Agency: defined in the FMA Act as a Department of State, a Department of the Parliament, or a prescribed Agency.
Annual Purchasing Plan: clause 7.16 of the CPGs states that ‘agencies are to plan their forthcoming annual procurement and must publish on AusTender, by 1 July each year, an Annual Procurement Plan (APP) to draw business’ early attention to potential procurement opportunities … the APP is to contain a short strategic procurement outlook for the agency supported by details of any planned procurement. The detail should include the subject matter of any planned procurement and the estimated date of the publication of the request for tender’.
Approach to the market: any notice inviting potential suppliers to participate in a procurement including a request for tender, request for expression of interest, or request for application for inclusion on a multi-use list.
AusTender: (www.tenders.gov.au) allows potential suppliers to access Australian Government business opportunities online, download tender documentation and submit tender responses electronically. The CPGs require agencies to publish all open approaches to the market on AusTender. Where other media are also used, the wording must be identical to that in AustTender.
CAC Act: Commonwealth Authorities and Companies Act 1997. ‘Relevant CAC Act Bodies’ are listed in CAC Regulation 9.
Commonwealth Procurement Guidelines (CPGs): the CPGs published in January 2005, incorporate the requirements of the free trade arrangements with New Zealand, Singapore, Thailand and the USA, and consequently reflect substantial changes to previous guidelines. Available on www.finance.gov.au, the guidelines are in three parts:
Division 1 — the Procurement Policy Framework, including the core principle of value for money.
Division 2 — mandatory procurement procedures.
Division 3 — other Government policies that affect procurement obligations.
The CPGs apply to all departments and agencies subject to the FMA Act, and to relevant CAC Act bodies that have been directed to comply by the Finance Minister.
Covered procurement: except where exemptions apply (for example, appendix B of CPGs), procurements are considered to be ‘covered’ by the mandatory provisions of the CPGs where the estimated GST inclusive value exceeds $80,000 (FMA agencies, except for purchase of construction services) and $400,000 for CAC Act bodies (except for procurement of construction services).
Deliverable: specific output, usually (and preferably) defined in the contract.
Expression of Interest: a response to an open approach to the market that requests submissions from businesses interested in participating in a procurement. The list of potential suppliers who have submitted expressions of interest may be used as the basis for conducting a select tender process.
FMA Act: Financial Management and Accountability Act 1997. The Act is supplemented by FMA Regulations (FMAR).
Issues log: a record of issues that arise during the project. (See Chapter 7 above).
Letter of intent: a documentary mechanism for making preliminary commitments in contract negotiations.
Liquidated damages: an agreed pre-estimate of damages for an anticipated breach of contract. Liquidated damages cannot be used as a penalty.
Memorandum of Understanding (MOU): formal agreement between two or more departments of the Australian Government. An enforceable contract is not possible because the departments are part of the same legal entity (the Australian Government), and the Government cannot contract with itself.
Milestone: point specified in contract. Where a milestone represents a point of payment, it is important to ensure that the point is specified in terms of a clearly identifiable and measurable output by the consultant. Some contracts specify milestones as points of formal review of progress on which an extension or continuation of the contract might be based.
Multi-Use List: a list, intended for use in more than one procurement process, of pre-qualified businesses who have satisfied the conditions for participation for inclusion on the list. Multi-use lists are one of the three means of using a select tender process.
Murray Motion: see ‘Reporting requirements’.
Nominated personnel: usually those identified in a contract as carrying out the actual work during the project, or as contact officers.
Open book approach: in a partnering arrangement, the risk of disagreement over fees and expenses can be reduced if the consultant permits the client full and open access to information on the consultant’s costs throughout the project.
Open tender process: publication on AusTender of a request for tender and accepting all submissions received before the deadline for submissions from any potential suppliers who satisfy the conditions for participation.
Panel: Panel arrangements or contracts involve an agency pre-selecting a number of consultants. The selected consultants can be drawn on at any time to provide services at a price agreed when bidding for a place on the panel, without the need to go again to tender. Both the agency and the panel consultants gain from this arrangement because there is no need to go through a tender process each time that work is required. Because of the cost savings to them, consultants will often quote a lower fee when bidding to be part of a panel arrangement. Under clauses 8.67 and 8.68 of the CPGs, panels can be established under open or select tender processes, and arrangements must contain minimum requirements, including indicative or set prices or rates.
Partnering: a cooperative approach to the employment of consultants. It may involve the use of a ‘relationship agreement’.
Period contract: an agreement to provide goods or services on particular terms over a period of time. (See Standing Offer).
Process contract: a statement in the nature of a Request for Tender may itself constitute an offer which, upon acceptance, becomes a binding and enforceable contract (a so-called process contract). In other words, an agency that issues an RFT may be bound to follow the procedures and selection criteria specified in it. The courts may consider that the Process Contract contains an implied term that the agency will conduct its evaluation fairly and in a manner that ensures equal opportunity for all bidders.
Project charter: essentially a plan for managing the project. It should include information like the terms of reference for the project, methodologies and a risk analysis for each component of the project, a budget, a schedule of project meetings, milestones and payments against them, a protocol on ‘partnering’ behaviour, details of specific client and consultant responsibilities, and any other relevant information about the project. The Charter then becomes the basic reference document for both parties, and should form the basis for managing the contract.
Project management plan: see Project charter.
Relationship agreement: agreement that supplements a contract and is designed to facilitate the development of a cooperative working relationship between parties, rather than the more adversarial approach fostered by some traditional contracts. It is essential that the purpose of a relationship agreement be clearly stated, in order to avoid conflict with existing legal contracts between the parties. Detailed legal advice should always be sought before entering into a relationship agreement.
Reporting requirements for procurements are outlined in chapter 7 of the CPGs.
Request for Tender (RFT): a formal request that may be publicly advertised to obtain offers from potential suppliers of goods and services. An RFT normally contains a Statement of Requirement.
Request for Expression of Interest (REI): see Expression of Interest.
Request for Proposal (RFP): usually sought following evaluation of responses to an REI, as a means of identifying innovative solutions. Parties are asked to provide a preliminary or a full tender proposal.
Request documentation: documentation provided to businesses to enable them to understand and assess the requirements of the procuring agency and to prepare appropriate and responsive submissions. The general term includes documentation for expressions of interest, multi-use lists, open and select tender processes, and direct sourcing.
Select tender process: a procurement procedure in which the procuring agency selects which potential suppliers are invited to submit tenders. For covered procurements, a select tender process may only be conducted in accordance with certain procedures and circumstances set out in mandatory section (Division 2) of the CPGs.
Sign-off: a client’s acceptance of an intermediate or final output. Further work requested after formal ‘sign-off’ should be the subject of a variation or extension to the contract.
Standing offer: (not a contract, but sometimes incorrectly called a ‘period contract’) is an offer to supply goods or services on certain terms over a period of time. Normally, no obligation exists to purchase a particular quantity of goods or services.
Statement of Requirement (SOR): description of an activity or client needs in terms of outputs and constraints such as timeframes. (See RFT)
Submission: includes any formally submitted response from a potential supplier to an approach to the market. Submissions include tenders, expressions of interest and applications for inclusion on a multi-use list.
Tender specification: document that provides information on the outputs and outcomes required from a consultant, including relevant quality standards.
Value for Money: the core principle underpinning Australian Government procurement (see Chapter 4 of CPGs).
Variation: work additional to the deliverables specified in the original contract, or changes in terms and conditions, should be recorded formally in a variation to the contract, in order to avoid later disputes and to ensure accountability.