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7 - Definitions

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Word or phrase

Reference

Definition

agency all Rules

A generic term used in the Rules to refer to New Zealand government entities across the Public Sector.

All-of-Government Contracts (AoG) Rule 55

A type of collaborative contract that has been approved by the Procurement Functional Leader (the Chief Executive of MBIE).

AoGs are usually Panel Contracts established by MBIE or other agencies that are approved Centres of Expertise for common goods or services (eg vehicles, laptops, and recruitment services).

allowable reduction Rules 28 and 31

An agency may reduce the minimum time period for tender response deadlines in three circumstances, namely if:

  • it has listed the contract opportunity in its Annual Procurement Plan not less than 2 months and not more than 8 months before the publication of the Notice of Procurement
  • all tender documents are made available electronically at the same time as the publication of the Notice of Procurement
  • it accepts responses electronically.

The number of business days for each allowable reduction is specified in Rule 31.

Annual Procurement Plan (APP) Rule 17 An agency's list of planned contract opportunities that meet or exceed the value threshold. It is a rolling list covering at least the next 12 months.
Application to Qualify (ATQ) Rule 53 An application by a supplier to be included in an agency’s Pre-qualified Suppliers List. A supplier must prove it has the capability and capacity to deliver specific types of goods, services or works to be included in the list. 
approach to market Chapter 3 The formal process of giving notice of a contract opportunity to potential suppliers and inviting them to respond. An example of an approach to the market is a Request for Tender published on GETS.
business activities Rule 25 Any activity that is performed with the goal of running a business. For the private sector, these are activities associated with making a profit (eg operations, marketing, production or administration).
business case Rules 19 and 63 A management tool that supports decision-making for an investment. It sets out the reasons for a specific project, considers alternative solutions and identifies assumptions, constraints, benefits, costs and risks.
business day Rules 26 to 31 Any week day in New Zealand, excluding Saturdays, Sundays, New Zealand (national) public holidays and all days from Boxing Day up to and including the day after New Year’s Day.
clear business day Rule 29 One full business day from 9am to 5pm.
closed competitive process Rule 15 A tender process where an agency asks a limited number of known suppliers to tender for a contract opportunity. The contract opportunity is not openly advertised.
collusion Rule 30 A secret agreement or cooperation between two or more parties to cheat or deceive others by illegal, fraudulent or deceitful means.
commercially sensitive information Rule 5 Information that, if disclosed, could prejudice a supplier’s commercial interests (eg trade secret, profit margin or new ideas).
commodity market Rule 15 A legally-regulated exchange (market) where raw goods or primary products, such as agricultural produce, metals and electricity, are bought and sold using standardised contracts (eg the London Metal Exchange and the Chicago Board of Trade).
Common Capability contracts (CCs) Rule 57

A type of collaborative contract that has been approved by the Procurement Functional Leader.

CCs establish various supply agreements (eg for ICT goods or services purchased across government with approved suppliers).

CCs differ from All-of-Government and Syndicated Contracts because, in a CC:

  • in some instances, a private sector supplier may be authorised to purchase from a CC when it is acting on behalf of an agency (authorised agent)
  • in some CCs, the lead agency may charge a participating agency an admin fee or levy.
competition Rules 5, 15 and 21 Rivalry between suppliers for sales, profits and market share. Competitive tension in the market and can produce innovation, better-quality goods or services, better value and better pricing.
Competitive Dialogue Rule 31

A type of open procurement process often used where there is no known solution in the market place. It involves a structured dialogue phase with each shortlisted supplier who invents a possible solution to meet the agency's needs. Shortlisted suppliers are often paid for their participation in the dialogue phase. All shortlisted suppliers are invited to respond to a Request for Proposal or Request for Tender.

For more information see the Guide to Competitive Dialogue [438 KB PDF].

conflict of interest Rules 15 and 54

A conflict of interest is where someone’s personal interests or obligations conflict, or have the potential to conflict, with the responsibilities of their job or position or with their commercial interests. It means that their independence, objectivity or impartiality can be called into question.

