Strategic Forward Procurement Planning by State Agencies Guideline

The first step in the forward procurement planning process is to identify the procurement activities that will be required for your agency to deliver on its strategic vision for the next two financial years. 

Some of the questions you should consider include: 

• What procurement processes are currently underway? What phase are these processes in (business case/procurement planning/contract formation)? When are they expected to be completed? 

• Are there any new projects commencing this year or next? Will these projects necessitate the procurement of new goods, services or works? 

• What contracts are currently in place that are due to expire in the year(s) ahead? Will the contracts need to be redeveloped and replaced? 

• Which existing contracts may benefit from being recalled due to the cumulative cost of variations undertaken for that contract?  

• What is being frequently purchased or funded across the agency through direct engagements, quotation processes and grants? Can these procurements or funding arrangements be aggregated to improve savings and efficiency? 

• Which Common Use Arrangements (CUAs) and agency specific panel arrangements are being frequently used across your agency? Does the CUA or agency specific panel arrangement offer benefits for aggregated purchasing in larger quantities?  

• Have you contacted other agencies who might have similar requirements to find out what they might be buying and identify Cooperative Procurement opportunities? 

Your agency should review the following information sources to help answer these questions and identify planned procurements to be included in the SFPP. 

Contract Register 

WA Procurement Rule F5 requires State agencies to maintain a contract register that records procurements valued $50,000 or more (inclusive of GST and all extension options), within 30 days of contract award.  

Your agency’s contract register is a primary source of information for identifying contracts that are due to expire and will be redeveloped in the forward procurement planning period.  

Business Intelligence Reports 

Finance publishes a range of interactive government procurement Business Intelligence (BI) Reports and Dashboards to assist agencies in developing insights based on their Common Use Arrangement (CUA) expenditure and Tenders WA contracts that can assist with the Strategic Forward Procurement Planning process. For example, the Tenders WA Contracts dashboard can identify all of your agency’s expiring contracts across the period of the SFPP that are recorded in Tenders WA. 

More information about accessing these dashboards is available on wa.gov.au. 

Your agency may also have its own business intelligence reporting system that can assist with the forward procurement planning process.  

Asset Investment Proposals 

State agencies may need to develop a Strategic Asset Plan in accordance with the Strategic Asset Management Framework to support and demonstrate effective and efficient management of assets. More information is available on wa.gov.au. 

Procurements arising from asset investment proposals, detailed in your agency’s Strategic Asset Plan should also be considered for inclusion within the SFPP. 

Agency Commissioning Plans

State agencies that commission community services under the Delivering Community Services in Partnership (DCSP) Policy may have been required to develop an Agency Commissioning Plan. 

Procurements arising from commissioning plans and detailed in your Agency Commissioning Plan should be included within the SFPP.

To assist in completing the SFPP, it is recommended that your agency undertakes a strategic analysis of its planned procurement activities. This will help you complete the fields in the SFPP data submission template that relate to the WA Government’s Social, Economic and Environmental Objectives and the Material Contract Variation Analysis.  

In addition, a strategic analysis of your planned procurements can help ensure your agency’s strategic vision is supported and the procurement workload is managed in the most efficient and effective way. 

WA Government’s Social, Economic, and Environmental Objectives 

State agencies are required by the WA Social Procurement Framework to ensure all procurement planning activities include consideration of government’s desired social, economic and environmental outcomes. These policy objectives should be at the forefront of consideration when preparing your agency’s SFPP. 

Completing the SFPP helps your agency to identify, at an early stage, planned procurements where these social, economic and environmental objectives can be incorporated. It will also help your agency to plan for specific policy targets, like those within the Aboriginal Procurement Policy, and avoid having to address requirements at the last-minute. 

WA Procurement Rule F6 requires State agencies to consider opportunities to engage: 

• registered Aboriginal Businesses 

• apprentices and trainees 

• Australian Disability Enterprises 

• regional businesses 

• small and medium enterprises. 

