"Works" relates to the construction component of a construction project. It includes maintenance works but excludes consultancies.
All building and construction/roads and bridges works valued at $250 000 and over are treated, and known, as "Major Works". Procurement of all building and construction/roads and bridges works valued at less than $250 000 is considered to be "Minor Works".
At a high level and in summary, the following processes apply:
procurement processes for purchases valued at $50 000 or less (excluding GST) are at the discretion of agencies. Agencies are required to weigh the value of the purchase and the cost of seeking quotations against the need to ensure that value for money and other building construction/roads and bridges procurement principles have been observed (Treasurer's Instruction 1206);
at least three written quotations are to be sought for Minor Works for building and construction/roads and bridges valued at more than $50 000 but less than $250 000 (Treasurer's Instruction 1206) unless approval for direct/limited submission sourcing has been given under Treasurer's Instruction 1217 (see Direct/Limited Submission Sourcing for additional information) or under Treasurer's Instruction 1231 - note: all values are excluding GST.
Where local capability exists, at least two quotes must be sought from Tasmanian businesses. If after seeking at least three written quotations, less than three submissions/responses are received, agencies are not obliged to seek further submissions.
Open tenders for Minor Works may be called at the discretion of agencies. Where tenders are called, generally the procurement process relevant to minor works will apply. However, advertising and opening of the tender and the issuing of addenda etc must be in accordance with the requirements for major works;
- for procurement with a value of $50 000 or less, an assessment of the impact on local suppliers is to be undertaken. In such cases, the format of the assessment and the process to be adopted for approval will be at the discretion and direction of the Head of Agency (Treasurer's Instruction 1225);
- for procurement with a value of more than $50 000, a pre-procurement local impact assessment must be completed and approved before the procurement may commence (Treasurer's Instruction 1225);
- a Local Benefits Test must be applied to all procurements with a value of $50 000 or more (Treasurer's Instruction 1225);
- agencies must provide suppliers with at least one electronic option for the lodging of their submission (Treasurer's Instruction 1206);
- agencies must comply with the reporting requirements outlined in Treasurer's Instructions 1212 and 1213;
- where the applicable threshold is met, the procurement process utilised must be reviewed by an agency's Procurement Review Committee prior to a contract being awarded or negotiations commencing with the preferred supplier (Treasurer's Instruction 1218);
- agencies must ensure that minor works contracts are awarded only to suppliers that have declared that they and their employees and/or sub-contractors hold all the appropriate certifications, accreditations, registrations or licences they have identified as necessary to undertake the work (Treasurer's Instruction 1206 and 1211); and
- the contract must conform to the requirements of the Crown Contracts Confidentiality Policy (Treasurer's Instruction 1401).
Applicability of Tendering Code (TI 1201)
Treasurer's Instruction 1201 provides that the Australian Standard Code of Tendering AS 4120-1994, which sets out the ethics and the obligations of the Principal and tenderers, applies to all building construction (including roads and bridges) procurement valued at $10 000 or more.
Use of Prequalified Contractors
For Minor Works, the use of prequalified contractors is optional.
For all Minor Works construction contracts valued at $50 000 and over, it is a mandatory requirement to use the Minor Works Contract Conditions - Australian Standard AS 4905-2002.This contract is also highly recommended for minor works contracts valued at less than $50 000.
Agencies should liaise with the Crown Solicitor to ensure the procurement documentation and contract is appropriately drafted to reflect the Government's procurement, confidentiality and contractual policies (refer to the Guide to Inclusions in Building and Construction Tender Documentation).
Where an agency is awarding a contract that may be high risk it is recommended that the Crown Solicitor be involved in the drawing up of the contract.
Quotation documents generally include:
- the Conditions of Quotation - which must refer to the requirement to comply with AS 4120-1994 and the National Code of Practice for the Construction Industry, the Tasmanian Annexure to the National Code of Practice and any other requirement of the Treasurer's Instruction 1201 ;
- a Quotation Form;
- the contract eg Minor Works Contract Conditions AS 4905-2002; and
- the Specification which may include drawings and other documents issued for the purpose of the procurement.
