LGP 2017 Annual Conference
A Landmark Event in LG Procurement

Early Bird Rate Extended till Friday 10 November

The Local Government Procurement Annual Conference is a landmark event within the NSW local government procurement sector. This event is poised to grow bigger and better with challenging and encouraging topics, speakers and ideas.

With a program based on key topics revolving around procurement professionals, technology, supplier relationship management, sustainability, innovation and future trends, we will provide you with fresh perspectives and plenty of innovative ideas you can implement into your organisation's procurement process for enhanced outcomes.

If you haven't yet secured your place at LGP 2017 Annual Conference, you have until the 10th of November to register at the early bird rate. This will be your last chance to take advantage of this special rate which delivers great value.

Registration

• Early bird rate: $990 inc GST (extended until 10 November)
• Standard rate: $1,320 inc GST (available from 11 November)
• Special rate: free attendance for general managers and directors, when attending with a registered council officer.

Cost includes

• Full attendance at the two day conference
• Conference pack
• Conference dinner on Thursday evening

Nominations for the Local Government Procurement Awards Closing Shortly

The Local Government Procurement Awards celebrate those procurement professionals or groups who are making a difference in local government and their community. The Awards recognise excellence and best practice in the field of procurement within the local government sector.

The awarded recipients will receive a personalised plaque and professional development training of the winner's choice to the value of $2,500. The Awards will be presented at the Local Government Procurement 2017 Annual Conference dinner on 30 November 2017 at the Sydney Masonic Centre.

There are three categories open for nominations, and you can nominate yourself, another person or organisation. The closing date for nominations is 10 November 2017.

• Procurement Professional
  To be eligible the nominee must have a minimum 2 years experience in procurement within NSW local government
• New Procurement Professional
  To be eligible the nominee must have less than 2 years experience in procurement within NSW local government
• Sustainable Procurement Initiative
  This award is for either an individual or organisation that has demonstrated exceptional sustainable procurement work

For further information or to download the nomination form view the LGP website, or contact Emma Murray, Marketing and Communications Manager or 02 8270 8710.

LGP provides a range of innovative learning and development solutions tailored specifically for NSW council staff, delivered via different mediums including face to face and online mode. Through the extensive and exciting gamut of training programs in procurement, LGP can support you in achieving the best outcome from your suitably qualified and skilled staff members.

LGP training programs are offered as the following three suites and you can learn more about each by clicking on the relevant links:

• eLearning: LGP’s eLearning programs use state-of-the-art technology, to deliver cost effective training, specifically designed for NSW local government employees engaged in purchasing, quoting, tendering and contract management. Please click eLearning for more details.
   
• Public Courses: LGP's face-to-face training features a range of interactive and leading practice modules, covering critical areas of procurement and contract management. Please click Public Courses for more details.
   
• Nationally Recognised Training: In partnership with ProLeaders Academy (Registered Training Organisation) LGP offers three Accredited Nationally Recognised Training from Certificate-IV to Advanced Diploma levels, customised specifically for NSW local government employees. Please click Nationally Recognised Training for more details.

Grab this opportunity to partner with LGP for your procurement training needs.
 

LGP Training is all geared up to cater to your procurement training requirements in 2018. The Training Calendar for 2018 is now available for your reference. 

To contact LGP Training, email or call 02 8270 8709.

We thought it useful to highlight any notable media articles each month which relate to procurement and contracting issues.  This is the first instalment of what we hope will become a useful resource, but also one which provides a prompt for all of us to reflect about our own contract arrangements.

Back pay to contractor’s staff

Woolworths Ltd has entered a compliance partnership with the Fair Work Ombudsman.  This will see Woolworths back pay trolley collectors who were underpaid by a Woolworths contractor. (Source: Back pay for Woolworths trolley staff, Sydney Morning Herald, 11 Oct 2017.) 

Impact: Councils need to take steps to ensure contractors and subcontractors are paying correct and appropriate wages.

Modern slavery

The NSW Legislative Council Select Committee on human trafficking in New South Wales has tabled a report into slavery, ‘Human trafficking in New South Wales’ (October 2017). Leading global companies have been under scrutiny about the supply chains used and issues of child labour, poor wages and work conditions and the Report is a step towards encouraging good practice on the prevention, detection, investigation and prosecution of modern slavery offences. (Source: NSW Falling Behind on slavery: report, Sydney Morning Herald, 20 Oct 2017).

