BC2477
Auckland Council
Procurement Policy
Auckland Council Procurement Policy
Auckland Council
Procurement Policy
Purpose
The purpose of this policy is to provide guidance to
suppliers and staff of Auckland Council to achieve
the outcomes of the Auckland Plan. It defines
how Auckland Council will undertake procurement
decisions and sets out the process of deciding who
the Council should procure from.
The Policy provides clear information to suppliers,
contractors and the community on what Auckland
Council will consider through its procurement process.
Objectives
The objectives of the procurement policy are that
procurement will support the procurement principles
in the Procurement Strategy.
Each principle needs to be considered at the early
stages of each procurement but not every principle
may be relevant to every procurement. It is important
that at an early stage in each procurement, there
is a process of reviewing each of the principles and
identification of which principles and policy objectives
should be part of any subsequent procurement
process. This needs to be done at business case stage.
Considering each of the principles at an early stage
will in effect, influence all subsequent stages of the
procurement, including desired specifications and the
relative weightings of the factors that are included in
a tender or evaluation process.
However, it is important to note that best practice
procurement includes undertaking procurement
planning (Policy Statement 5) and supplier
relationship management (Policy statement 4), and
these, along with other legislative requirements, are
mandatory parts of the process.
It is recognised that there are tensions between
the principles and where possible, the procurement
process will be transparent as to how any such
tensions are managed during the procurement
decision making processes. In particular, the business
case preparation stage will provide clear information
on the options and impacts of each option which will
assist the decision making on which option to follow.
Defining procurement
Procurement is defined as the acquisition of all goods,
works and services provided by or for the Council.
Procurement covers every aspect of the procurement
cycle. This includes determining and specifying the
needs of the service through the Long Term Plan,
Annual Plan and Local Board agreement processes,
through to the acquisition and delivery of goods and
services. It also includes the relationship management
of the supplier(s) involved. The procurement process
finishes at either the disposal of those goods or works
or when the service contracts or agreements come to
an end.
Procurement Strategy Principles and
Policy statements
The following section sets out the six principles and
the subsequent procurement policy approach.
Auckland Plan Principle 1: Work together
• Procurement Strategy Principle: Procurement
processes that enable staff to work collaboratively
with each other, the CCOs, and external agencies
where appropriate , to achieve best value.
• Procurement Policy statement – All procurement
decisions will consider what is the most appropriate
procurement option and be able to select from a
range of delivery processes to facilitate the best
outcome for council and the community.
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Auckland Council Procurement Policy
Auckland Plan Principle 2: Value te Ao Māori
• Procurement Strategy Principle: The procurement
process will support the council’s commitment to
Māori including responsibilities under Te Tiriti o
Waitangi/The Treaty of Waitangi and its broader
legal obligations as described in the council’s Māori
Responsiveness Framework.
• Procurement Policy Statement – The procurement
process will enable the integration of the Māori
Responsiveness Framework in decision-making,
business plan and procurement plan development,
and service delivery to realise and enhance Auckland
Council’s commitment to Māori.
Auckland Plan Principle 3: Be Sustainable
• Procurement Strategy Principle: The Council
procurement process will ensure that opportunities
for social, economic, environmental and cultural
interests and outcomes will be actively considered
for current and future generations.
• Procurement Policy statement – Procurement
practice supports the identification and assessment
of social, environmental, cultural and economic
interests of the community. This includes
assessing, as well as possible, the impacts on
current and future generations and communities.
Auckland Plan Principle 4: Act fairly
• Procurement Strategy Principle: The Council’s
procurement will be ethical and lawful and
consider the needs of all groups in the community.
• Procurement Policy statement – Procurement
practices will demonstrate integrity by all parties
and enable all potential suppliers to have equal
access through the use of open and contestable
processes.
Auckland Plan Principle 5: Make the best use of every dollar
• Procurement Strategy Principle: Council will use
efficient, effective and appropriate procurement
processes to deliver good quality goods, works
and services.
• For clarity, this principle is focused on the
effectiveness of Council’s procurement, while
Principle 6 relates to the efficiency of Council’s
procurement.
