(3 hour presentation)
User instructions
• This powerpoint deck is designed to provide a basic presentation for internal use in your organisation.
• You can customise it to suit your agency and your audience.
• Please read carefully through the slides and make any changes you feel are appropriate.

New Rules training module
This presentation provides information about:
1.
2.
3.
4.
5.
6.
7.
Rules and Principles
Application of the Rules
Non-procurement activities, opt-out procurement and exemptions from open advertising
Response times, minimum time periods and allowable reductions
Notice of Procurement
Other new Rules
Existing Cabinet directives now part of the Rules

Rules and Principles
The Rules set out the standards we work to
The Principles represent our values

Why do we have Rules?
 To strengthen accountability
 To promote our values
 To encourage commercial practice
 To support economic development
The Rules set out the government standards for all of the sourcing stages of the procurement lifecycle

What are the values that underpin the Rules?
The five principles of procurement
A new rule sets out the five principles of procurement:
You’ll learn more about these over the next few screens.
Rule 1

Principle 1
Rule 1

Principle 1
Rule 1

Principle 2
Rule 1

Principle 2
Rule 1

Principle 3
Rule 1

Principle 3
Rule 1

Principle 4
Rule 1

Principle 4
Rule 1

Principle 5
Rule 1

Principle 5
Rule 1

The Principles
 Each agency must have in place policies that incorporate the five Principles
 The Principles apply to all procurements, even if the Rules don’t apply
 Each agency must make sure that: o all procurement staff have been trained in the Principles o o its procurement practices reflect the
Principles for each procurement, it is able to show good planning and an appropriate market strategy
Rule 1

Who do the Rules apply to?
• Government in New Zealand is made up of four ‘tiers’, each of which has different levels of responsibility and oversight by central government
• Some agencies are required to apply the Rules
• Other agencies are expected or encouraged to apply the Rules

Who do the Rules apply to? continued
Tier 1: Public Service
Must apply the Rules }
Ministries and Departments
(includes NZ Police and NZ Defence
Force)

Who do the Rules apply to? continued
Tier 2: State Services
Expected to have regard for the
Rules as good practice guidance eg ACC, DHBs, Crown Research
Institute

Who do the Rules apply to? continued
Tiers 3 & 4:
Encouraged to regard the Rules as good practice guidance eg universities, State Owned
Enterprises, Regional Councils, local government

When the Rules don’t apply
The Rules don’t apply in two broad areas:
 Non-procurement activities
 Opt-out procurements
In addition, there are exemptions from open advertising
Rule 12 Rule 13 Rule 15

a. Non-procurement activities
For the Rules, these activities are not considered to be procurement activities:
 employing staff (excluding contractors and consultants)
 disposals and sales by tender
 investments, loans and guarantees
 gifts, donations and any form of unconditional grants
 statutory appointments
 Ministerial appointments
 Category 1 Legal Services
Rule 12

b. Opt-out procurements
What is an opt-out procurement?
 If a procurement is covered by the
Rules, in some circumstances an agency can opt-out of applying the Rules
 These circumstances are called ‘opt-out procurements’
Rule 13

b. Opt-out procurements continued
The circumstances in which an agency can opt out of the Rules:
 between government departments, NZ Police or NZ Defence
 purchased overseas / for use overseas
 government offices overseas
 non-contractual arrangement
 purchasing or renting land and buildings
 conditional grant
 some forms of international development assistance
Continued on the next screen
Rule 13.3

b. Opt-out procurements continued
The circumstances in which an agency can opt out of the Rules:
 international funding that is subject to another process
 international organisations’ procurement processes
 international agreements between countries

 public services, eg, certain types of health service government’s central financial control functions
 military and essential security interests
Rule 13.3

Exemptions from open advertising
Where a procurement can be exempt from open advertising all other Rules still apply
An agency does not need to openly advertise a contract opportunity on GETS if an exemption from open advertising applies , for example:
 in an emergency
 following an open tender
 if there is only one supplier
 in the case of an unsolicited proposal
Rule 15.9

Exemption to open advertising continued
All other Rules still apply, even when an exemption to open advertising has been claimed
These Rules include:
 the circumstances of the exemption must justify the exemption
 the agency must publish a Contract Award Notice when it has awarded the contract
 the Contract Award Notice must state the reasons for the exemption to open advertising
 an agency must offer each unsuccessful supplier a de-brief
Rule 45.2.h
Rule 45.1
Rule 46

