supplies, the planning process may also include a subject matter
expert for technical advice, which may be required over the Procurement process.
An accurate and comprehensive definition of the scope of Supplies will
be prepared.
Agencies will also develop Assessment Criteria and assign relative
percentage weightings for each Assessment Criterion which is not to be
published. In support of the Buy Territory policy a mandatory minimum
20% weighting must be allocated to the Local Development and Value
Adding Assessment Criterion. (refer Procurement Direction PO4).
The value of Supplies as described will be estimated (refer Procurement
Direction PO4).
Splitting of Supplies to bring it within any specific Procurement Tier level is NOT
permitted.
Agencies shall accurately and comprehensively defining the scope of Supplies,
including:
a. consideration of longer term Agency requirements (particularly for Supplies which
are not consumables and which are expected to be used over an extended
period of time) where a Contract may be established for this ongoing
requirement; and
b. timeframes for delivery (including length and vulnerability of Supply chain).
In some cases, to assist in defining the scope of the Supplies, an Agency could
conduct Market Testing where potential Suppliers are invited to present to the
Agency information, which may be pertinent to assisting the Agency to determine the
scope of the Supplies. In such cases it needs to be clearly noted that this does not in
any way evidence Government’s commitment to particular Procurement activity.
In conjunction with defining the Supplies, relevant Assessment Criteria will be
determined and Scope-Specific Assessment Criteria may be developed. The ScopeSpecific Assessment Criteria will be directly linked to the scope of Supplies.
At the same time, the estimated value of the Supplies will be determined.
a. When estimating the value of Supplies, all costs related to the Procurement of
the Supplies (such as direct costs, indirect costs, fixed costs and on-going
maintenance costs) will be considered. These costs will take account the wholeof-life costs associated with the Supplies and not just up-front costs.
The Assessment Criteria for any specific Tier Three Procurement activity will be
dependant on the Supplies, their complexity, availability, support required if any, and
any other issues required to be addressed.
Assessment Criteria for Tier Three Supplies, in the main, should consider Local
Development and Value Adding, Timeliness to deliver, Supplier Capacity, Past
Performance and Price. In terms of support for Local Business it is reasonable to
consider the majority of Quotations would be sought from Local Suppliers.
Identification of Local Suppliers can be established as a result of consultation with
NTICN and research undertaken of other sourcing avenues.
The time that the Quotation should remain open will depend on the complexity of the
Supplies and the Quotation response requirements or schedules.
a. Supplies that are freely available, “off the shelf”, low risk items, the minimum
response time should be four complete business days.
b. As the complexity of the Supplies increases so to should the response period.
c. The Agency must be confident in justifying the duration of response time as
stated in the Request for Quotation document.
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Procurement Direction PR3 Procurement Process for Tier Three Activity
IX.
PR3.9
PR3.10
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II.
III.
PR3.11
d. Tier Three Procurement shall close at CAPS at 2:00 pm Australian Central
Standard Time on the day as stated in the Request for Quotation.
Agencies shall use the Conditions of Quotation and Contract developed by the
Agency responsible for Procurement Policy. Where an agency has cause to depart
from those conditions they shall not proceed unless they have the written approval of
the Agency responsible for Procurement Policy.
Determine specific issues that need to be addressed in Request for
Quotation:
 Requirement for accreditation by Contractor Accreditation (CAL);
 Alternative Quotations;
 Variations or additions to the standard Conditions of Quotation
and Contract.
Determine the method of Procurement to be used to obtain the Supplied
(refer Procurement Direction PO2).
Agency will consider specific issues such as the requirement for CAL accreditation,
the Agency’s position in respect of Alternative Quotations and whether variations or
additions to the standard Conditions of Quotation and Contract are necessary.
The Agency will also give consideration to the appropriate method of Procurement
taking in the context of the scope of the Supplies and the market capacity to deliver
the Supplies.
Where the Agency considers a Select Quotation process to be the most appropriate
method of procurement, the agency shall seek an Approval to Invite Select
Quotations from the Agency Accountable Officer, with endorsement of the
Procurement Review Board.
