University Buying Strategies and Practices Schedule

Schedule overview

1 Purpose

To establish the University's buying strategies and practices.

2 Scope

This schedule must be read in conjunction with the Procurement and Purchasing Procedure and is subordinate to it.

3 Schedule

The total expenditure of the University on Goods and Services can be segmented into four categories (refer Figure 1 below):

1. Easy to secure supply and low relative expenditure 2. Easy to secure supply and high relative expenditure 3. Difficult to secure supply and low relative expenditure 4. Difficult to secure supply and high relative expenditure

Figure 1: Categories of Expenditure based on Relative Expenditure and Ease of Supply

These categories will influence the University's Procurement strategy and Procurement practices.

A summary of strategies and opportunities are outlined in Table 1 below.

Table 1: Procurement Strategies and Opportunities Summary

Nature of Procurement

Characteristics

Basic Purchasing Strategy

Opportunities to consider including the six Government Principles

1. Easy to secure supply and low relative expenditure

(Low degree of business risk and low expenditure)

Goods and Services in this category are usually very low value. These Goods and Services can be routinely purchased or purchased ad-hoc.

They are generally Goods and Services for which demand cannot be aggregated to establish standing offers.

The transaction costs associated with Purchasing the item may be of greater cost than the items themselves.

Generally there are competitive local supply markets for Goods and Services in this category even at the local level.

The University will source competitive local suppliers where possible.

Financial Services (Procurement) will design and develop basic standardised Purchasing documentation and processes to minimise transaction costs.

Financial Services (Procurement) will train Finance Officers and Procurement Officers with the skills to source and purchase these Goods and Services for each cost centre of the University.

The Purchasing methods and associated transaction costs will be kept to a minimum and will include petty cash and corporate credit cards. University purchase orders will only be used where the above alternatives are unavailable.

This approach is likely to enhance employment in the local retail and services sectors.

The University will secure value for money by utilising the most effective and efficient method to buy Goods and Services in the category.

The University will apply organisational wide standard, transparent and documented Purchasing processes for these routine purchases. This approach will assist the achievement of probity and accountability at this level of activity.

2. Easy to secure supply and high relative expenditure

(Low degree of business risk and high expenditure)

Goods and Services in this category are commonly used across the University, often in high volumes but with sometimes low value individual transactions.

There are often whole-of-government arrangements, University standing offer arrangements, or similar arrangements for the supply of these Goods and Services.

Due to the volume of Goods and Services purchased in this area the University may need to address environmental issues about disposal, waste management, recycling, handling or storage.

Procurement strategies in this category will aim to ensure that total costs, including the costs of the goods or services and the transaction costs, are reduced.

Financial Services (Procurement) will analyse and develop an understanding of the volume and type of Goods and Services required by the University in this category.

The CFO may appoint specialised Procurement sections to source and manage the supply and purchase of these Goods and Services. These specialised sections may include the University Corporate Travel Office and Campus Services.

As part of a planned approach to Purchasing, the University may develop standing offer arrangements, or avail the University of the opportunity to join whole-of government, or whole-of-agency or third party grouped (e.g. multi-university) arrangements.

University officers with a higher level of Procurement skills will be required to engage with internal customers to develop or participate in the development of these standing offer arrangements. These staff will be based in Financial Services (Procurement).

The terms and conditions of the standing offer arrangements may include addressing a number of considerations such as quality, availability, service or response times, price reductions, volume discounts and environmental issues such as disposal, waste management, recycling, handling or storage.

Buying from these arrangements will be undertaken by trained Finance Officers and Procurement Officers and the associated transaction costs will be kept to a minimum with the use of the corporate credit card where possible.

Financial Services (Procurement) will design and develop basic standardised Purchasing documentation and processes to minimise transaction costs.

This approach will ensure that supply arrangements include consideration of local access and/or distribution, resulting in promoting employment in regional areas, including distribution and service outlets.

The University will seek opportunities to promote the use of electronic commerce and ordering.

Where applicable, the University will encourage and provide opportunities for staff to develop the skills required to participate in the establishment of Standing Offer Arrangements.

Standard methodology will provide transparent and well documented processes, assisting in achieving probity and accountability in this type of Purchasing activity.

Where applicable, the mandatory requirements associated with the disclosure of summary details for awarded contracts under the Queensland Procurement Policy will achieve further transparency in the supply market.

Within the terms and conditions of the offer documentation there is potential to advance environmental priorities and set sustainability criteria in the specifications.

3. Difficult to secure supply and low relative expenditure.

(High degree of business risk and low expenditure)

Goods and Services in this category are usually highly specialised and there are often very few potential suppliers.

There are usually relatively few transactions in this category.

Procurement strategies for securing supply in this category generally focus on reducing the University's vulnerability in the market by actively identifying alternative sources of supply or, where possible, changing the demand requirements of the University.

The Procurement planning process will begin with a detailed understanding of what is required, how the arrangements should be managed and the market characteristics of the supply.

Where applicable, a Significant Procurement Plan will be developed.

Financial Services (Procurement) officers possessing a higher level of Procurement skills will engage with the internal customer to develop the Procurement plan, which will include identification of potential risks and associated methods to mitigate these risks. This planned approach will include the joint development of specifications, contract terms and conditions and identification of supply sources and the impact on other University resources or activities.

The University's Legal Services may be engaged for the development of a contract or clauses in an offer document, to mitigate the associated risks.

