Policy ID no: DCS12-CL

Procurement Policy

Date Authorised by Council: 14 June 2017

Commencement Date: 30 June 2017

Review Date: June 2018

Responsible Department Corporate Services

This policy has been authorised.

Nerina Di Lorenzo
Chief Executive Officer
Introduction
Moreland City Council (Council) recognises that developing a procurement strategy and adopting
appropriate best practice contracting and procurement principles, policies, processes and
procedures for all goods, services and works will enhance achievement of Council objectives such
as sustainable and social procurement, bottom-line cost savings, supporting local economies;
achieving innovation and better services for communities.
The elements of best practice applicable to local government procurement incorporates:
broad principles covering ethics, value for money, responsibilities and accountabilities;
guidelines giving effect to those principles;
a system of delegations (i.e. the appointment of officers to approve and undertake a range of
functions in the procurement process, including the awarding of contracts); and
procurement processes, with appropriate procedures covering minor, simple procurement to
high value, more complex procurement.
Councils purchasing and contract management activities endeavour to:
support Councils corporate strategies, aims and objectives including, but not limited to those
related to sustainability, protection of the environment and corporate social responsibility.
take a long term strategic view of its procurement needs while continually assessing, reviewing
and auditing its procedures, strategy and objectives;
provide a robust and transparent audit trail which ensures that procurement projects are
delivered on time, within cost constraints and that the needs of end users are fully met;
are conducted, and are seen to be conducted, in an impartial, fair and ethical manner;
achieve value for money and quality in the acquisition of goods, services and works;
ensure that risk is identified, assessed and managed at all stages of the procurement process;
use strategic procurement practices and innovative procurement solutions to promote
sustainability and best value, in particular making use of collaboration and partnership
opportunities;
use social procurement to enhance sustainable and strategic procurement to effectively
contribute towards building stronger communities and meeting the wider social objectives of
Council; and
comply with legislation, corporate policies or other requirements, ensuring that all staff
responsible for procurement and contract management are aware of and adhere to the
legislative requirements, Council standards and best practice.

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Context
The purpose of this Procurement Policy (the policy) is to:
provide policy and guidance to Council to allow consistency and control over Procurement
activities;
demonstrate accountability to the community;
provide guidance on ethical behaviour in public sector purchasing;
demonstrate the application of elements of best practice in purchasing; and
increase the probability of obtaining the right outcome when purchasing goods and services.

Alignment
This policy is made pursuant to the Local Government Act 1989 (the Act) which is the key
legislative framework that regulates the process of all local government procurement in Victoria.
Section 186A of the Act requires councils to prepare and approve and comply with a procurement
policy encompassing the principles, processes and procedures applied to all purchases of goods,
services and works by Council. The policy must be reviewed at least once in each financial year.
This policy applies to all contracting and procurement activities at Council and is binding upon
Councillors, Council staff and temporary employees, contractors and consultants while engaged by
Council.
The Act and the policy are the primary reference points for how all procurement should be
performed.

Treatment of GST
All monetary values stated in this policy exclude GST except where specifically stated otherwise.

Policy Details
Effective legislative and policy compliance and control

1.1.1 Ethics and probity

Councils procurement activities shall be performed with integrity and in a manner able to withstand
the closest possible audit scrutiny.

Conduct of Councillors and Council staff

Councillors and Council staff shall at all times conduct themselves in ways that are, and are seen
to be, ethical and of the highest integrity and will:
treat potential and existing suppliers with equality and fairness;
not seek or receive personal gain;
maintain confidentiality of commercial in confidence information such as contract pricing and
other sensitive information;
present the highest standards of professionalism and probity;
deal with suppliers in an honest and impartial manner that does not allow conflicts of interest;
provide all suppliers and tenderers with the same information and equal opportunity; and
be able to account for all decisions and provide feedback on them.

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Any employee managing or spending Council funds (whether by purchase order, credit card, petty
cash or any other method) is to ensure this policy and Councils procurement procedures are
adhered to.

1.1.2 Tendering processes

All tendering processes shall be conducted in accordance with the requirements of this policy and
any associated procedures, relevant legislation, relevant Australian Standards and the Act.
Where guidance is required, the Unit Manager Procurement should be consulted. Breaches that
appear to involve fraud are to be referred to the Chief Executive Officer and Internal Auditor
immediately.

1.1.3 Conflict of interest

Councillors and Council staff shall at all times avoid situations in which private interests conflict, or
might reasonably be thought to conflict, or have the potential to conflict, with their Council duties.
Council staff involved in the procurement process involving quotations and tenders where they are
involved in preparing tender documentation, writing tender specifications, tender opening, and
tender evaluation panels, must:
avoid conflicts, whether actual, potential or perceived, arising between their official duties and
their private interests. Private interests include the financial and other interests of Councillors
and Council staff, plus their relatives and close associates;
declare that there is no conflict of interest by completing a conflict of interest declaration form
for all purchases over $30,000. Where future conflicts, or relevant private interests arise, staff
must make their supervisor, or the chairperson of the relevant tender evaluation panel (TEP')
aware and allow them to decide whether the officer should continue to be involved in the
specific procurement exercise; and
observe prevailing Council, Victorian Government Purchasing Board and e-hub guidelines on
how to prevent or deal with conflict of interest situations; and not take advantage of any tender
related information whether or not for personal gain.