• Procurement Policy statement – The procurement
process will enable projects to identify and deliver
on multiple outcomes for every dollar spent.
Council will actively seek innovative approaches.
Auckland Plan Principle 6: Be affordable
• Procurement Strategy Principle: Council will
look for the best possible value for the whole
lifecycle of the good, service or asset. It does not
necessitate the selection of the lowest price.
• In addition, the Council procurement process will
encourage and maintain a sustainable and diverse
market place to ensure that a competitive market
is retained.
• Procurement Policy statement – Affordable in the
procurement context means that the procurement
process must efficiently identify and manage the
criteria and weightings to ensure the appropriate
balance between quality and short and long term
costs. In some circumstances, costs and benefits
to be assessed would include economic, social and
environmental and cultural costs and benefits.
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Auckland Council Procurement Policy
Scope
This policy applies to all procurements entered
into or on behalf of Auckland Council. It equally
applies to the council, local boards and management
including all groups and all staff. It is intended that
the Auckland Council family including the Council
Controlled Organisations (CCOs) will act consistently
in accordance with the adopted Strategy. The
Governing Body will work with each Auckland Council
CCO to ensure that the procurement practice of
each CCO is consistent with the Auckland Council
Procurement Strategy.
In light of this is it also important to understand the
role the various procurement related policies and
procedures will have in the procurement process.
There are four considerations to be made when
procuring as represented in the diagram below:
• why are we procuring?
• what are we procuring?
• how are we procuring?
• who are we procuring from?
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Auckland Council Procurement Policy
Context
Procurement Chain or Procurement “Waterfall”
Why are we
procuring
1. Outcomes, strategies & policies
2. Activities, functions & projects
What are we
procuring
How are we
procuring
Who are we
procuring
from
3. Specifications of what procuring
4. In-sourcing versus outsourcing
5. Procurement methodology
6. Procurement plan (specifications)
7. Evaluation of suppliers
8. Negotiation with supplier
9. Supplier selection (attributes)
10.Managing contract and delivery
Considerable emphasis in this policy is placed on the
development of the business case and specification
processes in the procurement chain. The specification
of why and what is required by the business owner
and critical to ensuring that the following stages of
the how and the who meet the business owner’s
requirements. Good procurement outcomes will
be best gained by an early understanding of all the
objectives of the programme, which will flow through
from concept development to business planning
Achieving the outcomes stated in
various strategies, plans and policies is
why we are procuring anything in the
first place.
We then need to define what we
are specifically procuring in the
way of goods and\or services.
There may be advantages in
how we procure, by way of
better outcomes, better pricing,
risk transference etc.
Once you know what you
need and the best way of
procuring it, it is down to
who will supply it.
to agreeing the specifications and then onto the
tendering process and the assessment criteria and
weightings. It is important at the specification stage,
that those most affected are involved in the process.
For instance, working with Local Boards in the
development of parks maintenance and town centre
maintenance contracts.
The Manager Procurement is responsible for the
policy, business rules and the procurement process.
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Auckland Council Procurement Policy
Policy statements
and guidance notes
1.Policy statement (Principle 1 - Work
together) – All procurement decisions will
consider what is the most appropriate
procurement option and be able to select
from a range of delivery processes to
facilitate the best outcome for council and
the community.
This provides the flexibility for Council to identify the
most appropriate procurement option for obtaining
goods, works or services. The decision, as to the
tool which should be used, will be based on the
type of expenditure being incurred as well as other
appropriate procurement objectives.
At the development stage of a project Council will
consider the range of procurement options that are
available to obtain the components for that project.
The tools that are available are therefore:
• full or total broadly external service delivery
• alliancing
• collaborative between Council and external
organisations
• public private partnerships
• fully resourced from internal sources.
Auckland Council will also ensure that local suppliers
are given advice and support so that they have full
and fair opportunity to compete for Council business.
This policy does not give preference or weighting to
local content in itself. Similarly, there should be no
discrimination on the basis of ownership of a supplier
or preference for local equity in itself. Having given
local suppliers full and fair opportunity and assessed
any commercial and practical value for money
advantages associated with local supply, Auckland
Council will buy from the best source available,
according to its own judgement of all costs, benefits
and overall value for ratepayer’s money. It may do
with the assistance of a Local Impact Assessment
methodology.