Impact: There is a strong possibility that local government may soon need to take reasonable steps to confirm supply chains are socially responsible. NSW Government has until April 2018 to respond to the Report.  (The Sustainable Choice team will provide further updates in future LGP News.)

Unfair Contract Terms

JJ Richards & Sons Pty Ltd has appeared in the Federal Court to answer charges in respect of its contractual dealings with small business.  (Source: ACCC takes JJ Richards to court over alleged unfair contract terms www.accc.gov.au 6 Sept 2017). The firm used a standard form contract with eight (8) clauses at issue including liabilities, unlimited indemnities and contract renewals.

Impact: Councils should be reviewing their own standard form contracts in light of the recent legislative changes to protect small business.

Parallel Procurement Processes
Is it simply a question of fairness???

Part 2

by Jessica Jones, Business Development Manager, Northern Region

In last month’s LGP Newsletter we raised the issue of parallel processes and explored some of the legal and probity concerns surrounding this topic, including the article written by David Baird, Baird Lawyers. It is safe to say that when this type of activity is undertaken it is usually with the best of intensions, however putting good intensions aside, we need to reflect on the bigger picture and consider the wider implications.

Let’s consider the following procurement…….

An organisation wants to buy a standard product like stationery. There are multiple price lists which council can access. For example, there is an LGP published price list, there may be a State Government published price list, and perhaps there is another organisation with an accessible published price list. On face value there is no real issue in comparing prices; the buyer has access to view the different pricing options and should be able to take advantage of the price comparison available to them. There is also a reasonable expectation of suppliers that their price will be compared with that of other market players - that is why they publish them and accordingly, on occasion the price may be a little higher than what might be offered when quoting against a specific list of needed products.

However, if buyers are seeking to procure goods, service or works where prices are not published, or the published price is not just for a standard product/quantity/service, it becomes important to be able to compare each supplier on an equal basis. The buyer needs to be mindful that under each type of arrangement (e.g. an LGP, State Government or perhaps under its own council arrangement) suppliers would be responding to an RFQ based on different contractual terms and obligations under the different arrangements. Not only is it likely to create confusion with suppliers as to which terms apply, but it may prove difficult to compare suppliers on an equal basis.

Buyers need to consider whether a disservice is done to the bodies that established the panels and to the suppliers that are quoting.  Suppliers could see these actions as ‘bid shopping’ based purely on best price and not ‘value for money’. Some suppliers may feel that they are disadvantaged against suppliers on another panel, whereas others may be on more than one panel, so what do they do?

Generally speaking:

1. It is not appropriate for organisations to run a tender/quotation process and also seek offers from other established contract arrangements (LGP/State Government etc.). The Tendering Guidelines for NSW Local Government (‘Tendering Guidelines’) state that “Councils must not invite or submit tenders without a firm intention and capacity to proceed with a contract,” (p11). It is clear that a council cannot run a tender process and run another process at the same time; seeking to procure through a parallel process means that there is no intention to contract at the end of each individual process.

2. Similarly, if an organisation were seeking to use LGP's VendorPanel and then seek offers from a State Government panel or another established arrangement, there is clearly not an intention to proceed with a contract in one or more of those arrangements. As such, is not acceptable.  An organisation should select one process, having a firm intention to proceed with a contract and complete that procurement process (i.e. either use VendorPanel solely for the process or don't use it at all. After all, the VendorPanel arrangements have been set up so that all parties lodge bids based on the same requirements and under the same circumstances). If at the end of the process the organisation is not satisfied with the outcome then cease the process and re-evaluate your approach to the market.

Where an organisation is intending on using an existing panel arrangement, it would need to follow the rules that apply to that panel. There is a risk that the buyer would start mixing one contract arrangement with another and one set of lodgement conditions with another.

Consider this! The simplest of scenarios is where an LGP panel contractor is late lodging its bid and LGP advises that it cannot be considered. Then another bidder from another panel or process is also late, but the person in charge decides that the late bid is acceptable to consider under that arrangement. Suddenly the organisation is faced with a situation lacking in fairness - one supplier being treated differently to the other. It is not reasonable for LGP or another panel provider to be changing its rules of operation on an ad hoc basis, as that means that they become inconsistent in dealing with their panel members. 

