New Rules overview (3 hour presentation)

1. New Rules overview (3 hour presentation) • User instructions • This powerpointdeck is designed to provide a basic presentation for internal use in your organisation. • You can customise it to suit your agency and your audience. • Please read carefully through the slides and make any changes you feel are appropriate.

2. Training Presentation Government Rules of Sourcing

3. New Rules training module This presentation provides information about: • Rules and Principles • Application of the Rules • Non-procurement activities, opt-out procurement and exemptions from open advertising • Response times, minimum time periods and allowable reductions • Notice of Procurement • Other new Rules • Existing Cabinet directives now part of the Rules

4. Rules and Principles Section One

5. Rules and Principles The Rules set out the standards we work to The Principles represent our values

6. Why do we have Rules? To strengthen accountability • To promote our values • To encourage commercial practice • To support economic development The Rules set out the government standards for all of the sourcing stages of the procurement lifecycle

7. What are the values that underpin the Rules? The five principles of procurementA new rule sets out the five principles of procurement: You’ll learn more about these over the next few screens. Rule 1

8. Principle 1 Rule 1

9. Principle 1 Rule 1

10. Principle 2 Rule 1

11. Principle 2 Rule 1

12. Principle 3 Rule 1

13. Principle 3 Rule 1

14. Principle 4 Rule 1

15. Principle 4 Rule 1

16. Principle 5 Rule 1

17. Principle 5 Rule 1

18. The Principles Each agency must have in place policies that incorporate the five Principles • The Principles apply to all procurements, even if the Rules don’t apply • Each agency must make sure that: • all procurement staff have been trained in the Principles • its procurement practices reflect the Principles • for each procurement, it is able to show good planning and an appropriate market strategy Rule 1

19. Application of the Rules Section Two

20. Who do the Rules apply to? • Government in New Zealand is made up of four ‘tiers’, each of which has different levels of responsibility and oversight by central government • Some agencies are required to apply the Rules • Other agencies are expected or encouragedto apply the Rules

21. Who do the Rules apply to? continued Tier 1: Public Service Mustapply the Rules} Ministries and Departments (includes NZ Police and NZ Defence Force)

22. Who do the Rules apply to? continued • Tier 2: State Services • Expectedto have regard for the Rules as good practice guidance • eg ACC, DHBs, Crown Research Institute

23. Who do the Rules apply to? continued • Tiers 3 & 4: • Encouraged to regard the Rules • as good practice guidance • eg universities, State Owned Enterprises, Regional Councils, local government

24. Non-procurement activities, opt-out procurement and exemptions from open advertising Section Three

25. When the Rules don’t apply The Rules don’t apply in two broad areas: • Non-procurement activities • Opt-out procurements In addition, there are exemptions from open advertising Rule 13 Rule 15 Rule 12

26. a. Non-procurement activities For the Rules, these activities are not considered to be procurement activities: • employing staff (excluding contractors and consultants) • disposals and sales by tender • investments, loans and guarantees • gifts, donations and any form of unconditional grants • statutory appointments • Ministerial appointments • Category 1 Legal Services Rule 12

27. b. Opt-out procurements What is an opt-out procurement? • If a procurement is covered by the Rules, in some circumstances an agency can opt-out of applying the Rules • These circumstances are called ‘opt-out procurements’ Rule 13

28. b. Opt-out procurements continued The circumstances in which an agency can opt out of the Rules: • between government departments, NZ Police or NZ Defence • purchased overseas / for use overseas • government offices overseas • non-contractual arrangement • purchasing or renting land and buildings • conditional grant • some forms of international development assistance Continued on the next screen Rule 13.3

29. b. Opt-out procurements continued The circumstances in which an agency can opt out of the Rules: • international funding that is subject to another process • international organisations’ procurement processes • international agreements between countries • public services, eg, certain types of health service • government’s central financial control functions • military and essential security interests Rule 13.3

30. Exemptions from open advertising Where a procurement can be exempt from open advertising all other Rules still apply An agency does not need to openly advertise a contract opportunity on GETS if an exemption from open advertising applies , for example: • in an emergency • following an open tender • if there is only one supplier • in the case of an unsolicited proposal Rule 15.9

