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Procurement and Purchasing Policy Te Pūkenga Aligned

Section
Board
Approval Date
3 March 2021
Approved By
Otago Polytechnic Limited Board
Next Review
30 November 2022
Responsibility
DCE: Business Services
Baldrige Criteria
Process management
Purpose

The purpose of this policy is to set out the principles of best practice and minimum standards for the purchase and procurement of goods, services and works by Otago Polytechnic Limited (Ltd).

Scope

This policy applies to all purchasing and procurement undertaken by or on behalf of Otago Polytechnic (Ltd), including procurement undertaken by contractors or consultants.

Objective

Our purchasing and procurement decisions will be based on our guiding principles which provide a broad framework that supports accountability, sound practice and successful procurement results.

Compliance

Procurement Guidance for Public Entities – Office of the Controller and Auditor General 2008 - 

https://oag.parliament.nz/2008/procurement-guide

Government Procurement Rules 

https://www.procurement.govt.nz/assets/procurement-property/documents/government-procurement-rules.pdf

All procurement and purchasing must meet standards of probity and financial prudence as set out in the Sensitive Expenditure Policy.  Purchasing must have a justified business purpose, be open and transparent and free from conflict of interest.

Policy

Otago Polytechnic Ltd is committed to making fair, ethical and defensible purchasing, and procurement decisions. To help guide those decisions, there are Five Principles of Government Procurement set out in the Government Procurement Rules that we must follow:

1. Plan and manage for great results

•    Identify what you need, including what broader outcomes should be achieved, and then plan how to get it.

•    Set up a team with the right mix of skills and experience.

•    Involve suppliers early – let them know what you want and keep talking.

•    Take the time to understand the market and your effect on it. Be open to new ideas and solutions.

•    Choose the right process – proportional to the size, complexity and any risks involved.

•    Encourage e-business (for example, tenders sent by email).

 

2. Be fair to all suppliers

•    Create competition and encourage capable suppliers to respond.

•    Treat all suppliers equally – we do not discriminate (this is part of our international obligations).

•    Seek opportunities to involve New Zealand businesses, including Māori, Pasifika and regional businesses and social enterprises.

•    Make it easy for all suppliers (small and large) to do business with Otago Polytechnic Ltd.

•    Be open to subcontracting opportunities in big projects.

•    Clearly explain how you will assess proposals – so suppliers know what to focus on.

•    Talk to unsuccessful suppliers so they can learn and know how to improve next time.

 

3. Get the right supplier

•    Be clear about what you need, and fair in how you assess suppliers – do not string suppliers along.

•    Choose the right supplier who can deliver what you need, at a fair price and on time.

•    Choose suppliers that comply with the Government’s Supplier Code of Conduct

•    Build demanding, but fair and productive, relationships with suppliers.

•    Make it worthwhile for suppliers – encourage and reward them to deliver great results.

•    Identify relevant risks and get the right person to manage them.

 

4. Get the best deal for everyone

•    Get best public value – account for all costs and benefits over the lifetime of the goods or services.

•    Make balanced decisions – consider the possible social, environmental, economic, and cultural outcomes that should be achieved.

•    Encourage and be receptive to new ideas and ways of doing things – do not be too prescriptive.

•    Take calculated risks and reward new ideas.

•    Have clear performance measures – monitor and manage to make sure you get great results.

•    Work together with suppliers to make ongoing savings and improvements.

•    It is more than just agreeing the deal – be accountable for the results.

 

5. Play by the rules

•    Be accountable, transparent, and reasonable.

•    Make sure everyone involved in the process acts responsibly, lawfully and with integrity.

•    Stay impartial – identify and manage conflicts of interest.

•    Protect suppliers’ commercially sensitive information and intellectual property.

The Government Procurement Charter sets out Government’s expectations of how agencies should conduct their procurement activity to achieve public value.

 

The New Zealand Government directs agencies to:

Seek opportunities to include New Zealand businesses

Openly work to create opportunities for local businesses and small-to-medium enterprises to participate in your procurement processes.

Undertake initiatives to contribute to a low emissions economy and promote greater environmental responsibility

Ensure that economic and social development can be implemented on a sustainable basis with respect for the protection and preservation of the environment, reducing waste, carbon emissions and pollution.

Look for new and innovative solutions

Make sure you do not overprescribe the technical requirements of a procurement, give businesses the opportunity to demonstrate their expertise.

Engage with businesses with good employment practices

Ensure that the businesses you contract with operate with integrity, transparency and accountability, and respect international standards relating to human and labour rights. For businesses operating within New Zealand, ensure that they comply with all New Zealand employment standards and health and safety requirements.

Promote inclusive economic development within New Zealand

Engage with Māori, Pasifika, and regional businesses and social enterprises to actively contribute to our local economy. Openly working to include and support these businesses and enterprises through procurement will promote both skills development and a diverse and inclusive workforce.

Manage risk appropriately

Responsibility for managing risks should be with the party – either the agency or the supplier – that is best placed to manage the risk. Agencies and suppliers should work together on risk mitigation strategies.

Encourage collaboration for collective impact

Look to support greater collaboration, both across-agency and across-businesses to give likeminded groups the opportunity to find common solutions within your procurement opportunities.

Otago Polytechnic Ltd is not required to comply with the Government Procurement Rules, but will endeavour to conduct procurement activities in a manner that is consistent with the Government Procurement Rules and the Controller and Auditor General’s Procurement Guidance for Public Entities, as statements of good practice.

If there is an existing supply arrangement or contract (such as a panel agreement or government collaborative contract) that meets the requirements, it must be used.  The procurement and contracts office who are responsible for procurement will advise on available contracts and how to access them. If there is no suitable supply arrangement or contract available, the following table applies.

