Principles governing procurement process
Principles governing procurement process
1. Probity and ethical behaviour
The principle of probity and ethical behaviour governs the conduct of all procurement activities. Employees who have authority to procure goods and services must comply with the standards of probity, professional conduct and ethical behaviour. Employees or directors must not seek to benefit from supplier practices that may be dishonest or unethical.
Value for money is the core principle underpinning procurement. Contracted organisations must be cost effective and efficient in the use of resources whilst upholding the highest standards of probity and integrity. In general, a competitive process carried out in an open, objective and transparent manner can achieve best value for money in procurement.
3. Non-discrimination
This procurement policy is non-discriminatory. All potential contracted suppliers should have the same opportunities to compete for business and must be treated equitably based on their suitability for the intended purpose.
4. Risk management
Risk management involves the systematic identification, analysis, treatment and, where possible, the implementation of appropriate risk mitigation strategies. It is integral to efficiency and effectiveness to proactively identify, evaluate, and manage risks arising out of procurement related activities. The risks associated with procurement activity must be managed in accordance with the organisation’s risk management policy.
5. Responsible financial management
The principle of responsible financial management must be applied to all procurement activities. Factors that must be considered include:
· the availability of funds within an existing approved budget
· staff approving the expenditure of funds strictly within their delegations
· measures to contain costs of the procurement without compromising any procurement principles.
6. Procurement planning
In order to achieve value for money, each procurement process must be well planned and conducted in accordance with the principles contained in this document and comply with all of the organisation’s policies and relevant legal and regulatory requirements.
When planning appropriate procurement processes consideration should be given to adopting an approach which:
· encourages competition
· ensures that rules do not operate to limit competition by discriminating against particular suppliers
· recognises any industry regulation and licensing requirements
· secures and maintains contractual and related documentation for the procurement which best protects the organisation
· complies with the organisation’s delegations policy.
7. Buy Australian made/support for Australian industry
Employees who are involved in procurement activities must make a conscious effort to maximise opportunities for Australian manufacturers and suppliers to provide products where there is practicable and economic value. In making a value for money judgment between locally made and overseas sourced goods, employees are to take into account:
· whole of life costs associated with the good or service
· that the initial purchase price may not be a reliable indicator of value
· the quality of locally made products
· the record of performance and delivery of local suppliers
· the flexibility, convenience and capacity of local suppliers for follow on orders
· the scope for improvements to the goods and ‘add-ons’ from local industry.
8. Pre-registered list of Strategic Partners, etc
Melbourne Car World shall maintain a pre-registered list of strategic partners, contractors, following a request for expressions of interest and an evaluation of the submissions. Strategic partners, such as select travel and tour operators allow Melbourne Car World to offer a wide range of travel options to our customers that represent great value. Strategic partners can request to be evaluated for inclusion on the existing pre-register list at any time.
This list is reviewed at regular intervals with admission of interested parties on a rolling basis. Care should be taken to ensure that such lists are used in an open and non-discriminatory manner. Melbourne Car World encourages new partners to provide information on their experience, expertise, capabilities, and areas of interest, fees, and current availability. It is in the interest of the organisation that the pool of potential suppliers is actively maintained and updated. Employees should provide reports of their experiences in working with each contractor/consultant to assist future decisions concerning commissioning suitable strategic partners, contractors and consultants.
Employees and directors are required to be free of interests or relationships in all aspects of the procurement process.
Employees and directors are not permitted to personally gain from any aspect of a procurement process.
Employees and directors shall ensure that to the best of their knowledge, information and belief, that at the date of engaging a contractor no conflict of interest exists or is likely to arise in the performance of the contractor’s obligations under their contract.
Should employees or directors become aware of potential conflicts of interest during the contract period, they must advise the CEO and directors immediately.
Prior to any situation arising with potential for a conflict of interest, complete disclosure shall be made to the CEO and directors to allow sufficient time for a review.
10. Report collusive tendering
Employees should be aware of anti-competitive practices such as collusive tendering. Any evidence of suspected collusion in tendering should be brought to the attention of the CEO and directors.