Sufficient time
How much time should I give suppliers to respond?
• An agency must allow Sufficient Time for suppliers to respond to a Notice of Procurement
• Unrealistic time periods introduce unnecessary risk
• Don’t jeopardise your results with a rushed process
• Put yourself in the suppliers’ shoes to work out how much time is Sufficient Time
Rule 26

Sufficient time continued
Ask yourself: how long it will take to:
• obtain, read and analyse all tender documents?
• ask questions to clarify the requirements and get answers?
• prepare a meaningful response including accurate pricing information?
• develop, check and submit a response including delivering it on time?
Rule 26

Sufficient time continued
• An agency must act in good faith and use sound judgement when calculating Sufficient Time
What is considered to be Sufficient time will always vary, depending on the nature and complexity of the procurement
Rule 26

Sufficient time continued
The key factors to take into account when calculating Sufficient
Time include:
• the nature and complexity of the procurement
• the amount of information and level of detail that suppliers must provide in their responses
• the type of goods, services or works
• how simple or hard it is to describe deliverables
• the level of risk
• the extent of any possible subcontracting
• how critical the procurement is to the agency’s success
• the time it takes for domestic and foreign suppliers to submit tenders
Rule 26

Sufficient time continued
Example 1: Simple one-step Request for Quote
• The request is for a large quantity of an off-the-shelf product at short notice
• You need a fixed price and a guaranteed delivery date
Rule 26

Sufficient time continued
Example 2: One-step Request for Proposal
• You need a review of a social policy programme
• This requires experts who will provide their own methodology, work plan, budget quote and timeline for delivery
Rule 26

Minimum time periods
Minimum Time Periods
• The Rules set Minimum Time Periods for different procurement processes
• The Sufficient Time that an agency sets for a procurement must not be less than: o the Minimum Time Period , or o the new Minimum Time Period, after Allowable Reductions
The ten-day rule no longer applies!
Rule 27 Rule 26 Rule 31

Minimum time periods continued
The following Minimum Time Periods apply:
One-step processes: Process
RFQ
Minimum time period
13 business days
RFT or RFP 25 business days
Multi-step processes: Step / process Minimum time period
Step one: ROI, EOI, ITP 20 business days
Step two: RFT, RFP 25 business days
Rule 31

Allowable Reductions
• In some circumstances reductions to the Minimum Time
Period are allowable
• If any of these Allowable Reductions apply, you can deduct them from the Minimum Time Period
• The result is the new Minimum Time Period
Rule 28

Allowable Reductions continued
An agency can claim Allowable Reductions if it complies with the requirements in any of the following circumstances:
• a prior listing in Annual Procurement Plan
• all documents are made available electronically
• responses are accepted electronically
Rule 28

Allowable Reductions continued
Minimum time period and allowable reductions for a one-step process:
Business Days
One-step process RFQ RFT / RFP
13 25 Minimum time period (Rule 27)
Allowable Reductions (Rule 28):
• Prior listing in an Annual Procurement Plan
• All tender documents available electronically on GETS
• Suppliers’ tenders or proposals accepted electronically
Minimum time period allowed, if allowable reductions apply
-1
-3
-1
8
-3
-4
-3
15
Rule 28

Allowable Reductions continued
Minimum time period and allowable reductions for step one of a multi-step process:
Step one of a multi-step process
Minimum time period (Rule 27)
Allowable Reductions (Rule 28):
• Prior listing in an Annual Procurement Plan
• All tender documents available electronically on GETS
• Suppliers’ tenders or proposals accepted electronically
Minimum time period allowed, if allowable reductions apply
Business Days
20
-3
-4
-3
10
Rule 27 Rule 28

Allowable Reductions continued
Minimum time period and allowable reductions for step two of a multi-step process:
Step two of a multi-step process
Minimum time period (Rule 27)
Allowable Reductions (Rule 28):
• All tender documents available electronically on GETS
• Suppliers’ tenders or proposals accepted electronically
Minimum time period allowed, if allowable reductions apply
Business Days
25
-5
-5
15
Rule 28

