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2 - Planning your procurement

Up one level

Procurement planning

Rule 16 - Strategic Procurement Outlooks

Rule 17 - Annual Procurement Plans

Rule 18 - Extended Procurement Forecasts

Rule 19 - Significant business cases

Preparing to approach the market

Rule 20 - Third-party agents

Rule 21 - Procurement advice

Rule 22 - Subcontracting

Rule 23 - Delivery date

Rule 24 - Technical specifications

Rule 25 - Pre-conditions

How much time should I give to suppliers to respond?

Rule 26 - Sufficient time

Rule 27 - Minimum time periods

Rule 28 - Allowable reductions

Rule 29 - Business day

Rule 30 - Fair application of time

Rule 31 - Minimum time periods by process

 

Rule 16

Strategic Procurement Outlooks

Rule 16 was rescinded by Cabinet on 30/03/2015

Rule 17

Annual Procurement Plans

  1. An agency must submit an Annual Procurement Plan (APP) to MBIE for publication.
  2. An APP is a list of planned contract opportunities over the next 12 months. An agency may include such information for a longer period, at its discretion. An APP must:
    a.  include a brief description of the agency’s purpose and the types of goods, services or works it mainly buys
    b.  contain all known or anticipated contract opportunities that the Rules apply to.
    An APP may contain other contract opportunities that the Rules don’t apply to, at the agency’s discretion.
  3. An APP is for planning purposes and does not represent an invitation for bids or pre-solicitation. It is not a commitment by the agency to purchase the described goods, services or works.
  4. Each agency must review and update its APP at least once every six months. An agency may update its APP more often, if appropriate.
  5. Updated APPs are due by 1 March and 1 October each year.

Rule 18

Extended Procurement Forecasts

  1. In addition to submitting an Annual Procurement Plan, an agency must submit an Extended Procurement Forecast (EPF) to MBIE to assist with cross-government planning.
  2. An EPF is a list of forecast contract opportunities over the next 4 years which fall into one or more of the following categories:
    a.  have an estimated total value over the whole-of-life of the contract of $5 million or more
    b.  due to the nature or complexity of the procurement, it would expose the agency or government to significant risks if it were not delivered to specification, within budget and on time
    c.  have the potential for cross-government collaboration or resource sharing.
  3. Each agency must review and update its EPF at least once a year. An agency may update its EPF more often, if appropriate.
  4. Updated EPFs are due by 1 October each year.

Rule 19

Significant procurement plans

  1. An agency must submit to MBIE, for review, procurement plans for procurements that fall into one or more of the following categories:
    a.  have an estimated total value over the whole-of-life of the contract of $5 million or more
    b.  due to the nature or complexity of the procurement, it would expose the agency or government to significant risks if it were not delivered to specification and within budget and on time
    c.  have the potential for cross-government collaboration or resource sharing.

    These are called significant procurement plans.
  2. An agency should have regard to the advice and feedback provided by MBIE on its significant procurement plans.
  3. This requirement does not apply where a procurement plan is part of a business case that is subject to review under another governance process (eg Syndicated Contracts (Rule 56) or investment decision reviews (Rule 63)).

Rule 20

Third-party agents

  1. An agency may purchase the services of a third-party agent (eg an external procurement consultant) to advise, arrange or manage a procurement, or part of a procurement, on its behalf.
  2. If an agency uses a third-party agent to manage a procurement, the agency, through the agent, must still comply with the Rules.

Rule 21

Procurement advice

  1. An agency should not purchase procurement advice from a supplier that has a commercial interest in the contract opportunity, and to do so would prejudice fair competition (eg a supplier is asked to write the contract requirements and then bids for the contract opportunity).

Rule 22

Subcontracting

  1. Once a supplier has been awarded the contract, any subsequent subcontracting that the supplier does is not subject to the Rules.
  2. However, an agency should ask that a prime contractor meet certain procurement standards in its subcontracting. The standards should be consistent with good procurement practice, as outlined in the Principles, the Rules and other procurement guidance.

Rule 23

Delivery date

  1. When identifying or estimating the delivery date for the goods, services or works, an agency should take into account any of the following factors that apply:
    a.  the complexity of the procurement
    b.  how much subcontracting there might be
    c.  a realistic time to produce, stock and transport goods from the point of supply to the delivery address
    d.  a realistic time to deliver services given their nature and scope.

