‘CSM80013 Procurement, Tendering, and Contracts - Selected extract of Live Online Lecture Session in Week 2 (Semester 1 2022: SUT-Hawthorn) CSM80013 Procurement, Tendering and Contract a em remeeinan Purr i . Carer carr eee re Procurement = Products = Facilities = Services Procurement is one ofthe key processes in project-based industries by which a procuring entity procures specific products or services ‘rom suitable supplying source(s) (e.9. supplier! vendor). gf Can you identity some examples? FEES «51100013 session 2, somester 1, 2022 E.Palaneoswaren) (© AiProf Palaneoswaran Ekambaram (Tel. +61 3 92148526, Ema: pekambaram@swin.eduau; Ofice: ATC738) School of Engineering, Swinburne University of Technology, Hawnorn, Victoria 3122, Austr(CSM80013 Procurement. Tendering, and Contracts ~ Selected extract of Live Online Lecture Session in Week 2 (Semester 1 2022: SUT-Hawthorn) Procurement in project-based industries + Materials: = Consumables? it = Non-consumables? When + Machinery Who = Large! small equipment? How = Tools! spare parts? Which + Project Delivery Team panate = Consultants? By whom How much = Contractors! subcontractors? = Skilled unskilled workforce? Design? Money? Knowledge! Advice! Data & Info? Infrastructure (Hardware & Software)? (CSMB0013 - Session 2, Semester 1, 2022 E, Palaneeswaran) i.) Outlining Procurement Objectives = Time = Cost/ finance = Quality = Risks (uncertainties) = Responsibilty arn = Sustainability a = Value = Any other? OBJECTIVE eee) (© AiProf Palaneeswaran Ekambaram (Tel: +461 3 92148626, Emal: pekambaram@swin.edu.au; Ofce: ATC738), School of Engineering, Swinaurne University of Technology, Hawnom, Vieloria 3122, Australia(CSM80013 Procurement. Tendering, and Contracts ~ Selected extract of Live Online Lecture Session in Week 2 (Semester 1 2022: SUT-Hawthorn) Public-Sector Procurement gf Can you identity some key diferences between public-sector and private sector procurement systems? gf an you identity some simartes as well” i ‘€SM80013- Session 2, Semester 1, 2022 (E, Palaneeswaran) Fi.) Procurement system requirements (€SMB0013 - Session 2, Semester 1, 2022(E.Palaneeswaran) (© AiProf Palaneeswaran Ekambaram (Tel: +461 3 92148626, Emal: pekambaram@swin.edu.au; Ofce: ATC738), School of Engineering, Swinaurne University of Technology, Hawnom, Vieloria 3122, Australia‘CSM80013 Procurement, Tendering, and Contracts - Selected extract of Live Online Lecture Session in Week 2 (Semester 1 2022: SUT-Hawthorn) Public Procurement Principles & Practice = Accountability = Value for money = Transparency = Equitable and fair competition = Confidentiality = Integrity & Probity FEE) csweo0ts- session 2 Semester ,2022(E.Palanceswaran) —) Accountability considerations in Public Procurements (© AiProf Palaneoswaran Ekambaram (Tel. +61 3 92148526, Ema: pekambaram@swin.eduau; Ofice: ATC738) School of Engineering, Swinburne University of Technology, Hawnorn, Victoria 3122, Austr‘CSM80013 Procurement, Tendering, and Contracts - Selected extract of Live Online Lecture Session in Week 2 (Semester 1 2022: SUT-Hawthorn) Public Accountability * Since public money (.e. tax-payer's money) is used, the use of it in procurement! project delivery should be properly ‘justified’ * “Accountabilty means that officals are responsible for the actions and decisions that they take in relation to procurement and for the resulting ‘outcomes" (Commonwealth Procurement Guidelines, 2008) FEE) csweo0ts- session 2 Semester 1,2022(E.Palnceswaran) ) Value for Money considerations in Public Procurements Be (€SM60013 - Session 2, Semester 1, 2022 (E. Palaneeswaran) seswaran Ekambaram (Tal: +61 3 92148626, Emall. pekembaram@swin edu.au; Office: ATCT38); School of Engineering, Swinaue University of Technology, Hawinom, Victoria 3122, Australia(CSM80013 Procurement. Tendering, and Contracts ~ Selected extract of Live Online Lecture Session in Week 2 (Semester 1 2022: SUT-Hawthorn) Value for Money + Value for money is enhanced in government procurement by — encouraging competition by ensuring non-discrimination in procurement and using competitive procurement processes; — promoting the use of resources in an efficient, effective and ethical manner; and — making decisions in an accountable and transparent manner. susrunce Canmore Pcionert Oaseres (2005, (CSMB0013 - Session 2, Semester 1, 2022 (E. Palaneeswaran) Value for Money (contd.) * Price is not the sole determining factor in assessing value for money. * A comparative analysis of relevant financial and non-financial costs and