Public Quotation or Select Quotation shall be undertaken through the use
of the Government Quotation and Tendering service. A Select Quotation
is not to proceed until a fully signed Approval to Invite Select Quotation
has been obtained. (refer Procurement Direction F4, PO2).
Public Quotation
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II.
Issuing of Public Quotations will be undertaken through the Government Quotation
and Tendering service.
Public Quotations would involve:
a. public advertising of the Quotation by CAPS;
b. CAPS issuing the Quotation documentation, which incorporates Conditions of
Quotation and Contract, to Suppliers;
c. Officer nominated in Quotation responding to any queries. Where the query
highlights an error in the Quotation documentation, to maintain probity, the
response shall be in the form of an addendum issued to all Suppliers who have
obtained documents.
d. CAPS receipting and opening Quotations received;
e. CAPS determining any issues of eligibility of Quotations and issues advice to the
Respondents
f. Procurement Review Board determining admissibility for consideration of
Quotations where appeals from Respondents have been received.
g. CAPS publishing the list of Quotations received.
h. Agency to undertake checks to determine eligibility of Quotations (eg conforming)
prior to commencing the assessment process.
i. Assessment of eligible Quotations by the Agency assessment panel based on
the Assessment Criteria specified in the RFPQ/RFQ documentation; and
j. The Agency assessment panel making recommendation on preferred Quotation
or to decline all Quotation.
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Procurement Direction PR3 Procurement Process for Tier Three Activity
PR3.12
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II.
PR3.13
PR3.14
PR3.15
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IV.
V.
VI.
PR3.16
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IV.
Procurement Review Board approval is to be obtained:
 Prior to negotiation with Respondents to a Public Quotation, or
 to decline all Public Quotations (refer Procurement Direction PO9).
Where the recommendation of the assessment panel is to negotiate with a preferred
Respondent, the Agency is responsible to arrange through CAPS for the relevant
documentation to be completed and appropriate Procurement Review Board
approvals to be obtained prior to negotiations commencing.
Where the recommendation of the assessment panel is to decline all Public
Quotations, Procurement Review Board approval is required.
Recommendation to accept a Public Quotation requires the approval of
the Accountable Officer ‘prior to notification to Respondents of the
Procurement outcome (refer Procurement Direction PO9).
Notification of the outcome of the Public Quotation, Gazettal and
debriefing of unsuccessful Respondents (refer Procurement Direction
PO9 and PO10).
CAPS will provide the Procurement Review Board with monthly reports
on Tier Three Procurement activity.
Notification of Procurement outcomes will not be done until all relevant approvals
have been obtained.
Agencies will arrange for Respondents to be notified of the Procurement outcome
(refer Procurement Direction PO9).
When notifying unsuccessful Respondents, Agencies will advise that they may ask
for a debriefing (refer Procurement Direction PO10).
Where an unsuccessful Respondent seeks a debriefing, the Agency will organise for
the debriefing to be conducted as soon as possible (refer Procurement Direction
PO10).
CAPS will arrange for publication of all Contracts awarded in the Gazette (refer
Procurement Direction PO9).
CAPS will arrange for monthly reports from APRO to be provided to PRB of all Tier
Three Procurement activity.
Agencies will ensure appropriate Contract management (refer
Procurement Direction PO12).
The Agency will ensure appropriate Contract management processes are in place
once the Contract is awarded.
Agencies are responsible to ensure that the Supplies are received in accordance
with the requirements of the Quotation or Purchase Order.
Procedures should be in place that cover the following issues:
a. Documentation required in support of the receipt of Supplies
b. Inspection of Supplies for receipt as per Purchase Order and in good order if
applicable
c. Follow-up of outstanding components of the Purchase Order
d. Documentation and reporting of performance; and
e. Adequate division of duties between the person approving the Purchase Order
receiving the Supplies and authorizing the Payment shall be arranged through
the Agency Delegation Manual.
Contract variations can only be made with relevant approvals.
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Procurement Direction PR3 Procurement Process for Tier Three Activity
Select Quotation
PR3.17
PR3.18
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III.