Rule 24

Technical specifications

  1. An agency must not apply technical specifications or prescribe conformance requirements in a way that creates unnecessary obstacles for suppliers.
  2. Where appropriate, technical specifications must be based on:
    a.  performance and functional requirements, not on design or a prescribed licensing model or a description of their characteristics
    b.  international standards where they exist, otherwise the appropriate New Zealand technical regulations, standards, or building codes.
  3. When an agency describes technical specifications, it must not (except under Rule 24.4):
    a.  require or refer to a particular trademark or trade name, patent, design or type
    b.  refer to the specific origin of the goods, services or works or the name of the producer or supplier.
  4. The exception to Rule 24.3 is when it is the only way to make the requirements understood. In this case, an agency must include words like ‘or equivalent’ in the specification and make it clear that it will consider equivalent goods, services or works that can be demonstrated to fulfil the requirement.

Rule 25

Pre-conditions

  1. An agency may include essential conditions for participation in a procurement process in its Notice of Procurement (Rule 34). These are called pre-conditions.
  2. Suppliers must meet all of the pre-conditions to be considered for the contract opportunity.
  3. An agency must limit pre-conditions to the following critical areas:
    a.  legal capacity
    b.  financial capacity
    c.  commercial or operational capacity or capability to deliver
    d.  appropriate technical skills or expertise or relevant experience.
  4. An agency must not make it a pre-condition that a supplier has been previously awarded a contract by a named buyer or a New Zealand government agency.
  5. To assess whether a supplier meets the pre-conditions, an agency must:
    a.  evaluate responses against the pre-conditions that it published in its Notice of Procurement (Rules 34 and 35), and
    b.  take into account the supplier’s business activities in New Zealand and overseas.

Rule 26

Sufficient time

  1. An agency must allow sufficient time for suppliers to respond to a Notice of Procurement (Rule 34). It must act in good faith and use sound judgement when calculating sufficient time.
  2. The key factors to take into account when calculating sufficient time include:
    a.  the nature and complexity of the procurement
    b.  the type of information and level of detail suppliers need to provide in their responses
    c.  the nature of the goods, services or works
    d.  how simple or difficult it is to describe the deliverables
    e.  the level of risk
    f.  the extent of any anticipated subcontracting or the likelihood of any joint bids
    g.  how critical the procurement is to the agency’s success
    h.  the time it takes for domestic and foreign suppliers to submit tenders, particularly if you have asked suppliers to deliver hard copies.

Mandatory minimum time periods are explained in Rules 27 to 31. The examples here show that sufficient time may be longer than the minimum time periods and will vary depending on the nautre and complexity of the procurement.

Example 1

Simple one-step Request for Quote

Scenario - The request is for a large quantity of an off-the-shelf product. You need a fixed price and a guaranteed delivery date.

Time for suppliers to:

Business Days

check GETS notices and download all documents 1
read and analyse the documents 1
ask for and get answers to questions 4
check stock and supply chain logistics 4
prepare pricing information 2
check the price and get the quote approved 1
arrange for the quote to be delivered on time 1
Total number of business days 14

 

Example 2

One-step Request for Proposal

Scenario - You need to review a social policy programme. This requires a team of three experts. You ask suppliers to propose their own methodology and provide a detailed work plan, budget quote and timeline for delivery. It is likely that there will be some joint bids or subcontracting involved.

Time for suppliers to:

Business Days

check GETS notices and download all documents 1
read and analyse the documents 1
ask for and get answers to questions 4
check experts' availability 2
consult all experts to develop and test the methodology, work plan and timeline 10
check fee rates and develop a detailed budget 3
check proposal and price and get it approved 2
arrange for the proposal to be delivered on time 4
Total number of business days 27

 

Rule 27

Minimum time periods

  1. The Rules set minimum time periods for each of the procurement processes listed in Rule 31.
  2. If any allowable reductions apply (Rule 28), you can deduct them from the minimum time period. The result is the new minimum time period.
  3. The sufficient time (Rule 26) an agency sets for a procurement must not be less than the minimum time period (Rule 31) or the new minimum time period, if one applies.