For more information see the Quick guide: Conflict of interest [300 KB PDF].

Contract Award Notice Rules 15, 45 and 54 A notice containing the information listed in Rule 45.2.
contract opportunity Rules 15, 21, 25, 28, 32, 33, 40, 41, 52, 53 and 54 An opportunity for suppliers to bid for a contract for goods, services or works.
Crown Research Institutes Rule 6 Companies established under the Crown Research Institutes Act 1992. A full list of Crown Research Institutes on the State Services Commission website.
deadline for responses Rule 33 The closing time and date for responses to a Notice of Procurement or any other call for tenders. If a tender is submitted after the closing date, it is deemed to be late and may not be accepted by the agency.
direct source Rule 15 A tender process where the agency asks a single supplier to tender for a contract opportunity, and the contract opportunity is not openly advertised.
discrimination Rule 4 Making an unfair and prejudicial judgement for or against a person or product.
e-auction Rule 42 An online reverse auction that takes place in real time. It gives suppliers the opportunity to bid against each other to improve their offers.
education services Rule 13

A generic term for public education services provided by government that includes:

  • primary education services: preschool and primary school
  • secondary education services: general and higher, technical and vocational
  • higher education services: post-secondary, sub-degree technical and vocational, and those leading to a university degree or equivalent
  • adult education services: for adults not in the regular school and university system   
  • other education services: not definable by level, excluding sport and recreation education. 
evaluation criteria Rules 35 and 42 The criteria that are used to evaluate responses. These include measures to assess the extent to which competing responses meet requirements and expectations (eg criteria to shortlist suppliers following a Registration of Interest or criteria to rank responses in awarding the contract).
exemption from open advertising Rule 15 The recognised circumstances (eg a procurement in response to an emergency) where an agency does not need to openly advertise the contract opportunity.
framework agreement Rule 54

Usually used in relation to Panel Contracts. It is the umbrella agreement that governs the relationship between the agency and the supplier(s). It sets out the terms and conditions (including pricing) that the parties agree to contract on in the event that the Supplier is allocated a contract for supplying the covered goods, services or works.

When the agency wants to buy something under the framework agreement, the parties then enter into a separate contract that refers to the terms and conditions contained in the framework agreement.

Functional Leader Rule 57 A government Chief Executive appointed by the Cabinet to drive performance across the State Services in a particular area, eg procurement, ICT and property.
GETS   An acronym for Government Electronic Tenders Service. GETS is a website managed by the New Zealand Government. It is a free service that advertises New Zealand Government contract opportunities and is open to both domestic and international suppliers. All tender information and documents are made freely available through GETS.
GETS listing Rule 33

The summary of a contract opportunity that is published on GETS. It includes key information such as the:

  • name of the buying agency
  • approach to market process that will be used (eg Request for Proposals)
  • deadline for responses
  • address for any enquiries.
goods  Rules 7 and 8, and throughout subsequent rules Items which are capable of being owned. This includes physical goods and personal property as well as intangible property such as Intellectual Property (eg a software product).
government’s central financial control functions Rule 13

This relates only to the acquisition of fiscal agency or depository management services, liquidation and management services for regulated financial institutions, and sale and distribution services for government debt.

These are central banking control functions on behalf of government such as those carried out by the Reserve Bank and Crown debt management functions such as those carried out by the Treasury.

Ordinary commercial banking and financial services are not covered by this definition and are not valid opt-out procurements.

grant Rules 12 and 13

Financial assistance in the form of money paid by the government to an eligible organisation with no expectation that the funds will be paid back.