A Local Impact Assessment is most logically considered
when a project has the following attributes:
• there is the opportunity for increased locally based
employment
• there is the opportunity for the provider to provide
appropriate work experience
• there is the opportunity for the provider to
contribute to local projects
The Council will apply a Local Impact Assessment in
the following ways:
a)All contracts over $7.5m must have a local impact
assessment criteria as part of the procurement
process
b)Contracts of a value of between $1m and $7.5m
may have a local impact assessment criteria as part of
the procurement process
c) Because smaller contracts (contracts less than
$1m) are likely to be provided by local entities no
local impact assessment will be required but may be
undertaken by the manager if considered desirable.
Guidance notes
The intention of this policy requirement is that
when Auckland Council begins to develop a
project that the various options for procurement
are considered at that early stage. As noted
in the policy statement there is a variety of
tools available to Auckland Council from fully
contracting out to a collaborative approach.
Often at the development stage of a project it
is possible to narrow the range of procurement
options. For example the building of a community
facility might have a range of options from a
design and build to having a number of different
contracts for the various components of that build.
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Auckland Council Procurement Policy
In addition, there may be opportunities for
complementary activities which may not necessarily
be provided by Council but be necessary for good
community outcomes. For example when a council
building is being planned, other complementary
activities should also be considered as part of the
initial consideration of options. A library might
be being planned for a particular area; other
complementary activities that may be considered
could be the provision of a cafe or similar
activity which would be provided by any external
organisation. Also there maybe the necessity to
intensify development within a certain area and
therefore complementary activities that increase the
overall density should be considered when the library
complex project is being planned, e.g. offices or
residential apartments.
A collaborative approach could be considered
when a community group may have the resources
to undertake the work which may result in other
intangible benefits such as providing training or
work experience.
employing persons with disabilities (who are likely
to come from across a sub-region or the wider
Auckland region), ethical or fair trade.
What is ‘local impact’?
‘Local impact’ is not about purchasing goods, works
and services from local suppliers (i.e. ‘buy local’) – it is
not about who should be awarded the contract; being
a ‘local’ business does not guarantee fair workforce
conditions or that revenue is multiplied (re-spent) in
the local economy. In addition, identifying the winning
tender (supplier) should be transparent, competitive
and outcome focused.
‘Local impact’ is concerned with the positive
contributions to:
• A local community’s capacity (e.g. the skills, social
capital and knowledge) to do things for themselves
and participate in decisions that affect their
community; and
• The health, resilience and sustainability of the local
economy.
What does ‘local’ mean for Auckland?
The multiplier effect
Given the large geographical area (4,894 km2)
covered by Auckland Council, and a population of
1.5 million people, a definitive definition that would
cover the wide range of procurements undertaken
by council is neither possible nor desirable. ‘Local’,
depending on the procurement, could mean:
neighbourhood; suburb; local board area; sub-region;
or the Auckland region or New Zealand.
An important contributor to a healthy local economy
is the multiplier effect of income in to a local area –
in other words, how much of that money is spent and
then re-spent in the local area and how many times
this happens, before it leaks out of the area.
There is a strong desire that procurements should
positively benefit local communities where the
works, services or supplies are delivered. What
level of ‘local’ will vary depending on the particular
procurement. In some procurements, the emphasis
may be on a range of community interests, such as
The Procurement Manual will set out more
information on using Local Impact Assessments.
Given the budgets of public organisations, public
sector procurement can have a significant multiplier
effect on a local economy.
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Auckland Council Procurement Policy
2.Policy statement – (Principle 2 –
Value te Ao Māori) The procurement
process will enable the integration of
the Māori Responsiveness Framework
in decision-making, business plan and
procurement plan development, and
service delivery to realise and enhance
Auckland Council’s commitment to Māori.
• Value te Ao Māori supports each of the other five
principles of the procurement policy. However it
recognises that Auckland’s aspirations and Māori
aspirations are aligned and that there will be times
when procurement requires close consideration
of Māori cultural competencies, such as te reo
Māori (Māori language), mātauranga Māori (Māori
understanding, knowledge and skill), tikanga Māori
(procedures, customs and practices) and kawa
(protocols)
• This principle requires consideration of the Māori
Responsiveness Framework and in particular the
three goals - an empowered organisation, effective
Māori participation, and strong Māori communities
- at each stage of the procurement process.
