Purchasing & Procurement
The purpose of this policy is to communicate the strategic approach to procurement and integration of this activity across the University.
This policy’s supporting procedure outlines the obligations of staff to ensure consistent procurement practices across the University and defines the university’s operational approach to procurement.
This policy establishes the directions that must be implemented relating to the procurement of goods and services by the University. The University is required to implement and maintain an effective internal control framework over procurement activities.
This policy applies to the acquisition of all goods and services by University staff, students or contractors either purchased or leased from vendors, for and on behalf of the University (including University controlled entities).
The procurement of goods and services must also:
- Only relate to business of the university and must not be of a personal nature
- Be approved in accordance with the university’s Delegations - Contract, Financial, Staffing and Tender Policy
The establishment and maintenance of financial management policies and procedures is required by Direction 3.1.3 of the Minister for Finance Directions that are regulated under the Financial Management Act 1994. More specifically, this policy is required by clause 3.4.5 of the Directions of the Minister for Finance under this Act.
|Approved Supplier||Finance check carried out but no contracts are in place between the University and Supplier due to no competitive selection process being carried out.|
|Audit and Risk committee||Committee of University Council.|
Conflict of Interest
A conflict of interest is a conflict between a member of the University Community’s public duty to act in the best interests of the University and their private interests. A conflict of interest exists whether it is:
|Contracted Supplier||A Supplier appointed as a result of policy compliant procurement process or in accordance with this policy and for which there is an agreement between the University and the Supplier to supply specified goods and/or services on agreed terms. This includes contracts available to the University from the Victorian Government or other consortiums and buying groups of which the University is a member.|
|Delegated Authorities||Financial delegation in accordance with the Delegations - Contract, Financial, Staffing and Tender Policy.|
|Environmental Issues||Environmental issues cover all environmental impacts of goods and services from cradle to grave including: reducing the number of goods and/or services purchased; minimising energy, water and materials; recycled, recyclable, biodegradable and reusable components; minimal packaging, maintenance, waste, emissions, chemicals and transportation; and environmentally responsible disposal.|
|Financial Records||University Financial Management System General Ledger incorporating subsidiary ledgers as maintained by the Finance department.|
A token offering provided in return for a voluntarily service as a sign of appreciation for providing the service.
There must not be any expectation of payment of value by the recipient for the service they provide, at the time of providing the service.
|Locally Sourced||The sourcing, purchasing or procurement of food, ingredients and other consumable products from within a specific radius (distance) from where they will be used or sourced, or from a given geographical area.|
|Open & Fair||An open competitive procurement process ensures fair and ethical treatment of bids from suppliers. The traditional competitive procurement process allows all interested parties to submit a bid for a job, complete with all required documentation to compete fairly for jobs.|
|Panel||Is an arrangement whereby specific suppliers, usually selected through a single procurement process, may supply goods or services to the University.|
|Policy||A procurement policy helps to ensure that the University can buy efficiently and obtain value for money from its suppliers.|
|An Independent Contractor is an individual, business or corporation that provides services to the University under a written contract. They bear the responsibility for payment of all taxes, superannuation and workcover. They must hold a relevant current certificate of currency of insurances.|
|Probity||The evidence of ethical behaviour in the procurement process. Defined as complete and confirmed integrity, uprightness and honesty. It contributes to sound procurement processes that accord equal opportunities for all participants. A good outcome is achieved when probity is applied with common sense. Probity should be integrated into all procurement planning and should not be a separate consideration. Procurement decisions are to be made in a transparent manner, which allows them to be understood and justified subsequently, and ensure that it is conducted in a transparent, honest, fair and competitive manner. Risk management of probity in the procurement process requires a higher level of control and mitigation over the procurement process where there is a higher likelihood of exposure to claims about the process. A probity advisor and/or auditor may be appointed to advise on or review the procurement activity.|
|Procurement||Process of acquiring goods on behalf of the University and the department established by the University and promote and oversee best practice processes for goods and services purchased by the University and ensure value for money.|
|Purchasing||The process of placing orders and buying goods or services for the University.|
|Purchasing Card||An official University corporate credit card available to University Staff members with a Financial Delegation.|
|Purchase Order||A University buyer generated document that authorises purchase transactions which, when accepted by the supplier, becomes an agreement binding on both parties.|
|Quotation||A formal statement or offer made in response to an invitation to supply specified goods or services, and which contains an estimated cost for the goods or service.|
|An invitation to others to make an offer or proposal for the supply of goods or services, which is made in order to attract tender responses.|
|Select Tendering||The process whereby specifically identified suppliers are invited to tender for the provision of goods or services, based upon market considerations.|
|Standing Purchase Order||Standing Orders are used to create a Purchase Order for recurring goods/services (e.g.sub-contracts, temp services, equipment maintenance services). A standing purchase order can accommodate multiple invoices over an extended period of time.|
|Social Procurement||Procurement activity that takes into consideration the real or potential impacts associated with the production or sale of goods and/or services including: health, safety, human rights, ethical production, social justice, indigenous businesses, fair trade, diversity, access, and purchasing locally and domestically made goods and/or services.|
|Sole Supplier||When there is only one possible supplier for the required goods and/or services. This is to be evidenced by an appropriate market analysis and assessment. If there is a dispute about whether or not there is a Sole Supplier the assessment shall be determined by Procurement and Director, Finance.|
|Supplier (s)||An external that supplies goods or services entity to the University.|
|Sustainable Procurement||Is the meeting of business needs for materials, goods, utilities and services in an environmentally-friendly, responsible and ethical way. Supply chain sustainability is integral to sustainable procurement.|
|Tender Response||An offer made in writing in response to a Request for Tender.|
|Threshold Value||The value to be applied on the anticipated total expenditure, accumulated over the total term of the contract, in Australian Dollars and exclusive of GST. If the term is unspecified then a nominal term of three years is to be used for calculating the Threshold Value.|
|Total Cost of Ownership (TCO)||Involves all costs associated with ownership and is based on the whole of lifecycle analysis. TCO is calculated over the whole life of the procurement and contract lifecycle. It estimates the accumulated costs of acquiring, operating, maintaining and disposing or decommissioning procured goods or services.|
|Value for Money (VFM)||The achievement of a desired procurement outcome at the best possible price (not necessarily the lowest price) based on a balanced judgement of financial and non-financial factors relevant to the procurement. VFM may take into account the Total Cost of Ownership and a mix of quality, costs and resources, as well as fitness for purpose, timelines and risk.|
Effective internal control procedures must be implemented and maintained by the University to ensure all procurement activities of the University are authorised in accordance with the delegated authorities and business requirements within a documented procurement framework.
