Western Australian Procurement Rules FAQs

A Covered Procurement refers to a procurement which is subject to the terms and conditions of the government procurement chapter of any of the Free Trade Agreements (FTA) to which the Australian Government is a party. To meet relevant FTA obligations, some Rules contain a general version of the Rule for non-Covered Procurements, and a separate or modified version of the Rule which is applicable to Covered Procurements.

Agencies should apply either the Covered Procurement version of a Rule or the general Rule, but not both. Where a Rule does not contain a ‘Covered Procurement’ modification, agencies should follow the Rule as it is for all procurements.

At the planning phase of a procurement, agencies should determine whether their procurement is Covered or non-Covered to ensure they can correctly apply the Rules. To do this, agencies should follow the below checklist:

• Step 1: Referring to the table at Appendix 4 of the Rules, determine whether your agency is a ‘Covered State Agency’
  1. If No, this procurement will be non-Covered
  2. If Yes, refer to step 2.
• Step 2: Referring to Appendix 3 of the Rules, determine whether the procurement falls within an excluded category.
  1. If No, refer to step 3
  2. If Yes, this procurement will be non-Covered.
• Step 3: Referring to the Free Trade Agreement section of the Rules, does the total estimated value of the procurement exceed the defined thresholds, OR, is the total estimated value unknown?
  1. If No, this procurement will be non-Covered
  2. If Yes, this procurement will be Covered.

What determines the value for a Covered Procurement when an existing arrangement is ‘refreshed’ (i.e. when a process is undertaken to add or supplement a standing offer)?

The original value as published on Tenders WA upon award of the standing offer. Generally, State agencies should follow the same process when undertaking a ‘panel refresh’ as was followed to establish the original standing offer.

If the addition of new contractors to a standing offer will result in a change in the estimated contract value, State agencies should follow the standard process for undertaking a contract variation, as outlined at Rule E2 in the WA Procurement Rules. 

The term ‘Emergency Situation’ is defined in the Rules as “a situation brought about by unforeseeable event(s) that requires urgent action.”

Therefore, events that State agencies could have, or should have, foreseen but did not address until it was urgent (e.g. running out of time to follow the Rules) do not constitute an Emergency Situation. Furthermore, if the unforeseen event does not require an immediate procurement response from the State agency (for example, there is no critical risk to the State agency if the procurement is delayed), it does not constitute an Emergency Situation.

While an Emergency Situation under Rule C5.2 ‘Exemption from Appropriate Procurement Method’ means that a State agency is not required to comply with Rule C4.1 ‘Use the Appropriate Procurement Method’, all other WA Procurement Rules still apply unless those Rules also specify Emergency Situation exemptions.

Exceptions

An exception permits agencies to not comply with a rule where the procurement meets special circumstances.

Rule C4.2 sets out the three circumstances when the minimum competitive requirements in Rule C4.1 do not apply.

The Authorised Officer (as determined by a State agency’s Delegation and Authorisation Register) is responsible for making a determination to use an exception in accordance with the Rules.

To proceed with exceptions (as distinct from exemptions), State agencies do not require written advice from Finance.

However, if a State agency uses an exception specified under Rule C4.2, the requirement to involve Finance to facilitate the procurement (where a State agency is required to do so per Rule C1(1)) remains.

Exceptions are only applicable for the stated Rule. All other procurement Rules and processes that correspond with the value of the Procurement must still be followed unless exemption(s) have been obtained in respect of any other Rules.

Exemptions

There are a number of instances throughout the WA Procurement Rules where an exemption from a Rule is permitted depending upon the circumstances and objectives of the procurement.

The Rules have been established to promote value for money and fair and ethical practices. An exemption is not an alternative method of procurement that agencies should use to bypass the appropriate planning and market testing requirements. When deciding whether an exemption is necessary, agencies should consider the justification for the exemption against the achievement of value for money and providing fair opportunity for the market to compete for work. Any justification to apply an exemption should be robust enough to withstand external scrutiny such as an audit by the Office of the Auditor General.

If a State agency wishes to exempt itself from a Rule (where the Rule makes provision to do so), advice or approval from Finance may be required. The Rule will specify if, and in what circumstances, advice or approval from Finance is required.  