1.1.4 Fair and honest dealing

All prospective contractors and suppliers must be afforded an equal opportunity to tender or quote.
The electronic systems provided assist in ensuring equal opportunity and are to be used in
preference to other methods. Other methods of engagement should only be used where the
electronic methods cannot be employed or present potential suppliers with significant
disadvantage. These instances should be discussed with procurement staff.
Impartiality must be maintained throughout the procurement process so it can withstand public
scrutiny. Tools such as the declaration of conflicts of interest and processes such as ensuring the
assessment weightings are finalized before advertising tenders or seeking quotations are designed
to ensure impartiality and fairness. Staff should refer to the intranet for more detail on processes
and guidance on approaches.
The commercial interests of existing and potential suppliers must be protected.
Confidentiality of information provided by existing and prospective suppliers must be maintained at
all times, particularly commercially sensitive material such as, but not limited to prices, discounts,
rebates, profit, manufacturing and product information.

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1.1.5 Gifts and hospitality
No Councillor or member of Council staff shall, either directly or indirectly solicit or accept gifts or
presents from any member of the public involved with any matter that is connected with the duties
of the officer, or in which Council is interested.
Potential conflicts of interest related to hospitality offered by vendors involved in current or future
tendering activity can be checked by referring to Councils Supplier Portal to view known upcoming
tenders. Any doubt can be confirmed with the Procurement Unit or the contract manager of the
service potentially provided by the supplier.
Councillors and Council staff must exercise the utmost discretion in accepting hospitality from
contractors or their representatives, or from organisations, firms or individuals with whom they
have official dealings. Councillors and Council staff should also avoid the ambiguous situation
created by visiting the premises of a contractor, organisation, firm or individual uninvited and/or not
on official business.
Offers of bribes, commissions or other irregular approaches from organisations or individuals (no
matter how flimsy the evidence available), must be promptly brought to the attention of the Chief
Executive Officer.
Staff should refer to the Gifts and Hospitality policy for detailed guidance.

1.1.6 Disclosure of information

Commercial in-confidence information received by Council must not be disclosed and is to be
stored in a secure location.
Councillors and Council staff are to protect, by refusing to release or discuss the following:
information disclosed by organisations in tenders, quotation or during tender negotiations;
all information that is commercial in confidence information; and
pre-contract information including but not limited to information provided in quotes and tenders
or subsequently provided in pre-contract negotiations.
Discussion with potential suppliers during tender evaluations should not go beyond the extent
necessary to resolve doubt on what is being offered by that supplier.

Governance

1.1.7 Structure
Council shall:
establish a procurement management responsibility structure and delegations ensuring
accountability, traceability and audit ability of all procurement decisions made over the lifecycle
of all goods, services and works purchased; and
ensure that Councils procurement structure:
is flexible enough to purchase in a timely manner the diverse range of material, goods,
works and services required;
ensures that prospective contractors and suppliers are afforded an equal opportunity to
tender/quote; and
encourages competition.

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1.1.8 Policy and legislation
Councils procurement activities shall be carried out to the professional standards required by best
practice and in compliance with:
the Act;
Local Government (General) Regulations 2015;
Local Government (Planning and Reporting) Regulations 2014;
Competition and Consumer Act 2010 (Cth);
Occupational Health and Safety Act 2004;
Privacy and Data Protection Act 20014;
Commonwealth Disability Discrimination Act 1992 (Cth);
Goods Act 1958;
Environment Protection Act 1970;
Victorian Charter of Human Rights and Responsibilities Act 2006;
Councils policies;
Councillor Code of Conduct and the Employee Code of Conduct;
Local Government Procurement Best Practice Guideline;
Competition Code;
National Competition Policy; and
Acceptance of Gifts and Hospitality Policy.

1.1.9 Methods
Before making a purchase staff must consider the approach to the market and the order and
payment method.
The approach to the market is governed by the value, risk and approach that will achieve the best
outcome. Staff should refer to table 3.3.2 for the minimum allowable process, however should
consider the approach that will achieve the best outcome when looking to buy.
The method of ordering and payment does not necessarily relate to the approach to market.
This is finding the most appropriate method of submitting an order and ensuring it is paid.
Approved methods and considerations when using these methods are outlined at 3.5.

1.1.10 Responsible financial management

The principle of responsible financial management shall be applied to all procurement activities.
Accordingly, to give effect to this principle, the availability of existing funds within an approved
budget, or source of funds, shall be established prior to the commencement of any procurement
action for the supply of goods, services or works.
Council staff must not authorise the expenditure of funds in excess of their financial delegations.
Council staff must not disclose allocated tender budgets to suppliers unless it is assessed or
known that the budget is insufficient and disclosure will allow tenderers to offer the best outcome
for the available funds.
Council funds must be used efficiently and effectively to procure goods, services and works and
every attempt must be made to contain the costs of the procurement process without
compromising any of the procurement principles set out in this policy.

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Procurement Processes and Thresholds

1.1.11 Process
Council procurement processes are based on a number of principles:
Best value
The benefits of the purchase are weighted against the costs necessary for the optimum result for
Council and local community. Council is not required to accept the lowest tender. Instead, Council
is required to take into account issues of quality, cost, the accessibility of the service and other
factors relevant to the overall objectives of the Act.
Best value is often mistaken for meaning the lowest price, however, in terms of the contracting
process, best value requires us to balance quality and price with as much transparency as is
reasonably achievable. In this context price should take into account the whole life cost of the
provision as far as is practicable. It follows that the delivery of best value is dependent upon
Council priorities.
Achieving best value also requires challenging the need for the procurement and the way in which
the service may be reconfigured to achieve improvements in service delivery, comparing service
provision options against all those available, consulting with key stakeholders and ensuring
competition in the open market.
Achieving best value for money must be the basis of all procurement decisions within Council.
Open and fair competition
All suppliers are treated fairly in an open and transparent manner and have access to the same
information.
Accountability
Council maintains consistency in the approach to procurement across the whole organisation
through coherent frameworks, policies and procedures. Accountability in procurement means being
able to explain and provide evidence on the process followed. The test of accountability is that an
independent third party must be able to see clearly that a process has been followed and that the
process is fair and reasonable.
Therefore the processes by which all procurement activities are conducted will be in accordance
with Councils procurement policies and procedures as set out in this policy and related, relevant
Council policies and procedures.
Additionally:
all Council staff must be able to account for all procurement decisions made over the lifecycle
of all goods, services and works purchased by Council and provide feedback on them; and
all procurement activities are to provide for an audit trail for monitoring and reporting purposes.