It can be either:

  • a conditional grant, where the recipient undertakes specific obligations in return for the money, or
  • an unconditional grant, where the recipient has no specific obligations to perform in return for the money.
GST Rule 9 Goods and Services Tax (GST) is a tax on most goods and services produced in New Zealand, most imported goods, and certain imported services. GST is added to the price of taxable goods and services.
guidance    A generic name for a range of New Zealand government good procurement practice guides, tools and templates.
health services Rule 13

A generic term for health services provided by government for the public good including:

  • hospital services (in-outpatient and outpatient) including: surgical, medical, gynaecological and obstetrical, rehabilitation, psychiatric and other hospital services delivered under the direction of medical doctors chiefly to outpatients, aimed at curing, restoring, and/or maintaining the health of such patients.
  • general and specialised medical services
  • military hospital services and prison hospital services
  • residential health facilities services other than hospital services
  • ambulance services
  • services such as supervision during pregnancy and childbirth and the supervision of the mother after birth
  • services in the field of nursing (without admission) care, advice and prevention for patients at home, the provision of maternity care, children's hygiene, etc
  • physiotherapy and para-medical services, ie services in the field of physiotherapy, ergotherapy, occupational therapy, speech therapy, homeopathy, acupuncture, nutrition instructions, etc.
Invitation to Participate (ITP Rule 31 An invitation to suppliers, published on GETS, to apply to be included in a Competitive Dialogue process.
Invitation to Qualify (ITQ) Rule 53 An invitation to suppliers, published on GETS, to apply to be included in an agency's Pre-Qualified Supplier List.
Invitation to Register (ITR) Rule 52 An invitation to suppliers, published on GETS, to register their interest in supplying a specific type of good or service. Suppliers who register their interest are included in a Registered Suppliers List.
maximum total estimated value Rule 9 A genuine estimate of the total cost that an agency will pay over the whole-of-life of the contract. It covers the full contract cost of goods or services, and any other expenses such as maintenance and repairs, and the cost of disposing of the goods at the end of the contract.
minimum time periods Rules 27 and 31 The least amount of time, set by the Rules, that an agency must allow suppliers to respond to a particular contract opportunity.  
multi-step process Rule 31 A procurement process with more than one step, (eg a Registration of Interest followed by a Request for Proposals).
new construction works  Rule 8

In the context of the Rules, the term relates to goods and services associated with delivering new civil or building construction works. This means buildings, roads, bridges and dams. It covers new build and replacement of an existing construction. It includes various stages in the project such as:

  • demolition of previous structure
  • pre-erection works at construction sites, including site investigation work
  • construction work for buildings, residential and non-residential
  • construction work for civil engineering
  • assembly and erection of prefabricated constructions. ie installation on site of complete prefabricated buildings or other constructions, or the assembly and erection on site of prefabricated sections of buildings or other constructions
  • special trade construction work such as foundation work, including pile driving, water well drilling, roofing and water proofing, concrete work, steel bending and erection, erection work from purchased or self-manufactured structural steel components for buildings or other structures such as bridges, overhead cranes or electricity transmission towers, steel reinforcing work and welding work
  • masonry work
  • installation work such as heating, ventilation and air conditioning work, water plumbing and drain laying work, gas fitting construction work, electrical work, insulation work (eg electrical wiring, water, heat, sound), fencing and railing construction work, other installation work (eg installation of lifts and escalators and moving sidewalk), fire escape equipment and construction work (eg staircases)
  • building completion and finishing or such as glazing work and window glass installation work, plastering work, painting work, floor and wall tiling work, floor laying, wall covering and wall papering work, wood and metal joinery and carpentry work, interior fitting decoration work, ornamentation fitting work, other building completion and finishing work (eg special trade building acoustical work involving the application of acoustical panels, tiles and other material to interior walls and ceilings), and steam or sand cleaning work of building exteriors
  • renting services related to equipment for construction or demolition of buildings or civil engineering works.
Notice of Procurement Rules 34 and 35 The document published on GETS that advertises a new contract opportunity (eg a Registration of Interest or a Request for Tender).
Official Information Act 1982 Rule 5 A New Zealand law that sets out the information that government must make freely available to the New Zealand public.
offset Rule 3 Within the context of the Rules, an offset is a condition or undertaking intended to develop the local economy or improve the balance-of-payments accounts by requiring or encouraging suppliers to purchase national products.
open advertising  Rule 14 Publishing a contract opportunity on GETS and inviting all interested domestic and international suppliers to participate in the procurement. 
opt-out procurements Rule 13 Specific types of procurement activities where agencies can choose to opt out of applying most of the Rules.
Panel Contract Rule 35 A type of  framework agreement  that governs the relationship between the agency and each Panel Supplier. It sets out the terms and conditions (including pricing) that the parties agree to contract on in the event that the Panel Supplier is allocated a contract to provide specific goods, services or works.
Panel of Suppliers Rule 54 A list of suppliers an agency has pre-approved to supply particular goods or services and who have agreed to the agency's terms and conditions for supply.
Panel Supplier Rule 54 A supplier included in a Panel of Suppliers.
pre-conditions Rule 25 A condition that a supplier must meet to be considered for a particular contract opportunity.
pre-qualified supplier Rule 53 A supplier included in a Pre-qualified Suppliers List.
Pre-qualified Suppliers List Rule 53 A list of suppliers an agency has pre-approved as having the capability and capacity to deliver specific goods or services. It is the New Zealand government equivalent of the World Trade Organization Agreement on Government Procurement’s ‘multi-use list’.
Principles Rule 1