benefits of alternative solutions throughout the procurement would inform the value for money assessment = This would include consideration of factors such as: = fitness for purpose; experience and performance history ofthe supplier — flexibly (including innovation and adaptability over the lifecycle of procurement}; — environmental sustainabilty (2. energy efficiency, environmental impact) and ~ Whole-ofife costs (CSMB0013 - Session 2, Semester 1, 2022 (E. Palaneeswaran) i.) (© AiProf Palaneeswaran Ekambaram (Tel: +461 3 92148626, Emal: pekambaram@swin.edu.au; Ofce: ATC738), School of Engineering, Swinaurne University of Technology, Hawnom, Vieloria 3122, Australia‘CSM80013 Procurement, Tendering, and Contracts - Selected extract of Live Online Lecture Session in Week 2 (Semester 1 2022: SUT-Hawthorn) Value for Money (contd.) * In order to achieve the ‘value for money’ the procurement transactions (e.g, contractor selections) should consider competitiveness, compliance with client's requirements, relabilty of performance, qualitative superiority, and life-cycle costs FEE) csweo0ts- session 2 Semester 1,2022(E.Palnceswaran) ) Transparency considerations in Public Procurements (© AiProf Palaneoswaran Ekambaram (Tel. +61 3 92148526, Ema: pekambaram@swin.eduau; Ofice: ATC738) School of Engineering, Swinburne University of Technology, Hawnorn, Victoria 3122, Austr‘CSM80013 Procurement, Tendering, and Contracts - Selected extract of Live Online Lecture Session in Week 2 (Semester 1 2022: SUT-Hawthorn) CAProf Pe Transparency * “Transparency provides assurance that procurement processes undertaken by agencies are appropriate and that policy and legislative obligations are being met. Transparency involves agencies taking steps to support appropriate scrutiny oftheir procurement activity * (Commonwealth Procurement Guidelines, 2008) * “In order to encourage contractors to be more responsive and competitive, al necessary information should be provided to them and all selection procedures and evaluation criteria should be clearly outlined and made transparent to facilitate their adequate understanding. There should be proper de-briefing arrangements for providing feedback to unsuccessful contractors" (Palaneeswaran and Kumaraswamy, 2001) FEE) csweo0ts- session 2 Semester 1,2022(E.Palnceswaran) ) Confidentiality considerations in Public Procurements FEMS) csvo0ts- session 2 semester, 2022(E Palonceswaran) —F) neeswaran Ekambaram (Tel. +61 3 92148526, Ema. pekambaram@swin.edu.au; Ofice: ATC738) School of Engineering, Swinburne University of Technology, Hawnorn, Victoria 3122, Austr‘CSM80013 Procurement, Tendering, and Contracts - Selected extract of Live Online Lecture Session in Week 2 (Semester 1 2022: SUT-Hawthorn) Competition considerations in Public Procurements FEE) csweo0ts- session 2 Semester 1,2022(E.Palnceswaran) ) Open, equitable and fair competition * ‘Effective competition requires non-discrimination in procurement and the use of competitive procurement processes" (Commonwealth Procurement Guidelines, 2008) + E.g. all contractors should be treated on an equal footing and it should be ensured that all those eligible are given the same information to prepare their proposals. They should be treated in an equitable manner without any bias or discrimination 3 FEMS) sv001s- session 2 semester 1, 2022. Palanceswaran) seswaran Ekambaram (Tel: +61 2 92148626, Emall. pekambaram@swin ed School of Engineering, Swinaue University of Technology, Hawinom, Victoria 3122, Australia Office: ATCT38);‘CSM80013 Procurement, Tendering, and Contracts - Selected extract of Live Online Lecture Session in Week 2 (Semester 1 2022: SUT-Hawthorn) Integrity! Probity considerations in Public Procurements FEE) csweo0ts- session 2 Semester 1,2022(E.Palnceswaran) ) Integrity, Efficiency, Effectiveness Propriety Integity! Probity: ll procurement procedures should be beyond reproach! citicism. The procurement personnel should exercise fair dealing within a sound ethical framework Efcieney relates tothe productivity ofthe resources used to conduct an actly in order to achiove the maximum value for the resources used. Inrelation to procurement, itincudes the selection ofa procurement process that is consistent wth government policy and isthe mos appropriate to the procurement objective under the prevaiing circumstances = Efcaneyn procurement i enhanced by conducting transparent, fa and appropriately competitive processes ofa scale commensurate wth te size and risk profle of each pattcular projec (Commonwealth Procurement Guidlines, 2008) Effectiveness relates to how well outcomes meet objectives. It concems the immediate characteristics of an agency's outputs, especially in tems of price, quality and quantty, ‘and the degree to which outputs contribute to specified outcomes. = Comprehensive montoring and assessment at al stages ofthe procurement process futher contbute to effectiveness. (Commonwealth Procurement Guidelines, 008) Be (€SM60013 - Session 2, Semester 1, 2022 (E. Palaneeswaran) (© AiProf Palaneoswaran Ekambaram (Tel. +61 3 92148526, Ema: pekambaram@swin.eduau; Ofice: ATC738) School of Engineering, Swinbume University of Technology, Hawnorn, Victoria 3122, Australi 10(CSM80013 Procurement. Tendering, and Contracts ~ Selected extract of Live Online Lecture Session in Week 2 (Semester 1 2022: SUT-Hawthorn) Efficiency in Procurement — Example objectives ‘The particular efficiency objectives identified by Infrastructure Australia are thal the procurement process: * enables potential praponents to effectively engage and participate in the procurement process; reasonably minimises the effort required of potential proponents to participate in the procurement process; * optimises the effort ofthe sponsor agency and other agencies to support the procurement process; * optimises the potential fr proponents to develop and submit proposals which are mast likely to deliver best value; ana "captures the value ofthe selected proposal in the contract withthe successful proponent. (Ret intastucture Australia (2012) Etciencies in Maor Project Procurement) (CSMB0013 - Session 2, Semester 1,2022 (E: Palaneeswaran) 9.) Confidentiality + all proposals and evaluation should ensure adequate confidentiality No information relating to the examination, clarification, and evaluation of bids and recommendations concerning awards should be communicated after the public opening of bids to any person not officially concerned with these procedures before the announcement of the award of a contract to the successful contractor SST (© AiProf Palaneeswaran Ekambaram (Tel: +461 3 92148626, Emal: pekambaram@swin.edu.au; Ofce: ATC738), School of Engineering, Swinaurne University of Technology, Hawnom, Vieloria 3122, Australia‘CSM80013 Procurement, Tendering, and Contracts - Selected extract of Live Online Lecture Session in Week 2 (Semester 1 2022: SUT-Hawthorn) Mandatory compliance requirements = Acts = Eg. Australian Public Procurements related to the construction of buildings and all procurements covered by the Public Works Comittee Ac! 1969; simian, the accountability and financial procedures should comply with provisions under the Financial Managemont and Accountabity Act 1997 (FMA Act) = Policies and legislative obligations - E.g, Commonwealth Procurement Guidelines (2008) stipulates that officials undertaking procurement are accountable for complying with relevant general government policies and legislative requirements. = This includes the procurement-specifie policies and legislative requirements set out in the CPGs, the FMA Act and FMA Regulations, and other policies and leisiaton that interac with procurement. = Rules and Regulations yp Any example? |p Su thers? i (€5M80013- Session 2, Semester 1, 2022(E. Palaneeswaran) =). Legislative framework Procurement Legislative & mon Steerentono Policy Framework — An pesca ec example from Victoria Sot cuantes Prone (CSMa0013 - Session 2, Semester 1, 2022 (E. Palaneeswaran) (© AiProf Palaneoswaran Ekambaram (Tel. +61 3 92148526, Ema: pekambaram@swin.eduau; Ofice: ATC738) School of Engineering, Swinbume University of Technology, Hawnorn, Victoria 3122, Australi‘CSM80013 Procurement, Tendering, and Contracts - Selected extract of Live Online Lecture Session in Week 2 (Semester 1 2022: SUT-Hawthorn) Procurement Integrity Fundamentals —E ES sense E ene 32 BE range VALUES = 2 = worvinon # 2 & SOCIAL & TRUTH ETHICS eeauurte, (RUTH PHIL Senate MORALS 22 character ETIQUETTE @ Actual/ Potential Conflict of Interest...? “ne Potential Conflict of Intereet Office: ATCT38); seswaran Ekambaram (Tel: +61 2 92148626, Emall. pekambaram@swin ed School of Engineering, Swinaue University of Technology, Hawinom, Victoria 3122, Australia(CSM80013 Procurement. Tendering, and Contracts ~ Selected extract of Live Online Lecture Session in Week 2 (Semester 1 2022: SUT-Hawthorn) Conflict of Interest = “any situation in which someone in a position of trust has competing professional or personal interests which make it dificult for himv her to fulfill his! her duties impartially, = an individual or organization is in a position to exploit a professional or oficial capacity in some way for his! her personal or for corporate benefit, or = incompatibility or contradictory interests exist between an employee and the organization which employs that employee.” (Ref: ISO10845-3:2011) (CSMB0013.