Responsibility for policy: Chief Operating Officer
Approving authority: Vice-Chancellor
Last reviewed: January 2023
Next review date: January 2028
- This policy applies to all staff of the University of Waikato and those who undertake any procurement activity on behalf of the University.
- This policy applies to all University procurement activity, excluding:
- property leases, and
- property sales and purchase agreements.
- The purpose of this policy is to
- set out the principles that apply with respect to procurement by the University
- ensure that the University’s procurement functions are carried out within a clearly defined and transparent internal control framework
- ensure that the University’s procurement processes comply with relevant legislation, rules and accounting practices, and
- ensure that procurement processes are conducted in a manner that maintains the University’s reputation for being fair and unbiased when dealing with suppliers.
- The following documents set out further information relevant to this policy:
- Capital Asset Policy
- Financial Authority Policy
- Financial Ethics Policy
- Gift Acceptance Policy
- Independent Contractor Policy
- Interests (Conflicts of Interest) Policy
- PCard Policy
- Procurement Tools
- Purchasing Policy
- Safety and Wellness Policy
- Staff Code of Conduct
- Supplier Code of Conduct
- Sustainability Strategy
- Travel Policy
- This policy takes account of the following legislation:
- Commerce Act 1986
- Consumer Guarantees Act 1993
- Fair Trading Act 1986
- Health and Safety at Work Act 2015
- Sale of Goods Act 1908
- This policy takes account of and reflects the following documents produced by the Office of the Auditor-General and the Ministry for Business, Innovation and Employment:
- Controlling Sensitive Expenditure: Guide for Public Organisations
- Government Procurement Rules
- Procurement Guidance for Public Entities
- In this policy:
All-of-Government (AoG) means a panel, single sourcing option or competitive tender process established through central Government that the University has mandated or opted into
Broader Outcomes means secondary benefits that may be generated by the way goods, services and/or works are procured and delivered; such outcomes may be social, environmental, cultural or economic benefits and are expected to deliver long-term public value for New Zealand; current Government Broader Outcomes are set out in Appendix 3 of this policy
emergency situations means genuinely unforeseen circumstances which could materially affect human wellbeing, the environment, or the reputation or financial wellbeing of the University, staff and/or students and/or suppliers
closed tender means a tender process that has been advertised to a select group of suppliers and not usually advertised through the Government Electronic Tender Systems (GETS)
contract variation means a formal process used to vary contract terms as agreed by the parties involved
independent contractor means a person or agency engaged by the University under a contract for service to undertake a specific activity
Lite Procurement Plan means a simplified procurement document that details the processes that must be followed prior to commencing a procurement activity in accordance with the requirements set out in Appendix 1 of this policy
open tender means a tender process that has been advertised to the public, usually through the Government Electronic Tender Systems (GETS)
preferred supplier means a supplier that has been awarded 'preferred supplier' status for the supply of specified goods, services and/or works following a competitive tender process which has resulted in a procurement contract; unless in an emergency situation or where an exemption has been approved, where preferred suppliers for the provision of specific goods, services and/or works have been determined those suppliers must be used to purchase those goods, services and/or works
procurement means the identification of potential suppliers, the tender process, the selection of a preferred supplier, the contract negotiation, the management of the contract and the establishment of the subsequent purchasing process
Procurement Plan means a procurement document that details the processes that must be followed prior to commencing procurement activity in accordance with the requirements set out in Appendix 1 of this policy
Procurement Principles means the ethical practices that underpin all procurement undertaken by the University; current Government Procurement Principles are set out in Appendix 2 of this policy
purchase means the transactional process used to enable the buying and selling of goods, services and/or works following a procurement process
purchase order means the approved University process undertaken through Unimarket by which goods, services and/or works are purchased and supplied
RFx means a ‘request for’ any of the following procurement processes:
- Request for Information (RFI) – used as a preliminary selection process to establish a list of potential suppliers to be approached as part of an RFQ, RFT or RFP process
- Request for Quote (RFQ) – used for procurement that has well defined requirements; RFQs are typically used where quotes can clearly articulate the cost and service provision
- Request for Tender (RFT) – used for complex procurement that has well defined requirements but has medium to long-term timeframes with complex implementation
- Request for Proposal (RFP) – used for complex procurement that has either broadly defined requirements or that seeks a detailed definition from a supplier
- Registration of Interest (ROI) – enables a preliminary market assessment and may be followed by another form of RFx
right of renewal means the additional term or terms that a contract can be extended for
syndicated contract means a collaborative contract between agencies, such as a collective of universities, that aggregates their respective needs and goes to market collectively for goods, services and/or works
Total Procurement Value means the collective costs associated with a procurement activity; this includes other associated projects and any future planned supply of goods, services and/or works
whole-of-life cost means the total cost, including purchase cost, operating cost, maintenance cost and residual value (where applicable) for the life of a contractual term.