Contract value

Minimum Requirement

Up to $5k

Quotations optional

$5k to $10k

A single written quote

$10k to $50k

At least three written quotes

Over $50,000 

Openly advertised procurement process/tender

 

For procurements over $50,000 a procurement plan must be prepared and approved by a delegate with the relevant level of authority in accordance with the Delegations Policy before Otago Polytechnic Ltd approaches the market.

Fair Trade

Otago Polytechnic Ltd registered with Fairtrade as a Fairtrade University (Polytechnic) in 2014. The registration with Fairtrade comes with commitments and as part of the response to those commitments Otago Polytechnic Ltd will demonstrate its social and environmental responsibility in the following ways:

a. Ensuring that when there are Fairtrade products available at comparable prices these will be considered preferential for purchasing. This includes but is not limited to Fairtrade tea, coffee, sugar, and hot chocolate and includes products used for staffroom supplies and those served at hospitality events

b. Selling as many Fairtrade products as is feasible in all campus cafes, restaurants, and shops

c. Asking new suppliers to provide Fairtrade options for all relevant products when tendering.

Preferred supplier agreements

Procurements that are of a recurring nature, for example insurance, cleaning, energy, are subject to standard procedures managed by the procurement and contracts office.

Otago Polytechnic Ltd is party to a number of agreements through the All-of-Government State Sector Procurement initiative led by the Economic Development Group within the Ministry of Business, Innovation and Employment, these are not part of the normal purchasing process however they have been rigorously negotiated and represent best value and will be periodically renegotiated by the Ministry.

The Chief Executive, DCE Corporate Services or DCE Business Services, under delegated authority (refer to policy Delegations from Board to the Chief Executive and Authorities and Sub-Delegations from Chief Executive), may sign contracts for the procurement of goods or services on Otago Polytechnic’s behalf with an agreed preferred supplier or pre-approved vendor.

Flexibility to respond

In a genuine emergency, Otago Polytechnic Ltd will need to be flexible in how they procure the goods and services that are required for their response. In these circumstances it is permitted to forgo routine procurement procedures. In adopting a more flexible procurement process Otago Polytechnic Ltd will consider what is reasonable and justifiable given all of the facts and circumstances they have to hand. Otago Polytechnic Ltd may be permitted to purchase direct from a supplier if the delay involved in conducting a routine procurement (i.e., which involves advertising and competitive tendering) will prevent them delivering the goods or services in time to bring effective relief.

Examples of emergency are:

•       Natural or manmade disasters: such as earthquakes, cyclones, tsunamis, volcanic eruptions, flooding, fires, or contamination

•       Failures of critical infrastructure or equipment: such as failure of a prison security system or critical hospital infrastructure

•       Critical health or environmental emergencies: such as a pandemic or food safety incident

•       Political emergencies: such as a war, coup, or civil insurrection in New Zealand or countries where the New Zealand government offers support

•       Critical security emergencies: such as a terrorist attack, serious crime, or major cyber security emergency

•       Unanticipated events that make it impossible for an agency to perform a statutory or critical function in the necessary timeframe: for example, the destruction of critical election supplies immediately prior to an election would be an emergency for the Electoral Commission.

 

Accountabilities and Responsibilities

Employees and contractors undertaking procurement

•     Make sure that all purchasing has appropriate prior approval.

•     Apply this policy and related policies and guidelines during purchasing and procurement

       activities.

•     Understand and apply the Government Procurement Rules and the Controller and

       Auditor General’s Procurement Guidance for Public Entities (good practice guide).

•     Report any policy breaches.

•     Complete appropriate training before participating in any purchasing and procurement

       activities.

 

Approver / Financial Delegation Holder

•     Apply this policy when conducting purchasing and procurement activities.

•     Operate within your financial delegation in accordance with the Delegations Policy when

       approving purchasing and procurement activities.

•     Authorise purchasing appropriately, using good judgement and in line with the purchasing

       and procurement principles.

 

Finance Manager or delegate

•     Apply this policy and related policies and guidelines during procurement activities.

•     Understand and apply the Government Procurement Rules and the Controller and

       Auditor General’s Procurement Guidance for Public Entities (good practice guide).

•     Make sure that all purchasing has appropriate prior approval.

•     Proactively manage responsibilities within Otago Polytechnic finance systems.

•     Monitor purchasing and procurement activities, including for compliance with this policy, report policy breaches, and Identify opportunities for new supply arrangements.

 

Legal Support

•     Provide assistance with contracts that are large, complex and/or significantly

       different to any standard terms we may have.

DCE Business Services (or delegate)

•     Update, publish, and communicate the procurement and purchasing policy and related guidelines.

•     Provide leadership and development of Otago Polytechnic Ltd procurement capability.

 

 

 

Recordkeeping

Staff undertaking procurement must maintain records documenting the procurement process, including all recommendations and decisions and the contract as awarded. Records must be kept for at least seven (7) years.

Policy Breaches

If the standards set out in this policy are not met, it may be considered a breach of the policy and disciplinary action may be taken.

If you are aware of a breach or possible breach of this policy, you must raise it with your formal leader.

References

Policies

Sensitive Expenditure Policy

Disclosure of Interests Policy

Delegations from Council to the Chief Executive and Authorities and Sub-delegations from Chief Executive Policy

Intellectual Property

 

Otago Polytechnic website – 

About Us > Governance and management > Tenders

RFP template available on Otago Polytechnic Intranet site or by contacting Otago Polytechnic Contracts Manager

Ministry of Business, Innovation and Employment – Procurement Guidance

Signature

Approved by:
Adam La Hood
Chair: Otago Polytechnic Limited Board
03/03/2021