Minimum spend competition thresholds

Any Council procurement under the threshold ($150,000 including GST for goods and services or
$200,000 including GST for works) must comply with this policy and procedures.
Prior to entering financial or commercial transactions, officers are required to test the market
having regard to the available funds, risk, market dynamics, Council objectives and to ensure that
Council is deriving best value from the transaction.
A formal risk appraisal, at minimum using the procurement risk tool, must be conducted for all
purchases over $5,000 (and over $2,000 where risks are evident). Staff are unable to assess risk
as low unless they have attended training in risk assessment and tendering.

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Table 3.3.2 Risk and expenditure thresholds
Requirement (unless covered Low risk Medium risk High risk
by an existing contract)
One verbal quote (excluding <$5000 <$5,000 <$2,000
GST)
One written quote (excluding $5,000> $30,000
GST)
Three written quotes using $30,000> $5,000> $50,000 $2,000> $10,000
standard purchase order terms $100,000
or industry contracts (RFQ) or
Moreland contract (excluding
GST)
Formal tender, can be confined $100,000> $50,000> $150,000 $10,000> $150,000
(select tender) (excluding GST) $150,000
Open public tender (note these >$150,000 >$150,000 >$150,000
figures include GST) ($200,000 for ($200,000 for ($200,000 for
works) works) works)
Note: Where it has been identified that there will be a large response to a public tender an
expression of interest (EOI) may be used to shortlist potential tenderers.
The period an EOI/RFT/RFQ/RFI is available in the market should be based upon the period
assessed as needed to provide a sound and effective response. Tender managers should
consider:
complexity of the project;
complexity of the response;
characteristics of the market;
public holidays and industry RDOs;
method of response; and
changes (the nature of questions and Addenda throughout the market test).
As a general guide, public tenders for relatively complex services would need to be in the market
for approximately of 20 working days; however this period can be reduced by reducing the
complexity of the task or response. Some smaller, straight-forward activities may be in the market
for as little as one business day. Select or confined procurements may be in the market for shorter
periods, as complexity may have been reduced through the adoption of a confined process.
Procurement requiring a formal or public tender will generally result in a formal (ie documented)
contract. Where medium and high risk activities under the tendering threshold are the subject of a
quotation process, a formal contract may be required to protect the parties by:
reducing risks;
documenting occupational health and safety requirements;
documenting insurance requirements; and
documenting the pricing regime.

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Where a medium or high risk activity is of a value that requires a select or public tender a
procurement plan should be developed prior to developing the specifications.
The procurement plan should clearly outline the strategy, risk management, probity requirements,
responsibilities, planned timeframes, identified stakeholders and required outcome. Tools and
templates are available on the intranet to assist staff, and Procurement Unit staff can also provide
additional assistance.
Where a risk assessment identifies a high reputational risk to council or a legal risk requiring
additional focus on process and accountability, officers are to consider the use of probity advisors
or probity auditors. Assessment tools are available to assist, however advice should be sought
from Procurement Unit staff.
Contracts are to be fully valued over the life of the contract (ie: including the cost of any contract
extension periods) and not split into smaller amounts to avoid authorisation or tender processes.
Splitting an order includes:
breaking the supply into a number of vendors;
receiving lower value invoices over a period of time (invoice splitting);
separating the supply into components and separately tendering (e.g. the purchase costs and
the maintenance costs of software);
calculating the cost of a relationship over a small timeframe rather than the entire contract
length (e.g. a monthly or annual fee rather than the life of the contract);
entering into many short time frame contracts to obscure the true and appropriate contract
length;
breaking the supply into components that avoid the accurate evaluation of risk; and
any other action taken to reduce the apparent authority required by misrepresenting the supply,
the value, the term or any contract condition.
Where an agreement may lead to non-routine charges (e.g. security alarm responses), the value of
the contract is to be based on all known costs plus an amount representing a reasonable
calculation of the likely charges based on market or technical expectations.
Council officers are not to enter into a supply arrangement without knowing the value of the
procurement. Where doubt legitimately exists about the likely obligation, a professional estimation
of the likely obligation is to be made. It is not acceptable to knowingly or otherwise misrepresent
the nature or value of a purchase or contract. Where doubt exists, advice is to be sought from the
Procurement Unit.

1.1.11.1 Variations
Where a variation occurs the delegation is not defined by the value of the variation, but by the
value of the whole contract. An officer with a sub-delegation from the Chief Executive Officer or
Council may vary a contract to the limit in the delegation. Other officers cannot delegate variation
discretion to another officer regardless of the limit of their delegation. Variations beyond this need
to be referred to an officer with delegation above $150,000.
Where a variation is related to a project and is significant or material in price, process, risk or
delivery it must be referred to the Project Executive to consider whether the variation is significant
enough to warrant re-tendering.