The Tendering Guidelines state that “the selected process should always be applied in a framework of probity and fair dealing to potential tenderers, while promoting open and effective competition” (page 32). It is not just a matter of fairness to suppliers but there are significant broader implications – accountability, transparency and consistency. So is it simply an issue of fairness or are there other broader implications?

So now we have agreed that running a parallel process is not an option due to the risks and broader implications imposed on the buyer. The question now being asked is “how do I know what is the best approach and how can I be sure that the arrangement I intend on using will provide me with the best possible outcome for my organisation?”. The answer……..that is the great unknown as there are many ways to obtain a great result, but I do believe time and experience will determine the way in which we proceed.

Microsoft Licensing and Associated Products & Services (T1.08-3)

Please be advised that the current Large Account Resellers Panel arrangement expires on 31 March 2018.

The current Large Account Resellers Panel provides the following services:

• Microsoft Licensing including Council Wide Operating Enterprise Agreements
• Microsoft Licensing and Product Advice
• Software Assurance Services and Advice
• Microsoft Training and other Benefits; and
• Associated Products and Services

LGP’s tender evaluation will include three (3) external council evaluators. Interested IT or procurement/contract staff are welcome to nominate.   

For more information, email Santhosh Dorairajan, Category Manager – ITC & Services, or call 02 8270 8732.

LGP115 IT&C Products, Services & Consulting 

LGP is pleased to advise that there are now additional LGP approved contractors under each category, so buyers have more options to choose from!

This follows an opportunity provided to existing LGP115 approved contractors to demonstrate their capacity to offer additional categories. View Summary of Outcome of the evaluation process.  The table lists out contractors who are now approved to offer additional categories under the LGP115 IT&C Products, Services & Consulting contract.

For more information about the contract and to see a full list of LGP approved contractors available under each category, please visit the LGP 115 Buyer’s Guide.

The Sustainable Choice Annual Survey has now closed and there will be busy times ahead, analysing the results and producing scorecards and performance reports. It is however exciting times as it will be the first time we apply the new ISO 20400 standard and the reports will provide each council with an indication of where they are at and what changes can be made to improve. We hope you will find this a useful tool to help you track your progress going forward. Thank you also to those councils who have provided feedback on the survey, it will be very helpful in preparation for next year.

The online resources are now up on the web and all members should have access. Should you have any problems with your access, please contact us via email or call us on 02 8270 8703. We are constantly researching and working on adding to our online resources. Please let us know if there is anything you are missing.

We are also currently kept busy developing our ISO 20400 training for local government. The training should be ready to be rolled out around February 2018.

Contact us if you want to know more.

LGP Consulting Team

LGP extends its expertise and experience to provide councils with an additional service through its Consulting Team.

LGP’s consulting team are well positioned to facilitate end to end tender processes on behalf of individual councils.  Our consulting team comprises highly qualified and experienced professionals who have demonstrated success in facilitating tenders on behalf of councils.

Examples of recent tenders we have conducted on behalf of individual councils are:

• Refurbishment of Library Building
• Legal Services Panel – two individual council tenders
• Internal Audit Services
• Natural Resources Services
• Management and Operation of Swimming Centre
• Security Services - two individual council tenders
• Food and Garden Organic Processing
• Scrap Ferrous Metals, Green Waste Processing, Crushing and Screening of Concrete and Waste Bin Audit (4 separate tenders for a group of councils)
• Remediation of Land works
• Development and Management of Caravan Park (EOI)
• ICT Services Provider
• Vehicle Leaseback
• Cleaning Services
• Trade Services Providers
• Lighting and Sound Technician Services
• Dry and Wet Plant and Equipment – two individual council tenders
• Insurance Broker and Insurance Brokerage Services  for ten councils (joint tender process)
• CBD Reconstruction Tender

If you have any requirements for tender facilitation for any product or service please email the LGP Consulting Team or call 02 8270 8747.

LEAP, a low cost ongoing continuous improvement program that uses real data and evidence to improve procurement capability of council, recently launched and continues to gain momentum!