If an exemption is approved, that decision must be recorded in the State agency’s exemption register. Exemption decisions must be justified and recorded in writing.

Under Rule C5.2, the Authorised Officer (as determined by a State agency’s Delegation and Authorisation Register) is responsible for:

• making the exemption determination; and
• seeking Finance involvement when necessary.

The Request for Exemption template provides further information and guidance.

An exemption to a particular aspect of the Rules does not permit the holder to disregard the other applicable Rules and processes.

What factors should be considered to increase the likelihood of Finance’s approval to establish or vary a Cooperative Procurement Arrangement? 

The criteria that should be demonstrated to obtain Finance’s approval are contained within Section 3: Justification in the Request for Approval template. These bullet points highlight the circumstances and factors that should be considered in justifying the need to establish or vary a co-operative procurement arrangement.

How do I amend a single-user standing offer arrangement into a multi-user arrangement, if this approval was not sought during the initial development?

State agencies may vary existing Standing Offer arrangements that do not have access provisions, to include them. This can be done by selecting the relevant option in Section 1 of the Request for Approval to Establish or Vary a Cooperative Procurement Arrangement document, completing the rest of the document and submitting it to the Department of Finance for approval.

Where can I find further information on the meaning of multi-user buyer arrangements, and the distributor model?

Detailed information on these topics can be found in the Cooperative Procurement Guideline.

The table contained within Rule D1.2 sets out the minimum requirements for the form of contract (i.e. the relevant terms and conditions) to be used for various types of procurement. Minimum requirements are based on procurement type and monetary threshold. 

Agencies must use the minimum form of contract prescribed in Rule D1.2. A State agency will determine the need to use a more complex form of contract based on an assessment of the procurement type, value, risk and/or complexity.

Example: A goods and services procurement valued at less than $50,000 requires the goods or services to be provided over a fixed term (for example, three years, with possible extension options). Using the minimum form of contract, the Very Simple Contract Terms (VSCT), would not be appropriate as the VSCT does not provide for period contracts. However, the Simple Contract Terms (SCT) and the associated approach to market template (the Written Quote Template Suite) allow for period contracts, making the SCT more appropriate in this case.
 

For covered procurements, State agencies seeking to specify a proprietary product without allowing equivalent alternatives must seek advice from the Department of Finance, except where Finance was not involved in the procurement under Rule C1. Where Finance was not involved an Authorised Officer may give approval to specify a proprietary product for a covered procurement where no equivalent alternative will be considered. This approval must be recorded in writing. Prior to approval, agencies will need to consider their obligations under Free Trade Agreements and, if necessary, should seek legal advice. Consideration should also be given to any implications on fairness to suppliers, the promotion of open competition and value-for-money principles.

To assist with conducting negotiations, guidance can be found in the negotiations section of the Evaluations of Offers guideline. Finance has also developed a Negotiation Plan and guidance that should be used when undertaking negotiations in low to medium value/risk procurements. For high value/risk procurements or negotiation items, State agencies should contact their Customer Team representative or seek independent legal advice.

In addition, Finance offers an Introduction to Contract Negotiations training module.

State agencies should also be aware of their probity obligations while conducting negotiations. Probity in procurement generally means a defensible process that can withstand internal and external scrutiny, which involves achieving accountability and transparency while providing tenderers with fair and equitable treatment.

The Act Ethically – with Integrity and Accountability Guideline provides information about probity obligations to assist State agencies in meeting this requirement.   

Evaluation reports must be prepared for all procurements valued at $50,000 and above. The form of contract used for the procurement informs which evaluation report template is suitable. For example, if using the Written Quote Template Suite, use the associated evaluation report template.

The documentation must be sufficient to demonstrate that probity was applied to the process and justify the appropriateness of the procurement decision, should it come under scrutiny. For a simple direct purchase, this may be a simple document capturing the contract value, contractor details, and value for money justification.