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1.1.11.2 Panel contracts
Panel contracts are often established to provide a known service at a known cost where either
leverage or efficiency can be gained using this method. Where a panel arrangement exists it
should be used for the circumstances it was designed, such as adhoc purchases, or repairs up to a
limited value. Where the arrangements were not designed to cover the instance and better
outcomes can be obtained, a new tender or quote should be conducted.
When a panel cannot effectively provide the outcome needed other arrangements should be
sought.
Reasons for not using existing contracts may include inability to meet timeframes, inability to
provide the exact product needed, or inability to meet quality requirements at that time. On
occasions price may indicate the panel contract does not provide the best value outcome, however
other factors would need to be assessed with price. The Unit Manager Procurement is to assess
the evidence and approve any procurement outside existing panel arrangements.

1.1.11.3 Confined procurement or exemptions to procurement process

Confined
There are circumstances whereby staff can confine procurement to a particular supplier.
This is a rare occurrence and should be undertaken with great care. Approval to restrict
procurement must be obtained prior from the Unit Manager Procurement.
Confining procurement will only be considered where purchases are less than $150,000 for goods
and services or $200,000 for works.
The following circumstances must apply:
where there is only one supplier that can provide the specialist goods/services being sought; or
where it is positively in Councils best interests.
Suitable evidence will be required to demonstrate that the circumstances apply.
Exemptions
There are circumstances whereby the Chief Financial Officer (CFO), on the recommendation from
the Unit Manager Procurement, may exempt processes within boundaries of this policy ie:
exemption from using a select tender etc up to the limit of the Act thresholds, for example: $150k or
$200k when satisfied this is the best approach to deliver value for money. This is discretionary and
subject to evidence being provided to support the exemption.

1.1.11.4 Evaluation
The TEP (Tender Evaluation Panel) must comprise at least three officers, one being a member of
an independent branch, such as the TEP should consist of a minimum of two officers from the
branch conducting the tender and an independent which takes on the form of someone from a
stakeholder branch, such as the Open Space Unit might conduct a tender for sports field lighting
and the independent would be someone from the Leisure Services Unit who is a primary
stakeholder.
The complexity, value and nature of the purchase should also be considered when selecting the
TEP, as Director or Manager, Executive Manager Organisation Development (EMOD) involvement
may be needed to achieve strategic consideration or executive support for the recommendation.
For purchases considered high risk and/or have a value of over $1 million the TEP will comprise
the manager and an officer of the relevant area, a member of the Procurement Unit and a member
of an independent branch, such as the evaluation team would consist of a minimum of two officers
from the branch conducting the tender, an independent which takes on the form of someone from a
stakeholder branch and a representative from the Procurement Unit.

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The following table summarises the number of evaluation team members required:
Process Evaluation team members
RFQ (high risk) 2 officers from the same business unit
Public/select tender < $150K (Inclusive GST) 2 officers from the same business unit
Public tender > $150K (Inclusive GST) 2 officers from the same business unit, plus 1
officer from an independent branch
Public tender > $1million plus high risk 1 manager, plus 1 officer from same business
unit, plus 1 officer from an independent
branch, plus 1 procurement representative
Procurement may opt to be in the evaluation for projects that are considered of high
risk, regardless of the value
In certain instances tender briefs and/or site inspections are required when the tender is open or
after the tender closure. In these occasions more than one officer is required to attend or be part of
these meetings. If possible these team members should be part of the Evaluation Committee.
The risk evaluation and quote/tender evaluation matrix must be stored in the Trim document
management system against the allocated contract or quotation number.
The report and recommendation is to be submitted to the relevant by the manager, EMOD and/or
Director to the Chief Executive Officer or Council for the contract(s) to be awarded in accordance
with delegated authority.
Template evaluation matrices and reporting tools are available on the intranet. Whilst the format
provided is not mandatory, these tools ensure all process and probity requirements are met.
Where a TEP elects to use different tools it must ensure the tools work correctly and that copies
are endorsed by the TEP.
Tenders will be evaluated using evaluation criteria and weightings.
Criteria may include, but are not restricted to:
price;
capacity;
capability;
technical;
local content;
social procurement elements; and
environmental aspects/sustainability.
Once the tender has been evaluated, where appropriate, local suppliers can be given preference
on price.
Council employees (other than TEP members) and Councillors are not to approach or discuss
offers with tenderers during the evaluation period. The TEP Chairperson may request clarification
of the tender received.
TEP reports to delegates are to clearly show the weightings for each category and the scoring
achieved by each tenderer. Where a tenderer fails a mandatory assessment criteria, the TEP may
elect to cease evaluating the tender.

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Often it is desired to have residents, representatives of bodies or stakeholders that are not
employed by council involved in projects that impact these organisations. Due to the legal nature
of tenders and the fact that evaluating the tender does not inform the scope, it is recommended
that these representatives are involved in specification development rather than tender
assessment. This provides the opportunity to define what is being sourced, rather than selecting
who will deliver it, which is more in keeping with their aims.
Whether involved in specification development or tender evaluation they are required to sign non-
disclosure agreements and conflict of interest declarations as well as receiving a briefing on probity
from a council officer (preferably a Procurement Unit representative).

Delegation of authority

Requirement
Delegation of procurement authority allows specified Council staff to approve certain purchases,
quotations and award contracts without referral to Council.
This enables Council to conduct procurement activities in an efficient and timely manner whilst
maintaining transparency and integrity.