We are delighted and pleased to inform you that the LEAP program is now being used by NSW councils, and the program is delivering improved procurement capability as designed.

If you would like more information about the program, please email us or visit our website.

The LEAP program is delivered to councils by LGP in association with ArcBlue.

LGP Training Update

The delivery of Certificate IV in Procurement and Contracting (PSP40616) and Advanced Diploma of Procurement and Contracting (PSP60616) was completed in October and the participants have successfully completed the course.

A number of onsite training sessions, both in metro and regional councils were delivered during October 2017. These included Waverley, Sutherland and Cumberland councils in the metro region and Cootamundra-Gundagai Regional Council and Tenterfield Council in regional areas. The sessions were received very well and the participants provided excellent feedback. A few more onsite customised training sessions are planned to be delivered up until December 2017.

The case of Nurisvan Investment Ltd & Anor v Anyoption Holdings Limited[1] answers a few interesting questions, including whether you can still be bound by an agreement even though you have not signed it.

The Court’s dilemma

On appeal the Court needed to answer whether:

1. Nurisvan was bound by the Agreement even though they did not sign it; and
2. The Agreement was in fact an agreement-to-agree, and if so, what position such an agreement has at law.

Interestingly, the Court heard evidence of the parties’ conduct after signing the Agreement as indication of their intentions at the time of signing and held that ‘there is no settled view in the authorities whether post-contractual conduct may be relied on to found or support an inference as to the identity of a party to the contract’[2].

Message to take away

• As in all contractual questions, the courts will examine construction of the documents, the words used, and the parties’ intentions to decide what type of agreement the parties have entered into.
• Before entering into any contractual relationship please decide what you want from such a relationship and what obligations you are content to be bound by.

[1][1] [2017] VSCA 141
[2] Ibid, at [77]

Monica Kelly from Prevention Partners explains more here.

Contact Prevention Partners NSW on 0438 280 621 or email to assist.

If there is any topic you would like covered next month, please feel free to contact Prevention Partners NSW to make suggestions.

With recent changes to audit legislation and the Auditor-General of NSW having been appointed as the auditor of all local councils, it’s important that councils are protecting themselves against activities which may fall outside appropriate procurement legislation and guidelines.

One of the biggest risk areas for council is below tender threshold decentralised procurement. In the 2015 ‘It’s not sexy but it matters’ white paper written by ArcBlue, they found that 40-60% of total spend is Operational spend and 93% of this sourcing activity was managed via email.

This is a significant spend, a high volume of transactions, and represents a major risk.

In most councils procurement managers typically focus on high value tenders, procurement strategy and policy.  This is important, but it is not the entire picture.  Generally, Operational spend is decentralised low value sourcing ($2k-$150k) that is below the tender threshold and managed by non-procurement staff.  Even though staff usually get three quotes, this decentralised procurement is hidden in email. It lacks transparency, governance and reporting, and is prone to corruption, risk, poor value and low compliance. It’s a massive unmanaged spend that presents significant risk.

For procurement teams, this decentralised procurement is invisible. It’s difficult to demonstrate governance and probity, and it’s nearly impossible to capture data and reporting. The lack of effective competition and poor spend under contract also undermines savings and value. Together, this represents both significant risk and lost value.

Reducing the risk is critical to local governments in ensuring that public funds are properly managed, procurement practices are appropriate, and audits are successful.

The reality is that most procurement managers know this, but they don’t have the time or resources to get involved in the large numbers of low value transactions. 

However, this has changed with technology. One of the more successful solutions is the LGP endorsed VendorPanel (TM) platform.

According to Grant Willoughby from Sutherland Shire Council “It is a structured process, very transparent at all different stages throughout procurement. Transparency ensures good compliance of the process due to electronic records and history”.

Tania Meyers from Coffs Harbour highlights, “It’s quick, easy and gets the enquiry out fast and effectively. And, being able to evaluate on the spot & provide an audit trail in all one place hits the nail on the head when probity is concerned”.

Whatever approach you take, we encourage you to do something proactive. It is too bigger risk to ignore.

For more information about using VendorPanel to get control of your councils tenders, panels, supplier compliances or decentralised low-value sourcing, please contact your LGP Business Manager or VendorPanel’s Commercial Manager for Local Government, Alicia Farrell.