Procurement strategy for community services

Consider the different procurement options available and the potential service providers. Rushing this process may lead to poorly identified needs and may result in you seeking services that do not meet the community need or achieve the required outcomes.  

Activities that can assist you to establish the business need include:  

• doing research to identify the service and potential service providers
• identifying or agreeing on the outcome and deciding on the best procurement option in terms of policy requirements, risk, cost and other management issues
• preparing a preliminary cost-benefit analysis

Competitively tendering a service may be considered appropriate when: 

• a number of organisations are capable of delivering the service
• service requirements are particularly complex or unique
• proposals offered by organisations through a restricted process do not represent value for money
• using a competitive tender process can potentially demonstrate better outcomes for service users and the community

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. 

The size and composition of a project team will depend on the nature, scope, value, level of risk and complexity of each procurement process. The team needs an appropriate mix of skills and experience to represent key areas such as technical and functional specialisations, policy expertise and knowledge of the government agency’s business or operational requirements. The team composition may include, for example:  

• Team Leader/Procurement Specialist  
• Policy Officer/Project Sponsor  
• Service user/Recipient  
• Technical Specialist  
• Price Analyst/Financial Analyst  
• State Solicitor’s Office 

The team leader/procurement specialist is usually responsible for planning and managing the entire procurement process from start to finish. This person usually chairs the evaluation panel. It is also important to consider whether it is appropriate to appoint an independent probity advisor. 

It is helpful, for at least some of the team members to remain involved throughout the procurement. This way the team will be responsible for: 

• assessing the needs 
• defining the specification of requirements
• designing an appropriate evaluation methodology
• evaluating offers
• providing input into performance standards, measures and developing service agreement requirements

This continuity is likely to strengthen the process and outcomes.  

Where separate individuals or other groups are responsible for different stages in the procurement, it can compromise the quality of the outcomes. For example, if a group that was not involved in defining the specification of requirements is required to develop the evaluation criteria, it may not completely understand the procurement objective and/or business needs. This could result in ineffective criteria or inappropriate weightings.  

As well as establishing a suitable procurement team, it is important to identify other requirements you need to undertake the procurement, such as:  

1. the Accountable Authority’s endorsement or approval to proceed with the procurement
2. financial resources and budget – ensure appropriate funding has been allocated and confirmed by a Director or senior officer in your agency
3. easy and timely access to market research, sector intelligence and technical advice
4. appropriate Information and Communication Technology systems and infrastructure
5. a suitable process for opening the tenders, and maintaining confidentiality
6. evaluation Panel with voting members that have appropriate skills and relevant experience

The role of the evaluation panel is to assess the offers against the qualitative criteria. The evaluation panel must include members with a range of skills and experience relevant to the nature of the procurement.

The evaluation panel does not make the service agreement award decision, but rather makes a recommendation for the Accountable Authority or delegate to make the final decision and award the service agreement. If the Accountable Authority or delegate does not agree with the recommendation of the evaluation panel then they can:

• refer the recommendation back to the evaluation panel to review or reconsider
• ignore the recommendation and award the service agreement on the basis of what they believe to represent better value for money

If the Accountable Authority or delegate believes the recommendation should change, you will need to record detailed supporting documentation.  

The Community Services Evaluation Handbook template provides a format and methodology for rating the responses according to the qualitative criteria and is available from Community services templates and guides. 

The Open and Effective Competition policy sets out thresholds for using certain procurement methods. The sections below briefly outline the different purchasing methods. You should also consult your agency’s internal procurement policies and requirements. 

Direct purchases up to $50,000 

Authorised officers within government agencies can directly purchase up to the value of $50,000 (including GST and indexation). This means that where an authorised officer is satisfied that the purchase represents value for money, they can proceed to engage a service provider directly. 

Written quotes for purchases between $50,000 and $250,000

Government agencies must seek written quotes for procurements over $50,000 and up to $250,000 (including GST and indexation). The process for seeking written quotes for community services is the same process as for goods and services, more information is available in the goods and services buying journey at Which is the most appropriate method for me?. 

Open tender process for purchases over $250,000 

Government agencies must conduct an open market process through an open tender for any procurements valued over $250,000 (GST and indexation inclusive). As most community services procurements are above this value, the open tender process is described in more detail in the following sections.