Run the tender process

Several rules and directions govern how you must run a tender.
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What you need to know
  1. You should always give suppliers enough time to prepare proper responses to a tender.
  2. In line with this, most tenders must stay open for a minimum period.
  3. The minimum period will depend largely on whether or not you’re engaging in a covered procurement, as well as how you are approaching the market.
  4. You should generally try to get enough quotes or tender responses to ensure competitive tension.
  5. You have certain obligations to suppliers who tender, including only asking for what’s necessary and making it easy to supply information.

General rule on running the tender process

You should always make sure the tender period gives prospective suppliers reasonable time to effectively prepare their submissions or bids and price the work. After all, the more prepared they are, the more likely you’ll find the right supplier and achieve a successful procurement outcome.

Wherever possible, you should allow potential suppliers to respond to the tender electronically.

Beyond this, different rules apply to how long you must keep a tender open. These depend on the value, complexity and urgency of the work, as well as how you publish the tender.

Tender periods for covered procurements

If your procurement is for:

  • goods and services valued over $680,000 (excluding GST)
  • a construction contract valued over $9.584 million (excluding GST)

it may be covered by Australia’s international trade agreements and subject to the requirements in board direction, PBD-2019-05 Enforceable Procurement Provisions.

Read more about Enforceable Procurement Provisions.

The following minimum tender periods apply for covered procurements. However, you must make sure you give suppliers enough time to prepare and lodge their submissions, taking into account your reasonable needs.

No set period:

  • Where you have a genuine and urgent need for the procurement. Examples include responding to a critical issue or an emergency.

10 calendar days:

  • Where you’re procuring commercial goods or services non-government businesses can routinely buy.
  • Where you’ve approached the market within the last 12 months for substantially similar goods or services and stated at the time you’d make another approach.
  • Where you’ve included a notice of the procurement in an annual procurement plan and published it on eTendering at least 40 days and not more than 12 months before you publish the tender.

25 calendar days:

  • All other tenders.

Tender periods for non-covered procurements

You can decide on the most suitable tender period, taking into account your reasonable needs and the suppliers’ ability to prepare and price their submissions. However, we recommend the following minimum tender periods for non-covered procurements.

No set period:

  • Where you have a genuine and urgent need for the procurement. Examples include responding to a critical issue or an emergency.

10 calendar days:

  • Where you include the tender on eTendering as part of your annual procurement plan.
  • Where you’re buying the goods or services through a panel contract, standing offer or NSW Government prequalification scheme.
  • Where you’re approaching the market as part of your recurring procurement arrangements.

25 calendar days:

  • In any situation where you publish the tender on eTendering.

30 calendar days:

  • In any situation where you don’t publish the tender on eTendering.

Tender periods for construction procurements over $100 million

When you’re procuring construction or infrastructure contracts worth more than $100 million, you should consider Infrastructure Australia’s recommended tender periods.

These are especially important where the procurement involves a design and construct, public/private partnership (PPP) or alliance-type delivery model.

A longer tender period may also be appropriate for any high-value and complex procurements under $100 million. This might include, for instance, construction works with significant design elements.

Your procurement may also be covered by Australia’s international trade agreements and subject to board direction, PBD-2019-05 Enforceable Procurement Provisions.

Read more about Enforceable Procurement Provisions.

Visit Infrastructure Australia to find out more.

Number of quotes or tenders

You must always look to achieve value for money, especially in high value and prescriptive contracts. One way you can do this is to make sure you receive enough quotes or tenders to create competitive tension.

You should also attempt to make sure you encourage small to medium enterprises (SMEs) to participate. Where appropriate, this should mean inviting at least one SME to tender or quote.

When you’re sourcing from a prequalification scheme, you should follow the guidelines in the buyers guide for each scheme.

You are also allowed to procure using a lower number of quotes for some types of procurements. These include some low-value contracts, contracts with small businesses and procurements involving an Aboriginal-owned enterprise.

Assistance with costs

Generally, the supplier must bear their own costs of responding to an approach to market.

In special circumstances, you may offer assistance with the cost of tendering. If you do, you must include details in the approach to market documents.

Special circumstances should be limited to high-cost procurements and extenuating circumstances. Your agency head must approve any reimbursement before you can pay a supplier.

Construction projects over $100 million

The NSW Government will consider contributing up to 50% of an unsuccessful bidders estimated costs, where:

  • you can demonstrate a bid cost contribution provides value for money
  • the bidder submitted an appropriate bid but wasn’t awarded the contract, and
  • the bidder agrees the NSW Government owns any intellectual property contained in the bid, where reasonable.