- The University recognises that is it a significant user of public money and that its use of this money impacts the local and domestic economy.
- The University seeks to maximise the benefits that can be delivered through its procurement activity, enabling it to achieve value for money as well as advancing the social, environmental and economic wellbeing of the University, its students and the wider community.
- The University aims to ensure that:
- its procurement processes are fair, transparent, compliant with all applicable legislation and rules and auditable
- its procurement function acts as an effective and efficient enabler in obtaining a wide range of goods, services and/or works from third party suppliers
- the value of the goods, services and/or works procured align with the requirements of the University; value includes but is not limited to whole-of-life cost, quality, level of service, relationships, minimisation of risk and sustainability, and
- the highest ethical standards in its relationships with its suppliers are maintained.
- To achieve the aims set out in clause 10 of this policy, the University will follow the Procurement Principles set out in Appendix 2 of this policy and consider the Broader Outcomes set out in Appendix 3 of this policy to ensure that it can demonstrate:
- Compliance – all procurement activity is undertaken in accordance with this policy, the Procurement Tools and all applicable legal obligations and accounting practices
- Openness - all procurement activity is undertaken in an open and transparent manner (unless approval has been granted for a closed tender process)
- Fairness - all competitive procurement activity is carried out in a fair manner and decisions made with impartiality and without bias
- Integrity - all University staff and/or third parties undertaking procurement activity do so ethically, equitably and with behavioural standards of a high standard
- Value for money – all procurement activity aims to minimise the whole-of-life cost of goods, services and/or works to deliver best value for money
- Management of risk – risks (commercial, reputational and otherwise) associated with procurement activity are considered and managed appropriately
- Accountability – staff, suppliers and/or third parties are accountable for the performance and delivery of procurement activity, and
- Sustainability - all procurement activity is environmentally and socially sustainable wherever possible, having regard to economic, environmental and social impacts over its lifecycle.
The procurement process
- The following is the sequential process for the delivery of procurement activity; the requirements underpinning each step are set out in the subsequent sections of this policy:
- Needs establishment - establish the need, budget and approval process to be followed for the procurement activity prior to commencement
- Procurement process selection - determine the correct procurement process to follow – All-of-Government (AOG), syndicated or University specific
- Procurement planning - ensure that the selected procurement process is appropriate to the planned spend and risk profile
- Preferred suppliers - ensure due consideration is given to existing preferred supplier relationships
- Exemptions - ensure that approval has been obtained if the procurement activity will go outside of the requirements of this policy
- Sourcing - ensure the correct sourcing methodology is applied and executed, taking into account:
- Promoting local benefit – ensure benefits to the local community, supplier base and environment are considered
- Ethical conduct and sourcing – ensure that all parties maintain an ethical approach throughout the procurement process and in their approach to their supply chains
- Health and safety – ensure that all health and safety requirements are covered in the procurement process
- Insurance – ensure suppliers are suitably insured to undertake the activities scoped
- Confidentiality - ensure that confidential information is not disclosed to any third party
- Risk management – ensure the procurement activity takes account of all identified risks
- Evaluation and award – ensure the appropriate decision-making process is undertaken to choose a successful supplier, approval is obtained from the appropriate Approval Authority and the supplier is awarded the work via either a contract or Purchase Order
- Contract Management – undertake ongoing management of the supplier to ensure the University receives the contracted goods, services and/or works.
- Prior to undertaking any procurement activity, a needs assessment must be undertaken and an appropriate budget established and approved; the needs assessment must include the consideration of opportunity costs associated with proceeding and/or not proceeding with the procurement activity.