Notice of procurement
What is a Notice of Procurement?
 A notice published on GETS that advertises a new contract opportunity, eg, a Registration of
Interest or a Request for Tender
 It includes all the information that suppliers need to know in order to prepare and submit a meaningful response
Rule 34

Notice of procurement continued
What should I include in my Notice of Procurement?
 Everything to help suppliers prepare meaningful responses
 Which procurement process is being used, eg, RFQ or RFP
 Contact details and descriptions of the goods / services
 Any conditions, including any pre-conditions or standards
 Any limits on the number of shortlisted suppliers
 The evaluation criteria and their importance / ranking
 The deadline and address for submitting responses
Rule 34

Notice of procurement continued
What should I include in my Notice of Procurement?
 Any limits on how suppliers can send responses
 Any other conditions relating to the procurement process
 The proposed contract conditions
 If procurement will be done electronically, all information suppliers will need to participate electronically
 The rules of an e-auction and info suppliers need to participate, if applicable
Rule 34

Delivery date
When identifying a delivery date take into account:
 how complex the procurement is
 how much sub-contracting there might be
 how long it will take to produce and transport goods
 how long it will take to deliver services
Rule 23

E-auction
 An e-auction is an online reverse auction - it gives suppliers the opportunity to bid against each other to improve their offers
 An agency must notify suppliers in advance if it intends to run an e-auction
 This advance notice must be in the
Notice of Procurement which must include: o a summary of the rules that will apply to the e-auction o the specific criteria that will be used in the e-auction
Rule 42

Types of supply lists
If an agency regularly purchases a specific type of product, service or works it may establish a list of suppliers
Common types of lists include:

Registered Suppliers List

Pre-qualified Suppliers List

Panel of Suppliers
Rule 52 Rule 53 Rule 54

Types of supply lists continued
Registered
Suppliers List:
Pre-qualified
Suppliers List:
Panel of
Suppliers:
A list of suppliers who have registered an interest in supplying specific types of goods, services or works
A list of suppliers who have been preapproved by an agency as capable of delivering specific types of goods, services or works
A list of suppliers who have been preapproved by an agency, and who have agreed to the terms and conditions for supply
Rule 52 Rule 53 Rule 54

New Rules
 Several Rules have been added since the Procurement
Rules were last released
 The new Rules include: o Rule 18: Extended Procurement Forecast o Rule 19: Significant Business Cases o Rule 57: Common Capability contracts
Rule 18 Rule 19 Rule 57

Extended Procurement Forecast
 An Extended Procurement Forecast (EPF) is a list of forecast contract opportunities over the next 5 years
 Agencies must give an EPF to MBIE for review, for all procurements that: o have a value of $5million or more, or o o pose significant risk, or have the potential for collaboration
 EPFs are for cross-government planning purposes only
 Agencies must update their EPF at least once a year
 Updated EPFs are due by 1 October each year
Rule 18

Significant Business Cases
 An agency must give to MBIE for review its
Business Case for any procurements that fall into one or more of these categories: o o o have a value of $5million or more, or pose significant risk, or have the potential for collaboration
 This is a supportive peer review
 An agency should take note of MBIE’s advice
Rule 19

Significant Business Cases continued
 This requirement doesn’t apply where a
Business Case is subject to review under another governance process , for example: o the Better Business Cases process o the Syndicated Contract process, or o the Common Capability contract process
Rule 19 Rule 63 Rule 56 Rule 57

Common Capability contracts
 Common Capability contracts (CCs) are a type of approved collaborative contracts between government and approved suppliers
Rule 57

Common Capability contracts continued
There are two types of CC contracts:
• Mandatory CC contracts o an agency must purchase from these contracts where the contract reasonably meets the agency’s needs o an agency that wants to opt-out of purchasing from this type of contract must seek the approval of the relevant
Functional Leader
• Voluntary CC contracts o an agency should purchase from these contracts where the contract meets the agency’s needs
Rule 57

Common Capability contracts continued
CC contracts differ from other contracts:
 The lead agency may charge a participating agency an admin fee
 A supplier acting for an agency may purchase from a CC contract
 Before approaching the market for goods, services or works an agency should check if there is an existing CC contract that meets its needs
Rule 57

Existing Cabinet directives now included
 There are several cabinet directives that are now included in the Rules
 The Rules provide links to other websites where details can be found