Delegations

1.1.11.5 Council staff

Council shall maintain a documented scheme of procurement delegations, identifying Council staff
delegated to make such procurement commitments in respect of goods, services and works.
Instruments of Delegation are held on the Intranet for the Chief Executive Officerand relevant staff.
From approximately August 2017, the delegations will also be on Councils website.
Delegations table (figures excluding GST)
Council officer Purchase orders Petty cash Staff Purchase Credit card
and awarding of reimbursements without order
contracts
Council Unlimited Unlimited Unlimited Unlimited N/A
Chief Executive Officer $700,000 $100 $20,000 *$100,000 To the card
limit
Director $350,000
$100 $5,000 $10,000 $25,000
Manager $150,000 $50 $500 $5,000 $5,000
Level 4 Unit $50,000 $50 $500 $1,000 $1,000
Managers /
Coordinators

Notes: The Chief Financial Officer has unlimited delegation in ERP (Enterprise Resource
Planning) system to enable the processing of transactions that have been approved by Council
and is for administrative purposes only.
ERP approval levels are recorded on TRIM at D10/47656
Petty cash approval levels and signatures are recorded on TRIM at D08/69783
* When exercising the delegation for purchase without order by the CEO of sums between $50,000
and $100,000, these transactions are to be reported to the next Council meeting following the
purchase.

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1.1.11.6 Delegations reserved for Council
Commitments and processes which exceed the Chief Executive Officers delegation and which
must be approved by Council are:
a) recommendations to award a contract with an estimated value over $700,000 (Including
GST); and
b) variations and contract term extensions resulting in the contract value exceeding the Chief
Executive Officers delegation.

Internal Controls
Council will install and maintain a framework of internal controls over procurement processes that
will ensure:
more than one person is involved in and responsible for a transaction end to end;
transparency in the procurement process;
a clearly documented audit trail exists for procurement activities;
appropriate authorisations are obtained and documented;
systems are in place for appropriate monitoring and performance measurement; and
Chief Executive Officer, Directors, EMOD and Managers report monthly on when they
exercised their delegations with regard to contracts.

Authority to purchase
Morelands business system (ERP) is the tool provided to purchase goods and services.
The use of purchase without order, direct debit, deductions through Accounts Payable, petty cash
and staff reimbursements is restricted to situations where ERP system is not suitable or council
benefits through the use of these methods.
The corporate credit card is to be used where adhoc suppliers are being engaged or the process
for procurement is more efficient when using the card, such as internet registrations.
Authorisation is required prior to entering into a contract, purchase order or other purchasing
arrangement. No agreement to legally bind Council into the purchase of goods or services shall be
made without the express permission of the appropriate authorising officer in accordance with the
Policy. Verbal approvals or arrangements contrary to this Policy are unacceptable.
When entering into a purchasing arrangement the following responsibilities have been applied:
Requisition raiser
Ensuring purchases and requisitions are in accordance with relevant policies.
Ensuring orders that appear to be outside this policy or of perceived benefit to the approver are
redirected to the next level of management for approval.
That the requisition is being raised for the correct supplier and the supplier details are correct.
The amount requested is correct on the order.
The tax code is correct.
The sub-ledger and cost codes are all correct.
The branch/plant is correct.
That the requisition has been raised and approved prior to receipt of the invoice and that the
order is receipted in accordance with Councils Procurement Guidelines.

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First requisition approvers have the responsibility for:
ensuring they only approve purchasing within their level of authority;
ensuring they do not approve expenditure where they have a perceived conflict or personal
gain, regardless of their delegation. Where this is the case, the purchase order must be
referred to the next level of management;
the purchase and requisition is in accordance with relevant policies and legislation;
the details completed by the requisition raiser are correct;
ensuring the supply is necessary and in the best interests of Council;
ensuring that sufficient budget is available for the supply and that uncommitted funds are
available for the supply;
ensuring that quotes and procurement documentation are in order;
ensuring that the goods or services are appropriate to the need for which they are to be
acquired;
ensuring that the correct procurement process has been undertaken with regard to legislation,
the Act and Council policy;
understanding contractual requirements and details where applicable;
ensuring that the staff member has the authority to purchase under the delegations; and
ensuring that the order has been approved prior to the receipt of the invoice.
Subsequent second/third and fourth level authorisers must ensure:
having knowledge that the order they are approving aligns with the purpose of the business
unit requirements;
understanding of the procurement process and are satisfied that the purchase has been made
in line with policy and legislative requirements for high risk expenditure and over $500k;
no contract form, including purchase orders, shall be used other than those approved by the
Procurement Unit; and
all employees are empowered to query incidents or directions that appear to contradict ethics,
probity, or policies and procedures.

Direct debit
Direct debit payments provide an opportunity for efficiency, however also come with reduced
control. Situations where direct debit will improve the outcome for Council should be discussed
with the Procurement Unit or the Finance Branch.

Direct deductions through Accounts Payable

These include liabilities such as tax, utilities, insurance and payroll deductions. This type of
procurement can be arranged through the Finance Branch and must be approved by the Chief
Executive Officer.

Petty cash
Petty cash purchases are only to be used for minor and urgent (pressing and calling for immediate
attention) purchases. Officers seeking to use petty cash must be able to demonstrate that a
purchase order could not be used. Advice should be sought from the Procurement Unit in the first
instance.

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Staff reimbursements
This method of procurement is to be used in exceptional circumstances and for incidental
purchases only or where conditions are set out in employment contracts.
Staff reimbursements may be returned to staff unpaid:
if the supplier/or a suitable alternative supplier is on the ERP system and a purchase order
could have been raised;
if the goods/services purchased did not have prior approval; and
if the purchase of goods is for catering purposes or for Council assets.