- All needs established as an outcome of assessment must be reviewed against other current procurement activities to identify and take account of any overlap or duplication with existing procurement arrangements.
- With respect to the establishment and approval of an appropriate budget, procurement activity is permitted only within the Total Procurement Value of the relevant Approval Authority set out in Appendix 1 of this policy.
- A staff member initiating a procurement activity on behalf of the University must meet the Procurement Requirements and provide the Documents Required as set out in the relevant contract type set out in Appendix 1 of this policy based on the Total Procurement Value.
- In all cases, when determining the correct procurement process, the Total Procurement Value to be considered is the whole-of-life cost of the goods, services and/or works and relates to the total spend.
Procurement process selection
- In selecting a procurement option, the University will:
- seek to ensure it obtains best value for money, including the whole-of-life cost of the goods, services and/or works, and the cost of undertaking the procurement process itself
- follow the Procurement Principles set out in Appendix 2 of this policy and consider the Broader Outcomes set out in Appendix 3 of this policy
- select the most appropriate procurement process to suit the circumstances of the procurement as set out in Appendix 1 of this policy; in determining the most appropriate process, the University will consider:
- the level of risk that the procurement poses
- the value of the proposed procurement
- the involvement of, or investment by, other public, private or not-for-profit organisations in the procurement decision, and
- any other matters relevant to the proposed procurement.
- Where an AoG or syndicated contract exists for the procurement of particular goods, services and/or works that meets the University’s requirements and does not inhibit any other procurement activity, the University should first consider entering into the relevant contract rather than pursuing an independent procurement process.
- Where it has been determined that an AoG or syndicated contract does not exist or is not appropriate to the circumstances, staff must consider the University’s aims under clauses 10 to 11 of this policy, the Procurement Principles set out in Appendix 2 of this policy and the Broader Outcomes set out in Appendix 3 of this policy to identify an appropriate procurement process, including the consideration of the establishment of preferred suppliers.
- Where preferred suppliers are not in place for the relevant goods, services and/or works and it has been determined that such a contract is not required, staff who wish to procure goods, services and/or works must follow the appropriate procurement process identified in Appendix 1 of this policy utilising the Procurement Tools.
- When planning a procurement activity, staff must:
- use the procurement process that is appropriate for the scale, complexity and risk involved in the procurement activity, as set out in Appendix 1 of this policy
- ensure that they and all other staff involved in the procurement process have up-to-date knowledge about the market and the effect that the University’s procurement activity may have on it
- identify and disclose any actual or potential conflict of interest that may affect, or may be seen to affect, their impartiality when acting on behalf of the University in accordance with clause 38 of this policy
- involve suppliers early in the process to explain the University’s needs, learn about the supplier and explore opportunities for solutions before going to market
- ensure that appropriate financial approval aligned with those set out in Appendix 1 of this policy and, where relevant, the Financial Authority Policy, have been obtained before going to market, and
- ensure that an appropriate procurement plan is developed and/or written quotations are obtained as required.
- For some categories of purchase, the University maintains panels or lists of preferred suppliers, particularly where:
- suppliers provide goods, services and/or works of low or medium cost and risk on an ‘as required’ basis
- suppliers provide goods, services and/or works on a continual basis (such as maintenance services), and/or
- suppliers provide niche goods, services and/or works and the University is not easily able to procure the specific goods, services and/or works elsewhere.
- Unless where an exemption has been approved under clauses 28 to 29 of this policy or in an emergency situation under clauses 60 to 64 of this policy, where preferred suppliers for the provision of specific goods, services and/or works have been determined those suppliers should be used to purchase those goods, services and/or works.
- Preferred supplier contracts may only be entered into after a procurement process has been followed that aligns with the Procurement Principles set out in Appendix 1 of this policy and the Broader Outcomes set out in Appendix 2 of this policy.
- Preferred supplier contracts must contain terms and conditions that permit regular reviews within the contract term; a new procurement process (including any rights of renewal) will be undertaken at the end of each term.
- For high-value and/or high-risk procurement activities, unless an exemption has been granted to allow for a closed tender process in accordance with clauses 28 to 29 of this policy, the University will utilise an open tender process.
