The division of duties, for example supplier selection and supplier management can also be asserted at policy level if desired. There can be tension within areas of the policy for example, balancing the principles of competitive neutrality against the administrative costs and commercial drivers of the organisation. The reform challenge for Local Government is to determine optimum minor purchasing thresholds. They should be sufficiently high such that best value is derived through the collection and qualitative evaluation of formal quotes, but not too high to the extent that there is an overinvestment of administrative time into the purchase decision making. Checks and controls to minimise the propensity of fraud are also important considerations within the establishment of a minor purchasing threshold framework and to this end the procedural requirements of each threshold tier should be considered as part of the policy development. Buy Local considerations should also be represented at policy level. Summary: A well constructed purchasing policy can derive significant process benefits and also feed into a more meaningful annual budget process. It is a regulatory requirement to have a policy, but good governance will move beyond the minimum requirements and utilise the policy as an effective way to derive value and best practice procurement. Checklist: Procurement Policy Task Critical Considerations Stage Review current purchasing policy documents of the current entities. Draft a schedule of differences Reconcile content Check all elements of the policy are included Determine if Regional Price Preference is required and what Buy Local inclusions apply. Stage 1 – to July 2014 (review) future size of procurement operation and determine suitable thresholds Develop thresholds that are commensurate with the number and of envisaged contracts. Stage 2 – Aug 2014 to March 2015 (plan) Review procurement process controls, separation of duties and fraud minimisation strategies. Relate back to organisational structure and reporting delegations register, and internal audit Stage 2 – Aug 2014 to March 2015 (plan) Determine additional purchasing policy requirements Beyond the minimum consider audit, analytics, regional economic development and supplier review requirements that should be elevated to policy level outside of operational practice. Stage 2 – Aug 2014 to March 2015 (plan) Merge the current purchasing policies in conjunction with the model template and other discussions to draft a new Purchasing Policy Maintain a focus on the future, not the past. The new entity has the opportunity to improve and enhance its procurement function, driven by the new policy. Stage 3 – April 2015 to June 2015 (mobilise)
Ensure a process is available to maintain access to certificates of currency Where appropriate assess the contents of the insurance policy to ensure sufficient protection Review activity Review insurance coverage and risk allocation framework Maintain register of supplier insurances invoked/claims processed through contractor activity. Stage 4 – July 2015 onwards (implement) Maintain register of insurance compliance Consideration of contract management KPI inclusion Stage 4 – July 2015 onwards (implement) Further support resources specific to Insurances: Resource Name Description Source LGIS Through LGIS, Local Governments across WA are working together to achieve the best insurance and risk management solutions. This unique and exclusive partnership brings the benefits of an industry-based Scheme, specialist risk management programmes, and advice and solutions from a Client Services Team focused on WA Local Government needs.
market at the time of need can derive better value. For example quarry supplies for road building vary according to input costs (fuel, labour) and seasonal impacts. Buying from the market in accordance with a price cycle will deliver lower costs than having annual supply. Summary Governments have the opportunity to reform to revisit their buying methodology, and in particular to assess the inventories and contract structures under which the supply of goods is provisioned. Supplier optimisation and strong Supplier Relationship Management are key elements of a successful inventory management program. Checklist: Compile a list of current goods contracts (contracts register extract) How many suppliers are What tracking mechanisms are in place to monitor inventories? Stage 1 – to July 2014 (review) Determine future mechanisms for managing and tracking supplies Contracts Management system Ordering and tracking functionality within purchasing system Stage 2 – Aug 2014 to March 2015 (plan) Stage 3 – April 2015 to June 2015 (mobilise) Future operations Effect new arrangements for the entity Action procurement plan and regularly review Engage in contract management performance review Shift from annual and biannual supply contracts to point of purchase buying structure Stage 4 – July 2015 onwards (implement) Further support resources specific to Reference Resources: The WALGA Procurement Handbook contains template documentation including General Terms and Conditions for the supply of goods. WALGA eQuotes contains buyers guides and other contract information relating to supply contracts.