Credit cards
Corporate credit cards are to be used in accordance with Councils Corporate Credit Card Policy
and Credit Card User Manual. A limited number of credit cards will be issued across Council.
Private credit cards may only be used in extreme circumstances and will be subjected to the above
staff reimbursements conditions.
Officers are not to use private credit cards without prior approval and the use of private credit cards
to avoid the procurement and delegation levels is not permitted.
Select credit cards are designated for emergency use only. These will be released for use when
the Chief Executive Officer declares an emergency. All transactions must be properly recorded,
reconciled and acquitted by the card holder. Cards are not to be used by staff other than the card
holder.

Risk Management

General
Risk management is an integral part of best practice in procurement. Risk management is the
method of establishing the context, identifying, analysing, evaluating, treating, monitoring and
communicating risks associated with any activity or process to enable Council to minimise losses
and maximize opportunities. Identifying risks early and selecting the best option for managing
those risks helps Council to achieve favourable outcomes.
Procurement risk factors include, but are not limited to, fraud, waste, abuse, vendor performance,
contract security, poor specification of need, public relations and administrative burden.
All staff have a responsibility to manage the risk associated with procurement. It is important that
all staff intending to procure goods and/or services undertake a level of risk assessment; the
procurement risk management tool provides the preferred method for off-line quotes; and the
purchase risk plan on the supplier portal presents the preferred method for on-line tenders and
quotes. One of these procurement risk management tools must be used for all purchases greater
than $5,000.
Staff must take particular care to assess the risk of scope creep, extension of the engagement, or
re-engagement for related services within a short period. Where these remain a risk staff should
plan on the worst case, as if they occurred and ensure the tender process and resulting contract
caters for this.
All contractors/vendors supplying goods, services and works to Council must demonstrate specific
understanding of the health and safety requirements of the work to be performed as well as
provide evidence of appropriate insurances, risk management practices and other measures as
deemed appropriate.

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Supply by Contract
The provision of goods, services and works by contract potentially exposes Council to risk.
Council will minimise its risk exposure by measures such as:
standardising contracts to include current, relevant clauses;
requiring security deposits where appropriate;
referring specifications to relevant experts;
requiring contractual agreement before allowing the commencement of work;
use of or reference to relevant Australian Standards (or equivalent); and
effectively managing the contract including monitoring and enforcing performance.
The supplier portal will provide current and up to date records of a suppliers certification status.
Suppliers not meeting the required certifications for the task are not to be engaged.

Contract terms
All contractual relationships must be documented in writing based on standard terms and
conditions.
Where this is not possible, approval must be obtained from the appropriate member of Council
staff listed in Councils delegations.
To protect the best interests of Council, terms and conditions must be settled in advance of any
commitment being made with a supplier. Any exceptions to doing this exposes Council to risk and
thus must be authorised by the appropriate member of Council staff listed in Councils delegations.
Dispute resolution
Contracts should include dispute resolution processes and where possible include a third party for
arbitration if internal escalation fails to resolve the dispute. Reliance upon the courts to resolve
disputes is generally inefficient and likely to deliver unsatisfactory outcomes for all parties.

Category management
Council has a category management approach to procurement which brings together expertise
from across Council to identify the most appropriate and effective approach to deliver Councils
outcomes through sourcing and supply arrangements.
The main objective of category management is to reach a point where all or a very high percentage
of Councils spend within a category is being channelled through approved arrangements, aligned
with strategic priorities such that value is maximised on every dollar of expenditure.

Contract management
The purpose of contract management is to ensure that Council, and where applicable its clients,
receive the goods, services or works provided to the required standards of quality and quantity as
intended by the contract by:
establishing a system for monitoring and achieving the responsibilities and obligations of both
parties under the contract;
providing a means for the early recognition of issues and performance problems and the
identification of solutions; and
adhering to Councils Risk Management Framework and adhering to relevant occupational
health and safety contractor compliance procedures.
All Council contracts are to include contract management requirements. Furthermore, contracts are
to be proactively managed by the member of Council staff responsible for the delivery of the
contracted goods, services or works to ensure Council receives value for money.

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Terms of trade
Council will pay creditors on the following terms:
less than 30 days after both the supplies have been delivered and the invoice has been
correctly rendered to the Accounts Payable area. The invoice received from the supplier must
show the appropriate Council purchase order number or it will be returned to the supplier;
in accordance with the contract terms, where a contract exists; and
within 10 working days in accordance with Building and Construction Industry Security of
Payment Act 2002 where it applies.
This policy overrides any payment terms requested by suppliers. Where a supplier offers a
discount for prompt payment, the request for early payment must be discussed with the Finance
Branch which will calculate the effect (cash flow and opportunity costs) and inform the requesting
officer to accept or reject the offer.

Demonstrate Sustained Value

Integration with Council Strategy
Council approach to procurement will support its corporate strategy, aims and objectives, including
but not limited to those related to sustainability, protection of the environment, corporate social
responsibility and meeting the needs of the local community such as:
feeling safe;
living in a clean and pleasant environment; and
receiving good quality and well managed Council services that are value for money.

Achieving Best Value

Requirement
Councils procurement activities will be carried out on the basis of obtaining best value.
This means minimising the total cost of ownership over the lifetime of the requirement consistent
with acceptable quality, reliability and delivery considerations. Lowest price is not the sole
determinate of best value. Value, generally, is determined using a weighted scoring system where
the supplier who attains the highest score whilst achieving a minimum acceptable score in each
category is likely to be identified as delivering the best value outcome.