Short for the Principles of Government Procurement. The five Principles are:

  • plan and manage for great results
  • be fair to all suppliers
  • get the right supplier
  • get the best deal for everyone
  • play by the rules.
procurement   All aspects of acquiring and delivering goods, services and works. It starts with identifying the need and finishes with either the end of a service contract or the end of the useful life and disposal of an asset.
Procurement Functional Leader

Rules 55, 56, 57 and 59

The Chief Executive of the Ministry of Business, Innovation and Employment, who has been appointed by the Commissioner for State Services as the Functional Leader for procurement activities across government.
procurement plan  Rule 17 A plan to analyse the need for specific goods, services or works and the outcome the agency wants to achieve. It identifies an appropriate strategy to approach the market, based on market research and analysis, and summarises the proposed procurement process. It usually includes the indicative costs (budget), specification of requirements, indicative timeline, evaluation criteria and weightings.
prototype Rule 15 An early sample, model or pilot study used to test a concept or process.
Public Sector Rule 6

This includes agencies in the:

  • Public Service (departments and ministries)
  • the wider State Services (eg Crown Entities, Crown Research Institutes, entities listed in Schedules 4 and 4A of the Public Finance Act 1989, and School Boards of Trustees) and
  • the wider State Sector (eg Offices of Parliament, Tertiary Education Institutes and State Owned Enterprises) and
  • Regional Councils and Territorial Authorities (as defined in s5 of the Local Government Act 2002). 

A list of these agencies is available on New Zealand's State sector organisations page of the State Services Commission website.

Public Service Rule 6

The New Zealand government public service departments and ministries listed in Schedule 1 of the State Sector Act 1988.

A list of these agencies is available on New Zealand's State sector organisations page of the State Services Commission website.

Public Private Partnerships (PPPs) Rule 62 A long-term contract for the delivery of a service, involving the building a new asset or infrastructure (eg a prison) or enhancing an existing asset. The project is privately financed on a non-recourse basis and full legal ownership is retained by the Crown.
refurbishment works Rule 7

In the context of the Rules, the term relates to goods or services or works associated with delivery of refurbishment works in relation to an existing construction. Construction means buildings, roads, bridges and dams. Refurbishment works cover renovating, repairing or extending an existing construction.

