Purchasing Principles

Value for money

Achieving the desired outcome at the best possible price

• weighing up the benefits of the purchase against the cost of the purchase.  Value for money factors needs to be specifically included in evaluation criteria and may include:

• the contribution to the achievement of government policy objectives;
• fitness for purpose;
• maintenance and running costs over the lifetime of the product (where appropriate);
• the advantages of buying locally, eg:

• shorter delivery times;
• local backup and servicing;
• the availability of spare parts;
• the contribution to the achievement of government policy objectives which support local business, such as industry development and employment creation;
• the potential for creating strategic partnerships and cooperative product development;

• quality assurance;
• risks;
• the capacity of the supplier (eg managerial and technical abilities);
• climate change and environmental considerations;
• energy conservation; and
• disposal value.

Open and effective competition

Ensuring that the purchasing process is impartial, open and encourages competitive offers

• using transparent, open, purchasing processes so that potential contractors and the public can have confidence in the outcomes;·
• adequately testing the market, whether by open tender or by seeking quotations, whichever process is applicable;
• avoiding biased specifications; and
• treating all potential suppliers consistently, fairly and equitably.

Compliance with ethical standards and observing the Procurement Code of Conduct

Ensuring that all purchasing is undertaken in a fair and unbiased way and requiring suppliers to act ethically and in accordance with appropriate legislation

This includes -

• government buyers being fully accountable for the purchasing practices used and the decisions made;
• ensuring that decisions are not influenced by self interest or personal gain (government buyers must not accept gifts or any other benefits from suppliers);
• identifying, dealing with and documenting issues relating to actual or perceived conflicts of interest;
• maintaining confidentiality; and
• ensuring that all purchasing is undertaken in accordance with government policies.

For more information, see the Ethical Standards, Codes and Record Keeping.

Agencies must require suppliers to act ethically and in accordance with relevant legislation such as industrial relations legislation and occupational health and safety legislation.

For building and construction procurement (including roads and bridges), agencies must -

• require suppliers to comply with the National Code of Practice for the Construction Industry, 1997 Edition, the Tasmanian Annexure to the National Code of Practice for the Construction Industry and with the Australian Standard Code of Tendering AS 4120-1994 for all procurement valued at $10 000 or more; and
• ensure that representatives (consultants etc) and agency officers act in accordance with Australian Standard Code of Tendering AS 4120-1994, for all procurement valued at $10 000 or more.

Enhancing opportunities for local business

Ensuring that local businesses that wish to do business with the Government are given the opportunity to do so

• buyers should actively seek bids from local businesses, particularly from those that have previously requested the opportunity to quote (where local capability exists, one quote should be obtained from a local business).

For goods and services purchases valued at $100 000 or more, buyers must contact the Industry Capability Network to determine local capability.

For further information on supporting local business see Buy Locally: A Guide for Tasmanian Government  Agencies.

Note:  Providing local businesses with the opportunity to bid is not the same as giving preference to local businesses.