Rule 28

Allowable reductions

  1. 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 - The agency must have listed the contract opportunity in its Annual Procurement Plan not less than 2 months and no more than 8 months before the Notice of Procurement is published on GETS.
    b.  All documents available electronically - All tender documents must be available electronically on GETS at the same time as the Notice of Procurement is published.
    c.  Responses accepted electronically - An agency must state in its Notice of Procurement that it will accept electronic responses and tell suppliers how to send those responses (eg by email).
  2. An agency may make documents available electronically (under Rule 28.1.b) through another website or e-procurement system. An allowable reduction can be claimed only if:
    a.  the URL address for the other website or e-procurement system is published in the GETS listing, and
    b.  the tender documents are free for suppliers to access and download, and
    c.  access to the documents is instant. If suppliers need to register, the registration process must be automated and instant.
  3. The allowable reductions for each type of procurement process (eg RFQ / RFP) are shown in Rule 31.

Example

Applying allowable reductions

  • An agency plans a one-step Request for Proposal process for procuring consultancy services.
  • The minimum time period for this process is 25 business days (Rules 27, 29 and 31.a).
  • The agency can reduce the minimum time period because it previously listed the opportunity in its Annual Procurement Plan (less 3 days) and has arranged for proposals to be received electronically by email (less 3 days).
  • The agency has another tender document, a civil engineering plan, which it can’t publish on GETS. It has to send it to suppliers in hard copy on request. The agency can’t claim the third allowable reduction because not all tender documents are available electronically.
  • The minimum time period is reduced by 6 business days from 25. This results in a new minimum time period of 19 business days.

Calculation

 

Minimum time period 25
Prior listing in Annual Procurement Plan -3
Receive responses electronically -3
New minimum time period 19

 

Rule 29

Business day

  1. An agency must calculate time periods in clear business days.
  2. A business day is a day when New Zealand government agencies and suppliers are normally open.
  3. Business days exclude Saturdays and Sundays, New Zealand (national) public holidays and all days between Boxing Day and the day after New Year’s Day.
  4. A clear business day is a full day from 9am to 5pm. The day a Notice of Procurement is submitted for publication on GETS is not a clear business day. The time starts on the next business day at 9am.

Rule 30

Fair application of time

  1. The time period an agency sets for submitting responses must apply to all interested domestic and international suppliers.
  2. Other than in exceptional circumstances, no supplier can be given more or less time than any other supplier.
  3. An agency may, in its Notice of Procurement, reserve the right to accept a late response in exceptional circumstances if there is no material prejudice to any other interested supplier. An agency must not accept a late response if:
    a.  there is any risk of collusion on the part of the supplier
    b.  the supplier may have knowledge of the content of any other response
    c.  it would be unfair to any other supplier to accept the late response because the late supplier is given additional time to prepare its response.

Rule 31

Minimum time periods by process

The following minimum time periods must be applied to the following types of procurement processes detailed in Rules 31.a and 31.b. Days are expressed in clear business days.

31. a. One-step processes

A one-step process can include a Request for Quote (RFQ), Request for Tender (RFT) or Request for Proposal (RFP).

One-step processes

business days

RFQ

RFT/RFP

Minimum time period (Rule 27) 13 25
Allowable reductions (Rule 28)    
a. Prior listing in Annual Procurement Plan -1 -3
b. All tender documents available electronically on GETS -3 -4
c. Suppliers' tenders or proposals accepted electronically -1 -3
New minimum time period (if all allowable reductions apply) 8 15

 

31. b. Multi-step processes

A multi-step process can include:

  • a Registration of Interest followed by a Request for Tender (RFT) or Request for Proposal (RFP), or
  • an Invitation to Participate in a Competitive Dialogue process followed by a RFT or RFP.

Step one

business day
ROI/ITP

Minimum time period (Rule 27) 20
Allowable reduction (Rule 28)  
a.   Prior listing in Annual Procurement Plan -3
b.   All tender documents available electronically on GETS -4
c.   Suppliers' tenders or proposals accepted electronically -3
New minimum time period (if all allowable reductions apply) 10

 

Step two

business days
RFT/RFP

Minimum time period (Rule 27) 25
Allowable reductions (Rule 28)  
a.   Tender documents available electronically to shortlisted suppliers -5
b.   Suppliers' tenders or proposals accepted electronically -5
New minimum time period (if all allowable reductions apply) 15

Last updated 22 April 2015