• This will enable Māori aspirations and expertise in
Māori matters to be actively considered through the
life of a project eg:
(a)in the supply and provision of services targeted
to Māori,
(b)in procuring or partnering with suppliers with
experience and the capability of working in a Māori
context, and
(c) to enable Māori outcomes to be included through
the procurement process as an integral part of, or in
adding value, to a project.
Guidance notes:
The Māori Responsiveness Framework articulates and
focuses the Council’s actions to enhance and guide
its commitment to Māori. While the Procurement
Strategy establishes consideration of the drivers as an
important step in the development of a project and
procurement plan, practical application throughout
the procurement process requires consideration of the
three Māori responsiveness framework goals. These are
outlined generally below, however, the Procurement
Manual will provide further guidance.
An empowered organisation places emphasis
on council staff, process and systems, and policy
development to improve the organisation’s ability
to respond more effectively to Māori and to actively
consider how the procurement process can assist the
council to achieve the Auckland Plan and Long-term
Plan Māori-specific goals. This is enabled through the
drivers of the Māori Responsiveness Framework by
considering each driver at the business plan stage.
Effective Māori participation emphasises the need
to build and strengthen relationships with suppliers
with experience and the capability of working in a
Māori context to participate in the procurement
process to provide shared and long-term outcomes
for the council and Māori.
Strong Māori communities places emphasis on the
council’s role through procurement of contributing
to Māori well-being. This requires an understanding
of the intended and unintended outcomes of any
procurement with a focus on contributing to improved
Māori outcomes. It also requires consideration of how
the procurement process can support and build Māori
capability and capacity in procurement and as an
outcome of procurement.
It is important to remember that when developing a
project specification that the engagement of Māori
advice be considered. For example in the construction
of a wetland within a culturally sensitive area, specialist
Māori advice might be sought and included into the
design of any buildings and surrounding plantings.
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Auckland Council Procurement Policy
3.Policy statement – (Principle 3 –
Be sustainable) Procurement process
supports the identification and
assessment of social, environmental,
cultural and economic interests of the
community. This includes, as well as
possible, the impacts on current and
future generations and communities.
increased local spend, enhanced local capability
and carbon reduction impacts, Auckland Council
is committed to providing strong leadership that
ensures Auckland becomes a more sustainable city.
It provides for integrated decision making and
assessing long term costs and benefits which
results in the best value over the whole of life of
the goods, works or services under consideration.
All procurement of goods, works and services must
consider these objectives in the Auckland Plan.
For Auckland Council to achieve the direct cost saving
benefits and indirect economic and environmental
benefits of applying the sustainability principle, the
Council needs to use a three-pronged sustainable
procurement approach:
Auckland Council will maximise the effective use of
ratepayer monies by requiring decisions to be made
on total cost of ownership over the life of an asset.
The total cost takes into account the initial purchase
price; usage costs; maintenance costs and disposal
costs or resale value.
• maximising effective use of ratepayer monies by
encouraging decisions to be made on total costs and
benefits of ownership over the life of an asset
• assessing increased local spend and enhanced local
capability where appropriate, and
• a requirement that the procurement process
includes consideration of environmental, economic,
social and cultural matters when procuring goods,
works and services.
By considering the long term costs and benefits
including (but not limited to) such matters as
A variety of tools can be used to determine the best
outcome – for instance, whole of life assessments or
life cycle approaches. The procurement manual will
contain further information on these approaches.
The business case development will include an
identification of levels of sustainability on a
level system as follows. Given the importance
of achieving sustainable outcomes and best
value particularly for high value procurement, a
sustainability assessment must be undertaken for
procurement in the Level 4 category.
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Auckland Council Procurement Policy
• Level 1 - Low sustainability risk and low value
contracts e.g. provision of security guards
• Level 2 - High sustainability risk, but low value
contracts e.g. battery purchases
• Level 3 - Low sustainability risk, but high value
contracts e.g. professional services
• Level 4 - High sustainability risk and high value
contracts e.g. new building
Further information on the range of assessment tools
will be set out in the Procurement Manual.