31. Exemption to open advertising continued All other Rules still apply, even when an exemption to open advertising has been claimed These Rules include: • the circumstances of the exemption must justify the exemption • the agency must publish a Contract Award Notice when it has awarded the contract • the Contract Award Notice must state the reasons for the exemption to open advertising • an agency must offer each unsuccessful supplier a de-brief Rule 46 Rule 45.1 Rule 45.2.h

32. Response Times, Minimum Time Periods and Allowable Reductions Section Four

33. Sufficient time How much time should I give suppliers to respond? • An agency must allow Sufficient Time for suppliers to respond to a Notice of Procurement • Unrealistic time periods introduce unnecessary risk • Don’t jeopardise your results with a rushed process • Put yourself in the suppliers’ shoes to work out how much time is Sufficient Time Rule 26

34. Sufficient time continued Ask yourself: how long it will take to: • obtain, read and analyse all tender documents? • ask questions to clarify the requirements and get answers? • prepare a meaningful response including accurate pricing information? • develop, check and submit a response including delivering it on time? Rule 26

35. Sufficient time continued • An agency must act in good faith and use sound judgement when calculating Sufficient Time What is considered to be Sufficient time will always vary, depending on the nature and complexity of the procurement Rule 26

36. Sufficient time continued • The key factors to take into account when calculating Sufficient Time include: • the nature and complexity of the procurement • the amount of information and level of detail that suppliers must provide in their responses • the type of goods, services or works • how simple or hard it is to describe deliverables • the level of risk • the extent of any possible subcontracting • how critical the procurement is to the agency’s success • the time it takes for domestic and foreign suppliers to submit tenders Rule 26

37. Sufficient time continued • Example 1: Simple one-step Request for Quote • The request is for a large quantity of an off-the-shelf product at short notice • You need a fixed price and a guaranteed delivery date Rule 26

38. Sufficient time continued • Example 2: One-step Request for Proposal • You need a review of a social policy programme • This requires experts who will provide their own methodology, work plan, budget quote and timeline for delivery Rule 26

39. Minimum time periods Minimum Time Periods • The Rules set Minimum Time Periods for different procurement processes • The Sufficient Time that an agency sets for a procurement must not be less than: • the Minimum Time Period, or • the new Minimum Time Period, after Allowable Reductions The ten-day rule no longer applies! Rule 31 Rule 27 Rule 26

40. Minimum time periods continued The following Minimum Time Periods apply: One-step processes: Multi-step processes: Rule 31

41. Allowable Reductions • In some circumstances reductions to the Minimum Time Period are allowable • If any of these Allowable Reductions apply, you can deduct them from the Minimum Time Period • The result is the newMinimum Time Period Rule 28

42. Allowable Reductions continued • An agency can claim Allowable Reductions if it complies with the requirements in any of the following circumstances: • a prior listing in Annual Procurement Plan • all documents are made available electronically • responses are accepted electronically Rule 28

43. Allowable Reductions continued • Minimum time period and allowable reductions for a one-step process: Rule 28

44. Allowable Reductions continued • Minimum time period and allowable reductions for step one of a multi-step process: Rule 27 Rule 28

45. Allowable Reductions continued • Minimum time period and allowable reductions for step two of a multi-step process: Rule 28

46. Notice of Procurement Section Five

47. Notice of procurement What is a Notice of Procurement? • A notice published on GETS that advertises a new contract opportunity, eg, a Registration of Interest or a Request for Tender • It includes all the information that suppliers need to know in order to prepare and submit a meaningful response Rule 34

48. Notice of procurement continued Everything to help suppliers prepare meaningful responses What should I include in my Notice of Procurement? • Which procurement process is being used, eg, RFQ or RFP • Contact details and descriptions of the goods / services • Any conditions, including any pre-conditions or standards • Any limits on the number of shortlistedsuppliers • The evaluation criteria and their importance / ranking • The deadline and address for submitting responses Rule 34

49. Notice of procurement continued What should I include in my Notice of Procurement? Any limits on how suppliers can send responses • Any other conditions relating to the procurement process • The proposed contract conditions • If procurement will be done electronically, all information suppliers will need to participate electronically • The rules of an e-auction and info suppliers need to participate, if applicable Rule 34

50. Delivery date how complex the procurement is When identifying a delivery date take into account: • how much sub-contracting there might be • how long it will take to produce and transport goods • how long it will take to deliver services Rule 23