The University will design and develop standardised Purchasing documentation and processes to assist with developing and maintaining an efficient mechanism to undertake the Procurement of these Goods and Services.

This approach may provide opportunities to leverage local industry development as part of a strategy to broaden potential sources of supply and secure value for money by reducing exposure to limited sources of supply.

Where applicable, the University will encourage and provide opportunities for staff to develop the skills required to participate in the Procurement of low value, high risk Goods and Services.

Standard methodology will provide transparent and well documented processes, assisting in achieving probity and accountability in this type of Purchasing activity.

Additionally, the mandatory requirements associated with the disclosure of summary details for awarded contracts under the Queensland Procurement Policy will achieve further transparency in the supply market.

Within the terms and conditions of the offer documentation there is potential to advance environmental priorities. Specifications will include sustainability criteria and suppliers may be asked for proposals to improve their sustainability performance

4. Difficult to secure supply and high relative expenditure.

(High degree of business risk and high expenditure)

Goods and Services in this category are often a complex 'bundle' or 'package' of services and associated goods that are critical in the service delivery of the University, for example capital projects and/or major IT systems upgrades.

Long-term relationships with suppliers are common. Supplier attitudes to the University as a customer are often crucial to the value the University will derive from the delivery of the goods and/or services.

The Procurement planning process will begin with a detailed understanding of what is required, how the arrangements should be managed and the market characteristics of the supply.

Where applicable, a Significant Procurement Plan will be developed.

University officers, based in Financial Services (Procurement) possessing a higher level of Procurement skills, will engage with the internal customer, to develop a Procurement plan which will include identification of potential risks and associated methods to mitigate these risks. This planned approach will include the joint development of specifications, contract terms and conditions and identification of supply sources and the impact on other University resources or activities.

The University's Legal Services will be engaged for the development of a contract or clauses in an offer document to mitigate the associated risks.

The final documentation, process and outcome may be subject to independent review of the final supply selection.

Management of the relationship with the supplier(s) is essential to obtain value for money and ensure the required outcome is achieved.

The University will design and develop advanced Purchasing documentation to provide an efficient and effective Procurement methodology for these Goods and Services. The documentation will include input from the University's Legal Services and the Procurement process may involve multiple steps.

Careful consideration of the appropriate level of bundling of services, or of project delivery methods, may identify opportunities to encourage the participation of local suppliers, especially those that are most likely to value the University as a customer. This approach is likely to promote local employment opportunities as well as value adding and knowledge intensive industry development.

Where applicable, the University will encourage and provide opportunities for staff to develop the skills required to participate in the Procurement of high expenditure value, high risk Goods and Services.

Standard methodology will provide transparent and well documented processes, assisting in achieving probity and accountability in this type of Purchasing activity.

The inclusion of an independent review process, such as a tender review committee, will add an additional probity measure.

Additionally, the mandatory requirements associated with the disclosure of summary details for awarded contracts under the Queensland Procurement Policy will achieve further transparency in the supply market.

Within the terms and conditions of the offer documentation there is potential to advance environmental priorities. Specifications will include sustainability criteria and suppliers may be asked for proposals to improve their sustainability performance.

4 References

Nil.

5 Schedule Information

Accountable Officer

Chief Financial Officer

Responsible Officer

Manager (Procurement)

Policy Type

University Procedure

Approved Date

24/7/2015

Effective Date

24/7/2015

Review Date

24/7/2018

Relevant Legislation

Queensland Procurement Policy 2013

Related Policies

Procurement and Purchasing Policy

Related Procedures

Procurement and Purchasing Procedure

Related forms, publications and websites

Definitions

Terms defined in the Definitions Dictionary

Goods and Services

Goods and Services can be either produced by the University for which fees can be charged or acquired by the University. Goods and Services produced are tangible and/or intangible products which are the outcome of human effort and/or knowledge that the University is either obliged to charge or has a right to charge a third party for the provision of these products. Goods and Services acq...moreGoods and Services can be either produced by the University for which fees can be charged or acquired by the University. Goods and Services produced are tangible and/or intangible products which are the outcome of human effort and/or knowledge that the University is either obliged to charge or has a right to charge a third party for the provision of these products. Goods and Services acquired are tangible and/or intangible products which are the outcome of human efforts and/or knowledge acquired to meet University needs. Goods and Services can be in the form of physical goods or intangible services.

Procurement

The entire process by which all classes of materials, facilities and services are obtained by the University. This can include the functions of planning, design, establishing standards, evaluating risk, writing specifications, selecting Suppliers, developing contracts and method of payment and subsequent disposal....moreThe entire process by which all classes of materials, facilities and services are obtained by the University. This can include the functions of planning, design, establishing standards, evaluating risk, writing specifications, selecting Suppliers, developing contracts and method of payment and subsequent disposal.

Purchasing

The method for acquiring the Goods and Services required. This can include credit cards, purchase orders and/or leasing arrangements....moreThe method for acquiring the Goods and Services required. This can include credit cards, purchase orders and/or leasing arrangements.

University

The term 'University' or 'USQ' means the University of Southern Queensland....moreThe term 'University' or 'USQ' means the University of Southern Queensland.

Definitions that relate to this schedule only

Keywords

Record No

15/790PL

Complying with the law and observing Policy and Procedure is a condition of working and/or studying at the University.

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