Refurbishment works does not include replacing a construction. That is deemed to be new construction works.  

registered supplier Rule 52 A supplier included in a Registered Suppliers List.
Registered Suppliers List Rules 8, 51 and 52 A list of suppliers who have registered an interest in supplying specific types of goods, services or works to an agency.
Registration of interest (ROI) Rule 31

Also known as an Expression of Interest. A formal request from an agency asking potential suppliers to:

  • register their interest in an opportunity to supply specific goods, services or works
  • provide information that supports their capability and capacity to deliver the goods, services or works.

It's usually the first formal stage of a multi-step tender process.

Request for information (RFI) Rule 34

A market research tool. A formal request from an agency to the market, for information that helps identify the number and type of suppliers and the range of solutions, technologies and products or services they can provide.

It is not a type of Notice of Procurement. It must not be used to select or shortlist suppliers.

Request for proposal (RFP) Rule 31

A formal request from an agency asking suppliers to propose how their goods or services or works can achieve a specific outcome, and their prices.

An agency may be open to innovative ways of achieving the outcome.

Request for quote (RFQ) Rule 31 A formal request from an agency asking potential suppliers to quote prices for ‘stock standard’ or ‘off-the-shelf’ goods or services or works, where price is the most important factor.
Request for tender (RFT) Rule 31

A formal request from an agency asking for offers from potential suppliers to supply clearly defined goods or services or works.

Often there are highly-technical requirements and a prescriptive solution.

response Rules 28 and 33

A supplier's reply to a Notice of Procurement. Examples include:

  • registering of interest in an opportunity
  • submitting a proposal
  • submitting a tender
  • applying to qualify as a Pre-qualified Supplier.
Rules   A short name for the Government Rules of Sourcing, which are the Rules 1 to 66 and the definitions on this page. Information in boxes and diagrams accompanying the Rules are not part of the Rules but may be used to help with understanding the Rules.
secondary procurement Rules 15, 45 and 54 Where an agency purchases goods, services or works from a panel of suppliers, an All-of-Government Contract, Common Capabilities Contract or Syndicated Contract.
services Rule 7

Acts or work performed for another party, eg accounting, legal services, cleaning, consultancy, training, medical treatment, or transportation.

Sometimes services are difficult to identify because they are closely associated with a good (eg where medicine is administered as a result of a diagnosis). No transfer of possession or ownership takes place when services are sold, and they:

  • cannot be stored or transported
  • are instantly perishable
  • only exist at the time they are provided. 
significant procurement plans Rule 19 Procurement plans for any procurement that meets one or more of the criteria in Rule 19.
sourcing Context The parts of the procurement lifecycle that relate to planning, market research, approaching the market, evaluating responses, negotiating and contracting.
State Sector Rule 6

This includes:

  • the Public Service (departments and ministries)
  • the wider State Services (eg Crown Entities, Crown Research Institutes, entities listed in Schedules 4 and 4A of the Public Finance Act 1989, and School Boards of Trustees)
  • offices of Parliament, Parliamentary Service and the Office of the Clerk of the House of Representatives
  • Tertiary Education Institutes
  • State-owned enterprises 

A list of these agencies is available on New Zealand's State sector organisations page of the State Services Commission website.

State Services Rule 6

This includes:

  • the Public Service (departments and ministries)
  • Non-Public Service departments (including New Zealand Defence Force and New Zealand Police)
  • Crown agents, autonomous Crown entities, independent Crown entities, Crown entity companies, and Crown entity subsidiaries,
  • Crown Research Institutes
  • entities listed in Schedules 4 and 4A of the Public Finance Act
  • Reserve Bank of New Zealand
  • School Boards of Trustees. 

A list of these agencies is available on New Zealand's State sector organisations page of the State Services Commission website.

sufficient time Rule 26

The time a government agency must give suppliers to respond to a Notice of Procurement, to support:

  • quality responses
  • the integrity of the process
  • the agency’s reputation as a credible buyer.
supplier   A person, business, company or organisation that supplies or can supply goods or services or works to an agency.
supplier debrief Rule 46

Information an agency provides to a supplier who has been unsuccessful in a particular contract opportunity, that explains:

  • the strengths and weaknesses of the supplier's proposal against the tender evaluation criteria and any pre-conditions
  • the reasons the successful proposal won the contract
  • anything else the supplier has questioned.
Syndicated Contracts Rule 56

A type of collaborative contract that has been approved by the Procurement Functional Leader.

