Panel of suppliers
Explains how an agency can establish and operate a panel of suppliers.
- A panel of suppliers (Panel) is a list of suppliers who have been pre-approved by an agency and who have agreed to the terms and conditions for supply.
- A Panel of suppliers is appropriate when an agency wants to:
- verify which suppliers are capable of delivering specific goods, services or works
- agree in advance with each supplier the terms and conditions of supply of the goods, services or works, including the pricing (eg agreed hourly fee) or the pricing mechanism that will apply.
- Before establishing a Panel, an agency must:
- have a good understanding of the anticipated demand for the goods, services or works and number or range of Panel suppliers that are required
- anticipate an ongoing need for the goods, services or works
- have resources and plans in place for the Panel to be appropriately managed once established.
- Once a Panel has been established through an open process under the Rules, an agency does not need to openly advertise individual contract opportunities. It may purchase directly from the Panel. This is called secondary procurement.
When purchasing from the Panel the agency must use the specified method (Rule 57.11) to select a supplier.
Establishing a Panel of Suppliers
- An agency must openly advertise the opportunity to be selected for the Panel of Suppliers in accordance with Rule 13 and Rule 35.
- The Notice of Procurement must comply with Rule 37 and include the content specified in Rule 38. It must also include the following information:
- the terms and conditions of supply that will apply (eg the framework agreement)
- the method/s the agency will use to award contracts to suppliers on the Panel (ie the secondary procurement process (Rule 57.11))
- how the agency will contract with a supplier who agrees to deliver specific goods or services or works
- the period of time the Panel will be established for
- whether or not the Panel is ‘open’ or ‘closed’
- any circumstances that may lead to a supplier being removed from the Panel.
- The Notice of Procurement (Notice) can be:
- a one-off Notice to establish the Panel
- a standing Notice which is made available continuously on GETS that allows interested suppliers to respond on an ongoing basis
- an occasional Notice that is published from time to time when an agency wants to refresh or expand the Panel.
- It is expected that an agency will appoint more than one supplier to a Panel.
Method of allocation of contracts
- The Notice of Procurement used to establish the Panel must outline the method/s that the agency will use to select suppliers when a contract opportunity arises (secondary procurement process). The method/s should be appropriate for the nature of the goods, services or works and the anticipated volume of work.
- An agency should use competitive secondary procurement processes, unless there is a good reason not to.
- Accepted selection methods for secondary procurement processes include:
- competitive quotes which could be based on the supplier’s expertise, proposed solution and/or best public value: Ask for quotes from some or all Panel suppliers and award the opportunity to the supplier who has the right level of expertise, can offer the best public value and deliver on time
- direct source, based on the best fit for purpose: Fair evaluation of all Panel Suppliers and selection of the supplier who has the right capacity and capability to fulfil the opportunity and offers the best public value at the time of the purchase
- rotation: Award opportunities to each supplier in turn regardless of their expertise, public value or delivery time
- equal division of the work: Fix an upper limit for the amount of work that can be awarded to each supplier and award opportunities on a rotational basis. When a supplier reaches the upper limit, the agency chooses the next supplier from the Panel
- preferred supplier basis: Identify a preferred supplier from the Panel. This supplier receives most of the opportunities unless it has a conflict of interest or is unable to supply. If this happens, the agency will award the opportunity to the next-ranked supplier from the Panel
- location: Award opportunities to the supplier who is best able to deliver based on their location and the location of the work.
Who can establish a panel
A Panel of suppliers may be established by:
- a single agency for its exclusive use
- a lead agency on behalf of a group of agencies with common needs (eg for a Syndicated or All-of-Government contract).
No guarantee of work
Although suppliers from a Panel are not guaranteed any work, they will have some expectation of getting work. So the size of the Panel should be proportionate to the anticipated demand. Ideally, all suppliers should get some work while the Panel is in existence.
Open and closed panels
A Panel is ‘open’ if other suppliers can apply to be on the Panel during the period it is established for.
A Panel is ‘closed’ if other suppliers can't apply to be on the Panel during the period the Panel is established for.
Information about the contract award notice
Contract award notice
On establishing the Panel, an agency must publish the names of all of the suppliers that have been appointed to the Panel in its contract award notice.
Where a Panel supplier is given a specific contract through a secondary procurement process, the agency does not need to publish a contract award notice.
However, it is good practice to be transparent and publish summary details of contracts awarded as a result of secondary procurement from a Panel (eg an agency may publish these on GETS or its own website).
Secondary procurement process
Agencies can use more than one method for secondary procurement as long as this is explained in the Notice of Procurement (for example, the notice may say the agency will either direct source from one panel member or request quotes from some or all panel members).
A Panel of suppliers is normally established with a set number of suppliers for a specific time period. The number of suppliers will depend on the:
- nature of the goods, services or works
- maturity of the supply market
- anticipated volume of work.
Competitive secondary procurement processes (such as a Request for Quote) involving a selection or all of the Panel suppliers will usually result in better public value. It also gives capable Panel suppliers the opportunity to compete.
There may be some circumstances when a competitive process may not be appropriate. For example, if the procurement is low risk and low value (less than $100,000), or if you already have all the necessary information you need to make a decision, such as quality and pricing information. Remember that whatever secondary method is used, it needs to feature in the Notice of Procurement (Rule 57.6.b).
You should still consider what broader outcomes you could achieve when conducting competitive processes in a secondary procurement.