PR3.19
I.
II.
PR3.20
PR3.21
I.
Undertake Select Quotation (refer Procurement Direction PO2).
The Accountable Officer approves an Invitation for Select Quotation
subject to the endorsement of the Procurement Review Board.
Select Quotations will be undertaken through the CAPS mandated Quotation and
Tendering service.
The Agency will arrange for the relevant documentation to be completed and
appropriate Approval to Invite Select Quotation obtained prior to Request for Select
Quotation documentation being issued
Select Quotations involves:
a. CAPS issuing the RFQ documentation which incorporates Conditions of
Quotation and Contract to Suppliers who have been selected to submit a Select
Quotation;
b. Officer nominated in RFQ documentation responds to any queries from
Respondents Where the query highlights an error in the Quotation
documentation, to maintain probity, the response shall be in the form of an
addendum issued to all persons/businesses who have obtained Quotation
documents;
c. CAPS receipting and opening Quotations received;
d. CAPS determines any Quotations received after the nominated closing date and
time, and issues letter to Respondent ;
e. Procurement Review Board determining admissibility for consideration of
Quotations received after the closing time and date;
f. CAPS publishing the list of Respondents to the Select Quotation;
g. Agency to undertake checks to determine eligible Quotations prior to
commencing the assessment process;
h. assessment of Quotations by the Agency assessment panel based on Quotation
Assessment Criteria specified in the RFQ documentation; and
i. The assessment panel makes a recommendation on preferred Tenderer or to
decline all Tenders.
Procurement Review Board approval is to be obtained:
 Prior to negotiation with Respondents to a Select Quotation, or
 To decline all Select Quotations. (refer Procurement Direction
PO9).
Where the recommendation of the assessment panel is to negotiate with a preferred
Respondent, the Agency responsible is to arrange through CAPS for the relevant
documentation to be completed and appropriate Procurement Review Board
approvals obtained prior to negotiations commencing.
Where the recommendation of the assessment panel is to decline all Public
Quotations, CAPS will arrange for the relevant documentation to be completed and
appropriate Procurement Review Board approvals obtained.
Recommendation to accept a Select Quotation requires the approval of
the Accountable Officer ‘prior to notification to Respondents of the
outcome (refer Procurement Direction PO9).
Notification of the outcomes of the Select Quotation, Gazettal and
debriefing of unsuccessful Respondents (refer Procurement Direction
PO9 and PO10).
Once the relevant approvals to either accept or decline a Select Quotation have
been obtained, Agencies will notified Respondents of the outcome of the Select
Quotation process (refer Procurement Direction PO9).
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Procurement Direction PR3 Procurement Process for Tier Three Activity
II.
III.
IV.
When notifying unsuccessful Respondents, Agencies will advise unsuccessful
Respondents that they may be debriefed (refer Procurement Direction PO10).
Where an unsuccessful Respondent seeks a debriefing, the Agency will organise for
the debriefing to be conducted as soon as possible (refer Procurement Direction
PO10).
CAPS will also arrange for publication of all Contracts awarded in the Gazette (refer
Procurement Direction PO9).
Alternative Tier Three Procurement Process
PR3.22
I.
II.
III.
Where the Tender process is to be utilised it will be conducted as
outlined in PR4.
The Quotation process may not be appropriate for procuring Supplies where risks to
the Government are such that the simplified contract conditions may not adequately
protect the Government’s interests.
As the Quotation process has been established to reduce the direct costs to
business associated with Public Tenders for low value transactions, Agencies need
to justify departures from the use of the Public/Select Quotation process for Tier
Three Supplies.
Agencies may only use a method of Procurement other than the Public/Select
Quotation process when demonstrable risks associated with use of the Public/Select
Quotation process can be identified and an alternative Tender process can be
justified.
Effective 30 March 2009
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Procurement Direction PR3 Procurement Process for Tier Three Activity
Table of Amendments
Amendment
General
Effective 30 March 2009
Detail
Amended to reflect increase Tier Three Threshold and the Public Quotation process.
Effective Date
30 March 2009
8