The request documentation must provide all the information necessary to enable potential suppliers to prepare appropriate submissions in response and the specifications must not restrict competition, reflect bias to any brand, product or contractor or act as a barrier to the consideration of any alternatives.
The quotation documents should indicate to whom quotation enquiries are to be referred.
Crown Solicitor's pro forma RFQ documentation
Crown Solicitor Template Request for Quotation building and construction minor works documentation for low risk/low value works and mid risk/mid value works is available for use. The Crown Solicitor should be consulted on any amendments to template documentation.
When undertaking a quotation for which the AS 4095-2002 version of the Crown Solicitor's RFQ pro forma is being used, agencies should check whether their agency has a licence to use and amend AS 4905-2002 from SAI Global. Agencies should then complete and amend Annexures Part A and Part B to AS 4095-2002 in accordance with the appropriate Guide to the Completion of Annexures to AS 4095-2002 and attach relevant AS 4095-2002 documentation to the RFQ pro forma.
Copies of the Guide for completing the AS 4095-2002 version RFQ have been distributed to all agencies and information on its use can be obtained by contacting the agency's Procurement Reference Group representative. If unsure of your Procurement Reference Group representative, please contact Treasury at firstname.lastname@example.org
To obtain a licence for the amendment and use, reproduction and distribution of SAI Global material, contact SAI Global on (02) 8206 6355 or email email@example.com.
Electronic Options for the Lodging of Submissions
Treasurer's Instruction 1206 requires agencies to provide suppliers with at least one electronic option for the lodging of their submission. The method used is a matter for the agency to determine ensuring all requirements in relation to handling and confidentiality can be met. Electronic options may include, for example, the use of the Tenders website electronic lodgement functionality or a secure email or facsimile facility. Where email or facsimile is used:
- the facility should be secure;
- access to the submissions should be controllable to prevent compromising security of responses/confidentiality; and
- access should be auditable and/or documented.
Detailed guidance on 'secure facilities' is provided at Major Works.
Conditions for Participation and Evaluation Criteria
Conditions for participation are the minimum mandatory conditions that potential suppliers must meet in order for their submission to be considered. These requirements are assessed as either being 'met' or 'not met' by a supplier in the first stage of evaluation of their submission.
Conditions for participation include any prequalification or pre-registration requirements such as prequalification as a contractor with the Treasury Prequalification Scheme.
Other examples of possible conditions for participation include: the supplier and all its employees and subcontractors hold all required accreditations, certifications, registrations or licences required at law for the undertaking of the works; solvency and financial viability; mandatory insurance policies/levels; relevant licences; and professional accreditations or registrations.
Non-conformity with conditions for participation will eliminate a supplier from further consideration. Therefore, it is important for you to carefully consider what, if any, conditions should be mandatory. The conditions for participation should be clearly marked as mandatory requirements and the quotation or tender documentation should clearly indicate that a failure to comply with the requirements will eliminate the supplier from further consideration.
Evaluation criteria are the standards that are used to assess how well an offer meets your agency's requirements. They provide a mechanism for comparing offers by assessing the relative worth of different offers.
Agencies are required to ensure that the evaluation criteria includes as a criterion, consideration of the local SME industry impact.
Inviting Submissions, Amending Documentation and Issuing Addenda (TI 1206)
It is not necessary to publicly advertise quotations. Invitations to quote may simply be sent to persons chosen by the agency. A minimum of three submissions must be sought. Where local capability exists, at least one submission must be sought from a Tasmanian business. A Tasmanian business is a business that operates in Tasmania, has a permanent office or presence in Tasmania and which employs Tasmanian workers.
The details of suppliers issued with quotation documentation must be recorded in an appropriate manner so that potential suppliers can be identified should addenda or amendment to the original documentation be required.