On the other hand, a high value, high risk procurement, would warrant a formal evaluation report which outlines the evaluation process and value for money justification in detail. In this instance, the evaluation report would detail what each respondent was offering in response to the qualitative criteria and how this influenced consideration of the price of delivering the contract for each respondent. Some evaluation reports will require detailed spreadsheets showing the breakdown of pricing for different elements of a contract, where that was asked for, and enable a comparison across each respondent. How respondents will manage and allocate risk will, at times, be a critical evaluation factor and should also be balanced against the price on offer.

Any decision made by an agency to accept departures, a lower level of liability or an increased risk exposure should be clearly explained and justified and indicate appropriate approvals have been sought (in the case of risk allocation, this may include indicating that the Insurance Commission of WA has been involved).

Further guidance can also be found in the ‘Prepare Evaluation Report’ section of the Evaluations of Offers guideline.

Yes, the contract value under Rule D8 is cumulative. Where variations take a contract’s value over $50,000, then the original contract award information must be published on Tenders WA, as well as the updated expenditure information in accordance with Rule E3.1.

State agencies are responsible for establishing the Buying Rules for their own Standing Offers.

Buying Rules established by State agencies are required to comply with the WA Procurement Rules, including the provisions relating to when Procurement Plans and Contract/Project Management Plans are required. Other considerations include (but are not limited to) the risk profile of the procurement, market conditions and fairness between suppliers.

Buying Rules should be clearly identified in the Procurement Planning stage, prior to tender release. This is particularly important in relation the requirement to develop a Procurement Plan and Evaluation Report, as well as the requirement to involve the Department of Finance for the establishment of any Customer Contracts under the Head Agreement.

An example set of Buying Rules is provided in the Request – ICT, CUA Group Buy and/or Panel Arrangement template for guidance purposes.

More information on the topic of Standing Offers and their Buying Rules can be found in the Types of Agreement Guideline and the Purchase from a CUA or my Agency’s Panel Arrangements Guideline.

Before considering any potential contract variation:

• ensure the variation is allowable under the contract (be familiar with all the contract documents and what the contract covers)
• consider any agency-specific policies, procedures, templates or forms relating to variations
• determine who has the authority to negotiate and approve contract variations
• ensure the full impact of the proposed variation has been assessed (for example, budget, scope or risk)
• consider the total cumulative effect of all variations that have occurred since the commencement of the contract
• ensure appropriate stakeholders are consulted regarding the change (where applicable)
• consider whether the variation is better suited as a separate procurement.

A variation may take total contract expenditure over the threshold for Department of Finance involvement prescribed in Rule C1 of the Procurement Rules. Where this is the case, agencies should consider seeking further advice from Finance.

A contract variation that significantly changes the scope, value or complexity of the contract may be more appropriately undertaken as a separate procurement, particularly if the State agency considers it likely that other suppliers would have responded differently to the amended contract scope in the tendering process.

In deciding whether to vary a contract or undertake a separate procurement, a State agency should consider, among other things:

• whether the contract as varied will continue to deliver the original required outcomes and achieve value for money;
• the impact on the market – i.e. whether varying the contract create perceived or actual unfairness to other suppliers;
• whether the contractor is willing to vary under the existing contract conditions;
• the impact on contract deliverables, price, and timeframes;
• the reasons for not including the variations in the original scope;

If you are unsure about any aspect of a variation, please seek appropriate advice, assistance or clarification.

Remember, any variation to a contract must be appropriately documented, formally approved and filed with the contract documents.

State agencies must establish and maintain an exemption register, to contain details of all relevant exemptions approved pursuant to the Rules.

An Exemption Register Template is available on wa.gov.au to assist State agencies to establish and maintain their exemption registers. The template can be adapted to meet a State agency’s specific needs, if required. 

State agencies must establish and maintain a contract register, to contain at minimum, the information listed at Rule F5(5).

A Contracts Register template is available on wa.gov.au to assist State agencies to establish and maintain a contract register. The template can be adapted to meet a State agency’s specific needs, if required. 

The Authorised Officer refers to an Officer of the State agency duly delegated or authorised to carry out the functions of Procurement in accordance with the Procurement Act 2020, the Financial Management Act 2006, and any other relevant legislation and policies. It is the responsibility of agencies to delegate this authority, and to refer to the delegation when required for procurement decisions.