manage operational plan

This document is Purchasing Policy and Procedures.

It is part of the supporting assessment resources for Assessment Task 3 of BSBMGT517.

King Edward VII College

Purchasing Policy and Procedures

Policy Purpose

The purpose of this policy is to provide clear guidelines for the procurement of goods and services, valued at under $150,000. This policy will assist King Edward VII College in ensuring the best value for money, good management practices, legislative compliance, transparency, probity and environmental performance.

Policy Objectives

This policy applies to all employees of King Edward VII College and to any external entity overseeing, or having any involvement in, the procurement of goods and services for the College.

Staff authority to requisition, order and approve purchases is governed by Staff Delegations of Authority made by the CEO. This includes the specific upper limits on purchasing approvals permitted by individual staff positions. No staff must act outside their delegation of authority.

Purchasing Principles and Procedures

The first consideration in procurement is determining whether or not it is necessary to purchase, or if it is possible to use or share existing resources within the College.

Consider:

· Have both recycling and surplus stores (if appropriate) been checked to ensure that no comparable product is available internally?

· Is it possible to share existing resources with other departments?

· Is the quantity requested appropriate and sure to be used?

· Will the product be used to the end of its useful life? If not, can it be easily reallocated to another department and how will this cost be borne?

If the answer is yes to the all of the above, then proceed.

Basic Purchasing Principles

Purchasing must be governed by the following principles;

· The purchasing system should be designed to provide the best value for money;

· The procedures used must be, and must be believed to be, able to withstand public scrutiny;

· Purchasing procedures should ensure open competition and no individual supplier should be given advantage over others; and

· Purchasing procedures should comply with all of the College’s policies, including sustainability.

· When quotations have been requested of suppliers, all unsuccessful bidders will be notified in writing.

Value for Money

The best way of obtaining value for money is to ensure that there is a strong element of competition in the allocation of orders or awards of contracts. This is ensured by obtaining competitive quotations wherever practicable.

The degree of detail with which procurement is performed depends on the value, complexity and sensitivity of the goods and services being purchased. It is not good practice to use excessive time and paperwork on simple purchases of low value. ‘Best value for money’ does not imply that the lowest quotation must be selected uncritically. Other criteria such as the degree of compliance with specified quality standards, known performance and capacity of suppliers as well as maintenance, impact on the environment and whole of life costing must be taken into account.

Conflict of interest

Staff engaging in procurement, for even small purchases, must be mindful of any conflict of interest. Information provided to the College should be treated as commercial, in confidence, restricted to persons concerned with the specific purchase or contract. Care should be taken that it is not inadvertently displayed or otherwise communicated to competitors in the course of supplier evaluation.

Environmental sustainability

The College requires that procurement decisions incorporate environmentally sound policies. Staff must carefully consider environmental issues when planning both service levels and the required standards of goods. Expected and desired environmental performance and outcomes is to be documented, where practical, in the specifications and evaluation of contracts.

Procedures in procurement by financial category

These categories apply to the cost of individual products or services, not the total cost of a group purchase.

Goods and Services up to $5,000

Minimum of 2 verbal or internet-based quotations are to be sought except:

· Where goods or services are needed immediately in an emergency situation

· Where rates are considered reasonable and consistent with normal market rates and these are tested from time to time.

The Administration officer will complete a Quotation Record Form which includes:

· A description of the goods or services required

· A list of organisations submitting quotations, costs, details and delivery details

· In any instance where the quotation accepted is other than the lowest received, the reason or reasons for accepting that quotation.

The Quotation Record Form must be provided to, and signed by, an approving officer, usually the relevant Manager, with delegated authority to approve purchases at this value.

Although it is not obligatory to obtain written quotations when purchasing under the $5,000 threshold, circumstances will arise when it may be advantageous to call written quotations to put the procurement on a more formal footing and/or eliminate any ambiguity about process.

Goods and Services over $5,000 and up to $10,000

The following procedures are to be applied when calling for quotations:

· Minimum of three written quotations obtained and filed. Where 3 written quotes cannot be obtained the reasons are to be documented.

· Quotation Record Form with written quotations attached to be completed by Admin and provided to Manger for approval and then filed.

· Reasons for passing over any lower price bids must be documented.

The Quotation Record Form must be signed by an approving officer, usually relevant Manager, with delegated authority to approve purchases at this value.

Goods and services over $10,000 and up to $50,000

The following procedures are to be applied when calling for quotations:

· Minimum of three written quotations obtained and filed. Where 3 written quotes cannot be obtained, the reasons are to be documented.

· Specifications must be supplied to persons providing quotations.

· Declaration of Interest Form must be completed and signed by staff involved in the procurement process. Staff with an interest in this procurement are to be excluded from the process.

· Quotation Record Form with written quotations and associated documentation including specification, process requirements, Declaration of Interest Forms and reasons for passing over any lower price bids to be completed and filed.

The Quotation Record Form must be signed by an approving officer with delegated authority to approve purchases at this value, usually the relevant Director.

Goods and Services over $50,000 and up to $150,000

The following procedures are to be applied to formal quotation process:

· A Purchasing Officer should be identified. This will usually be one of the Senior Managers. A signed Declaration of Interest Form must be completed prior to commencement of the formal quotation process. Staff with an interest in this procurement are to be excluded from the process.

· Detailed specifications must be prepared and provided to suppliers. In addition to the specific goods or services requirements, specifications may call for response to organisational capacity and risk management, environmental performance, maintenance, whole of life costing and requests for ‘referees’.

· Official “Requests for Written Quotation” may be issued, either selectively to a list of suppliers and/or opened to a broad range of suppliers by advertisement in the local press.

· At least 3 written quotations must be received unless this is not possible. If so, the reasons must be documented.

· Quotations must be delivered or forwarded to the specified Purchasing Officer and by a specified date. A schedule of quotations received will be prepared.

· The quotations are to be evaluated by the Purchasing Officer. Evaluation must be made against the elements included in the specification and fully documented including reasons for passing over any lower price bids.

· The evaluating officer or committee will complete a Quotation Record Form and attach associated documentation, including the Schedule of Quotations, signed Declaration of Interest Forms, detailed deliberations and final recommendation.

The approving officer (usually the CEO) may either accept or reject the recommendation. If the recommendation is approved, a written offer can be made to the successful supplier. If the recommendation is rejected and an alternative supplier approved, then full justification for the decision of the approving officer must be documented or the process of procurement can recommence. The Quotation Record Form must be signed by an approving officer with delegated authority to approve purchases at this value, usually the relevant Director.

Formal tender processes may be used for purchases under $150,000. This is advisable in circumstances where the value of the procurement is reaching the upper limit of $150,000; goods and services being sought are of significant public interest; or where the procurement is complex. In these circumstances the accountability and best value benefits of a formal tender process should be considered.

Goods and Services over $150,000

This will be a formal tender process as per the Tender Process Policy and Procedure.

Summary of Threshold values

Dollar Value	Process	Documentation
Up to $5,000	2 verbal quotes	Quotation Record Form
$5,000 - $10,000	3 written quotations	· Quotation Record Form · 3 written quotes
$10,000 - $50,000	3 written quotations	· Quotation Record Form · 3 written quotes · Specification · Declaration of Interest Forms · Process Documentation · Letter notifying suppliers of outcome
$50,000 - $150,000	3 written quotations or Formal Tender Process	· Quotation Record Form · 3 written quotes · Detailed Specification · Declaration of Interest Forms · Schedule of Quotations · Quotation Evaluation · Detailed Process Documentation · Letter notifying suppliers of outcome
$150,000 and above	Formal Tender Process	Tender process

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