Quotations and tender policy

Intent

This policy articulates the guiding principles and provisions that apply when sourcing goods or services at RMIT.

Scope

This Policy applies to all expenditure (regardless of fund source) on:

  • Goods and services, and
  • Building, infrastructure and equipment (including related consultancy services).

Exclusions

This policy does not extend to expenditure in relation to:

  • Property (land) transactions
  • Works of art
  • Services of authorised persons undertaking audits for the Victorian Auditor-General’s Office
  • Engagement of barristers by the Legal Services group, or
  • Goods or Services provided by Statutory Authorities.

Objectives

The objectives of this policy are to ensure that procurement policies and procedures are based on the following principles:

  1. Value for money
  2. Open and fair competition
  3. Accountability
  4. Risk management, and
  5. Probity and transparency.

Policy provisions

1. Quotation and tendering to form part of standard purchasing processes

Quotation and tender processes must be used to support procurement decisions in accordance with the following provisions in order to test the market, encourage competition and ensure that the purchase will represent value for money.

Goods or services:

Where the amount to be expended is estimated to be*

Minimum quotation/tender requirement unless exemption granted

$2,500 or less

One verbal or written quote.

Between $2,500 and $25,000

One written quote.

Between $25,000 and $150,000

Three written quotes or reasons for not obtaining the required minimum number of quotes must be recorded on file.

More than $150,000

Open Tendering must be undertaken.

Building, infrastructure and equipment:

Where the amount to be expended is estimated to be*

Minimum quotation/tender requirement unless exemption granted

$25,000 or less

One written tender / proposal which is consistent with current market prices.

Between $25,000 and $200,000

Three written tenders / proposals for price quotations against the scope of works.

More than $200,000

i) Tenders must be called from at least three pre-qualified contractors / suppliers, or

ii) Tenders must be called by public advertisement.

Related consultancy services for building, infrastructure and equipment:

Where the amount to be expended is estimated to be*

Minimum quotation/tender requirement unless exemption granted

$25,000 or less

One written quote / proposal which is consistent with current market prices.

Between $25,000 and $150,000

Three written quotes / proposals for price quotations against the scope of works.

More than $150,000

i) Tenders must be called from at least three pre-qualified consultants, or
ii) Tenders must be called by public advertisement.

* values are exclusive of GST (where applicable), but inclusive of importation, handling, delivery, installation and any associated building works and services.

2. Purchases from approved suppliers

While the use of Approved Suppliers is a legitimate means of managing procurement risk and minimising transaction costs, it is important to recognise and manage any risks to good procurement practice which could arise from a tendency to give certain suppliers repeat business. The following provisions apply to these agreements:

  • Approved Suppliers are to be subject to periodic review/market testing.
  • The period of contract will depend upon the market volatility of the goods and/or services being purchased – otherwise the RMIT guideline is for three (3) years with two (2) further one year extensions written into the contract at RMIT’s option, providing a maximum contract period of five (5) years.
  • The quote and tender requirements outlined in this policy apply to the negotiation and periodic renewal of Approved Supplier Agreements.
  • The rules of use that apply when purchasing from an Approved Supplier are to be fully documented and explicit. If there are no rules of use in relation to sourcing goods or services from the Approved Supplier, the quote and tender requirements outlined in this policy apply.

3. Exemptions from the quotations/tender requirements (quotation/tender waiver)

  • Exemptions should only be considered in exceptional circumstances based on merit.
  • Exemptions cannot be used for the purpose of avoiding competition. An exemption granted from a quotation/tender requirement specified in this policy should also specify such other approach to the market as is deemed appropriate under the circumstances (eg. An exemption from public tendering may be granted on condition that a selective tender is undertaken).
  • Delegations for granting such exemptions are set out in the delegations matrix.
  • Factors that may justify granting an exemption include:
    • Matters of extreme urgency including public health, security or safety as a consequence of an unforeseen event or occurrence
    • Direct contact with a supplier of choice may be appropriate where no quotations/tenders were submitted or no quotations/tenders were submitted that conform to the essential requirements of the quotation/tender documentation
    • For additional delivery of goods and services that are intended either as replacement parts, extensions or continuing services for existing equipment, software, services or installations where a change in supplier would necessitate the procurement of goods and service that do not meet the requirements for interoperability or interchangeability
    • An absence of competition for technical reasons or where specialist expertise is required and this has been justified
    • An extension to building contact works by way of variations whereby use of another building contractor may void warranties, create industrial problems or compromise compatibility / continuity with the existing contract / installation
    • When a tender requirement under this policy has not been followed and for continuity of service, a temporary extension of a contract becomes necessary (which is not specified in the expiring contract) and an acceptable timeline to follow the process is provided
    • The application of the Victorian Universities Procurement Forum (VUPF) ‘Open Use’ provisions in accordance with University Guidelines or approved access to a ‘whole of Government’ contract.

4. Other requirements

  • It is unacceptable to divide procurement into separate parts or use a particular method for calculating the estimated total value for the purpose of circumventing the quotation/tender policy requirements.
  • Where the procurement process is very large and/or the risk associated with a procurement process is considered high, the appointment of a designated probity adviser should be considered to provide independent advice on probity issues and/or the implementation of a Probity Plan.
  • As a minimum in all cases, University Probity Guidelines should be applied.
  • Advice and support is available from Strategic Sourcing and Procurement (SS&P) and should be sought in advance to ensure compliance with this policy. Also SS&P are to be directly involved in the open tendering requirements by:
    • conducting the tenders required for centrally managed contracts, and
    • endorsing the process for other open tender requirements for the purchase of goods and/or services under this policy.
  • SS&P are to be provided a copy of all Approved Supplier / Standing Offer Agreement approvals and executed contracts. SS&P are then responsible for the maintenance of the University Approved Supplier listing published on the SS&P website for access by all staff. This will inform staff what Approved Suppliers are available for access and how to go about this. Access to this information on one web site for the University is critical to maximise the value gained by the university from these Approved Supplier arrangements.
  • TAFE Institutions are required to apply policies and procedures applying to the Department of Innovation, Industry and Regional Development (DIIRD) when entering any contract regarding expenditure. Although this policy has adopted the key provisions of DIIRD’s procurement policy, TAFE procurement should also note the requirement for one of the three quotes for procurement of goods and services in the range of $25,000 to $250,000 to be sought from a small business, if appropriate. Guidance on the definition of a small business is contained in the VGPB Procurement Policies.

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