Code of Tendering
Objectives of the Code
To establish and communicate the rules which are to apply to the competitive tendering of services by City of Sydney to ensure equity to in-house and external tenderers and probity over the entire process.
Background
This code applies to all tendering conducted by the City of Sydney conducts. It provides guidance for tendering and, in particular, provides advice where a tender is received from the City of Sydney's own staff. In the event of inconsistency between the code and other Council publications and manuals, the code will prevail.
Other standards, codes and guidelines may be relevant to Council's tendering. For example, The Local Government Act and Regulations, the Australian Standard Code of Tendering AS 4120 1994 applies generally, the NSW Government Policy Statement on the Application of Competition Policy to Local Government must be complied with; and NSW Government Guidelines will also be relevant when issued.
Equity and Probity
The City of Sydney will ensure that the tender process is fair to all parties. Specifically it will:
- Clearly separate its role as a purchaser from that of a provider of services
- Apply the same conditions of tendering to an in-house tenderer as it does to an external tenderer including regulatory, OH&S and industrial - employees to work under awards or agreements
- Produce tender documents which clearly specify Council's required services to allow tenderers to bid for and price their work accurately
- Package work put to tender in a manner which encourages competition and the best outcome for residents and ratepayers
- Actively discourage improper tendering practices such as collusion, misrepresentation, and disclosure of confidential information
- Require any conflict of interest to be disclosed immediately
- Have regard to the cost of tendering to tenderers and to Council and seek to contain that cost
- Appoint internal auditor as probity auditor to monitor the entire tender process.
Tendering Process
Specifications
Council has a responsibility to its residents and ratepayers to ensure services are delivered properly.
It will therefore develop specifications, which set out clearly Council's expectations. Most specifications will focus on outcomes, quality and performance requirements.
Some may include both output and input requirements (particularly minimum requirements) for a service.
The tender documents will require tender proposals to detail how the performance standards will be met and how the tenderer would measure the level of customer satisfaction.
Council will consider the requirements of stakeholders including customers in developing specifications and may seek the views of the providers of the existing service, providers of similar services and potential service providers, whether in the public or private sectors.
Any Council assets to be made available to tenderers, whether inhouse or external will be identified in specifications and Council may set charges, terms and conditions on their use.
No potential tenderer, in-house or external, will have access to the final specifications prior to their formal approval and public release by Council. However in-house and external tenderers may have access to draft specifications where an expression of interest process has been used.
Public Notice
Council will advertise all open tenders and expressions of interest (EOI) in the Sydney Morning Herald and may advertise them more widely.
Expression of Interest
An Expression of Interest (EOI) process may be used before Council invites tenders. The aim at EOI stage is to assess the capacity of respondents to undertake the work, to seek feedback on draft specifications to assist in refinement of specifications and to shortlist respondents for a selective tender. Evaluation criteria for shortlisting for selective tender will be included in each EOI.
Council may invite tenders from some, all, or none of the registrants, by the advertised date. If Council does not invite tenders by that date, it will write to all registrants advising when tenders are to be invited. Respondents who are not invited to tender will be advised in writing. Council will use this list of registrants to invite tenders for the advertised contract only.
Invitation to Tender
Council will offer the same tender documents to all those who respond to an invitation to tender. A copy of this code will be attached to all tender documents.
A fee may be imposed for tender documents.
The tender documents will include the tender evaluation criteria and accord the order of importance of the criteria in appropriate cases.
Tenderers will be advised how Council proposes to treat possible redundancies resulting from the tender. Generally staff will be offered a voluntary redundancy, redeployment to another area of Council or may be employed by the successful tenderer by agreement between the parties. In the latter case staff would be eligible for a limited redundancy payment. Redundancy costs as a result of the tender will be amortised over five years and added to the tender prices of external tenderers.
If the Council gives advice, verbal or in writing, to a respondent clarifying the meaning of the tender documentation, it will give the same information to all other respondents in writing. Council will maintain a written record of all advice given.
The Council will respect the confidentiality of a respondent who discloses information, which has commercial or intellectual property value.
A pre-tender briefing may be held and Council may decide to give no additional information apart from that briefing.
Tenderers will generally be given a minimum of 21 days to respond to the EOI and to the tender. The submission period is determined by the nature and complexity of the tender. Tender periods may be extended in exceptionable circumstances.
Late tenders will not be accepted.
Inhouse Tenders
Many inhouse service providers are competing against the private sector for the first time. As a responsible employer, Council will provide assistance to staff to become more competitive and to respond to tenders effectively. At the same time Council is aware that competition must be fair to all parties.
Accordingly, Council will treat an inhouse tenderer on the same terms as an external tenderer.
Council will ensure there is a clear separation between the inhouse tenderers and those responsible for the final tender specification and evaluation of tenders.
In-house tenders will be prepared on the basis that all direct costs and indirect or overhead costs attributable to the tender are included.
In allocating overhead costs to inhouse tenders, Council will only exclude those costs, which it would continue to incur even if the service was contracted out. Overhead costs are limited to:
- Governance costs – conduct of elections, support for Councillors and Council meetings, making laws and policy, levying rates and charges, other statutory duties not associated with the tender.
- Corporate and strategic management of services, corporate planning, and the cost of tendering and contract management.
- Core corporate costs such as administrative support for the governance and strategic management of services.
There will be no adjustment to inhouse tenders to take account of income taxation however a payroll tax equivalent will be added to in-house tenders.
Tender Evaluation
Council will establish a tender evaluation panel with more than one member for each tender process. As a matter of good practice, where there is an in-house tender, at least one member of the panel will be a person who is independent of Council and has expertise relevant to the tender. The tender evaluation report will disclose the names of the panel members. No member of a panel will be involved in preparing the in-house tender, will be responsible for the direct management of the in-house service if it is successful, or have any interest in an external tender.
The panel will examine tenders in accordance with the criteria in the tender documentation.
Award of Contract
The Council may negotiate with tenderers to determine the award of the contract but must have regard to the scope of the tender document at all times. Council will not trade the price of one tenderer against that of another tenderer. All negotiations with one tenderer will be exhausted before beginning negotiations with another tenderer.
The decision to award a contract/agreement, which involves an inhouse tenderer, will be made by Council in a Council meeting. The Council will award the contract on the basis of the best quality and value for money for ratepayers and the city community. The Council will have regard to the tender evaluation report and may also have regard to other factors impacting on the best quality and value for money outcome.
Unsuccessful tenderers will be notified promptly in writing and the advice will include reasons for the award of the contract.
Complaints
Complaints about the tendering process will be dealt with promptly by Council. Each complaint will be recorded in writing and the complainant given an opportunity to discuss the complaint with the general manager or delegated senior officer.
