Purchasing Steps

What are the purchasing steps?

Purchasing process is determined

Bid documents are prepared

Bids are invited

Suppliers respond

Evaluation and selection

Notification and debriefing

Contracts established and managed

What are the purchasing steps?

The Government's purchasing processes have been developed to encourage fair and open competition with the objective of achieving best value for money.

Once it has been determined that a purchase is required, and the funding has been approved, the seven main steps in the purchasing process are:

Purchasing process is determined

Which purchasing process is used, ie quotation or tender, depends on the value of the purchase and the business category, i.e. Goods and Services, Building Construction, or Roads and Bridges. See How Purchasing Works to find out what the purchasing thresholds are and what other rules apply, for example, where and when tenders are advertised.

Bid documents are prepared

Once the purchasing process has been determined, the government buyer will develop documentation that outlines what is required and how you should respond.

The style of document used and the amount of detail provided will be determined by the purchasing process and the value of the purchase.   

This documentation may include:

• Conditions of tender or quotation, including:

• an explanation of the evaluation criteria to be used to evaluate the bids;
• information on relevant government policies; and
• closing time, date and place of lodgement.

• A specification describing the product, service or works required. This specification should be clear, accurate and complete.
• Conditions of Contract.
• Forms to be completed by the business making a bid.

See Understand the Tender Documentation for further information.

Bids are invited

Depending on the value and business category of the goods, service, or works to be purchased, the government buyer may contact businesses directly or advertise the request to purchase.  It is therefore important to understand how bids are invited.  How Purchasing Works explains the rules and guidelines for when, where and how bids may be invited.

In some cases, pre-qualification may be required to be able to bid. See the Pre-qualification section to see if this is applicable to you.

Also refer to How to Get Known to ensure that you do not miss out on any opportunities.

Suppliers respond

If available, you should obtain all relevant documentation from the agency contact.  For very simple purchases or projects there may be no documentation. You should also:

1. attend any pre-bid briefings being conducted;
2. clarify any uncertainties;
3. plan your response;
4. prepare your response; and
5. submit your response in the right format, on time and at the right location.

To find out more, go to Planning to Quote or Planning to Tender.

Evaluation and selection

Depending on the value of the purchase and the business category, a committee or individual will be responsible for the evaluation of all bids and the final selection.

At all times, the bid that provides the best value for money will win the business.  Remember, value for money does not necessarily mean the lowest price.

To determine value for money for low value purchases, an assessment will generally be made on how well each bid meets the requirements and price.

More complex purchases or work projects will be evaluated against the criteria specified in the bid documentation. See How Tenders are Evaluated for further information.

Notification and debriefing

When a contract has been awarded, the successful bidder will be advised either verbally or in writing of the outcome. Unsuccessful bidders are also usually advised and in most cases a debriefing session is available.

Contracts established and managed

Depending on the value and complexity of the purchase and its business category, a contract may be established by using a letter of acceptance, issuing a Purchase Order, or using a formal agreement with specific conditions of contract.

For further information, see Establishing the Contract.

Once the contract has been established, both you and the government agency have responsibilities to manage and complete the contract.

Payment will be made at the completion of the contract or as outlined in the payment schedule in the bid documentation. For further information see Managing the Contract.

Want to know more about the purchasing process? See Pre-qualification, Quotation Process, Tender Process or Contracting Process.