The different ways that government engages service providers

We use various processes to engage service providers, including grants, competitive process and the preferred service provider process.

Government engage existing and new service providers through a range of processes, choosing the best process will result in a value for money outcome, and provide continuing service delivery for users of community services.

Grants

Grants are financial assistance arrangements made for a specific purpose.

Grant agreements may be an appropriate arrangement where:  

  • the grant is linked to a specified purpose and outcome
  • an organisation requires one-off subsidies, top-ups, seed funding, or funding for a discrete project, innovative trial, pilot program, research of a non-commercial nature, capacity building project or to introduce a new service 
  • the grant is for a discrete period
  • the grant does not constitute the entire financial base of an organisation

The Western Australian Procurement Rules and Procurement Directions do not apply to grants.

​Competitive process​

Government agencies use direct, limited and open advertisement tender processes to seek responses from potential service providers.

The process generally depends on the value of the service agreement, as per the thresholds below: 

  • direct sourcing for service agreements up to $50,000 (inc GST)
  • limited sourcing for service agreements between $50,001 and $250,000 (inc GST)
  • open advertisement for service agreements above $250,000 (inc GST)

An open tender is a formal invitation to potential service providers to submit an offer for a particular community service based on the government’s required outcomes. Open tenders are advertised widely to ensure equal opportunity for all relevant service providers to bid. The Request is advertised on the Tenders WA website with a specific link for DCSP Policy Requests listed under the ‘Tenders’ tab.

The request document will outline all of the important information about the process. Some requests include a briefing session for potential respondents, which can provide useful information for those interested in submitting an offer. The details of a briefing session will be included in the request. 

The government agency will evaluate all offers and seek the relevant approvals (where necessary) before making a decision about awarding a service agreement. Service providers may be invited to clarify their offer during the evaluation phase if required. 

Preferred service provider process

​Government agencies may retain an existing service provider through a preferred service provider (PSP) arrangement (also known as a restricted tendering process).

Before entering a PSP arrangement, government agencies must determine whether the service provider is: 

  • continuing to meet the identified need
  • meeting the agreed service specifications, outcomes, quality standards and contractual requirements
  • operating efficiently and effectively
  • seeking to continuously improve services
  • being responsive to service user and government agency needs 
  • offering innovative solutions to provide the best possible service to the community

The government agency can either extend the existing service agreement with the PSP via a contract variation or undertake a restricted tendering process, which would require the existing PSP to submit an offer.  

If your organisation is currently providing a service to government and is given approval to progress with the PSP process, the agency will contact you to get the process started and will ask for your input in developing the request and the associated service specifications. 
 

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