- In addition to circumstances set out for preferred suppliers under clauses 23 to 27 and emergency circumstances under clauses 60 to 64 of this policy, an exemption from the standard procurement processes set out in Appendix 1 of this policy, such as a closed tender, may be permitted where the activity involves:
- proprietary information or innovation
- minimal market competitors
- bespoke services or equipment
- existing commercial arrangements which prohibit going to market, and/or
- sensitive expenditure which must ensure minimal market presence.
- An Exemption Form must be completed for any exemption and submitted to the Procurement Manager.
- When sourcing goods, services and/or works other than through AOG contracts or syndicated contracts in accordance with clause 19 of this policy or preferred suppliers in accordance with clauses 23 to 27 of this policy, staff must:
- give all suppliers a full and fair opportunity to participate in an open tender process (unless an exemption has been granted to allow for a closed tender process in accordance with clauses 28 to 29 of this policy)
- provide a transparent process that can be understood by all potential suppliers
- use the relevant and appropriate quote, tender and/or contract templates as set out in Appendix 1 of this policy, and
- choose potential suppliers that have demonstrated their ability to meet the University’s requirements and that offer the best value for money, taking into account:
- the likely whole-of-life cost of the goods, services and/or works
- the suppliers’ ability to deliver what the University needs at a fair price and on time, and
- the Procurement Principles out in Appendix 2 of this policy and the Broader Outcomes set out in Appendix 3 of this policy, and
- have an approved purchase order, contract and/or PCard transaction in place before the supplier starts to deliver the relevant goods, services and/or works.
Promoting local benefit
- Where feasible and appropriate, the University will seek opportunities to generate local value benefits to the Waikato and Bay of Plenty regions through its procurement processes over and above the normal considerations set out in clause 18b of this policy.
- Local value benefits may accrue through:
- social procurement requirements such as the employment of disadvantaged sectors of the local community or the introduction of apprenticeships, internships, training and/or minimum or living wage opportunities, and/or
- sustainable procurement requirements where local environmental and economic benefits are factored into the procurement decision.
- The University will be transparent regarding any local value benefit component to its competitive procurement processes; where local value benefits are included in a competitive tender process they will be made clear in the information that the University provides to potential suppliers regarding its requirements, including clear information on any local value benefit weighting to be applied.
- Local value benefits must not be used to exclude potential suppliers from outside the Waikato and Bay of Plenty regions from participating in a procurement process.
Ethical conduct and sourcing
- The University is committed to procuring goods, services and/or works in an ethical and responsible manner in accordance with the Financial Ethics Policy, protecting the health, safety and welfare of workers and minimising potential environmental impacts associated with its business.
- No procurement activity may be undertaken with any supplier unless they and/or their extended supply chain can demonstrate that they comply with the Supplier Code of Conduct set out within the Procurement Tools.
- In accordance with the Interests (Conflicts of Interest) Policy, staff members must:
- be seen at all times to behave in an impartial and transparent manner, and
- identify and disclose any actual or potential conflict of interest that may affect, or may be seen to affect, their impartiality when acting on behalf of the University and ensure that it is recorded in the central Interest Register through Kuhukuhu (choose ‘Financial Services: Interest Declaration).
- All potential suppliers participating in a procurement process must identify and disclose any actual or potential conflict of interest that may affect, or may be seen to affect, their impartiality; any undeclared conflicts of interest may result in a supplier’s exclusion from further participation in the procurement process.
- Any attempt made by a potential supplier, staff member or third party to influence the outcome of a procurement process by canvassing, lobbying or otherwise seeking support of staff or third parties may be deemed valid grounds for the exclusion of that supplier, staff member or third party from the procurement process and, potentially, from any future procurement activity; a breach of this clause by staff may result in disciplinary action under the Staff Code of Conduct.
- Staff who are involved either directly or indirectly in a competitive tender process must not accept a gift of any type from a supplier of goods, services and/or works where those goods, services and/or works are the same as, or similar to, goods, services and/or works that are currently the subject of the procurement process; information about current competitive tender processes may be obtained from the Procurement Manager.
