Establishing the Contract

What is a contract?

When is a more formal Agreement required?

What standard Conditions of Contract are used?

Finalising the Contract

Crown Contracts Confidentiality Policy

What is a contract?

A contract defines the rights and obligations of both parties once the contract is awarded.

A contract is established when an offer is made and accepted.

Depending on the complexity, value and type of goods, services or works being contracted, government agencies will accept an offer by:

• paying for the goods, services or works provided;
• writing a letter of acceptance;
• issuing a Purchase Order; or
• using a more formal Agreement, including specified Conditions of Contract.

A contract comprises all relevant information provided to and by the business which has made the successful offer. This includes:

• Conditions of Quotation or Tender;
• Specifications, including any plans and other attachments;
• the successful Offer (Tender or Quotation); and
• Conditions of Contract.

When is a more formal Agreement required?

Formal contractual agreements are generally required in the following circumstances:

Most formal Agreements use standard Conditions of Contract. These may be varied to suit the particular contract and you should ensure that you read and understand all Conditions of Contract before entering into an Agreement.

What standard Conditions of Contract are used?

Goods and Services

Building and Construction

Many different standard Conditions of Contract are used but the key Conditions of Contract are:

Roads and/or Bridges

Many different standard Conditions of Contract are used but the key Conditions of Contract are:

Finalising the Contract

For complex or high value purchases it may be necessary to enter into negotiations prior to finalising the contract. The purpose of these negotiations is to:

• test your understanding and assumptions in determining your costs;
• clarify and rectify any false assumptions;
• achieve operational refinements and enhancements that may result in cost reductions.

If negotiations are allowed, you will generally be advised that this will be the case in the tender documentation.

The outcomes from these negotiations are always reflected in the final contract.

Once completed and agreed the formal contract is then signed.

For more information see the Contracting Process and Managing the Contract.

Crown Contracts Confidentiality Policy

The Crown Contracts Confidentiality Policy applies to all contracts entered into by agencies. The policy provides that in any contract between the Crown and another party, confidentiality requirements in relation to the provisions of the contract are not to be included unless an exemption has been approved as being in the public interest. An agency negotiating with a supplier may apply to the Crown Contracts Confidentiality Standing Committee for an exemption. Further information is available from the Treasury Publication, Crown Contracts Confidentiality Policy, located on the Treasury Web site (www.treasury.tas.gov.au) under Publications and from the Frequently Asked Questions on this matter.