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Procurement processes for councils

Assistance has now been activated for in excess of 30 councils across Queensland following monsoonal flooding. As councils look to rebuild their communities there may be significant procurement activity required. For any eligible activities being claimed under the Disaster Recovery Funding Arrangements (DRFA) 2018, local governments are reminded that the DRFA requires council to follow applicable procurement processes.

The Department of Local Government, Racing and Multicultural Affairs acknowledges the potential need for urgent repairs and replacement, however this must be balanced with legislative requirements for procurement.

The department understands that sometimes insurers require works to be undertaken by specified providers. In those circumstances, local governments may wish to consider whether the direct engagement of contractors by an insurer is more appropriate.

Departmental Regional Advisors are available to assist your council to comply with these requirements and discuss options available. This may include exemptions and/or exceptions.

Legislative requirements

All local governments must comply with the requirements under Chapter 6 of the Local Government Regulation 2012 (LGR) when making a contract for the supply of good and services or the disposal of a non-current asset.

Strategic Contracting Procedures

If a council has adopted Strategic Contracting Procedures all contracts must follow the procedures set out unless an exemption applies.

Default Contracting Procedures

If a council has not adopted the strategic contracting procedures option, the default procedures will apply to all:

  • medium-sized contractual arrangements (valued between $15,000-$200,000 ex GST); or
  • large-sized contractual arrangements (valued over $200,000 ex GST); or
  • valuable non-current asset contracts.

These requirements mean that a council must do the following:

  • for any medium-sized contractual arrangement, the council must invite at least three (3) written quotes from suppliers who can meet the local government’s requirements at competitive prices.
  • for any large-sized contractual arrangement, the local government must undergo a tender process
  • to dispose of a valuable non-current asset, the council must invite tenders or offer the asset for sale by auction.

Tender process

Where a tender process is required, the council must comply with the following requirements:

  • The council must either:
    • invite written tenders by:
      • advertising in a newspaper that circulates generally in the local government area and allow 21 days for responses; or
    • invite expressions of interest by:
      • first deciding to invite expressions of interest by resolution and that it would be in the public interest to invite expressions of interest and record its reasons in the minutes of the meeting at which the resolution was made; and
      • advertising in a newspaper that circulates generally in the local government area; and allowing 21 days for responses;
      • preparing a short list from the persons who respond to the invitation for expressions of interest; and
      • then inviting written tenders from those persons.

A local government may decide not to accept any tenders it receives but if it does decide to accept a tender, the local government must accept the tender most advantageous to it, having regard to the sound contracting principles.

Exemptions from tender requirements

The LGR provides a number of exemptions where a local government does not need to comply with tendering requirements.

These include:

  1. If a quote or tender consideration plan is prepared and adopted by council (section 230 LGR)
  2. Exception for contractor on approved contractor list (section 231 LGR)
  3. Exception for register of pre-qualified suppliers (section 232 LGR)
  4. Exception for a preferred supplier arrangement (section 233 LGR)
  5. Exception for an LGA arrangement (section 234 LGR)
  6. Other exceptions for contracts under section 235 of the LGR:
    • The local government resolves it is satisfied that there is only one supplier who is reasonably available; or
    • The local government resolves that, because of the specialised or confidential nature of the services that are sought, it would be impractical or disadvantageous for the local government to invite quotes or tenders;
    • A genuine emergency exists; or
    • The contract is for the purchase of goods and is made by auction; or
    • The contract is for the purchase of second-hand goods; or
    • The contract is made with, or under an arrangement with, a government agency.

The council must decide by resolution which exemption will apply to the disposal.

Please contact your Regional Advisor who will be able to provide assistance in determining whether any exemptions apply, particularly in light of likely emergency works required.