Procurement and Contract Management
Procurement Model and Contract Management
Primary Health Networks (PHNs) / manage the procurement process and introduce a new national health information system.
Procurement Plan developed and agreed:-
- SoR development;
- RFT developed;
- Evaluation Plan (also covering probity) drafted;
- RFT published using Lange’s online tendering tool;
- Tenders received;
- Desk top evaluation;
- Tenders shortlisted;
- Referees and demonstrations;
- Evaluation committee recommendation;
- Contract negotiations;
- Contract executed;
- Contract begins.
ICT Procurement and Evaluation
Australian Criminal Intelligence Commission
Procurement of ICT services and tender evaluation
Deliver (at a minimum) the following scope of works for multiple ICT approaches to the market:
- Strategic procurement analysis, preparation of papers
- Procurement plan, probity plan, risk assessment, evaluation;
- Collation of the Request for Tender (open) – assist in developing Statements of Requirements
- Tender Evaluation Plan, Probity Plan, Risk Management Plan
- Draft Contract management plan, contract negotiation directive
- Facilitate review and comments
- Addenda
- Compliance check
- Facilitate Technical evaluation, value for money analysis
- Tender Evaluation Report
Equipment Acquisition
BHP - Mobile Equipment Acquisition $600m
Approach:
- 12 month detailed Surface Mobile Equipment acquisition planning for a new Iron Ore mine, involving more than 300 separate pieces of equipment ranging from $10m + excavators to small mobile equipment trailer mounted items.
- Developed detailed sourcing strategies based on leveraging existing BHPIO framework agreements and tendering with current/ newly prequalified suppliers.
- Prepared capital budgets, detailed sourcing timelines (including identification of long lead time project critical acquisitions) and cash flow forecasts.
- Participation in mine operating cost modelling through identification and collection of budget pricing, servicing maintenance and consumables costing.
- Participation in value improvement and cost down processes including development and documentation of streamlined specifications.
- Developed logistics and movement plans given substantial out of gauge road transportation requirements.
Value Add:
- Complete execution plan
- Identified and qualified tenderers
Procurement Management - Community Services
Ruah Community Services - Procurement Management
Approach:
RCS (a large NFP organization) has no formal Procurement and Contracts function. It intends to develop a new purpose built office complex and requires the services of a seasoned PM for the entire development.
Services included:
- Developed sourcing strategy.
- Preparation EOI and RFT documentation.
- SOW drafting and documentation.
- Development of tender evaluation sheets/process/outputs.
- Tender probity audit role
- Approval documentation.
Value add:
- Fee within budget.
- PM appointed in accordance with agreed schedule.
- Transference of procurement/contracting skills to nominated officer.
Procurement Approach
The Issue
A University, as part of its overall transformation of the Financial Services area, recognised the need to strengthen and update its approach to procurement. The Manager of Shared Services, and the person recruited to achieve this, implemented a strategy that focused on three key areas:
- introduction of professional procurement expertise to manage strategic sourcing;
- policy development to exploit the expenditure leverage; and
- technology deployment to streamline and introduce velocity into the source to pay process.
The institution’s procurement policy dictates that activity in excess of $200,000 requires the approval of the University Tender Board.
In support of the technology deployment objectives, the University realised that the introduction of an electronic tendering solution would offer significant benefit. Benefits would be associated with improved turn around times for completion of the tendering process, elimination of paper-based activity, stimulation of competition amongst the supply base, and improvements to the University’s controls posture through greater transparency
The University was already using PeopleSoft for its core financial systems, including the eProcurement module to manage the procure to pay process. It did not, however, have an electronic solution to manage RFx activity, such as requests for tenders, request for quotations, expressions of interest, and requests for information.
The Solution
In 2005, the University identified an eRFx solution from Canberra-based developers. The eTenderbox software offered the ability to electronically manage the publication and receipt of RFx documents, while VFM Online added to the core functionality by providing decision support capability through an objective analysis of suppliers’ responses.
The joint project team put the solution through a rigorous testing process to understand how the tool would operate in the University environment. Security of the system was an obvious area of concern. Whilst the solution provides appropriate functionality around audit trails to support transparency objectives, the clients of the system, the suppliers, had to be confident their submissions would be secure and could not be accessible or disclosed to their competitors.”
In April 2006, the Shared Services team implemented a rigorous proof-of-concept test for the software, running an online tender for some very specialised scientific equipment, of which there were only two known suppliers, both located in Japan. The software successfully handled this activity. Three key factors emerged from this pilot exercise: the technology received the full support of both the suppliers and the internal client, and the University Tender Board accepted the final evaluation report produced by the tool.
In its first six months, since the initial pilot, eTenderbox and VFM Online have handled a wide variety of requirements ranging from relatively non-complex items such as office furniture and bulk print needs, through to complex medical and scientific equipment to support specific research objectives, and higher-value strategic purchases such as musical instruments.
The Result
“One of the reasons we were able to move so quickly with is that the initial investment required was very reasonable, so much so that we expect a complete return on investment within nine months,” University commented “The result is that we now have 21st century technology that provides our strategic sourcing community with more time to spend engaging the internal client and the supply base, rather than worrying about logistics, administration and manual handling of tender processes.”
The supplier community benefits as well, which is of critical importance. Electronic publishing with eTenderbox means that all interested suppliers receive tender documentation at the same time, regardless of whether they are locally or internationally based. Queries may be forwarded electronically and if required, addenda can easily be sent by the University to all suppliers. Suppliers gain extra response time through the ability to submit up until the last second before the closing time, without having to factor in the time and cost of printing, binding and couriering their submissions - a fact that has been acknowledged on many occasions by suppliers.
As mentioned earlier, the solution has also helped to provide additional transparency to the eRFx process. Together, eTenderbox and VFM Online provide security with exceptional transparency, maintaining a complete audit trail of any online activity associated with a particular tender, such as when the tender document is released; when suppliers download it; the time a response is submitted; and how evaluations are made.