Health and safety
- The University’s health and safety expectations must be clearly communicated to suppliers as part of the procurement process and be appropriate for the type of goods, services and/or works procured in accordance with the Safety and Wellness Policy and the Health and Safety at Work Act 2015.
- The University may address health and safety through procurement by:
- approving and inducting suppliers into the University’s health and safety regime prior to the provision of goods, services and/or works
- undertaking all checks and assessments for specific health and safety requirements related to a particular procurement activity
- requiring suppliers to provide health and safety plans, where appropriate, and/or
- including the monitoring and/or auditing of health and safety practices as a condition of a procurement contract.
- Where health and safety requirements are identified as a condition of a procurement contract, no procurement activity may be undertaken until the requirements have been met.
- Suppliers must provide evidence of all insurances required by the University.
- Suppliers must provide copies of all insurance policies required by the University prior to commencing high value and/or high-risk procurement process as set out in Appendix 1 of this policy.
- All staff involved in procurement activities on behalf of the University must ensure that confidentially is maintained with respect to all supplier proposals, quotations, prices, contracts and other proprietary materials; confidential information is not to be disclosed in any way to any other supplier, potential supplier or other third party.
- In accordance with Appendix 1 of this policy, a Risk Assessment must be completed prior to commencing a high-value or high-risk procurement process and a project specific risk register recording all risks associated with the procurement process prepared showing the steps to be undertaken to eliminate, mitigate or manage the risks; at all other levels set out in Appendix 1 of this policy a general risk assessment should be undertaken as standard good practice.
Evaluation and award
- All procurement activity must be fully evaluated before any financial commitment is made.
- Where an RFx process is used, the RFx must detail the methodology, criteria and weightings to be used in the evaluation process.
- For any procurement activity over $100,000 the documentation must be in accordance with Appendix 1 of this policy. Evaluation reports must be developed and a formal recommendation made.
- For any procurement activity over $500,000 or as requested by the Procurement Governance Group, these activities must be approved by the Procurement Governance Group as set out in clauses 68 to 70 of this policy.
- In approving a procurement activity, the relevant Approval Authority is certifying that they have reviewed the process and all related documentation and that it conforms to University aims under clauses 10 to 11 of this policy as well as all applicable laws, and aligns with the Procurement Principles set out in Appendix 2 of this policy and that the Broader Outcomes set out in Appendix 3 of this policy have been considered.
- With the exception of exemptions given under clauses 28 to 30 of this policy and emergency procurement under clauses 60 to 64 of this policy, all procurement activity must have been approved by the relevant Approval Authority prior to or at the point of order of the goods, services and/or works.
- Under no circumstances may any Approving Authority both initiate and approve the same transaction.
- Under no circumstances may any Approving Authority approve a payment of any kind to themselves.
- Where a contract is negotiated between the University and a supplier, the University will:
- set clear performance measures and monitor the contract against them
- ensure that relevant regulatory and best practice requirements are met
- encourage and recognise suppliers for delivering great results, and
- work with suppliers to make on-going savings and improvements for the benefit of both entities.
- All contract targets should be achievable, drive good performance and meet desired outcomes for both parties.
- The relevant Business Owner is responsible for assigning a Contract Owner to manage any contract negotiated and approved under this policy.
- Contract Owners are responsible for:
- uploading an electronic copy of the contract, signed by both parties, to the central Contract Register through Unimarket
- collaborating with the supplier to ensure that all appropriate associated documentation is maintained that enables adequate reporting to ensure that the University receives regular reports that provide a clear and demonstrable view of the goods, services and/or works provided
- ensuring that the University receives the relevant goods, services and/or works at the agreed price and service levels
- managing risks as set out in clause 47 of this policy and
- ensuring that the Procurement Manager is notified not less than three months prior to the end date of the contract, so that they can report to and/or receive guidance from the Procurement Governance Group, review the contract and provide any advice about its re-negotiation, if appropriate, to the Contract Owner.
- Specific financial delegations and processes established for procurement in emergency situations must be followed as a priority.
- In emergency situations staff may circumvent the requirement for the prior approval of purchase orders established under clause 53 of this policy and/or a quote and/or a tender process.