Prompt payment
 Each agency should ensure prompt payment of suppliers’ invoices
 At a minimum, invoices must be paid in accordance with their contract terms and conditions or earlier if possible
Rule 48

All-of-Government Contracts (AoGs)
 An All-of-Government contract (AoG) is a type of approved collaborative contract
 AoGs establish a single supply agreement between the
Crown and approved suppliers for the supply of selected common goods, services and works purchased across government
 Examples of the types of common goods and services are office consumables, vehicles and travel
Rule 55

All-of-Government Contracts (AoGs) continued
 All agencies must purchase from the AoGs, unless there is a good reason not to
 Before approaching the market an agency should check if there is an existing AoG which meets their needs
Rule 55

Syndicated Contracts
 Syndicated Contracts typically involve a ‘cluster’ of agencies combining their needs and going to market together
 They typically include a Common Use Provision (CUP) clause in the contract, to allow other agencies to join the contract later
 Agencies wishing to establish a Syndicated Contract with a
CUP clause must get approval from MBIE before publishing a Notice of Procurement
 Before approaching the market an agency should check if there is already a Syndicated Contract that meets their needs
Rule 56

Web Standards
 If an agency outsources web development work, it must include a requirement in its Notice of Procurement , and contract for the work to comply with the latest version of the New Zealand Government Web Standards
Rule 58

Approved Government Model Templates
 From time to time, the Chief Executive of MBIE, as the
Procurement Functional Leader, issues
Approved Government Model Templates (A-GMTs)
 Agencies must use these templates in their procurement activities, regardless of whether or not the Rules apply to the procurement
 An example of an A-GMT is the Government Model
Contract (GMC)
Rule 59

Geospatial Information and Services
 If an agency intends to procure geospatial information or services it must first contact the New Zealand Geospatial
Office (NZGO) ( www.linz.govt.nz/geospatial-office ) before: o approaching the market or o publishing a Notice of Procurement
Rule 60

Intellectual Property
 If a procurement involves creation by the supplier of new
Intellectual Property , the agency should advise its intentions about: o ownership, o licensing, and o future commercialisation of that
Intellectual Property
 Agencies should take these guidelines into account
Rule 61

Public Private Partnerships (PPPs)
 The PPP Team in the Treasury oversees all Public Private
Partnership (PPP) arrangements
 All capital projects of $25 million or more must consider PPP
Rule 62

Public Private Partnerships (PPPs) continued
 If an agency wishes to do a Public Private Partnership (PPP): o the agency must consult the PPP Team early in the development of the PPP proposal o the PPP Team should be involved in the economic and financial assessment and advice on the PPP o the agency should give the PPP Team the chance to make an experienced officer available to the project steering and working groups
, and
Rule 62

Capital Business Cases
Capital Business Cases
 Cabinet approval is required for some capital expenditure, lease or asset disposal proposals from Departments, Crown agents or other Crown entities
 A capital asset project that meets one of more of the criteria shown on the next slide must: o o consult with the Treasury, and use the Treasury’s Better Business Cases (BBC) methodology
Rule 63

Capital Business Cases continued
 The criteria are: o any project that requires new Crown funding o any project that is a potential PPP o any project with a whole-of-life cost of $25 million or more o any project identified as high risk in the Gateway
Risk Profile Assessment o any programme / project involving asset disposals with significant policy decisions
Rule 63

Gateway assurance
 Gateway is an assurance review process for major investments
 It examines programmes and projects at key decision points in their lifecycle to provide assurance that they can proceed successfully to the next stage
 Gateway assurance is part of
Treasury’s Capital Asset Management regime and is managed by the State
Services Commission
Rule 64

Timber and wood products
 When procuring timber and wood products, agencies must apply the New Zealand Timber and Wood Products
Procurement Policy
Rule 65

Employee transfer costs
 In certain situations an agency must disclose the costs relating to the transfer of employees due to a restructuring
 The circumstances are contained in the the Employment
Relations Act 2000, Part 6A and Schedule 1A
 In relation to a procurement activity the disclosure costs must be made available to prospective suppliers (new employers) who ask for them if: o the restructuring is the subject of a tender, and o the type of employees affected falls within a category listed in the Act
Rule 66

Property Services Industry
Agencies must recognise the Principles for a Sustainable
Property Services Industry in their procurement of property services
Rule 67

For further information about procurement, go to: www.procurement.govt.nz