Finalising the contract - Contracting

Following the evaluation stage of the procurement and approval by your agency's Procurement Review Committee (where appropriate), you should advise the preferred supplier, preferably in writing, and contract negotiations may be commenced. Once the negotiations are concluded (and if required, a Tasmanian Industry Participation Plan approved by your Head of Agency) a contract may be formed.

Depending on the complexity, value and type of goods and/or service being purchased, an offer can be accepted by:

  • issuing a letter of acceptance;
  • issuing a Purchase Order; or
  • using a more formal Agreement, including specified Conditions of Contract.

Accepting an offer by any of these means forms a contract with the supplier.

Finalising the Contract - negotiations

For complex or high value purchases it may be necessary to enter into negotiations prior to finalising the contract (if you are negotiating on the Crown Solicitor's pro forma contracts, you should consult with the Crown Solicitor in relation to any changes). Ideally, suppliers will have been advised in procurement documentation of the possibility of these post-submission negotiations. The purpose of these negotiations is to:

  • test the understandings and assumptions made by tenderers in determining their costs;
  • clarify and rectify any false assumptions; and
  • achieve operational refinements and enhancements that may result in cost reductions.

The outcomes from these negotiations must be reflected in the final contract.

Once completed and agreed, a formal agreement is entered into by both parties.

What Conditions of Contract should be used?

Treasurer's Instruction 1109 requires that for all Requests for Tender, Crown Solicitor approved Conditions of Tender and Conditions of Contract must be used.

The Crown Solicitor has developed a set of pro forma Request for Tender documents. These documents contain a formal agreement (the Conditions of Contract). Where the pro forma documentation is not used, or is substantially modified, you must have your documentation approved by the Crown Solicitor.

Note: The formal agreements contained in the Crown Solicitor Request for Tender documentation must not be used in isolation from the balance of the documentation as the documents are inter-dependent. If used in isolation, it may fail to form a legally binding contract.

When procuring services (eg consultancies), if a formal agreement is required and the Crown Solicitor's Request for Tender documentation has not been used, the Crown Solicitor's pro forma Contracts for Services may be useful.

Inclusions in contracts

Certain conditions are required to be contained in all contracts with suppliers regardless of whether a formal agreement is entered into or whether some other form of contract is used. These conditions are set out in Treasurer's Instruction 1109.

When preparing contracts, reference should be had to the Crown Contracts Confidentiality Policy.