Service Agreements are usually established where a government agency enters into a fee-for-service arrangement with an organisation for its own benefit; or is contracting with an organisation to provide a service to a third party.
The processes for establishing a service agreement outlined in the Delivering Community Services in Partnership (DCSP) Policy have been designed to promote flexibility, innovation and be responsive to community needs. This is to better meet the needs of the community, while continuing to meet government probity and accountability requirements.
The main contracting arrangements available under the DCSP Policy are:
- a service agreement
- a master agreement where multiple service agreements (i.e. individual service agreements) are rolled into a single service agreement between a government agency and an organisation
Competitive process for community services
Show moreThese include:
- Expressions of Interest
- Direct Negotiation
- Request for Tender
- Preferred Service Provider
Expressions of Interest
Show moreEOI can be useful:
- when a Request for Community Services will be time-consuming to respond to
- allows your agency to shortlist respondents prior to the Request
- to select potential service providers to engage in time-consuming co-design activities to shape the Request and resultant services.
An EOI is not a market research tool: if a government agency is not sure which organisations may be interested in providing community services there are better ways to gain this information, including but not limited to a registration of interest.
Government agencies evaluate the EOI responses received and typically proceed to a restricted Request for Community Services, either with a shortlist of service providers or a sole service provider.
Direct Negotiation
Show moreDirect negotiation may be considered appropriate where:
- no service provider exists with the necessary skills and there is a need to develop these skills
- only one service provider exists with the skills and experience necessary
- an open approach to the market has been undertaken recently and the preferred service provider offered the best value for money
- there are strategic considerations, such as the viability of other funded services that make direct negotiation desirable
Government agencies must exercise great care before choosing to negotiate with a sole service provider, so that other service providers that may be in a position to offer a competitive solution, if given the opportunity, are not excluded. Government agencies must be able to demonstrate, if asked (for example, by the Office of the Auditor General), that the decision is in the best interests of the service users and the community. The DCSP Policy enables direct negotiation with potential service providers by allowing Accountable Authorities to approve exemptions from the State Supply Commission’s (SSC) Open and Effective Competition policy under certain circumstances. Government agencies are required to maintain a register that records all instances where an exemption has been granted by the Accountable Authority.
Request for Tender
Show moreA Request is any document issued by a Government agency requesting the submission of offers which are capable of resulting, with or without further negotiations, into a service agreement, and includes any Request for Quotation or open tender process. The Request is not an offer to enter into a service agreement.
Read more about the competitive procurement process for community services.
Grants
Show moreGrants are generally funded by government agencies and paid to organisations to assist them to carry out their established purpose (or a specific program) and may contain conditions relating to the organisation’s behaviour or activities.
Whether a government agency wishes to provide a grant to an organisation is a matter to be determined by that government agency. Government agencies intending to provide grants to organisations must comply with the requirements of the DCSP Policy.
Grants may be an appropriate funding arrangement when:
- an organisation requires one-off subsidies, top-ups, seed funding, or funding for a discrete project, innovative trial, pilot program or research of a non-commercial nature
- it is for a fixed period
- it does not form the entire financial base of an organisation
While grants are provided for a fixed purpose and period, their timeframe may extend beyond a financial year. For example, where a government agency wishes to provide financial support for a community capacity building project, a grant may be provided for a longer period of time to enable adequate project planning, implementation and evaluation.
A grant generally has less oversight, reporting and documentation than service agreements. Grants must also be linked to a specified purpose and should be paid as either a lump sum, or through instalments.
The Community Services Grant Agreement template is available from Community services templates and guides. Further information about grants is available at Community services procurement resources.
The preferred service provider process for community services
Show moreThe existing service provider will then be known as a preferred service provider.
Government agencies must consider the history of a service provider’s performance and the resulting need, in many instances, to maintain service continuity.