If addenda are required to be issued, agencies must ensure that:
- one copy of every addendum is included in the final contract documentation;
- one copy of every addendum is included in each set of documents not yet issued;
- one copy of every addendum is forwarded by email notification of an addendum placed on the Tenders website (where appropriate), fax or courier to each of the prospective suppliers that have previously obtained documents; and
- where the addendum results in a substantial change to the request for quotation and is issued with less than five working days remaining to the quotation closing date, an extension of the quotation closing date is to be granted to all prospective suppliers that have previously obtained documents.
Each addendum for a particular work is to be consecutively numbered and should precisely define and describe the alterations, additions or deletions required, with reference to the appropriate elements in the documents.
Where addenda are to be issued for documents which include a Schedule of Rates, the addenda are also to detail the necessary quantity or description changes. A supplementary Schedule of Rates may also be necessary.
Each addendum must state that the addendum will be incorporated in the procurement documents and suppliers must be required to confirm receipt, in writing, of the addendum and that allowance has been made for each addendum. The receipt is to be included with the submission.
Each procurement is to be allocated a specific closing time and date. There is no mandatory set period for which Minor Works procurement should remain open, however, it is important to ensure that sufficient time is provided to enable contractors to properly formulate their submission. Remember, the person intending to lodge a submission will be required to be acquainted with all matters relating to the proposed contract, including an inspection of the site, prior to lodging their submission.
If addenda are issued, it may be necessary to extend the period for which a quotation remains open.
Late submissions must always be dealt with in accordance with the information set out in the procurement documents.
Receiving and Opening Submissions (TI 1206)
Secure facilities must be provided at each designated lodgement location for receipt of submissions. A "secure facility" could include a lockable box/ cabinet, an electronic tender box such as the lodgement facility on the Tenders website, or secure email/ facsimile facilities.
In relation to physical tender boxes, suppliers should be requested to ensure that submissions are enclosed in a sealed envelope endorsed with the contract title and lodged in the box provided, at the date, time and place named in the procurement documentation.
The submission should be accompanied by any documents noted as required by the procurement documentation.
Submissions are not to be opened until the time set for the closing of submissions has elapsed.
It is recommended that submissions be opened in the presence of a minimum of three officers, including at least two senior officers of the agency, and clearly identified and recorded.
All persons involved in the opening and evaluating of submissions should appreciate that the information provided by persons submitting quotations must be treated as confidential until the preferred supplier is selected and a contract is awarded.
After the awarding of a contract, information provided during the procurement process by each unsuccessful supplier, is to continue to be treated as confidential.
The procurement documentation should require that submissions should remain valid for 60 days unless this period is extended by agreement of the suppliers concerned.
Evaluating Submissions (TI 1206)
The Head of Agency may appoint an evaluation committee for the purpose of evaluating submissions and making recommendations in respect of these.
All submissions must be fairly and equitably evaluated in a manner that is consistent with the Government's procurement principles and in accordance with the evaluation criteria and methodology outlined in the request documentation. The final decision must be able to withstand public scrutiny.
Where an agency provides potential suppliers with opportunities to correct unintentional errors of form between the opening of submissions and any decision, the agency must provide the same opportunity to all participating potential suppliers.
A technical review of all submissions should be undertaken even if it is a simple lump sum contract and a compliant submission within funding approvals.
Any submission may be rejected if it does not comply with any requirements of, or contains provisions not required or allowed by, the quotation documents.
Alternative tenders should not to be considered unless they are allowed for in the Conditions of Quotation/Tender. Where an alternative is offered by only one supplier, prices are not to be sought from other suppliers on the basis of that alternative.
If suppliers are encouraged to offer alternative proposals, the documents must specify the conditions under which alternative proposals are to be submitted. Unless otherwise stated, alternative proposals should only be considered when submitted with a conforming quotation.
Awarding the Contract (TI 1211)
A submission shall not be deemed to have been accepted until the supplier is notified in writing of such acceptance. A formal instrument of agreement may be required in some cases.
