September 23, 2024
The Queensland Government has their own specific processes for procurement and tendering for building and construction maintenance (BCM). BCM covers the construction of new infrastructure (for example, schools, hospitals, government buildings and housing) as well as the maintenance of existing infrastructure.
Keep in mind that different government agencies will adopt different procurement processes. This article will provide an overview of the main considerations that all government agencies should have when procuring for BCM.
Assessing Risk
One of the most crucial parts of the government’s procurement process is assessing the risk of the building project. This is because the risk rating of the project will determine which Queensland Government procurement policies are relevant to the project.
The agency will need to work out if their project is considered high risk or significant (HRS) before they procure goods or services. Risk factors to consider include design, timeframes, quality, sensitivity and if there are specialist services involved.
HRS projects must use the Prequalification (PQC) System to assess their risk. Building projects worth $1 million or more and building specialist or consultant contracts worth $60,000 or more must also go through the PQC. Medium or low risk projects can go through their government agency contact for BCM procurement advice and assistance.
Develop a Procurement Strategy
Selecting the correct procurement strategy for the agency’s BCM activity will help to deliver on planned outcomes, manage risks and reduce the likelihood of contractual disputes and litigation. The procurement strategy takes the procurement activity from early planning through to completion.
During the project development phase, the agency should consider the best procurement strategy based on the scope of work, when it is needed and estimated contract value. Policy requirement 3 of the Building Policy Framework delineates that ‘Agencies must follow the HLGPPW published guidance on procurement strategies.’ This guidance is outlined in the associated Building Policy Guideline.
Selecting Contracts
Policy requirement 3 also prescribes that ‘Agencies must use standard contracts (including conditions of offer) developed and maintained by the HLGPPW Contract Services Unit and currently published on the Queensland Government website, for all government building construction and maintenance projects.’
This requirement aims to ensure consistency, fairness and efficiency in the government’s dealings with industry, as well as effective implementation of the government’s building related policies. Agencies cannot amend the BCM templates without consulting Contract Services.
Project specifications must be completed within the editable sections in the BCM templates prior to going to the market. Additionally, there are standard conditions of offer and tender templates provided with each BCM contract template.
To identify the most suitable standard contract for a project, agencies should take into consideration the following:
1. Procurement strategy and methodology;
2. Type of works or services (for example, construction, maintenance, consultancy, building materials procurement);
3. Value of the services; and
4. Project or program specific risks and constraints and their impacts.
Agencies should refer to the Building Policy Framework and the Building Policy Guideline when selecting a contract.
Use Local Suppliers
The Queensland Procurement Policy (QPP) requires capable and competitive local suppliers to be given a full, fair and reasonable opportunity to supply to government.
Clause 25 of the QPP stipulates that a ‘local benefits’ approach must be applied to all procurement. Taking a ‘local benefits’ approach means that:
1. For routine procurement – invite at least one local supplier to respond except where the goods and/or services are not able to be supplied by a local supplier. If a local supplier is not invited to respond, the reason why must be documented.
2. For HRS procurement – conduct a Local Benefits Test. If the test is not applied, the reason why must be documented. Refer to the Local Benefits Test Guide for further details on conducting the test.
The purpose of the Local Benefits Test is to evaluate the benefits that any supplier would bring to the local area. Furthermore, be conscious that some government agencies may have additional requirements other than what is outlined in clause 25.
Plan Open, Select List or Sole Supply Tenders
There are three government methods of tendering. Namely, they are open, select list and sole supply tenders.
Invitations for open or public tenders must appear on the QTenders or eTender website. Agencies should refer to their agency’s procurement procedures to find out when using the open tender method is suitable.
Select tendering involves inviting a limited number of contractors to tender on a contract, based mainly on how closely their known capabilities or experiences match the contract requirements. This method minimises the cost of tendering and promotes competition. The Contracts Committee may need to approve the agency’s approach before they begin a select list tender process. Agencies can ask their agency contact if their select list tender needs approval from the committee. Agencies can invite select list tenders through the QTenders or eTender website.
If an agency believes that a supplier has unique qualities that set them apart from other candidates, or the project is commercial-in-confidence, they may be able to justify a sole supply tender process. For instance, a firm may have extensive knowledge of a building to be renovated, or continuing their current involvement in a project may deliver significant cost benefits. Agencies can invite sole supply tenders through the QTenders or eTender website.
Contract Disclosure Requirements
Under clause 31 of the QPP, agencies must publish:
1. Basic details of all awarded contracts and standing offer arrangements of $10,000 and over; and
2. Additional contract details for contracts and standing offer arrangements of $10 million and over.
Agencies can read the Procurement Guidelines: Contract Disclosure document for further advice or ask their agency contact.
The final instalment of this article series will outline the risks of procurement and tendering and how to manage them.
Lamont Project & Construction Lawyers
The Lamont Project & Construction Lawyers team has extensive knowledge and experience assisting parties in preparing tenders and submitting responses. With this knowledge and expertise, Lamont Project & Construction Lawyers can provide the required support and advice to assist at any stage in the tender process.
If you would like to discuss any matters raised in this article as it relates to your specific circumstances, please contact Lamont Project & Construction Lawyers.
The content of this article is for information purposes only and does not discuss every important topic or matter of law, and it is not to be relied upon as legal advice. Specialist advice should be sought regarding your specific circumstances.
Contact: Peter Lamont or Ashleigh van Meurs
Email: [email protected] or [email protected]
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