Guidance notes
The procurement process may include environmental
and social specifications for products and services.
Under this approach, products with environmental
and social labels, such as those with recognised
standards could receive a higher weighting, as set
out in the relevant specification process. The relevant
standards will be set out in the specifications. This
approach either states a minimum standard for all
suppliers or provides a weighting for businesses with
sustainable practices. Suppliers with good sustainable
practices would have a stronger chance of higher
scores in this area.
Being sustainable requires the full evaluation of the
life cycle of that particular procurement. Therefore
it is important to identify both the capital costs
and all ongoing costs and to evaluate all reasonable
alternatives to ensure that council is being sustainable
both environmentally, socially, economically and
culturally. Procuring goods and services on a whole of
life basis, will provide cost savings to the Council.
Comprehensive sustainable procurement practices
could include procuring works, goods and services from
businesses with appropriate certification and practices.
This could influence the supply chain over time.
For example, a high sustainability certification
requirement could result in suppliers changing their
practices in order to be successful in securing a
Council Contract. The changed practices could result
in suppliers becoming more innovative and reduce
their costs in energy, water, waste and transport. This
in turn would support Auckland Plan outcomes such
as increasing the growth in the green economy for
Auckland and reducing air pollution, greenhouse gas
emissions, waste, water usage and traffic congestion.
The Procurement Manual will provide more
information on various methodologies to support the
sustainability policy statement in practice.
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Auckland Council Procurement Policy
4.Policy statement – (Principle 4 –
Act Fairly). Procurement practice will
demonstrate integrity by all parties and
enable all potential suppliers to have
equal access through the use of open and
contestable processes.
Auckland Council will conduct its business with the
utmost integrity in its procurement of goods, works
and services. Therefore, Auckland Council employees
and suppliers are expected to conduct themselves
with the highest standards of honesty, fairness, and
personal integrity. It is critical that both employees
and suppliers adhere to these standards, all applicable
laws and avoid all perceptions of conflict of interest
and impropriety.
To this end we have included wording on the ethics
we maintain and subscribe to during all procurement
activities in Auckland Council. Further, we have
expressed the behaviours we expect from our
suppliers in the supply of goods, works and services.
Suppliers will:
• comply with all New Zealand legislation
• respect human rights as set out in New Zealand
law, and international law that New Zealand is a
signatory to
emergency. Council will document the justification
for such actions.
Council will use the principles of section 7 of the
Local Government Official Information and Meetings
Act 1987 (LGOIMA) for protecting confidentiality
when negotiating contracts.
Access
All potential suppliers will have equal access to
Council’s procurement process. All publically
notified Procurements will be advertised through the
Government Electronic Tenders Service
(www.gets.govt.nz) and/or Tenderlink
(www.tenderlink.com).
Auckland Council will continue to give all suppliers
that are unsuccessful, the invitation for a debrief and
feedback session on why they were unsuccessful and
offer guidance how they can improve their responses
for future procurements
Supplier management
It is important to note that different delivery
approaches (such as a negotiated collaborative
arrangement as distinct from a tendered contractual
arrangement) will require differing relationship
management arrangements and monitoring
programmes.
• refuse to accept unlawful discrimination of any
kind in working relations
However, there is a risk that suppliers delivering the
same category of goods, works or services are treated
in a different or more preferential way than another.
To ensure equity, the management of all suppliers in
any kind of agreement with Council will follow the
same approach when managing performance.
• give consideration to flexible working conditions to
promote work/life balance
The supplier management programme will, amongst
other things:
• provide a healthy and safe working environment
for all employees in accordance with international
standards and laws.