- Emergency procurement should be via either an existing contract or preferred supplier in the first instance and followed up retrospectively with a purchase order through Unimarket.
- Retrospective approval for emergency procurement must be sought from the relevant Approval Authority set out in Appendix 1 of this policy as soon as practicable.
- Staff must report all emergency procurement to the Procurement Manager as soon as practicable; reports must include justification for the emergency procurement undertaken.
Unsolicited procurement proposals
- The University will treat unsolicited procurement proposals in a fair and transparent manner that respects the intellectual property rights of the proposer.
- Any procurement activity undertaken in response to an unsolicited procurement proposal will be considered in accordance with the Procurement Principles set out in Appendix 2 of this policy and the Broader Outcomes set out in Appendix 3 of this policy.
- For an unsolicited procurement proposal to be considered by the University it must:
- provide solutions to a problem or need that is not currently able to be met by the market
- be truly innovative and unique
- demonstrate how the solution provides the University with the best possible value; value includes but is not limited to whole-of-life cost, quality, level of service, relationships, minimisation of risk and sustainability, and
- align with the University’s strategic priorities.
Procurement Governance Group
- The role of the Procurement Governance Group is to ensure that Procurement Plans developed for high-value and medium to high-risk procurement in accordance with Appendix 1 of this policy comply fully with this policy prior to going to market and at award of a contract, All-of-Government (AoG) or syndicated contracts for the procurement of particular goods, services and/or works meet the University’s requirements and do not inhibit any other procurement activity, and to review any trends in exemptions permitted under clauses 28 to 29 of this policy; the terms of reference and constitution of the Procurement Governance Group are set out in the Committee Directory.
- The Procurement Governance Group may review the commercial outcomes of a procurement process in the event that it has exceeded its budget, there has been a significant departure from the agreed scope of services and/or or additional goods, services and/or works are requested.
- The Procurement Governance Group may request information on any procurement activity at any time to ensure compliance with this policy.
Reporting and records
- All staff responsible for procurement activities must be trained in the correct processes for managing and reporting procurement documentation; at a minimum this should include:
- quotes and contracts
- contract variations
- contract management, including performance and legally required documentation, and
- dispute resolution.
- Records must be maintained for each contract that document:
- that this policy and any associated procurement processes have been followed
- that sufficient budget has been allocated for the procurement activity
- that appropriate approval has been given for the procurement activity by the relevant Approval Authority in accordance with Appendix 1 of this policy
- that all identified interests have been identified and managed in accordance with the Interests (Conflicts of Interest) Policy
- that all associated risks have been identified and mitigated, and
- the final supplier contract/s entered into.
- Procurement documentation and supplier contracts must be registered in a central Tender Register through Kuhukuhu (choose Financial Services: Tender Registration) and/or a central Contract Register through Unimarket.
- All contracts should be set up in the central Contract Register by the relevant Contract Owner following the allocation of a contract number by the Procurement Manager.
- The Procurement Manager is responsible for maintaining a central Tender Register of all competitive tender processes through Kuhukuhu (Financial Services: Tender Registration).
- All reporting should be fed into the procurement planning and review process to ensure effective decision making is achieved on an ongoing basis.
- Any operational dispute between the University and a supplier will, in the first instance, be managed by the relevant University Business Owner, Contract Owner and/or, depending on the nature of the dispute, the Procurement Manager in accordance with the dispute resolution process set out in the relevant contract.
- Any commercial dispute between the University and a supplier will, in the first instance, be managed by the Procurement Manager and/or, depending on the nature of the dispute, the Chief Operating Officer, in accordance with the dispute resolution process set out in the relevant contract.
- In the event that a dispute constitutes a significant breach of this policy or poses a materially high risk to the University, it should be directed to the Procurement Governance Group.
- Any person who believes that this policy has been breached is encouraged to advise the Chief Operating Officer who will investigate the matter; alternatively, staff may follow the procedures set out in the Fraud and Corruption Policy and/or Protected Disclosures Policy.
Responsibility for monitoring compliance
- The Procurement Manager is responsible for monitoring compliance with this policy and reporting any breaches to the Chief Operating Officer.
- Breaches of this policy may result in disciplinary action under the Staff Code of Conduct.