The SFPP data submission template includes a field for indicating whether a planned procurement will be used to leverage a social procurement policy outcome.  

Material Contract Variations Analysis  

As part of the forward procurement planning process, your agency is required to complete an analysis of material contract variations that may have occurred on existing contracts in your agency’s contract register. This analysis will assist your agency in identifying planned procurements and ensure continual improvement in contract and project management activities.  

You should review your agency’s Contract Register to identify any anomalies such as a high number of variations or a significant difference between ‘the estimated dollar value of the contract at award’ and the current estimated contract value. If you identify any contracts that stand out, examine the variations on those contracts to determine whether the variations are material in the context of the contract.

Whether a variation is material or not will depend on the specifics of the contract and may differ from contract to contract. Your agency should determine what it considers to be a material variation. As a general rough guide, it may be helpful to consider variations that alter the scope or value of the contract by more than 20% or more than $50,000. In addition, it may be helpful to consider whether industry would perceive the variations as material. You may also wish to consider variations to the term of a contract, particularly if a contract has been extended multiple times beyond its original completion date.

Record your analysis of any contracts with material variations. At a minimum the analysis should detail the contract title, why the variation(s) was necessary, potential risks, and steps taken to minimise the need for further variations. An optional template for recording this analysis is available as part of the annual SFPP package provided to agencies.

Rule F6 requires agencies to submit its analysis of material contract variations to Finance. However, Procurement Direction 2022/2 has been issued which requires agencies to complete the analysis, but agencies are only required to provide a copy of the analysis to Finance upon request. 

Other considerations 

Some additional questions your agency should consider as part of the forward procurement planning analysis include: 

• Where will the budget come from for each planned procurement process? Will it be drawn from recurrent or capital funding? When completing your SFPP it is important to work with your annual budget allocation (capital and recurrent) from the Department of Treasury. 

• What are the expected whole-of-life costs for the contract and what implications does this have for the procurement timeline? 

• Who will be responsible for contract management? Are there steps that can be taken now to ensure availability of contract management resource(s) with appropriate knowledge and skills to manage the contract successfully?   

• What is the level of risk associated with the procurement process? Will you need to seek assistance from technical advisors, legal advisors and/or probity advisors to ensure strong procurement outcomes? 

• What is the relative priority of each planned procurement for your agency? Can this assessment be used to allocate resources for the procurement process and contract management?  

• What is the operational impact (i.e. resourcing and time implications) a procurement activity will have on your agency from contract development to management? 

Once your agency has identified planned procurement activities for the next two financial years, this information should be used to complete the SFPP data submission template. The template will be provided to agencies as part of the annual SFPP package, however, if you do not have a copy, the template can be requested from ProcurementAdvice@finance.wa.gov.au. 

If your agency has determined that there are no planned procurements for the reporting period after completing the strategic analysis described in Step 2, it is not necessary to complete the SFPP data submission template. However, your agency must still complete the agency certification and submission to Finance described in Step 4.  

Your agency’s Accountable Authority is required to sign the Agency Certification document provided in the SFPP package. If you do not have a copy, the template can be requested from ProcurementAdvice@finance.wa.gov.au. 

The Agency Certification indicates that: 

• the information contained in the completed SFPP submission covers your agency’s planned procurements valued at $250,000 or more for the reporting period; or the agency has no planned procurements valued at $250,000 or more for the reporting period; and 

• your agency has undertaken an analysis of material contract variations that have occurred and may inform procurement planning for the reporting period. 

Throughout the year, you can measure your agency’s progress on its procurement activities against your SFPP. This helps your agency in achieving efficient, value for money contract outcomes which align with your agency’s strategic vision. 

Finance will remind State agencies to review the currency of their SFPP. Should any changes be required, such as indicating that procurements have been discontinued or have progressed to advertising, agencies can submit an updated SFPP data submission template to Finance. Any updates will be incorporated into the SFPP reports by Finance.