Where the value of the procurement is $100 000 or more, the procurement must be reviewed by an agency's Procurement Review Committee prior to any contract being awarded or before negotiations are entered into with the preferred supplier.
Prior to awarding a contract, agencies must ensure that the preferred supplier has identified all the appropriate certifications, accreditations, registrations or licences necessary to undertake the work; and completed a statutory declaration that it, and its employees and/or sub-contractors, hold the above. Refer to the example declaration template, prepared by Crown Law, here.
When there has been a long delay in evaluation, the recommended supplier should be requested to confirm that the offer still stands.
Any revised estimates or negotiations in relation to price or services are to be fully documented and any amendments are to be incorporated into the contract established between the Crown and the contractor.
The following checks should be undertaken prior to making a submission to the Procurement Review Committee and/or the Head of Agency.
Crown Contracts Confidentiality Policy
The Crown Contracts Confidentiality Policy is to be applied in all circumstances and where appropriate an exemption sought from your Head of Agency.
The Request for Quotation or Request for Tender documents must contain, in the conditions of tender/quotation, information on the Government's policy position on confidentiality. If a formal tender or quotation process is not undertaken (eg a supplier is engaged through direct or limited submissions sourcing), then during negotiations with the preferred supplier, the supplier must be advised, in writing, of the Government's policy position on confidentiality.
See the Crown Contracts Confidentiality Policy and Treasurer's Instruction 1229 for further information.
Verifying Contractor's Legal Status
When submitting an offer, some contractors use a name, for example a business name, which is not the name of a legal entity.
The rule of privity of contract states that, with very few exceptions, only parties to the contract can acquire rights or have liabilities under the contract. In other words, a person who is not a party to the contract cannot generally enforce the contract or be subjected to its burdens.
As a result of this rule, great care must be taken to ensure that contracts are awarded only to recognised legal entities.
The trading name should only be used to help eliminate duplication and for cross-referencing purposes. A registered business name must not be used as the sole means of identifying the principal(s) of a business for contract purposes.
The contract must name 'The Crown in Right of Tasmania' as the principal and contracting party expect where a statute specially confers contracting power. An example of a statute conferring contracting power is the Director of Housing under the Homes Act 1935.
A formal instrument of agreement is recommended for Minor Works projects.
An experienced and responsible officer should prepare and issue letters of acceptance and, where utilised, the necessary formal instruments of agreement.
The letters are to be:
- in the name of a supplier (if a company then the name of the company);
- properly addressed;
- include appropriate identifying information ie a contract number, file number, contract title etc;
- refer to the original offer submitted by the supplier;
- include any necessary obligations arising from the supplier's industry impact statement (where a formal instrument of agreement is not used);
- list any post-offer correspondence which is to form part of the contract;
- name a contact officer;
- enclose the formal instrument of agreement, if one is to be used; and
- specify the total amount of security deposit and/or retention moneys (including the retention moneys percentage to be deducted from progress payments) if appropriate, the contract sum and the completion time.
Any revised estimates or negotiations in relation to prices or services must be fully documented and any amendments incorporated into the contract established between the Crown and the contractor/consultant. The clarification of all matters must occur during the evaluation and examination stage and be confirmed in writing.
For Minor Works, generally the contact officer is the nominated Superintendent. For the duties and responsibilities of the superintendent, see roles and responsibilities.
Note: when using the Crown Solicitor's template for Request for Tender (building and construction version), a contract may not be entered into by way of a letter of acceptance alone - a formal instrument of agreement is required.
Unsuccessful Suppliers (TI 1206)
Suppliers should be advised in writing of the quotation outcome and provided with details of the successful offer including the name of the supplier and the price accepted.
All tenderers must be offered, and if requested provided with, a debriefing. See here for information on debriefing.
Reporting (TIs 1212 and 1213)
Refer to Reporting for further information.
Agencies should maintain records of all suppliers approached and their responses including documented advice from suppliers who have declined to submit a quote.