Procurement to purchasing activities within the University includes ethical, compliance and financial obligations, as well as opportunities for financial savings, improved sustainability, service and quality. The University must ensure the following procurement principles are adhered to:
- Value for Money (low environmental and social impacts)
- Accountability and maintain comprehensive and well documented records
- Open and Fair Competition (Quotation and Tender processes adhered to)
- Risk Management.
- Probity and Transparency
- Customer Service
- Reductions in the administrative costs of procurement processes
- Improved purchasing efficiency and control (avoid unnecessary consumption)
- Electronic transaction data for reporting, analysis and control
- Comply with any and all directions regarding the use of University contracted suppliers
- Comply with Conflict of Interest Policy and Conflict of Interest Procedure
There must be sufficient justification to demonstrate that there is a need for the goods and services to be provided and that the economical and sustainability considerations have been fully considered prior to the purchase of any goods and / or services. The availability of existing funds within an approved budget, or source of funds, will be established prior to the commencement of any procurement activity.
The University recognises it has a role to play in providing support for the development of awareness, understanding and competency in relation to sustainable, social and locally sourced procurement.
Purchases from all suppliers must be covered by an official University Purchase Order, with the following exemptions:
- Direct invoice procedures have been put in place (eg Utility expenses, Council rates)
- The purchase is made with a University purchasing card used in accordance with the University’s Purchasing Card Policy
- Legal expenses and legal advice fees
- Staff reimbursements
- Property rentals, insurance, settlement fees
- Defined Human Resources department related expenditure for reasons of confidentiality
A purchase can only be approved and committed following approval of funds expenditure from the appropriate delegate.
All Purchase Orders must be requested and approved prior to the delivery of goods and services being entered into, and prior to any payment being made for the goods or services.
A Contracted Supplier or a Panel of Contracted Suppliers may be appointed pursuant to a competitive process in accordance with this policy and the Procurement of Goods and Services Procedure.
Where goods or services are required for which the University has appointed a Contracted Supplier(s), that Contracted Supplier(s) must be used unless they are unable to supply the specified goods or services as and when required.
Where a contracted supplier(s) is in place, the Threshold Value requirements set out in Table 1 do not apply.
Where a Contracted Supplier(s) is unable to supply the specified goods or services as and when required an exemption must be sought and approved in accordance with this policy and the Procurement of Goods and Services Procedure prior to engaging the broader market.
- Where there is no Contracted Supplier(s), the requirements set out in Table 1 must be satisfied.
- The Threshold Values are to be applied on the anticipated total expenditure, accumulated over the total term of the contract, are in Australian Dollars and are exclusive of GST.
- Documented evidence of the requirements and assessment of Value for Money is required to be submitted with the request for a Purchase Order.
- The requirements for demonstrating a competitive, fair and transparent p process and the corresponding values at which the thresholds apply are set out in Table 1:
|Type of Purchase||Threshold Value||Requirements|
|One Quote||$0 - $50,000||Minimum 1 documented Quotation|
|Three Quotes||$50,000 - $350,000||Minimum 3 written Quotations|
|Strategic Sourcing||$350,000and above||Tender Process|
Exemptions to the threshold requirements may be sought if the purchase is within a delegated authority and is:
- approved by the Chief Operating Officer/Chief Financial Officer, Manager, Procurement or delegate directly related to a critical incident
Exemption applications are required to be submitted formally in writing to the Accountable Officer prior to the proposed purchase(s) being commenced and or committed to. Exemptions to this policy may only be sought in exceptional circumstances based on business necessity and merit (such as instances of genuine commercial or confidential matters) or cases of extreme urgency
Procurement will coordinate the process of the application and its approval or not.
- myFinance Goods and Services Receipting Flowchart (PDF 31.1kb)
- myFinance_SWL Purchase Requisition System Flowchart (PDF 129.0kb)
- Purchase Requisition Flowchart (PDF 98.7kb)
- Purchasing and Accounts Payable Process (PDF 646.7kb)
- Vendor Application/Change of Vendor Details (PDF 324.1kb)
The COO/CFO (as the Approval Authority) is responsible for monitoring the implementation and outcomes and its accompanying procedure/s.
The Manager, Procurement (as the Policy Sponsor) is responsible for maintaining the content of this policy and scheduling its review as delegated by the COO/CFO.
The Procurement of Goods and Services Policy will be implemented throughout the University via:
- Announcement Notice via FedNews website
- The ‘Recently Approved Documents’ webpage to alert the on the ‘Policies. Procedures and forms @ the University’ website to alert the University-wide community of the approved Policy.
- Information/Training Sessions; and/or
- Inclusion in the University’s online Policy Library
- Distribution of e-mails to relevant University staff and stakeholders