Syndicated Contracts typically involve a group of agencies aggregating their needs and collectively going to market for common goods, services or works.

If the contract includes a common use provision (CUP), to allow other agencies to contract with the supplier on the same terms later, it is an Open Syndicated Contract.

If the contract is limited to a group of named agencies, it is a Closed Syndicated Contract.

technical specifications Rule 24

A tendering requirement that either:

  • lays down the characteristics of goods, services or works to be procured, including quality, performance, safety and dimensions, or the processes and methods for their production or provision, or
  • addresses terminology, symbols, packaging, marking or labelling requirements, as they apply to a goods, service or works.
tender watch code/s Rule 33 Codes used on GETS to classify goods, services and works. They are based on the United Nations Standard Products and Services Code (UNSPSC). You can find these codes on the GETS website.
The Crown Rule 62 information box The short name for "the Sovereign in Right of New Zealand" as the bearer of government rights, powers, privileges and liabilities in New Zealand.
third party agent Rule 20 A party who is contracted to manage a procurement process on behalf of an agency. The agency remains responsible and accountable for ensuring that the procurement complis with the Rules of Sourcing.
total cost of ownership (TCO) Chapter 3 A estimate of the total cost of the goods, services or works over the whole of their life. It is the combination of the purchase price and all other expenses and benefits that the agency will incur (eg installation and training, operating and maintenance costs, repairs, decommissioning and cost disposal and residual value on disposal). It is a tool often used to assess the costs, benefits and risks associated with the investment at the business case stage of a procurement. 
unsolicited unique proposal Rule 15

An approach initiated by a supplier proposing a unique solution which is not available in the market place.

For more information, see the Guide to unsolicited unique proposals [307 KB PDF]

value for money Chapter 3

Rules 4, 13 and 43

Value for money is not always the cheapest price. It is the best available outcome for the money spent. It means using resources effectively, economically, and without waste, and taking into account:

  • the total costs and benefits of a procurement (total cost of ownership), and
  • the procurement’s contribution to the results you are trying to achieve.

The principle of Value for Money when procuring goods, services or works does not necessarily mean selecting the lowest price but rather the best possible outcome for the total cost of ownership (over the whole-of-life of the goods, services or works).

Selecting the most appropriate procurement process that is proportionate to the value, risk and complexity of the procurement will help achieve value for money.

value threshold Rule 7, 8 and 9 The minimum NZ$ value at which the Rules apply to a particular procurement type. It excludes GST.
welfare services Rule 13

A generic term for public welfare services provided by government, which includes:

  • social services, including residential and non-residential welfare services to the old, handicapped, children and other social assistance clients
  • compulsory social security services (administration of benefits).
Whole of Government Direction Rule 6

The Whole of Government Direction Regarding Procurement Functional Leadership given by the Ministers of Finance and State Services, on 22 April 2014, under section 107 of the Crown Entities Act 2004 (notified in New Zealand Gazette No. 65 on 19 June 2014).

This direction requires certain types of State Services agencies to apply the Rules. A list of these agencies is available on the Public Sector Agencies page.

The direction is available on the Directions to support a whole of government approach page of the State Services Commission website.

works Rules 7 and 8 A generic term which covers new construction works for a new build or refurbishment works to an existing construction.
WTO Agreement on Government Procurement Introduction and Rule 6 Also known as the GPA. A free trade agreement established by the World Trade Organisation (WTO). It is a legally-binding treaty between participating countries, based on the principles of openness, transparency and non-discrimination, and sets out detailed rules for good procurement processes. The main aim of the GPA is to improve access to government procurement markets and remove barriers to international trade.

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Last updated 22 April 2015