There is a range of policy requirements and supporting guidance that addresses various aspects of procurement. Those involved in contracting should be aware of this information and apply it to the particular circumstances. This material comprises: • the Commonwealth Procurement Guidelines (CPGs), issued by the Finance Minister, that establish the procurement policy framework within which agencies subject to the FMA Act, and relevant CAC Act bodies, determine their specific procurement practices. The CPGs establish principles that apply to all procurements and mandate procedures for covered procurements.5 The CPGs provide the policy basis for whole-of-government coordinated procurement contracts and arrangements for categories of property or services6 and for cooperative procurement.7 The CPGs establish whole-of-life value for money as the core principle for procurement, and by extension make achieving value for money a key objective for contracts8; • policies and legislation that interact with procurement, for example Australian Industry Participation, Fair Work Principles, Fraud Control, ICT Sustainability, Intellectual Property Principles, Privacy, 30 Day Payment Policy for Small Business, Protective Security, Legal Services Directions, Coordinated Procurement, and Indigenous Opportunities Policy9; • Finance Circulars issued by the Department of Finance and Deregulation (Finance) which provide advice on key changes and developments in the procurement policy framework; and • a range of web-based and printed material issued by Finance and other entities that provides guidance to entities and officials in implementing procurement policy.10 The procurement policies of CAC bodies not subject to the CPGs are the responsibility of each individual body in the context of their enabling legislation. These bodies may consider adopting some or all of the requirements of the CPGs, recognising that they represent good practice. | There is a range of policy requirements and supporting guidance that addresses various aspects of procurement. |
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5 For FMA agencies a covered procurement is one where the expected value of property or services being procured is above $80,000 (or $9 million for construction services) and is not specifically exempted under Appendix A of the Commonwealth Procurement Guidelines (CPGs).
6 Relevant CAC Act bodies can choose to use coordinated procurement contracting arrangements under the CPGs.
7 Whole-of-government contracting arrangements are summarised in Appendix 1.1.
8 Value for money in a procurement process requires a comparative analysis of all the relevant costs and benefits of each proposal throughout the whole procurement cycle. This core principle is supported by open-competition, non-discrimination, efficiency, effectiveness, economical and an ethical use of resources. Whole-of-life assessments of value for money should include assessing: fitness for purpose; the performance history of each prospective supplier; the relative risk of each proposal; the flexibility to adapt to possible change over the life cycle of the goods or service; financial considerations including all relevant direct and indirect benefits and costs over the whole procurement cycle; and the evaluation of contract options. At the time of the preparation of this Guide, the CPGs were under review by the Department of Finance and Deregulation.
9 Refer to the Department of Finance and Deregulation website, <http://www.finance.gov.au/procurement/>, Procurement Connected Policies guide for details of these and other policies of the Commonwealth that interact with procurement.
10 Details of this material are included in the References List at the end of this Guide.