We make contributions based on your assessment of the bidder’s costs, not theirs. We won’t consider any bid cost contributions on projects with an estimated total capital cost of $100 million or less.

If you’re considering bid cost contributions as part of a tender, you should always first seek NSW Treasury’s consent before you release any expression of interest (EOI). NSW Treasury will provide this, so long as you meet the conditions of the Bid Costs Contribution Policy.

You should also include the proposed contribution in the total project funding envelope that you present to the ERC or Cabinet for approval before you begin the procurement process.

Using external advisers

Where you engage an expert adviser to help prepare request for tender (RFT) documents, you must exclude them from also tendering for the work.

Obligations to suppliers

You should always be mindful of your obligations to potential suppliers. We’ve set out some of these obligations below.

Annual procurement plans

As an accredited agency, you must provide an annual procurement plan to the Procurement Board by 31 August each year. This will cover the following 12 or 24 months, depending on your level of accreditation. You must also publish an abridged version on eTendering.

The abridged version should cover any planned procurements that may result in an open request for tender (RFT), as well as major or strategic initiatives that may generate procurement. You must also provide your contact details.

You must use the agency procurement plan template when you notify the market about potential open market RFTs.

If your agency is unaccredited, you can also choose to publish an annual procurement plan.

Your annual procurement plan is a key source of information for potential suppliers on your planned procurements. You should update it through the year in light of changed needs or new requirements so that it stays current.

For covered procurements, you can reduce the tender period to 10 calendar days, so long as:

  • you’ve included the procurement in your annual procurement plan, and
  • suppliers still have enough time to prepare and price their submissions.

Intention to proceed

Before you engage with the market, you must have:

  • the intention, commitment and authority to proceed
  • an approved and adequate budget
  • arrangements in place to manage all stages of the procurement process and its outcome.

You must also make sure the method you use to approach the market is fair and transparent and will achieve value for money.

Tender information

Your tender documents must give suppliers enough information to prepare their responses. You should provide:

  • a description of the good or services you’re procuring
  • the contract length or the period the goods or services must be provided
  • where and how suppliers can lodge their responses
  • the due date for responses
  • any conditions suppliers must meet to be considered for the contract
  • key evaluation criteria
  • whether the procurement process contains any further steps
  • your contact details and how they can ask for further information.

Covered procurements

For covered procurements, you must provide information contained in clause 14 of the EPP Direction. This includes:

  • a description of the procurement. This includes, if appropriate, the nature and estimated quantity of the goods and services you’re procuring
  • an explanation of the procurement process
  • the contract duration or period over which goods or services must be provided
  • a summary of any conditions for participating, including documents or certifications
  • your contact details, as well as how to get the procurement documents and the date for lodging submissions
  • where applicable, any criteria you’ll use to select suppliers who’ll be invited to make further submissions and any justification for limiting the number.

Minimise requests for information

You should minimise the amount and type of information you ask suppliers to provide at every stage of the procurement cycle. You must:

  • include the type and amount of information you’re seeking as early as possible in contracting documents and communication. This extends to any documents you issue after awarding the contract.
  • only require potential suppliers to provide information necessary for assessing a proposal.
  • ask for information at the latest possible stage of the contracting process and only then from suppliers you’re still considering.
  • not ask for the same or similar information at more than one stage of a multi-stage procurement process. However, you can ask a potential supplier for additional information or clarification on whether their information is current.
  • not ask for publicly-available information unless you need it to confirm accuracy or validity.

Make information requests easy

Whenever you ask a potential supplier for information, you should:

  • provide options on the format for supplying that information
  • use industry standards and commonly-used terms
  • only ask for financial information at the contracting stage on low-value contracts
  • not ask for financial information at the prequalification stage
  • inform the potential supplier what information you'll release publicly or to other agencies.

Provide information when asked

You should respond promptly to any questions or requests for clarifications from suppliers.

For covered procurements, you must reply promptly to suppliers’ reasonable requests for procurement information unless providing that information:

  • is against Australian law
  • there’s an overriding public interest against disclosing the information (as defined in the Government Information (Public Access) Act 2009)
  • would give the supplier an unfair advantage over other suppliers in a competitive procurement process.

Suppliers can request information at any time, including during a procurement’s planning phases.

Obligations for preparing a contract

When you’re preparing a contract for a potential supplier, you must

  • describe any information you’re likely to need, as well as the formats in which it can be supplied and the frequency you’ll ask for it.
  • not ask for information, unless:
    • you’re required to by law
    • you’ll use it to assess the delivery of goods and services under the contract, or
    • you’ll use it to assess performance.