Approach
This will be facilitated by:
developing, implementing and managing procurement strategies that support the co-ordination
and streamlining of activities throughout the lifecycle;
effective use of competition;
using aggregated contracts where appropriate;
identifying and rectifying inefficiencies in procurement processes;
developing cost efficient tender processes including appropriate use of e-solutions;
Council staff responsible for providing procurement services or assistance within Council
providing competent advice in terms of available products and agreements; and
working with suppliers to create relationships that are professional and productive, and are
appropriate to the value and importance of the goods, services and works being acquired.

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Role of specifications
Specifications used in quotations, tenders and contracts are to support and contribute to Councils
value for money objectives through being written in a manner that:
ensures impartiality and objectivity;
clearly defines Councils requirements;
encourages the use of standard products;
encourages sustainability; and
eliminates unnecessarily stringent requirements.

Performance measures and continuous improvement

Appropriate performance measures are to be established and reporting systems will be used to
monitor performance and compliance with procurement policies, procedures and controls
Procurement procedures, practices and costs will be benchmarked externally. Internal service
standards will be agreed within Council and performance against these targets will be measured
and reviewed regularly to support continuous improvement.
The performance measurements developed will be used to:
highlight trend and exceptions where necessary to enhance performance;
improve the internal efficiency of the procurement process and where relevant the performance
of suppliers;
facilitate programs to drive improvement in procurement to eliminate waste and inefficiencies
across key spend categories;
monthly invoice before order reporting (organisational KPI);
monthly tender status reporting; and
monthly contract delegations reporting.

Corporate social responsibility

Corporate social responsibility (CSR) is about taking positive action to demonstrate Councils
commitment to the local community and environment on which it impacts. This means Council
maximising the benefits of the services they provide across the community and minimising the
negative aspects of their activities.
Council integrates CSR into its organisational policies and practices through social procurement,
sustainability and diversity.

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Social procurement
CSR generates positive outcomes by building on initiatives already undertaken by Council in
enhancing sustainable and strategic procurement practice, further enabling procurement to
effectively contribute towards building stronger communities and meeting the social objectives of
Council.
Council is committed to CSR by:
ensuring all procurement practices are sustainable and strategically aligned with the wider
Council objectives;
achieving greater value for money across the community through the use of effective
procurement;
ensuring all businesses have the same opportunity to tender for Council contracts;
enhancing partnerships with other councils, suppliers and community stakeholders;
building and maintaining a strong community by exploring ways to generate local employment
(particularly among disadvantaged residents) and further strengthening the local economy;
purchasing ethical and fair trade goods to support equitable, local, national and international
trade;
ensuring that suppliers pay award wages or above;
being aware of supporting businesses that are involved in services that are part of causing
harm or suffering to people; and
excluding from future contracts, tenders or business dealings any companies involved in
Australias offshore and onshore immigration processing system that fail to meet the No
Business in Abuse (NBIA) pledge requirements.

Sustainability

General
Council is committed to achieving sustainability and ensuring it monitors and reports on Council
activities and programs that have an impact on or contribute to the environment including but not
limited to the following:
waste management;
recycling;
energy management;
emission management;
water conservation;
green building design; and
procurement.

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Sustainable procurement
Council recognises it has an implicit role in furthering sustainable development, through its
procurement of goods, and services and works.
In addition, Council recognises the potential impact this spend has on the environment and where
applicable will integrate sustainability, environmental and social issues into the procurement
process. Council aims to achieve this by:
giving a preference to the need to minimise emissions and reducing the negative impacts of
transportation when purchasing goods and services;
giving a preference to minimising carbon dioxide and other greenhouse gas emissions through
the detailed consideration of products and services procured;
considering the environmental performance of all suppliers and contractors, and encouraging
them to conduct their operations in an environmentally sensitive manner;
considering the basic life cycle analysis of products and giving preference to those that
minimise the adverse effects on the environment resulting directly or indirectly from products;
selecting products/services that have minimal effect on the depletion of natural resources and
biodiversity;
giving a preference to fair-trade, or equivalent, and ethically sourced and produced goods and
services;
working more effectively with local suppliers to ensure they are encouraged to bid for Councils
business in line with this Policy;.
ensuring all relevant procurement contracts and tenders contain sustainability specifications as
appropriate to the product or service being procured; and
complying with all Australian regulations and legislation and ensuring our suppliers do the
same
training all Council staff on sustainability considerations within the procurement process; and
using only forest free paper.

Diversity
Promoting equality through procurement can improve competition, best value, the quality of public
services, satisfaction among users, and community relations. It should be a consideration in every
procurement project and reflect corporate commitment to diversity and equal opportunities
wherever possible.

Buy Australian
In accordance with section 186(3) of the Act, Council gives preference to goods, equipment,
material or machinery manufactured in Australia and New Zealand whenever practicable.

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Critical or Emergency Incident
In recognition that full compliance with existing Council purchasing procedures may not support
Councils needs during a critical or emergency incident, an alternative procurement process may
operate during the incident.
This alternative process aims to accommodate urgent procurement needs, while ensuring that the
procurement process adopted is reasonable and conducted with appropriate consideration of
standard purchasing principles and probity.
The alternative process is to be authorised by the Chief Executive Officer, Director Corporate
Services, Municipal Emergency Response Officer, Municipal Recovery Manager or Chief Financial
Officer once a critical or emergency incident has been declared or in line with the Municipal
Emergency Management Plan and Business Continuity Plan.
Such incidents are:
a state of disaster declared under the Emergency Management Act 1986, or any other
emergency declaration made by the States Premier under an enactment;
an incident declared by the Chief Executive Officer or Director where the safety or security of
any person or property associated with Council is threatened; and
an external incident to which the Chief Executive Officer has authorised the provision of urgent
support.
Once the immediacy of the incident has passed, purchase orders should be raised to record
the expenditure in the same way as they would have been in normal circumstances.

