Grantee guide to procurement for Environmental Trust projects

Procurement process

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Procurements follow 3 stages: planning, sourcing and managing the procurement.

Important procurement practices

1. Ensure that you consider and manage actual, potential or reasonably perceived conflicts of interest

Actual	Potential	Reasonably perceived
You are being influenced by a conflicting interest	You could be influenced by a conflicting interest	You could appear to be influenced by a conflicting interest

Examples of conflicts of interest in relation to procurement might include:

• a project manager engaging their own business, family or friends to carry out project related work and using Trust funds to pay for it (actual)
• using Trust funds to pay members of the grantee's organisation who have not been selected through an open recruitment process (actual)
• using Trust funds to buy goods or services in a way that results in personal benefit (actual)
• a project partner being on a contract selection panel where they are friends with one of the potential suppliers (potential and reasonably perceived)
• running an open selection process for a position that a friend is applying for and not declaring or taking steps to manage the conflict of interest (potential and reasonably perceived).

You must put systems in place to manage actual, potential or reasonably perceived conflicts of interest that may arise during delivery of the project and procurement processes (e.g. convene an independent panel to consider and approve acceptance of quotes).

The Independent Commission Against Corruption document on Managing Conflicts of Interest in the Public Sector describes Ways to manage and monitor conflicts of interest on pages 19-23.

You will need to declare any conflict of interest to the Trust as soon as you are aware of it, as per your grant agreement.

2. Do not forward pay for goods and services

Avoid pre-paying or forward paying for goods and services unless a deposit or initial payment is required to commence the contract. Payments can be made up of progress payments and a final payment, but full payment of a contract should not be made until the goods or services have been provided.

3. Choose service providers based on their merits

All contractors and consultants must be chosen on their merits and ability to effectively deliver the work. If you have a preferred supplier list of contractors that you want to use for your project, this must be based on a merit selection process and be reviewed regularly to ensure it reflects the current market.

4. Do not split contracts to avoid procurement threshold levels and/or governance requirements

The procurement strategy implemented should be based on the total value of works over the life of the project, for example, if you are spending $45,000 on bush regeneration over 3 years, the total contract value is $45,000 and should not be split into $15,000 for each year to avoid obtaining three quotes.

5. Make sure you and your service provider are covered

You must ensure that all service providers have appropriate insurances and licences for the work they are doing prior to engaging them for your project.

Procurement strategies for goods and services

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Contract value less than $10,000

For the procurement of goods and services less than $10,000, excluding GST, you can buy from any supplier provided the rates are reasonable and consistent with normal market rates. While there is no need to get a written quote, you should ensure that you and the supplier have a clear understanding of the work being conducted and outcomes expected. This could be outlined in a project brief or defined within a quote or email correspondence.

Contract value $10,000 to $30,000

For the procurement of goods and services between $10,000 and $30,000, excluding GST, you must get at least one written quote. Because you're using public funds, obtaining multiple quotes is highly preferable to ensure fair competition and value for money. Rates must be reasonable and consistent with normal market rates. The Trust may ask for evidence of how you have determined this.

A project brief should be prepared and can form part of the contract. Quotes should be itemised so there is a clear understanding of the services to be provided.

You can engage the supplier via email to accept their quote. This email can stand as the contract for the work.

Contract value over $30,000

If the value of work to any single contractor (or consultant) exceeds $30,000 (excluding GST) in total during the life of the project, you must seek at least 3 written quotes from potential suppliers. A project brief should be prepared so that potential suppliers are clear on what they are quoting for. Quotes should also be itemised so there is a clear understanding of the services to be provided.

Once you have accepted the supplier's quote, you will need to develop a contract for the works.

You may also wish to engage a provider through more competitive procurement processes, such as open tender, if this is more appropriate for your project.

Under $10k	Under $30k	Over $30k
One quote (optional), but an email is adequate	Minimum one written quote	Grantee to retain documentation for auditing and reporting purposes
Price must be based on industry standard and represent value for money	Quote must be based on industry standard and represent value for money	Grantee to retain documentation for auditing and reporting purposes
Grantee to retain documentation for auditing and reporting purposes	Quotes must be based on industry standard and represent value for money	Grantee to retain documentation for auditing and reporting purposes

The Trust understands that in some locations there may be skills shortages or a lack of local suppliers of goods and services, and that you may have difficulty in obtaining 3 quotes. If you can show that you have explored all options, that a fair and independent merit-based process for selection of the successful provider has been held, and that value for money has been achieved, this should be enough to satisfy policy requirements. If in doubt speak to your Grants Administrator.

Exemptions

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You may buy goods and services directly from suppliers as per the list below. Value for money remains the overarching consideration and you must ensure that you address any perceived or actual conflict of interest that may arise:

• for the procurement of goods and services <$50,000 you may directly purchase from a small business (a business with less than 20 full-time staff or equivalent)
• for the procurement of goods and services <$250,000 you may directly purchase from an Aboriginal owned business
• you may buy goods and services from an approved disability employment organisation via a single written quote.

There is no cap on the value of goods and services when purchasing from an approved disability employment organisation.

Reporting and audits

Documentation relating to and demonstrating an open, transparent and competitive procurement process must be retained by the grantee for audit purposes, and you will be required to provide information about your procurement processes (including justification for application of exemptions) when reporting to the Trust.

The Trust may audit your procurement processes, documentation and decisions relating to the selection of providers of goods and services as per your Funding Agreement.