Promoting efficiency in the tender process (Direction and Instruction 3.3)

Direction 3.3 and Instruction 3.3 explain strategies to increase efficiency in the tender process and how to apply them.

Promoting efficiency in the tender process (Direction 3.3)

Effective date: 1 July 2018

Principles

Value for money, scalability and probity are procurement principles that are specifically relevant to tender preparation and processes.

Of particular relevance to this Direction are the following construction procurement principles:

  • appropriately planning and managing Public Construction Procurement to deliver procurement objectives;
  • employing the appropriate Procurement Models and processes taking account of the complexity and value of the project and supplier market capability;
  • reducing unnecessary burden of Public Construction Procurement for all parties;
  • encouraging appropriate innovation and responsiveness in the supplier market;
  • ensuring appropriate competition and contestability when undertaking Public Construction Procurement;
  • conducting Public Construction Procurement processes in an efficient and timely manner;
  • treating all tender participants fairly and equally; and
  • undertaking Public Construction Procurement in accordance with the relevant legislation, policy, guidance and any mandatory requirements in these Directions.

3.3 Promoting efficiency in the tender process

Tender processes involve time and cost for suppliers and the procuring Agency. When engaging a supplier to perform Works or Construction Services, Agencies must ensure the tender process:

(a) is appropriate for the Procurement Model and, to the extent practicable, is consistent with the way in which the Agency conducts comparable processes;

(b) is conducted in an efficient and timely manner; and

(c) is structured in a way that takes account of the cost of participating in a tender process for both tender participants and the Agency and seeks to reduce unnecessary transaction costs for all participants.

Promoting efficiency in the tender process (Instruction 3.3)

Effective date: 1 July 2018

Objective: To help Agencies to promote efficiency and reducing the burden of the tender process

3.3.1 Do not request unnecessary information

Agencies should not request unnecessary information from tender participants. In particular, Agencies should be mindful of the time and cost to tender participants of preparing project-specific plans and documents. Agencies should limit the information requested to what is necessary for the evaluation at that stage of the procurement process.

For large or complex projects, Agencies should consider using two-stage processes so that only short-listed tender participants are required to prepare project-specific documentation.

Agencies should consider whether preparing project-specific plans and documents, such as project-specific environmental management plans, can be limited to the successful tender participant rather than requested from all tender participants where such plans and documents are not critical to the evaluation criteria and project program.

When conducting a tender process using a Register, Agencies must, to the extent practicable, make use of information provided during the prequalification process for the Register to reduce the amount of information that pre-qualified tenders are required to provide during the tender process.

3.3.2 Establish cost estimates

Agencies should establish cost estimates before releasing a tender. This might mean engaging a professional cost adviser.

Agencies should avoid asking tender participants to price multiple, mutually exclusive options in a tender process. Where this is unavoidable or design alternatives are required, Agencies should select an appropriate procurement strategy and project delivery method.

3.3.3 Have a firm intention to proceed before issuing the tender

Agencies must ensure there is a firm intention to proceed with the Works or Construction Services before beginning a tender process.

If funding is yet to be confirmed for any part of the Works or Construction Services, this should be clearly identified to potential tender participants and contractual arrangements for the Works or Construction Services should be structured appropriately.
 

Tools resources and assistance

Promoting efficiency in the tender process (Direction and Instruction 3.3) are supported by non-mandatory guidance Promoting efficiency in the tender process (Guidance 3.3).

The Practitioners Toolkit includes key documents, guidance and information relating to the Ministerial Directions and Instructions.

For further information about the Ministerial Directions and Instruction for public construction procurement, please contact the Construction Policy Team.

Reviewed 02/07/2018
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