What principles must government buyers follow when purchasing?
Government purchasing is based on the four principles of:
- Value for money;
- Open, impartial and effective competition;
- Providing local suppliers that wish to do business with Government the opportunity to do so; and
- Observation of ethical procurement.
Value for money
Value for money means achieving the desired outcome at the best possible price. This does not necessarily mean choosing the lowest price.
When assessing value for money the agency will weigh up the benefits of the purchase against the cost of the purchase. The factors that an agency may consider in the assessment of value for money may include:
Open, impartial and effective competition
Open, impartial and effective competition is achieved through:
Providing opportunities to local suppliers and adoption of the Buy Local Policy requirements
To meet the requirements of this principle, agencies should:
ensure procurements are planned taking into consideration the impact on local suppliers;
actively seek bids from local businesses, particularly from those that have previously requested the opportunity to participate;
ensure that requirements do not unnecessarily preclude local businesses from bidding or disadvantage local suppliers; and
It is important that you make yourself known to Government buyers. Follow the link to find out How to get known.
Note: providing opportunities to local suppliers is not the same as giving preference to local business. Under various international free trade and cooperative agreements that bind Australia, government buyers cannot discriminate against suppliers from other states, territories, New Zealand, or any of the participants in those international agreements. Government buyers in those places must also ensure that they do not discriminate against Tasmanian suppliers or favour local suppliers.
Observation of ethical procurement standards
Government buyers must ensure that all purchasing is undertaken in a ethical way and in the best interests of the State. Certain legislative requirements, ethical standards and codes are required to be met both by buyers and suppliers. As an example:
fair and equal treatment and consideration to all suppliers and interested parties;
dealing honestly with suppliers;
dealing with conflicts of interest;
complying with relevant public sector policies including those relating to gifts and confidentiality;
conducting business in the best interests of the State, avoiding situations that may impinge, or might be deemed to impinge, on impartiality.
In relation to construction related procurement, both agencies and suppliers are required to comply with various Codes including the National Code of Practice for the Construction Industry, the Tasmanian Annexure to the National Code of Practice for the Construction and the Australian Standard Code of Tendering (AS 4120-1994) and the Code of Ethics and Procedures for the Selection of Consultants (AS 4121-1994).
Where the Australian Government provides funding to projects that meet its contribution value thresholds, compliance with the Building Code 2016 and/or the Australian Government Building and Construction OHS Accreditation Scheme may also be required by both parties.
Which government entities do these principles apply to?
These purchasing principles apply to entities required to comply with the Treasurer's Instructions pursuant to the Financial Management Act 2016. See Who are the Buyers for further information on the government entities that are required to adopt these principles.