Exemptions Under The Policy

The following areas are exempt from the terms of this policy:
payments with statutory/legislative requirements, such as payments to the ATO;
superannuation;
WorkCover;
legal costs (exempt from tendering requirements due to the provision of the Local Government
(General) Regulations 2015;
payments to the Victorian Electoral Commission (VEC) as the VEC is now mandated to
conduct all council elections (see clause 1 of Schedule of the Local Government Act 1989);
payroll deductions;
investments/term deposits;
sundry refunds (such as pension rate rebates, deceased animal refunds, crossing deposit
refunds);
payments under the Building and Construction Industry Security of Payments Act 2002;
Metropolitan Fire Brigade levies;
Mayoral and Councillor allowances and expenses;
property purchases;
utilities;
warranty renewals; and
leases and licences.

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Roles and Responsibilities
The Unit Manager Procurement is responsible for the administration of this Policy.

Monitoring, Evaluation and Review

The policy is subject to ongoing monitoring and an annual review by Council.

Definitions
Term Definition
Act Local Government Act 1989.
Best Value Best value in procurement is about selecting the supply of goods,
services and works taking into account both cost and non-cost
factors including:
contribution to the advancement of Councils priorities
non-cost factors such as fitness for purpose, quality, service
and support; and
cost-related factors including whole-of-life costs and
transaction costs associated with acquiring, using, holding,
maintaining and disposing of the goods, services or works.
Category Management A Category is an area of spend determined by known market
boundaries separating different products, services or industries.
Category management recognises that suppliers within a certain
market are likely to have similarities which enable a tailored
approach to procurement.
Commercial in Confidence Information that, if released, may prejudice the business dealings
of a party e.g., prices, discounts, rebates, profits, methodologies
and process information.
Contract A contract includes any engagement that results in a legally
binding offer and acceptance. This may be verbal or written and
could be formal or informal.
In order to clarify any misconceptions, for the purposes of
compliance with the Act, order splitting, or independent orders all
forming part of one engagement are not considered individual
contracts unless each of these engagements is discrete and has
been tendered to or quoted by several parties and could have
been appointed to any.
Contract Management The process that ensures both parties to a contract fully meet their
respective obligations as efficiently and effectively as possible, in
order to deliver the business and operational objectives required
from the contract and in particular, to provide value for money.
Corporate Social CSR is about taking positive action to demonstrate Councils
Responsibility (CSR) commitment to the local community and environment on which it
impacts.
Council Staff Includes full-time and part-time Council staff, and temporary
employees, contractors and consultants while engaged by
Council.

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Term Definition
e-Procurement e-Procurement is integral to the overall development of
procurement processes and involves the use of an electronic
system/s to acquire and pay for supplies, services` and works. At
Moreland City Council this is generally orders raised on ERP
System, however could involve other systems such as on-line
stationery ordering or on-line travel management.
Expression of Interest (EOI) An invitation for persons/companies to submit an EOI for the
provision of the goods and/or services generally set out in the
overview of requirements contained in the document. This
Invitation is not an offer or a contract. This can be used to confine
the number of invited tenderers for an RFT where there is
expected to be significant cost or effort and only potential winners
are to be invited, to pre-qualify tenderers where significant interest
is expected, or even to gather information on what is available in
the market before conducting a tender.
Local Business At times it is assessed that there is economic benefit having the
business delivered by a local company. This assessment should
take into account whether it is the head office, a branch and what
actual benefit may be delivered by utilizing a local resource. For
the purposes of assessing whether a business is local or not
assessors are to apply the following thresholds. The highest
threshold is for Moreland-based businesses, the next highest for
neighbouring municipalities, then wider target areas such as north
and west councils, then Victoria, then Australia
Probity Probity refers to uprightness, honesty, proper and ethical conduct
and propriety in dealings. Within local government, the word "probity"
is often used in a general sense to mean good process. A
procurement process that conforms to the expected standards of
probity is one in which clear procedures that are consistent with
Councils policies and legislation are established, understood and
followed from the outset. These procedures need to consider the
legitimate interests of suppliers and ensure that all potential
suppliers are treated equitably.
Procurement Procurement is the whole process of acquisition of external
goods, services and works. This process spans the whole life
cycle from initial concept through to the end of the useful life of an
asset (including disposal) or the end of a service contract.
Request for Proposal (RFP) An RFP is generally sent to the supplier market, designed to
sometimes also referred capture commercial information and pricing. Allows Council to
to as RFI assess the suitability and evaluate responses against a set of pre
defined requirements or to gather information on what is available
in the market prior to finalizing specifications for a tender.
Request for Quote (RFQ) An RFQ follows the same probity rules as a RFT however is
generally a more efficient and flexible process used for lower risk
and/or lower value engagements.
Social Procurement Social procurement uses procurement processes and purchasing
power to generate positive social outcomes in addition to the
delivery of efficient goods, services and works.
Sustainability Activities that meet the needs of the present without
compromising the ability of future generations to meet their
needs.

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Term Definition
Tender Process/Request for An RFT is the process of inviting parties to submit a quotation by
Tender (RFT) tender using public advertisement, followed by evaluation of
submissions and selection of a successful bidder or tenderer

Associated Documents
Local Government Act 1989
Councillors Code of Conduct
Employee Code of Conduct
Gifts and Hospitality Policy Employee
Gifts and Hospitality Policy Councillors
Travel Policy
Financial Delegation Policy

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