Construction procurement plan guidelines

Updated: 1 Oct 2020
These guidelines assist agencies to plan and source procurement activities that drive value for money outcomes for the NSW Government, and ensure fair and equitable processes for engaging with contractors.

1. Purpose

The purpose of these guidelines is to ensure procurement of construction services, and construction-related consultancies, are conducted in accordance with the NSW Government Procurement Policy Framework.

2. Objective

These guidelines assist agencies to plan and source procurement activities that drive value for money outcomes for the NSW Government, and ensure fair and equitable processes for engaging with contractor.

The preparation, approval and application of a construction procurement plan DOCX, 224.33 KB is required to achieve these objectives.

3. Application

3.1 Unaccredited agencies

For unaccredited agencies, a plan is required for construction-related procurements in excess of $1.3 million (excluding GST).

The guideline can also be applied to procurement activities that are lower than $1.3 million (excluding GST) if the agency deems the risk and complexity of the procurement is sufficiently high.

3.2 Accredited agencies

For accredited agencies, it’s expected a plan is developed for all procurements over $1.3 million (excluding GST), to ensure all activities and risks are addressed and managed, noting accredited agencies may have their own template.

This application of due diligence will ensure that an agency’s accreditation status is not compromised.

4. Assumptions and prerequisites

Before completing the plan, and preparing to approach the market, it is assumed that prerequisite processes have been undertaken. These prerequisites, where applicable, must be observed to ensure that the procurement documentation flow is informative and seamless, in accordance with the NSW Government Procurement Policy Framework.

Plan prerequisites may include:

  • approval of a business case or equivalent agency approval
  • project plan
  • gateway approvals (for projects over $10 million ex GST)
  • development and planning approvals
  • project risk assessment.

Plan prerequisites required are scalable in accordance with the value, risks and policy requirements for the procurement.

Agencies must familiarise themselves with policy and best practice requirements or seek advisory support from the:

  • sponsoring agency, or
  • Construction Procurement Team at Public Works Advisory (PWA).

5. Preparing the plan

For unaccredited agencies

Before engaging the sponsoring agency to develop the plan the unaccredited agency should, where possible, determine or complete the plan prerequisites. Addressing the prerequisites beforehand could significantly reduce the time it takes for the sponsoring agency to endorse the plan.

The unaccredited agency is then responsible for completing the plan. When the accredited agency has confirmed the plan is complete, the unaccredited agency may prepare documentation to approach the market, subject to any improvements identified by the accredited agency.

The plan is to be developed by the unaccredited agency, in collaboration with the accredited agency that is sponsoring the procurement. Where procurements involve multiple stakeholders, the plan should be jointly developed by the agency who is the principal in the contract and the sponsoring agency. Other stakeholders can provide input to the plan as required.

Both parties should agree on the requirements and focal points of the plan to ensure they manage risks and comply with any policy or regulatory requirements.

Advice on policy and regulatory requirements can be referred to PWA for assistance, noting that this service is advisory only.

When making recommendations and endorsing the plan for an unaccredited agency, sponsoring agencies should apply the same standard of governance, procurement expertise and due diligence as they would if endorsing a plan for their own agency.

It is recognised that unaccredited agencies possess some of the skills and expertise required to mitigate risks during construction procurement and project delivery. Sponsoring agencies should therefore focus on strategies to fill the skill and expertise gaps of the unaccredited agency when making recommendations for the plan and endorsing it.

For accredited agencies

For accredited agencies, the plan can be used to enhance their current procurement system and governance processes.

It should be created in a format that complements their individual governance and accreditation arrangements.

6. Completing the plan template

The construction procurement plan template  DOCX, 224.33 KB covers many of the standard requirements that are mandated by policy and regulatory requirements.

Given the diverse nature of construction procurement, this example can be enhanced and amended to reflect agency-specific policy, risks and processes that are unique to a project.

7. Endorsing the plan

The plan is to be endorsed by the accredited agency in accordance with their administrative delegations.

The role of the sponsoring agency, as an agent for the NSW Procurement Board, is to support an unaccredited agency and ensure that the procurement is conducted in accordance with the principles of the NSW Government Procurement Policy Framework. Accredited agencies should apply a similar level of governance to that which would be used to a construction procurement within their own agency.

Accredited agencies do not assume procurement and project responsibility for the delivery of the outcomes of the project. Responsibility and obligation of the procurement and project will rest with the unaccredited agency (as the principal named on the contract).

Once endorsed the unaccredited agency delivers the procurement in accordance with the plan. Any material departures from the endorsed Plan should be referred to the endorsing agency for concurrence of the change of action or process.

8. Building construction procurement capability

The procurement plan process, and sponsorship by accredited agencies, is designed to manage procurement risks and build capability within unaccredited agencies that are unfamiliar with construction procurement processes.

It is suggested that the sponsoring agency and the delivery agency conduct post-contract delivery discussions to document lessons learnt and positive outcomes from the procurement process.

Unaccredited agencies can use the documentation from these activities to support their application for Construction Procurement Accreditation.

9. Construction procurement plan template

See construction procurement plan template DOCX, 224.33 KB for step-by-step guidance on developing a procurement plan for construction.