- Session 2, Semester 1, 2022 (E: Palaneeswaran) | Corrupt practices can adversely impact at serious levels gf Can you dent some potential examples and! or or foot causes of corrupt practices procurements? gh. 020 you rey cscuss your recommends for potently preventing corrupt practices in public sector procurements ead Cy {0880013 - Session 2, Semester 1, 2022(E Palaneesnoran) 3.) (© AiProf Palaneeswaran Ekambaram (Tel: +461 3 92148626, Emal: pekambaram@swin.edu.au; Ofce: ATC738), School of Engineering, Swinaurne University of Technology, Hawanom, Vieloria 3122, Austr(CSM80013 Procurement. Tendering, and Contracts ~ Selected extract of Live Online Lecture Session in Week 2 (Semester 1 2022: SUT-Hawthorn) Procurement Risks: Corrupt practice & Fraudulent practice = Comrupt Practice: “Offering, giving, receiving or soliciting of anything of value to influence the action of the employer or his staff or agents in the tender process.” (Ref: |S010845-3:2011) = Fraudulent practice: “Misrepresentation ofthe facts in order to influence the tender process, or the award of a contract arising from a tender offer to the detriment of the employer, including collusive practices intended to establish prices at arttfcial levels.” (Ref: [SO10845-3:2011) {6380013 Session 2, Semester 1, 2022(E.Palaneeswaran) Bid rigging = Bid rigging is the illegal & fraudulent bidding practice by a group of people conspiringly agree to ‘ix’ the normal bidding process to suit their collective vested interests - that could inflate the price and or deflate the value/ quality (ie. forthe procurer and other stakeholders). ~ Cover bidding ocurs wien (a group of bidders agree to submit higher pies than the fim chosen to win or when they submit bids that are made to contain special terms (.. qualifications) that make them unacceptable tthe clint — Bid suppression is opposite of ‘cover bidding’ in which one or more of the parties agreeing noo bid'or to withdraw ther id to ensure the frm chosen to win is success — Bid rotation — in which the bidders take turns for being the lowest bidder (either systematically r randomly), 0 that each bidder in the collusive group wil get their respective share of contacts — Market allocation — an agreement among the bidders not to compete for certain clents ori certain geographic regions CSMB0013- Session 2, Semester, 2022E. Palaneeswaran) 1) (© AiProf Palaneeswaran Ekambaram (Tel: +461 3 92148626, Emal: pekambaram@swin.edu.au; Ofce: ATC738), School of Engineering, Swinaurne University of Technology, Hawnom, Vieloria 3122, Australia(CSM80013 Procurement. Tendering, and Contracts ~ Selected extract of Live Online Lecture Session in Week 2 (Semester 1 2022: SUT-Hawthorn) Corruption red flags in procurement ~ IBAG (Victoria) Podcast 5 Fodcat hve: Corrntion red fagsin procurement are 5205-4489. 2176-28ed640{a526 (CSMB0013.- Session 2, Semester 1, 2022 (E: Palaneeswaran) | AS8001:2021 Fraud and Corruption Control = Corruption: ‘Dishonest activity in which a person associated with an orgnaisation acts contrary to the interests of the organisation and abuses their position of trust in order to achieve personal advantage or advantage of another person or organization.” (Ref: AS8001:2021) = Fraud: "Dishonest activity causing actual or potential gain or loss to any person or organisation including thett of moneys or other property by persons internal and! or external to the organisation and/ or where deception is used at the time, immediately before or immediately following the activity. * (Ref: ASB001:2021) SES eT (© AiProf Palaneeswaran Ekambaram (Tel: +461 3 92148626, Emal: pekambaram@swin.edu.au; Ofce: ATC738), School of Engineering, Swinaurne University of Technology, Hawanom, Vieloria 3122, Austr(CSM80013 Procurement. Tendering, and Contracts ~ Selected extract of Live Online Lecture Session in Week 2 (Semester 1 2022: SUT-Hawthorn) A discussion agenda sf) Caveat Emptor # i # Caveat Venditor gf Waranty (CSMB0013- Session 2, Semester 1, 2022 E, Palaneeswaran) i.) (© AiProf Palaneeswaran Ekambaram (Tel: +461 3 92148626, Emal: pekambaram@swin.edu.au; Ofce: ATC738), School of Engineering, Swinaurne University of Technology, Hawnom, Vieloria 3122, Australia 17