|Date Approved||14 October 2011|
The University of Newcastle is publicly accountable for the use of its funds and takes seriously the responsibility to ensure that its processes for procurement and purchasing operate effectively and efficiently with due regard for transparency, probity and accountability.
This policy describes the principles guiding the University’s procurement activities and provides a framework in which University officers have delegated authority to make procurement decisions that are appropriately documented. In addition the policy seeks to enhance the University’s reputation and provide protection from complaints, legal action and liabilities by supporting the fair and equitable treatment of all potential suppliers to the University.
This policy encourages the University to monitor and evaluate performance in this area to maximise the use of resources and its provisions are consistent with relevant legislative obligations. It should be read in conjunction with the Purchasing Procedure, Tender Procedure  and Quotations Procedure .
2. Policy Scope
This policy applies to the procurement of all goods and services for the University of Newcastle regardless of the source of funding. This includes capital works for the construction and improvement of facilities, IT projects and infrastructure as well as professional services and independent contractors.
The principles outlined in this policy apply to the controlled entities of the University however they may adopt procedures that are specific to their business needs and requirements.
3. Policy Intent
This policy and the supporting documents address the importance of establishing, implementing and monitoring a simple, clear procurement system that meets the University’s business requirements and promotes the fair and equitable treatment of all potential suppliers.
4. Relevant Definitions
In the context of this document:
procurement means the overarching activities and processes undertaken to acquire goods and services for the University;
procurement strategy means the defined and structured way in which the University will approach the market and conduct the tender process for any given procurement, taking into account risk and the nature of the goods or services;
purchasing means the process of ordering and receiving goods for the University;
quotation means an offer, either written or verbal, made in response to a selective invitation to supply specified goods or to perform a specified service up to the threshold value of $150,000 (GST exclusive); and
tender means an offer made in writing in response to an invitation to supply goods or to perform a service as set out in the relevant specification and tender documentation.
5. Policy provisions and principles
- The University’s procurement processes are governed by the following key principles with due consideration for the University’s legislative, occupational health and safety and other compliance requirements:
- value for money;
- open and fair competition;
- transparency, probity, equity and ethical behaviour;
- risk management;
- responsible financial management;
- social and environmental impact;
- planning and strategy development;
- formation of supply relationships; and
- timely and accountable decision-making.
Value for money
ii. Potential suppliers will be evaluated against criteria that relate to:
- strategic fit and consistency with the University’s objectives;
- non-cost factors such as fitness for purpose, quality, timely delivery, ongoing service support, warranty and legal compliance;
- whole-of-life costs including transaction costs, installation, operation, maintenance and disposal.
iii. Where appropriate, the University will undertake a cost-benefit analysis to determine whether leasing is a more suitable option than outright ownership.
iv.In the case of professional services, the University will also give consideration as to the relative merits of a consultancy as compared to an employment contract.
Open and fair competition
v. Open and fair competition between suppliers support the University’s commitment to obtaining best value for money and ensuring transparency, probity, equity and ethical behaviour.
vi. The University will ensure that:
- the competitive strategy is appropriate for the specific procurement and approved by an authorised delegate;
- staff involved in the process have up-to-date knowledge of the market and the University’s requirements;
- potential suppliers are provided with consistent information and opportunity, are evaluated against defined criteria and bear minimal cost for participating in the procurement process; and
- specifications and tender documentation will not be prepared to favour or disadvantage particular suppliers provided that the University’s business requirements are met.
Transparency, probity, equity and ethical behaviour
vii. The University conducts its procurement processes with the highest regard for transparency, probity, equity and ethical behaviour such that:
- goods and services will be procured for authorised business purposes only and not private use, in accordance with external legislation and/or obligations as well as University policies and procedures;
- confidentiality will be maintained in all dealings;
- conflicts of interest (potential, perceived or actual) and personal/business relationships will be disclosed and dealt with in accordance with the University’s Conflicts of Interest Policy ;
- gifts, gratuities or any other benefits that may influence (or be perceived to influence) the procurement process will be declined; and
- accurate and sufficiently detailed records will be kept to document the process, justify the outcome and provide an audit trail for regular review.
viii. In the event of a perceived or actual conflict of interest, the relevant staff member may be excluded from aspects of the procurement process as appropriate in accordance with the University's Conflicts of Interest Policy .
ix. Risk management is a primary consideration and potential risks will be identified, analysed, evaluated, treated and monitored across the procurement process with reference to the University’s interests and risk tolerance.