• deal with suppliers even-handedly
• not use forced, bonded or compulsory labour
• not use child labour in the supply chain
Council policy is that procurements are, for the most
part, open and competitive. However, there are
occasions when Council will decide to restrict or limit
supplier involvement in a procurement process, based
on matters of scale or relevance for example in an
• ensure that key performance indicators (KPIs) are
set in the initial notifications requesting services
to be provided or supply of goods or works, and
in the contract covering quality of performance,
scheduled performance and relationships for all
supply agreements
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Auckland Council Procurement Policy
• monitor the performance of the supplier against
the KPIs or agreed outputs
• provide feedback to key stakeholders and
management on compliance, savings and cost of
non-compliance
• facilitate resolution of complaints and noncompliances both at supplier level and with
internal stakeholders
• explore opportunities with suppliers over and
above contractual obligations
• ensure ethical, safe and honest practice
• ensure compliance with health and safety
requirements
• promote sustainability in all interactions.
All procurements will be evaluated fairly.
The procurement documentation that Council puts
out to the market will contain information which
makes it clear what council is looking for by way of
response. As an example, if the weighted attributes
methodology is used, the attributes and as well as the
weightings for each attribute will be published so that
the market understands the relative importance of
each attribute to council.
Where the relationship is managed at Department
level the Department is responsible for the supplier
management programme. Where the relationship
is managed centrally, the Procurement Unit is
responsible for the programme.
Guidance notes
The Council expects its procurement processes to
be fair but Council is a demanding buyer, who will
purchase from internationally, domestic and local
suppliers where they offer best value for money (best
value not being limited to financial considerations).
This requires due consideration of potential
commercial and practical advantages in purchasing
local, domestic or internationally produced goods and
services. These may include:
• price and total or whole-of-life ownership cost
• through-life support (e.g. better availability of
spare parts and after-sales service)
• supply lines and/or delivery lead times
• the costs of maintaining inventory
• level of reduction or elimination of exchange
rate risks
• impact on communications/transport
• impact on contract administration and dispute
resolution
• scope for cooperative and innovative product
development and influence over the supply base
• continuity of supply and level of direct control
over orders
• goods/services adaptation to local conditions; and
• level of knowledge of the producer’s reputation
and reliability.
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Auckland Council Procurement Policy
5.Policy statement – (Principle 5 –
Make the best use of every dollar). The
procurement process will enable projects
to identify and deliver on multiple
outcomes for every dollar spent. Council
will actively seek innovative approaches.
Procurement planning
To deliver on this objective, Council needs to
forecast its procurement requirements over time. In
order to understand its resource requirements and
manage procurement activities professionally and
understand the multiple outcomes sought across the
organisation, Council needs to have a view of what
procurements are likely to be required in the next one
to three years. Identification of likely procurements
over this timeframe will enable the organisation to
identify potential benefits from coordination of like
supply activities, supply aggregation and phasing of
activities. It will also enable procurement resourcing
needs to be anticipated and planned.
As part of annual planning activity, expected
procurement activities over the next one to three
years are to be identified, showing:
• categories of the goods, works and services that
they expect to be acquiring. This does not include
day-to-day items such as stationery
• the approximate spend involved
The selection of suppliers will be based on the
consideration of whole of life costing. This approach
ensures that risks, including the risk of supplier failure,
are identified.
When a good, work or service is being considered
for inclusion in the Long Term Plan or Annual
Plan, that project should be considered with other
possible projects across other departments to
achieve multiple outcomes to assist Council being
effective, efficient, and appropriate.
It is expected that making the best use of every dollar
will support the search for innovation in how Council
procures goods, works and services.
Guidance notes
There are a number of planning processes which plan
for, and allow assessment of, multiple outcomes
delivery – for example, the Crime Prevention through
Environmental Design programme. Council is also
trialling the Social Return on Investment assessment
process which, if successful, will enable business
owners to quantify, and monitor, the social outcomes
being achieved by the project.
For example, in the case of facility development, the
planning for multiple outcomes can include working
with external agencies. In such a case, planning
for procurement could include the consideration of
alternative uses for the facility being considered as
well as other complementary activities not delivered
by the Auckland Council.
• the expected timing
• contract expectations (existing contract,
Expressions of Interest, Request for Proposal, etc).
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Auckland Council Procurement Policy
6.Policy statement – (Principle 6 Be Affordable). Affordable in the
procurement context means that the
procurement process will efficiently
identify and manage the criteria and
weightings to ensure the appropriate
balance between quality, and short and
long term costs. In some circumstances,
costs and benefits to be assessed
would include economic, social and
environmental and cultural costs and
benefits.