It is a basic principle of procurement that a competitive process should be used unless there are justifiably exceptional circumstances. The type of competitive process can vary depending on the size and characteristics of the contract to be awarded.
For purchases of low value product and services (less than $75,000), less formal procedures may be appropriate. Purchases might be procured on the basis of quotes from one or more competitive suppliers.
For purchases of higher value products and services ($75,000 or more) under a formal arrangement, contracts may be awarded based on responses to specifications by at least two suppliers or service providers. Where there are justifiably exceptional circumstances, the CEO must first gain written approval from the chair before procurement of goods or services on the basis of only one quote where the value meets or exceeds $75,000.
12. Direct invitation (selective or restricted tendering)
A process of direct sourcing to tender may be used. This may involve:
· An invitation to organisations deemed appropriately qualified for a particular product or service (this may be appropriate for specialised requirements in markets where there is a limited number of suppliers or service providers).
· An invitation to tender to organisations on Melbourne Car World’s pre-registered list of strategic partners, consultants and contractors established on an open and objective basis. Where direct invitations are issued, organisations from which tenders are sought should be a good representative of all potential bidders in the market concerned. The number invited to tender should be sufficient to ensure adequate competition, and be no less than two where the value of the product or service is $75,000 or more, and should not be restricted for reasons of administrative convenience. Where there are justifiably exceptional circumstances, the CEO must first gain written approval from the chair before procurement of goods or services on the basis of only one quote where the value meets or exceeds $75,000. Selection from the list can be made in accordance with specified criteria. Selection may be based on factors such as overall suitability for the particular project by reference to experience, competence, and capability. The selection process should have particular regard to the need for equal treatment and reasonable distribution of opportunities.
13. Evaluation and contract award
For projects being awarded, consideration will be given not only to the most economically advantageous tender, but also to the track record of the tender respondent and the degree of confidence that the panel has in the quality if the bid. It will be the normal practice to have the evaluation of tenders carried out by a team with the requisite competency.
14. Results of tendering process
All tender respondents should be informed in writing of the result of a tendering process immediately after a contract has been awarded.
Summary of procurement policy delegations
| Purchase Amount | Required Number of Quotes | Comment | |
| CEO and one director | Authority to sign contracts for products and services over $75,000. | Two or more competitive quotes for contracts over $75,000. | Detailed services contract required. |
| CEO | Authority to sign contracts for products and services up to $75,000. | Two or more competitive quotes. | Detailed services contract required for contracts over $20,000. |
| General Managers delegated authority only through CEO | Authority to sign contracts for products and services under $30,000. | One or more competitive quotes preferred. | Provided they are within the approved budget and consistent with business/operational and strategic planning.
Detailed services contract required for contracts over $30,000. |
| Sales agents at dealerships | Individual delegations for discounts, promotions, etc | N/A | Must receive approval of offers from dealership manager before concluding business with customer |
Expenditure Payment Approval Form
| For Completion by Person Verifying Payment | ||||||
| Date: | Invoice date: | |||||
| Payee name: | ||||||
| Job/project number: | Project title: | |||||
| Description of payment: | ||||||
| Payment amount: $ | ex GST inc GST | |||||
| Signature of person verifying payment | Signature of delegated manager |
| For Completion by Finance: | ||
| Account number | Account name | Amount |
| Total Payable: | $ |
| Approved: | Date: | ||||
| Director: | |||||
| CEO: | |||||
| CFO: | |||||
Pre-registered list of Strategic Partners
| Company | Phone |
| Adventure supplies | 03 7878 4334 |
| Bars are us | O7 6745 7890 |
| Car Universe | 03 8529 0643 |
| Gorilla bars | 03 6549 8764 |
| Universal roof racks | 03 3456 7891 |
| International towing equipment | 03 9876 5430 |
| XYZ Childcare | 03 9996 7645 |
| OZ cars customisers (non-standard modifications) | 03 7865 3988 |
Chief Executive Officer
Flo Mehra
Chief Financial Officer
Cameron White
Sales and Customer Service General Manager
Phil Andersson
Manager West
Pat Marks
Operations General Manager
Les Mackie
Manager North
Kim Phelps
Manager East
Saul Van Buren
Board of Directors