Responsible financial management
x. The University will exercise responsible financial management in all procurement processes such that:
- University funds will be used appropriately and effort will be made to contain the costs of the procurement wherever possible;
- procurement activities will not be initiated without confirmation that funds are available within an approved University budget;
- staff will not authorise or approve expenditure of University funds in excess of their delegation limits; and
- the performance of ongoing contracts will be monitored and evaluated to ensure continuing value for money for the University.
Social and environmental impact
xi. The University has a responsibility to ensure that its procurement activities consider relevant social, community and environmental issues. Provided goods and services are fit for purpose and offer best value for money according to the evaluation criteria, consideration will be given to:
- products containing materials that are produced or distributed in a sustainable manner;
- purchasing local products and services where possible;
- products that are more energy-efficient and minimise their adverse environmental impact;
- suppliers that minimise their energy consumption and adverse environmental impact;
- suppliers that offer product stewardship by assisting the University in responsible disposal of products and minimisation of waste;
- business practices that support the global fair trade movement aimed at tackling poverty and empowering producers through trade; and
- the overall track record and reputation of the supplier in terms of environmental issues.
Planning and strategy development
xii. Planning and development of a procurement strategy will be undertaken for:
- any engagement and/or project that is valued at over $150,000; and/or
- any procurement which is assessed as presenting a significant risk; and/or
- any procurement for the engagement of professional consultants and independent contractors,
to ensure that the University acts in accordance with the key principles in this policy.
xiii. The development of the procurement strategy will be coordinated by Commercial Services with input from a range of internal stakeholders:
- the relevant business area in terms of scope of work and timeline;
- Financial Services in terms of funding availability and/or appropriate financing strategies;
- Legal Services in terms of the type of legal contract and ongoing contract management;
- Risk and Assurance Services in terms of the risk assessment and mitigation; and
- Commercial Services in terms of the procurement methodology, timeline, evaluation criteria, commercial terms and ongoing contract management.
xiv. For large capital expenditure projects, the procurement strategy should consider specific engagements in the context of delivery of the overall project to achieve the best outcomes for the University and potential suppliers.
xv. The procurement strategy must be approved by an authorised officer or committee in accordance with the University’s Delegation of Authority Policy  and supporting Delegation Schedules.
Formation of supply relationships
xvi. Wherever possible, the University will seek to develop ongoing relationships with suppliers, especially for commonly purchased goods and services.
xvii. With reference to the principles outlined in this policy, the University may establish schemes and/or processes to approve supply relationships on the basis of a qualified or exclusive basis.
xviii. In exceptional circumstances, an exemption to using a contracted University supplier may be approved by the Chief Financial Officer or Associate Director, Commercial Services.
xix. The University will monitor the performance of its suppliers to ensure that it continues to obtain best value for money in procurement activities.
Timely and accountable decision-making
xx. This policy is underpinned by clearly documented procedures for purchasing, tender and quotations that support timely decision-making across the organisation.
xxi. These procedures include specific delegations of authority to University officers and committees in accordance with the University’s Delegation of Authority Policy  and supporting Delegation Schedules.
6. Audit, reporting, compliance, and review
6.1 The implementation of and compliance with this policy and the supporting procedures will be periodically audited as part of the University’s internal audit cycle.
6.2 The Council will receive reports on relevant matters associated with the implementation of and compliance with this policy and the supporting procedures via its Committees – Audit and Risk Management Committee (for audit and exception reporting) and Finance Committee (for monitoring budget and expenditure).
6.3 Failure to comply with the provisions of this policy, the supporting procedures and the relevant delegations will be taken very seriously. University staff found to be in breach may be subject to disciplinary action.
6.4 This policy will be reviewed by the Chief Financial Officer at least once every three years with advice from the Associate Director, Commercial Services.
7. Essential Supporting Documents
8. Related Documents
|Date Approved||14 October 2011|
|Date for Review||14 October 2014|
|Policy Sponsor||Chief Financial Officer|
|Policy Owner||Associate Director, Commercial Services|
|Policy Contact||Associate Director, Commercial Services|
Minor amendment - Change of Deputy Vice-Chancellor (Services) to Chief Financial Officer with the move of Commercial Services to Finance, Governance and Policy, 12 June 2012.