When procurement occurs, the principle of best value
over whole of life of goods, works or services must be
evident. Council will use best practice and will seek to
be increasingly efficient in its procurement processes.
Best value for money is concerned not just with unit
costs but with the full value or public benefit that
will occur as a result of the procurement process.
Council considers that there are four elements to best
value which are:
1. quality and suitability of the service
2. long-term implications
3. wider outcomes for society
4. the cost and benefits (both short and long term)
Efficiencies will be gained through clear processes
which assess each of these factors and through clear
contract specifications, and management of the
weightings and criteria in the assessment process.
Doing this well will result in the Auckland Council
being cost effective and therefore affordable for
household and businesses.
Monitoring and risk
The Auckland Council is accountable to the
community through the Long Term Plan and Annual
Plan. Achievements and results will be reported
through the Annual Report.
Monitoring the procurement process in the first
instance will be undertaken by the Tenders and
Procurement Sub-committee. The Sub-committee
will ensure that reasonable purchasing procedures
have been followed in awarding large contracts and
will provide an efficient mechanism for documenting
the approvals for those contracts.
Monitoring will also occur at management level to
ensure that council projects are delivering on the
objectives as set out in the project business plan.
The policy will be reviewed within five years. This
review will include an assessment of how the policy
has contributed to the effectiveness, efficiency and
appropriateness of council’s procurement processes
and outcomes.
Risks in procurement occur in every stage of the
procurement process from selecting the procurement
method through to the contract management
including invoice and payment. Auckland Council
will identify and mitigate risks through its risk
management processes. In addition, in order to
be efficient, Council procurement in practice uses
a scaled system where lower value procurement
can be actioned on the basis of a direct approach;
procurements of greater value face an ever increasing
scale of requirements .
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Auckland Council Procurement Policy
Selecting a supplier
The criteria for selection of a supplier, contract or
proposal will include (but is not limited to):
• total cost over the life of the goods, works or
services supplied. Considerations include:
oo base price
oo maintenance costs
oo consequential costs
oo ongoing supplier/contract management costs
• pricing:
oo the price identified as part of the procurement process
oo price improvement through bulk buying, available
discounts and potential leveraged discounts
oo price stability and sustainability over the life of the contract
• demonstrated supplier ability to deliver, including:
oo resources
oo contract and relationship management
oo timing
oo quality
• contribution to Auckland Plan desired outcomes
and supporting strategies
Guidance notes
The Local Government Act 2002 requires all councils
to meet the current and future needs of communities
for good quality infrastructure, public services and
performance of regulatory functions in a way that is
most cost-effective for households and businesses.
Good quality has been defined as being efficient and
effective and appropriate to present and anticipated
future circumstances. This does not require councils to
always consider the lowest cost but requires councils
to ensure that procurement is cost-effective. Therefore
all procurement must comply with this requirement.
The initial requirement of any procurement is to
ensure that the procurement is both suitable and
of the appropriate quality for the service that is
being supported by that procurement. When
procurement occurs it is important that not just
the immediate short-term cost is identified, but
acquisition, maintenance and operational costs and
the consideration of the costs in replacing the asset
together with its estimated useful life are included in
the assessment.
Being affordable requires Council to consider the life
cycle of procurement. While some infrastructure
may last for a 60 to 80 years other procurement
life cycle might only be five years (e.g. computer
hardware). Therefore it is important to identify the
life cycle when procurement occurs.
A further consideration of the life cycles for capital
projects is the impact of any debt funding and the
time period over which the debt will be repaid.
Generally debt repayment over 25 years results in a
significant interest payment by the community.
Promoting diversity and competition in all the market
sectors in which Auckland Council is involved is a
means of ensuring that affordability and best value
is achieved. Procurement is one way that Auckland
Council can act on its responsibility to ensure that
market competition continues. To ensure that the
competition is open, all qualified suppliers must
have a reasonable opportunity to participate in all
Auckland Council procurements and proposals must
be evaluated, and selections made, in a fair manner.
This is addressed in Principle 4.
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